FEDERALLY QUALIFIED HEALTH CENTER FEDERAL TORT

Volume 27, Number 3, February 2015 The Health Lawyer

continued on page 32

Michael A. Dowell, Esq.

Carol D. Scott, Esq.

Hinshaw & Culbertson

Los Angeles, CA

FTCA Background

and History

The Federal Tort Claims Act

(“FTCA”), established in 1948, is the

legal mechanism for compensating

people who have suffered personal

injury due to the negligent or wrong-

ful action of employees of the U.S.

government.

The FTCA was passed

following a 1945 crash of a a military

plane into the Empire State Building.

Eight months after the crash, the U.S.

government offered money to families

of the victims.

Some accepted, but

others initiated a lawsuit that resulted

in legislation that established the

FTCA. The FTCA permits private

parties to sue the United States in

federal court for torts and negligence

committed by persons acting on

behalf of the United States, and pro-

vides compensation for personal

injury, including death, resulting from

the performance of medical, surgical,

dental or related functions that con-

stitute medical malpractice. Prior to

the passage of the FTCA, lawsuits by

private individuals and corporations

against the federal government and

federal employees were barred by sov-

ereign immunity.

Extension of FTCA

Coverage to Federal

Government Funded Entities

The FTCA originally only cov-

ered the federal government, federal

government agencies, and federal gov-

ernment employees. In 1988 and again

in 1990, Congress extended the FTCA

to negligent acts of tribal contractors

carrying out contracts, grants, or coop-

erative agreements pursuant to Public

Law 93–638, the Indian Self-Deter-

mination and Education Assistance

Act (“ISDEAA”).

In general, the

ISDEAA protects the following indi-

viduals/entities from personal liability

under the FTCA when they are acting

within their scope of official duty:

federal employees, tribal employees,

Public Health Service officers, and

certain contractors, including Indian

Health Centers.

In 1992, Federal Tort Claims Act

coverage was extended to eligible

Bureau of Primary Health Care

(“BPHC”) grantees funded through

Section 330 of the Public Health

Service Act, passed as the Federally

Supported Health Centers Assistance

Act (“FSHCAA”) of 1992 (Public Law

102-501) through an amendment to

Section 224 of the Public Health Ser-

vice Act.

The general purpose of the

FSHCAA was “to provide that doctors

or other health care providers at a fed-

erally funded migrant health center,

community health center, or health

center providing services to homeless

individuals or public housing residents

(collectively referred to as “Health

Centers”), would be deemed to be

employees of the Public Health Service

for civil liability purposes, and thus

would be covered by the FTCA.”

Health Centers are community-

based and patient-directed organizations

that serve medically underserved com-

munities and vulnerable populations

with limited access to healthcare,

including low income populations, the

uninsured, those with limited English

proﬁciency, migrant and seasonal farm

workers, individuals and families experi-

encing homelessness, and those living in

public housing.

Health Centers have

been providing these comprehensive,

culturally competent, quality primary

healthcare services for more than 45

years. Currently, 1,200 Health Centers

deliver care through over 9,000 service

delivery sites across the United States.

Health Centers were initially

staffed by physicians who worked for

the National Health Service Corps

(“NHSC”); however, budget cuts and

policy changes in the NHSC forced

Health Centers to hire former NHSC

physicians as their own employees and

purchase professional malpractice

insurance coverage. Then, during the

medical malpractice insurance crisis

that occurred from 1985 through 1995,

the cost of such insurance increased

drastically. In addition, as set forth in

the legislative history, Congress wanted

to “eliminate the need for these Health

Centers to purchase medical malprac-

tice insurance, the costs of which [had]

been found to far exceed the amount of

claims paid by the Health Centers, and

thus free up more resources to provide

additional health care services.”

Con-

gress further sought to “strengthen

the responsibility of grantees to check

staff credentials, by conditional grants

to applicants on their certification

that they have reviewed and veri-

fied the professional credentials,

references, claims history, ﬁtness, pro-

fessional review organization ﬁndings,

and license status of their physicians

and other licensed health care

practitioners.”

The FHSCAA originally was a

three year demonstration project to see

if the coverage would lower a Health

Center’s medical malpractice costs and

thus leave more money for providing

services. Subsequent reviews of the

costs savings concluded that the

Health Centers benefited from the

protections offered by the FTCA,

and Congress eventually approved a

permanent extension of the coverage

with the FSHCAA of 1995, which

clariﬁed the 1992 Act and conﬁrmed

that the FTCA covers any officer,

governing board (“Board”) member,

or employee of a Health Center, as

well as certain independent contrac-

tors, for actions within the scope of

FEDERALLY QUALIFIED HEALTH CENTER FEDERAL

TORT CLAIMS ACT INSURANCE COVERAGE

The Health Lawyer Volume 27, Number 3, February 2015

Federally Qualiﬁed Health Center Federal Tort Claims Act Insurance Coverage

continued from page 31

their employment or contract.

The

FSHCAA also extended FTCA cov-

erage to Veterans Administration

Medical Centers and outpatient clin-

ics, Military Hospitals, Indian Health

Centers, the NHSC, the Public

Health Service, and Free Clinics.

How FTCA Coverage for

Health Centers Differs

from FTCA Coverage

for Government Agencies

FTCA Coverage for Health Cen-

ters is different from that provided

directly to government agencies, and

from insurance coverage provided by

commercial medical malpractice

insurers. Health Centers must meet

very speciﬁc requirements in order to

be covered by the FTCA, and many

common activities engaged in by

Health Centers and which might be

covered by private malpractice insur-

ance are not covered by the FTCA.

Health Centers must meet rigid deem-

ing requirements. Health Centers must

operate within the parameters of the

FTCA program rules to ensure that

the Health Center does not jeopardize

its FTCA coverage and to ensure that

it does not exceed the limitations on

the scope of coverage for certain staff

members or services provided to cer-

tain patients.

The FTCA provides occurrence-

based coverage for professional

malpractice to a Health Center that

is “deemed” eligible by the Health

Resources and Services Administra-

tion (“HRSA”) of the Department of

Health and Human Services (“HHS”),

but only for claims arising from acts or

omissions by the Health Center, its

qualified individual providers and/or

other eligible individuals (i.e., Board

members, ofﬁcers, employees and cer-

tain individual contractors or the

Health Center) that (1) occur on or

after the effective date that HRSA

determined the Health Center met

the requirements for FTCA coverage;

(2) are within that Health Center’s

approved scope of project and occur

during the provision of services to

Health Center patients (or non-patients

in certain limited situations);

and (3)

are within the requirements of the job

description, contract for services, Health

Center scope of employment, or duties

as an ofﬁcer or director of the Health

Center.

After a claim is filed against a

Health Center, the Health Center must

take deliberate steps to access coverage

under the FTCA. Failure to perform

the required steps may put the Health

Center’s FTCA coverage at risk.

Beneﬁts of FTCA Coverage

Free Medical Malpractice

Insurance Coverage

FTCA coverage provides signiﬁ-

cant beneﬁts, including a reduction or

elimination of professional liability

insurance costs and unlimited cover-

age. There is no cost to participating

Health Centers or their providers, and

there is no personal liability for cov-

ered individuals. In addition, Health

Centers are not limited to the tradi-

tional coverage limits of one million

dollars per incident and three million

dollars in the aggregate. Covered enti-

ties are not liable for any settlements

or judgments that are made, as the fed-

eral government assumes responsibility

for related costs. The Health Center

and its officers, directors, employees

and certain contractors covered by the

FTCA are considered to be federal

employees for the purpose of malprac-

tice coverage under the FTCA, but are

not considered federal employees for

any other reason. Currently 956

Health Centers are deemed eligible by

HRSA for FTCA medical malpractice

coverage.

Reduced Liability Risks

FTCA rules make it harder for a

plaintiff to recover damages, thereby

discouraging litigation. For example,

there is a federal two year statute of

limitations from the time a plaintiff

discovered or should have discovered

the injury (no competency or minor

age tolling of statute of limitations),

and the preliminary administrative

review process serves as another stat-

ute of limitations if a lawsuit is not

filed within six months after the

claim was denied or failed to settle. In

addition, there is no common law dis-

covery rule, no jury and no punitive

damages.

Claims, Scrutiny Expected

to Increase

One of the central funding initia-

tives in the Patient Protection and

Affordable Care Act is the expansion

of Health Centers as a means of

improving access to primary health-

care, and the number of Health

Centers is increasing rapidly. Health

Centers are likely to play a central

role in the country’s health system

over the coming years, as Health

Centers currently provide care to

more than 22 million people, and an

increasingly number of consumers

will be obtaining healthcare services

from Health Centers in the future.

As more Health Centers are estab-

lished, the number of medical

malpractice claims involving Health

Centers will also likely increase.

Plaintiffs’ attorneys, their clients, and

Health Center attorneys and compli-

ance ofﬁcers must be aware of FTCA

requirements.

In addition, the 2015 Work Plan of

HHS’ Office of Inspector General

(“OIG”) indicates that the OIG will be

auditing Health Center compliance,

and HRSA has recently begun to

conduct random FTCA coverage com-

pliance site visits of both Health Center

initial applicants and deemed grantees

to determine compliance with FTCA

program requirements.

Volume 27, Number 3, February 2015 The Health Lawyer

continued on page 34

The purpose of this article is to

provide guidance to plaintiffs’ coun-

sel, Health Center legal counsel, and

Health Center compliance ofﬁcers on

how to comply with the applicable

FTCA requirements.

The Federal Tort Claims

Act Health Center Policy

Manual

The Federal Tort Claims Act

Health Center Policy Manual (the

“FTCA Manual”) is the primary

source for information on the FTCA

program for Health Centers and

related stakeholders.

HRSA recently

issued an updated FTCA Manual

which modifies and supersedes the

prior manual (Policy Information

Notice (“PIN”) 2011-01), and reﬂects

amendments to the FTCA Health

Center regulations.

HRSA also

issued a Program Assistance Letter

(“PAL”) that highlights the updates

and modiﬁcations (“PAL 2014-09”).

The revised FTCA Manual is

intended to be the principal Health

Center Program resource on FTCA

matters; however if there are any con-

flicts between the Manual and the

FTCA and regulations as interpreted

by the courts, the FTCA, implement-

ing regulations, and case law prevail.

New changes reflected in the

FTCA Manual include the following:

Individual Emergencies

The updated FTCA Manual

includes an expansion of FTCA cover-

age for services rendered to non-Health

Center patients in certain individual

emergencies. To be covered by the

FTCA when temporarily treating or

assisting in treating a non-Health

Center patient, the treatment must

take place in or near the Health Cen-

ter provider’s location, the provider

must be furnishing (or about to fur-

nish) FTCA covered services within

the Health Center’s scope of project

and must be asked, called upon or

undertake to treat or assist in treating

the non-Health Center patient. In

addition to documentation of the

original services, the Health Center

must have documentation (such as an

employee manual, provider contract or

Health Center bylaws) that provides

that a practitioner is required as a

condition of employment to provide

individual emergency treatment when

the practitioner is already providing or

undertaking to provide covered services.

Participation in Health Fairs

The updated FTCA Manual clar-

ifies that Health Center staff that

conduct or participate in health fairs

are covered by the FTCA.

Immunization Campaigns

The updated FTCA Manual clar-

ifies that Health Center staff that

conduct or participate in an event to

immunize individuals against infectious

illnesses are covered by the FTCA.

Covered immunization campaigns

now include those provided to adults,

in addition to those provided to chil-

dren and adolescents.

The FTCA Manual is generally

updated infrequently and limited to

signiﬁcant updates, as minor changes

are usually communicated in PINs or

PALs.

The FTCA Coverage

Application and Coverage

Renewal Process

Each Health Center seeking FTCA

coverage (including both Health Center

grantees and sub-recipients) must sub-

mit an application in the form and

manner prescribed by HRSA. All appli-

cations, whether initial or renewal

applications, must be submitted

through the FTCA deeming module

within the HRSA Electronic Hand-

book (“EHB”). The application must

document that the Health Center has

successfully implemented all program

requirements set forth in the FTCA

and regulations and further described

in HRSA guidance entitled “Calen-

dar Year 2015 Requirements for

Federal Tort Claims Act (FTCA)

Medical Malpractice Coverage for

Health Centers.”

Program require-

ments include not only the submission

of written documentation of appro-

priate policies, procedures, and

practices, but also evidence of their

implementation.

In view of the importance of the

application process, it is essential that

all applicants for coverage or annual

renewal:

• Submit FTCA application materi-

als in a timely manner (including

responding within specified time

frames to all clariﬁcation and addi-

tional information requests from

HRSA);

• Demonstrate implementation of

the required policies, procedures,

and requirements, as further out-

lined in PAL 2014-03; and

• Present and verify all material facts

during the application process

(including providing information

during FTCA site visits).

The FTCA Coverage

Application

The FTCA coverage application

must be complete and accurate and

must demonstrate that the Health

Center:

• Has implemented appropriate poli-

cies and procedures to reduce the

risk of malpractice and the risk of

lawsuits arising out of any health or

health related functions performed

by the covered entity;

• Has implemented a system whereby

professional credentials, references,

claims history, ﬁtness, professional

review organization findings, and

licensure status of its physicians

and other licensed or certified

healthcare providers are reviewed

and veriﬁed and, where necessary,

has obtained the permission from

these individuals to gain access to

this information;

• Has no history of claims having

been ﬁled against the United States

The Health Lawyer Volume 27, Number 3, February 2015

Federally Qualiﬁed Health Center Federal Tort Claims Act Insurance Coverage

continued from page 33

as a result of the application of the

FSHCAA to the entity or its cov-

ered individuals, or, if such a history

exists, has fully cooperated with the

Department of Justice in defending

any such claims and either has

taken, or will take, any necessary

corrective steps to assure against

such claims in the future; and

• Will fully cooperate with the

Attorney General and the federal

government in providing the nec-

essary information related to the

claim.

Documents to be

Submitted with the

Application

Health Centers must submit the

following documents with the FTCA

coverage application:

• A Quality Improvement/Quality

Assurance (“QI/QA”) Plan, signed,

dated, and approved by the Health

Center’s Board within past three

years (on or after April 5, 2011);

• Board-approved Credentialing and

Privileging policies (signed and

dated);

• Minutes from six QI/QA commit-

tee meetings. All minutes must be

from meetings that took place

between April 5, 2013 and the sub-

mission date of the application;

• Minutes from six Board meetings

that reﬂect Board approval of QI/

QA activities. All minutes must be

dated between April 5, 2013 and

the submission date of the

application;

• Clinical policies and procedures for

referral tracking, hospitalization

tracking, and diagnostic tracking;

• A statement verifying whether or not

there were any medical malpractice

claims or allegations presented during

the past ﬁve years, that any such claims

or allegations were internally analyzed,

and that appropriate actions were

implemented as needed in response

to such claims or allegations; and

• A credentialing list (in an excel

spreadsheet) of all licensed and/

or certified healthcare personnel

employed and/or contracted by the

Health Center, with information

speciﬁed in PAL 2014-03.

The HRSA FTCA

Coverage Eligibility

Deeming Process

Health Center FTCA coverage is

contingent on approval of an annual

deeming application by HRSA.

Health Centers must demonstrate

compliance with all applicable FTCA

program requirements. The Health

Center must demonstrate that it has

implemented “appropriate policies

and procedures to reduce the risk of

malpractice and the risk of lawsuits

arising out of any health or health-

related functions performed by the

entity.”

It is not sufﬁcient to develop

policies and procedures; there must be

evidence that such policies and pro-

cedures are implemented and in use.

Similarly, the Health Center must

show that it has reviewed and veriﬁed

the professional credentials, references,

claims history, fitness, professional

review organization findings, and

license status of its physicians and

other licensed or certiﬁed healthcare

practitioners and, where necessary,

has obtained the permission from

these individuals to gain access to this

information.

In addition, the applica-

ble statute mandates that any entity

that has a history of any FTCA claims

must demonstrate that it has “either

has taken, or will take, any necessary

corrective steps to assure against such

claims in the future.”

The FTCA Deeming Application

Once a complete initial FTCA

application is submitted, HRSA will

complete its review within 30 days.

Grantees that do not submit complete

applications in a timely manner may not

receive deemed status (i.e. FTCA cover-

age) on the date desired. If additional

information or clarification is needed,

HRSA will notify the grantee, and the

grantee will be given 10 business days

from the date of the notification to

provide the requested information to

complete its application. Should

requested information not be submitted

within 10 business days of notiﬁcation,

the FTCA application may be deter-

mined to be incomplete and voided.

HRSA FTCA Deeming

Application Review Process

As part of the approval process,

HRSA will review and verify all profes-

sional credentials, references, claims

history, ﬁtness, professional review orga-

nization ﬁndings, and license status of

the Health Center’s physicians and

other licensed or certified healthcare

practitioners.

HRSA may conduct a

site visit at any point during the appli-

cation review process and/or as part of

its oversight responsibilities relative to

the FTCA program to ensure that risk

management, QI/QA policies and pro-

cedures, and credentialing have been

appropriately implemented. HRSA may

also conduct a random site visit to any

initial applicant or deemed grantee to

ensure implementation under 42 U.S.C.

Section 233(h). If a site visit results in a

ﬁnding that the Health Center has not

met the FTCA program requirements,

this ﬁnding may be grounds for a nega-

tive deeming determination.

Negative

deeming determinations are common;

however, most applicants are able to

successfully address the deficiencies

during the appeals process. Notwith-

standing the above, nearly 100 Health

Centers are rejected for deeming status

on an annual basis.

HRSA Notiﬁcation of a

Deﬁcient FTCA Deeming

Applications

During the review process, if

HRSA determines that the applicant

Volume 27, Number 3, February 2015 The Health Lawyer

has not successfully demonstrated

compliance with the FTCA deeming

requirements and is in danger of being

disapproved for FTCA initial or

renewal coverage, HRSA will notify

the Health Center of such non-compli-

ance and provide the Health Center

with a ﬁnal opportunity to demonstrate

compliance. The notice will outline:

(1) the areas of non-compliance; (2)

additional documentation that must be

submitted to demonstrate evidence of

compliance; (3) the time frame within

which the documentation must be

submitted; and the form and manner in

which the submissions must be pre-

sented.

Once the additional information

is submitted, HRSA will review the

documentation and make a ﬁnal determi-

nation within 30 days. After a final

determination is made on the application,

HRSA will notify the Health Center’s

contact person(s) identiﬁed in the applica-

tion of whether or not the Health Center

is deemed eligible for FTCA coverage.

The FTCA Deeming

Coverage Letter

Each deemed Health Center will

receive a general letter from HRSA

explaining that it is covered by the

FTCA and outlining the FTCA cover-

age (the “Deeming Letter”). The

Deeming Letter serves as veriﬁcation of

coverage and must be renewed on an

annual basis.

It is essential that that the

Health Center keep annual Deeming

Letters on ﬁle, since the Health Center

will need to send the letters to HHS

in the event that the Health Center

is the subject of an FTCA lawsuit.

The FTCA Claims and

Lawsuits Process

Exhaustion of Administrative

Remedies

FTCA actions proceed in two

steps. First, the claimant should con-

tact the Health Center and subject

healthcare providers and inquire if

the Health Center and staff have

been deemed Public Health Service

employees. If a timely response is not

received, the claimant may contact

the BPHC to obtain a report on the

Health Center’s status as covered by

the FTCA. If so, the claimant ﬁles an

administrative complaint with the

relevant federal agency or agencies.

For example, in order to ﬁle a mal-

practice claim against a Health Center

under the FTCA, the plaintiff must

present his or her claim to the HHS

Office of the General Counsel

(“OGC”), General Law Division

(“GLD”), Claims and Employment

Branch (“CELB”) (“OGC/GLD/

CELB”). A claim shall be deemed to

have been presented when a federal

agency (HHS) receives from a claim-

ant, his duly authorized agent, or legal

representative an executed Standard

Form (“SF”)-95 or other written notiﬁ-

cation of an incident, accompanied by

a claim for money. The claim must be

filed in writing with the appropriate

federal agency, using Form SF-95 or a

letter.

The form or letter must provide

written notiﬁcation of the incident and

the speciﬁc amount of monetary dam-

ages claimed.

Practitioners should

carefully consider the damages demand,

because the agency’s liability generally

cannot exceed the amount stated in the

administrative complaint.

If an attor-

ney prepares the claim, it must be

presented in the claimant’s name, be

signed by the attorney, and show evi-

dence of the attorney’s authority to bring

the claim on the claimant’s behalf.

Statute of Limitations

As noted above, an administrative

claim must be presented in writing to

the appropriate federal agency within

two years after the claim accrues.

State law tolling rules such as those for

infancy

or incompetency

do not

apply to FTCA statutes of limita-

tions.

A second FTCA statute of

limitations requires that the lawsuit be

ﬁled within six months of the denial of

the administrative claim.

Federal Agency Review of

the Administrative Claim

Upon receipt of a claim against a

Health Center by the OGC, the

Health Center is provided a litigation

hold letter by the OGC and requested

to provide the following information

as soon as possible:

1. Three copies of the summons and

complaint.

2. Three copies of the covered entity’s

initial deeming letter and all subse-

quent redeeming documentation

including Notices of Grant Award

(“NGAs”) containing re-deeming

language or re-deeming letters, as

appropriate.

3. Three copies of the covered entity’s

Federal Section 330 grant applica-

tion and Forms 5-A, 5-B and 5-C

setting forth the approved scope of

project, including delivery sites and

services, for the period of time cov-

ered by the claim.

4. Three copies of a statement, on

covered entity letterhead, identify-

ing which providers are involved or

named in the claim and their dates

of employment at the covered

entity (if not already provided for a

premature lawsuit relating to the

same incident).

5. Evidence that the named providers

were licensed physicians or licensed

or certiﬁed healthcare providers at

the time of the incident, including

documentation of the specialty of

all named providers.

6. In the event the alleged incident

arises from acts or omissions that

occurred outside of the covered

entity’s approved service sites, the

name and address of the outside

facility and information as to the

nature of the afﬁliation among the

outside facility, Health Center and

its personnel.

7. Three copies of the Wage and Tax

statements (W-2) for each individual

involved in the alleged incident for the

period of time covered by the claim.

8. If the provider whose care is at issue

was a licensed or certiﬁed healthcare

provider contractor at the time of the

alleged incident, three copies of the

1099 form; an employment contract

covering the period of the alleged

continued on page 36

The Health Lawyer Volume 27, Number 3, February 2015

incident; and evidence that the

healthcare provider contractor was

working full time, an average of 32.5

hours per week, or if employed part

time, that the healthcare provider

contractor was providing services only

in the ﬁelds of family practice, obstet-

rics and gynecology, general internal

medicine or general pediatrics.

9. Three copies of a declaration verifying

the employment of each individual

involved in the alleged incident on

the Health Center’s letterhead, signed

by each provider whose care is at

issue. The declaration should state

that to the best of his/her knowledge,

the named provider was not billing

privately, or, if the named provider

was billing privately, he/she com-

plied with the alternate billing

arrangement requirements.

10. Three copies of any professional lia-

bility or gap insurance policy that

provides coverage to the Health

Center and the named provider. The

policies must cover the dates of the

alleged incident. If neither the cov-

ered entity nor the named provider

involved in the alleged incident has

medical malpractice coverage other

than that provided under the FTCA,

the covered entity should submit a

statement on Health Center letter-

head addressing that fact. However, if

the named provider has purchased

his/her own individual professional

liability medical malpractice insur-

ance coverage, which was in effect

during the allegation time period,

the covered entity must provide

evidence of this coverage.

11. All correspondence received from

the claimant pertaining to the claim.

12. The name and telephone number

of a contact at the Health Center

familiar with the certification

information requested above.

13. Three copies of all of the plain-

tiff’s medical records including

x-rays, laboratory reports, and

other results and treatments from

the covered entity and any private

facility that might be involved.

The Administrative Agency

Determination

The OGC will review the

information received and make a rec-

ommendation with regard to coverage

by the FTCA and defense of settle-

ment of the claim. The agency has six

months to assess the merits of the

administrative tort claim, during which

time no suit may be instituted.

If the

agency does not elect to pay or settle

the claim, and, instead, makes a “ﬁnal

denial” of the claim (i.e., denies the

claim or fails to act on it within six

months), the claimant then may ﬁle a

complaint in federal district court.

In the alternative, the claimant may

request an administrative reconsidera-

tion within six months of the denial.

Once an administrative claim has been

denied, the claimant must file suit

within six months or request reconsid-

eration. If neither is done, the action

will be time barred.

Venue

Only federal district courts have

subject matter jurisdiction over FTCA

cases.

Venue is proper only in the

federal district where the “plaintiff

resides or wherein the act or omission

complained of occurred.”

However,

the FTCA venue provision can be

waived.

When a lawsuit is ﬁled, the

case is transferred to the Department of

Justice (“DOJ”). The DOJ may attempt

to settle the lawsuit; otherwise it goes

into litigation. Cases are heard with-

out a jury and are defended by the

DOJ with help from the requisite fed-

eral agency (here, OGC).

Attorney’s Fees

There is no provision in the

FTCA for a separate award of attor-

ney’s fees. The FTCA specifically

authorizes attorneys’ fees and collec-

tion of contingent fee payments. If

the claim is resolved administratively,

recovery may not exceed 20 percent

of the settlement. If the claim is set-

tled after district court litigation is

initiated, the attorney may recover up

to 25 percent of the settlement or

judgment.

What the FTCA Covers

Scope of Project Limitation

FTCA coverage is limited to the

performance of medical, surgical, den-

tal, or related functions within the

scope of the approved grant project,

which includes sites, services, and

other activities or locations, as listed

in the grant application and any sub-

sequent approved changes in scope

requests.

Scope of Employment Limitation

FTCA coverage is further limited

to those acts or omissions of a Health

Center that are within the scope of

employment of a covered individual

(including acts of a qualiﬁed contrac-

tor that fall within an applicable

contract) that cause personal injury,

death or loss of property. The term

“scope of employment” covers perfor-

mance under an applicable individual

contract. It is essential that all cov-

ered individuals including employees,

contractors, officers and directors

have: (1) current written job/position

descriptions that delineate the duties

they perform on behalf of the Health

Center; (2) that these descriptions

comply with the scope of employment,

licensure and certiﬁcation requirements

and any contract or employment

agreement; and (3) specify the type of

services to be provided and the location

where such services will be provided.

These descriptions will be essential in

determining if the person was acting

within the scope of employment and

is covered by the FTCA. For actions

to be within the scope of employ-

ment, they must:

• Be within the approved scope of

the project, including sites, services

Federally Qualiﬁed Health Center Federal Tort Claims Act Insurance Coverage

continued from page 35

Volume 27, Number 3, February 2015 The Health Lawyer

and other activities and locations

as deﬁned in PIN 2008-01;

• Be within the requirements of the

job description, contract for ser-

vices, and/or duties required by the

Health Center;

• Occur during the provision of ser-

vices to the Health Center’s patients

and in certain circumstances to

non-Health Center patients.

Recordkeeping and

Documentation

The Health Center is responsi-

ble for keeping records for covered

individuals and any sites and sched-

ules that may be relevant to FTCA

coverage. In the event of a claim,

HHS will verify that the individual

was employed by or under contract

with the Health Center at the time of

the incident, that all statutory and

program requirements have been met

and that the Health Center and the

covered individual complied with all

FTCA requirements, such as providing

healthcare services with the approved

scope of project and within the scope

of deemed employment.

FTCA Coverage

Compliance Requirements

The QI/QA

In order to comply with FTCA

coverage requirements, Health Centers

must maintain a QI/QA program

which has been approved by the

Health Center Board and provides an

organizational structure that supports

the provision of high-quality patient

care.

A QI/QA committee should

oversee the QI/QA plan and hold

monthly QI/QA committee meetings.

The QI/QA committee should be a

multidisciplinary team including

administration, providers, and profes-

sional staff. The QI/QA program

should describe the structure and pur-

pose of the QI/QA committee;

clinical, financial, or administrative

areas addressed in quality improvement

activities (e.g., continuity of care,

disease management, credentialing,

patient education, patient satisfaction);

the process for implementing policies

and procedures; how often the Board

receives reports from the QI/QA com-

mittee on the QI plan and progress; and

how recommendations from the QI/

QA committee are presented to and

approved by the Board.

QI/QA programs must provide

for periodic assessments of utilization

and quality of health services. These

assessments must: (1) be conducted

by physicians or other licensed profes-

sionals under the supervision of

physicians; (2) be based on the sys-

tematic collection and evaluation of

patient records;

and (3) identify and

document needed changes and the

results of such changes.

In addition,

Health Centers must have a process

for compiling information and report-

ing information to HRSA on costs,

service utilization, and the availabil-

ity, accessibility, and acceptability of

the Health Center’s services.

Health Centers should compare

data to benchmarks to determine what

QA/QI areas need improvement and

develop strategies or initiatives to

address such areas. Thus, the QI/QA

program should describe the process for

assessing and identifying clinical quality

and risk issues on a continuous basis,

and include a list of tools used to sys-

temically collect and analyze data. The

QI/QA program should describe how

the Health Center identiﬁes potential

problems, prevents adverse occur-

rences, and discusses how strategies for

improvement are implemented, contin-

ually monitored, and measured.

Credentialing and Privileging

Health Centers must have a pro-

cess for credentialing and privileging all

licensed or certiﬁed healthcare practi-

tioners, as reﬂected in a Health Center

credentialing and privileging policy

(with Board approval/signature/date on

the document or Board minutes that

show approval). HRSA provides the

following general guidance:

• “All Health Centers shall assess the

credentials of each licensed or cer-

tiﬁed health care practitioner.”

• “A Health Center must verify that

its licensed or certiﬁed health care

practitioners possess the requisite

skills and expertise to manage and

treat patients and to perform the

medical procedures that are required

to provide the authorized services.”

Staff to be credentialed include

staff who are licensed, registered, or

certified by the state in which the

Health Center is located to provide

care and services without direction or

supervision (Licensed Independent

Practitioners (“LIPs”), such as physi-

cians, dentists, physician assistants,

nurse practitioners and nurse mid-

wives); and staff who are licensed or

certiﬁed to provide care and services,

but must have direction or supervision

(Other Licensed or Certified Prac-

titioners (“OLCPs”), such as nurses,

laboratory technicians, social workers,

medical assistants, and dental hygien-

ists). Health Center medical staff

should not provide healthcare services

prior to completion of the credential-

ing and privileging process.

Health Centers’ policies and pro-

cedures should clarify required

credentials for each position, which

may include: current state license,

certiﬁcation, or registration; relevant

education, training, or experience;

current competence; health fitness,

including immunization and PPD

tuberculosis skin test status; govern-

ment-issued picture identiﬁcation; Drug

Enforcement Administration (“DEA”)

registration (as applicable); hospital

admitting privileges (as applicable); life

support training (as applicable); and a

query of the National Practitioner

Data Bank.

As Health Centers are required

to maintain complete and organized

documentation of credentialing and

privileging records, Health Center

policies should describe a format for

organizing credentialing information

and assuring appropriate conﬁdential-

ity and security. Health Centers are

permitted to use a Credentials Veri-

fication Organization (“CVO”) to

continued on page 38

The Health Lawyer Volume 27, Number 3, February 2015

Federally Qualiﬁed Health Center Federal Tort Claims Act Insurance Coverage

continued from page 37

perform credentialing, however, if they

do so, it is important for the Health

Center to make sure that the docu-

ments maintained by the CVO are

completed and organized and that the

Health Center can access physical ﬁles

or electronic databases in advance of

a HRSA site visit.

The Credentialing Process

Credentialing is the process of

assessing and conﬁrming the qualiﬁ-

cations of a licensed or certified

healthcare practitioner to render spe-

ciﬁc healthcare service(s) based on a

review of the practitioner’s experience,

credentials and other qualifications.

Health Centers must develop and

implement a consistent and systematic

approach to assessing the credentials,

training, competency, and practice his-

tory of each healthcare practitioner

and the practitioner’s ability to per-

form within her or her scope of

practice. All Health Centers must

assess the credentials of each licensed

or certified healthcare practitioner,

including employed, contracted, vol-

unteers, and locum tenens (temporary)

practitioners, at all Health Centers

sites, and must review credentials on

an ongoing basis with recredentialing

at least every two years.

Credentialing veriﬁcation proce-

dures should include primary and

secondary source veriﬁcation.

Health

Center policies should deﬁne whether

a credential must be veriﬁed using pri-

mary source veriﬁcation or if secondary

source veriﬁcation is acceptable.

Cre-

dentialing of OLCPs requires primary

source veriﬁcation of license only. The

credentialing process for LIPs is rigor-

ous and includes two steps: (1) primary

source veriﬁcation of current license,

relevant education, training and expe-

rience, current competence, health

ﬁtness or ability to perform the requested

privileges; and (2) secondary source LIP

verification, which requires proof of a

government issued picture I.D., DEA

registration (as applicable), hospital

admitting privileges (as applicable),

immunization and PPD tuberculosis

skin test status, life support training (as

applicable), and National Practitioner

Data Bank queries every two years.

The Privileging Process

Each Health Center provider

should be “privileged” speciﬁc to the

services being provided at each of

the Health Center’s delivery settings.

Privileging is the process whereby the

Health Center determines the speciﬁc

scope and type of patient care services

that a healthcare practitioner may

perform, based on an evaluation of

the individual’s credentials and per-

formance. Health Center privileging

and re-privileging policies should

document: services for which privi-

leges are granted; skills and expertise

measures that must be achieved in

order to demonstrate competency for

each service to be granted privilege;

standardized procedures to monitor

proficiency of practice; periodicity of

the review of privileges; and methods

for disciplining a practitioner to assure

compliance with credentialing and privi-

leging policies. They should also describe

a practitioner’s rights to appeal if a deci-

sion is made to discontinue or deny

privileges, and deﬁne the Health Cen-

ter’s approved appeal process, including

information needed, format, and time

limits for requesting the appeal.

Health Center privileging veriﬁ-

cation should include primary source

veriﬁcation of a course of study from a

recognized and certifying educational

institution; direct, ﬁrst hand one-on-

one documentation by a supervising

clinician who possesses the privilege

of the particular procedure or manage-

ment protocol; and direct proctoring by

a qualiﬁed clinician possessing a degree

of expertise in the particular procedure

or protocol beyond the level of exper-

tise of most primary care providers.

Whatever verification procedures are

used should be appropriate to the spe-

cialty of each practitioner, the breadth

of clinical services offered by the

Health Center, and the particular cir-

cumstances of the Health Center’s

accessibility to ancillary and tertiary

medical practitioners.

Governing Board Requirements

Health Center policies should

deﬁne the role and responsibilities of

the Board, including that the ulti-

mate authority for credentialing and

privileging of providers is vested in

the Board,

which generally makes

such determinations after reviewing

recommendations from either the

Clinical Director or a joint recom-

mendation of the medical staff

(including the Clinical Director) and

the Chief Executive Ofﬁcer. The cre-

dentialing and privileging policies

and procedures must be reviewed and

approved, signed, and dated by the

Health Center Board of Directors.

Risk Management

Health Centers are required to

use a portion of their savings to pro-

vide risk management services that

identify, manage, control, and moni-

tor all risks to the Health Center.

Broadly defined, risk management

includes any activity, process, or pol-

icy to reduce liability exposure, and

includes processes for monitoring,

anticipating, determining, minimizing

and preventing accidental loss in a

business. This review involves all

aspects of a Health Center’s infrastruc-

ture and services, including employee

and staff training, financial matters,

facility maintenance, ﬁre safety, com-

pliance with applicable laws and

regulations, and clinical care. Com-

plete risk management includes taking

appropriate safety measures, having

policies and procedures to anticipate

risk and to address risks once a risk

occurs, acting in a professional man-

ner, and having appropriate insurance

coverage.

After identifying risks, Health

Centers must implement controls and

Volume 27, Number 3, February 2015 The Health Lawyer

other techniques to manage the risks.

The following risk management prac-

tices are recommended by HRSA:

•

Periodic Assessments of Malpractice Risk:

Safety culture surveys, event report

reviews, claims reviews, root cause

analysis, and patient complaints;

•

Supervision and Training of Staff on Risk

Management:

Staff should receive

supervision oversight and either onsite

or offsite annual training on topics

related to risk management;

•

Comprehensive patient medical records:

These records document the care pro-

vided to the patients at the Health

Center. Health Centers should peri-

odically review medical records for

completeness, quality and legibility;

•

Appropriate use of clinical protocols:

Establishing guidelines for providing

clinical care that healthcare practi-

tioners use. Health Centers should

develop and implement policies and

procedures to minimize the risks

associated with the provision of

healthcare services, including but

not limited to clinical protocols that

define appropriate treatment and

diagnostic procedures for selected

medical conditions;

•

Diagnostic Tracking:

Health Centers

should have policies and procedures

and tracking systems for diagnostic

tracking, and designate a staff member

responsible for monitoring tracking

logs and following up on compli-

ance issues;

•

Hospitalization Tracking:

Health Centers

should have policies and procedures

and tracking systems for hospitalization

tracking, and designate a staff member

responsible for monitoring tracking

logs and following up on compliance

issues. Health Centers should educate

patients to notify the Health Cen-

ter of emergency room and hospital

visits, and keep a log of patient

hospital/emergency room visits;

•

Referral Tracking:

Health Centers

should have policies and procedures

and tracking systems for referrals, and

designate a staff member responsible

for monitoring tracking logs and fol-

lowing up on compliance issues.

Health Centers should document all

patient referrals, communicate to

patients the importance of keeping

referral appointments, ask specialists

to contact the Health Center if a

patient misses a referral appointment,

and follow up with patients who miss

appointments;

•

Patient Accessibility:

Health Centers

should have policies and proce-

dures that address triage, walk-in

patients, telephone triage, and no-

show appointments;

•

Formal grievance mechanism:

Health

Centers should have a system to

collect, analyze, and address com-

plaints received from patients and/

or staff;

•

Regular patient satisfaction surveys:

survey to assess patient satisfaction

with the level of service and clini-

cal care that patients received

should be done on a regular basis;

•

Up-to-date policies and procedures on

risk management:

Health Centers

should have written documents that

are current and up-to-date and

explicitly describe a Health Center’s

operations and processes related to

risk management.

A Health Center that fails to

meet the risk management (or the

QA/QI, credentialing, and privileg-

ing) compliance requirements may

lose its existing FTCA coverage.

FTCA Compliance

Oversight and Audits

HRSA has recently begun con-

ducting random FTCA coverage

compliance site visits of both initial

applicants and deemed grantees to

determine compliance with FTCA pro-

gram requirements.

Factors that may

prompt a site visit include, but are not

limited to, the submission of an initial

deeming application; submission of

documentation which indicates non-

compliance; follow-up on prior site visit

findings/issues; history of repeated

conditions on the Health Center’s

grant; and/or a history of medical

malpractice claims.

Non-compliance

with FTCA program requirements

is grounds for a negative deeming

determination.

FTCA Coverage Compliance

Risks

Health Centers should keep

abreast of HRSA enforcement trends

and key compliance risks. Recent

FTCA compliance audits have focused

on the adequacy of clinical policies

and procedures for referral tracking,

hospitalization tracking, x-ray track-

ing, lab result tracking, triage, walk-in

patients, telephone triage, no-show

appointments, HIPAA privacy and

security, medical record reviews, risk

management education and training,

clinical protocols, credentialing, peer

review, and QA/QI.

HRSA FTCA Site Visits/Audits

Health Centers are usually given

several weeks’ notice before the compli-

ance audit. The visits are conducted by

an FTCA staff member along with pri-

vate contractor(s). The site visits last

two to three days, during which time

the site visit team reviews risk manage-

ment, quality improvement, quality

assurance and credentialing policies

and procedures and supporting docu-

mentation. The site visit team also

meets with Health Center leadership

and the Board. The site visit team pro-

vides findings and recommendations

during an exit conference. If the site

visit team ﬁnds that the Health Center

has not met the FTCA program

requirements, HRSA may determine

that the Health Center should not be

covered by the FTCA and deny the

Center’s deeming application.

How To Prepare for an FTCA

Coverage Compliance Audit

In order to prepare for a site visit,

the Health Center should take the

following steps:

1. Review the Health Center provider

list to confirm that the Health

Center does not have any part-time

continued on page 40

The Health Lawyer Volume 27, Number 3, February 2015

contracted providers who are not

practicing in the fields of family

practice, general internal medicine,

general pediatrics, or obstetrics/

gynecology.

2. Conﬁrm that Health Center services

are not provided to non-Health Cen-

ter patients unless such services fall

within an approved exception.

3. Ensure that the Health Center

has written documentation that

hospital call coverage or emer-

gency room coverage is required

for Health Center physicians to

maintain medical staff privileges, if

applicable.

4. Ensure that risk management/QA/QI

programs include audits of the creden-

tialing and privileging processes to

ensure that policies and procedures

are fully implemented and the Health

Center is compliant with FTCA and

Health Center requirements. Health

Centers must have documentation

and demonstrate oversight of employ-

ment agreements, cross-coverage

activities, activities related to

securing/maintaining hospital priv-

ileges, and independent contractor

arrangements.

FTCA Coverage Gaps

Health Centers engage in numer-

ous activities that are not covered by

the FTCA, and those activities may

present potential “gaps” in insurance

coverage, resulting in exposure to

unanticipated risk and liability for the

Health Center. In order to address

such potential gaps in coverage, the

Health Center should be familiar

with what the FTCA covers, identify

potential risks and gaps in coverage,

and purchase general liability, direc-

tors and ofﬁcers liability, automobile

coverage, ﬁre coverage, theft cover-

age, and such other coverage as

appropriate to cover gaps and poten-

tial risks. Obtaining comprehensive

FTCA wrap-around gap insurance

from a private insurer is an alterna-

tive solution. FTCA gap insurance is

a professional liability insurance

policy that covers activities not pro-

tected by the FTCA. Policies are

generally written to cover all activi-

ties and services provided by the

Health Center (e.g., cross coverage,

nursing home, and residency program

activities) that would not be pro-

tected by the FTCA. Under such a

policy, speciﬁc known gaps in FTCA

coverage are protected, and unex-

pected gaps in coverage are protected,

such as denial of FTCA coverage of

a service that was expected to be con-

sidered within the Health Center’s

scope of project. Common Health

Center activities that are not covered

by the FTCA include the following:

Acts Outside the FTCA’s

Limited Scope of Coverage

FTCA coverage is restricted to

tort/medical malpractice acts or omis-

sions of a covered entity that are

within the scope of employment of a

covered individual. For actions to be

within the scope of employment, and

therefore to be covered activities,

they must: (i) be within the approved

scope of the project, including sites,

services, and other activities and

locations; (ii) be within the require-

ments of the job description, contract

for services, and/or duties required by

the covered entity; (ii) occur during

the provision of services to the cov-

ered entity’s patients and, in certain

circumstances, to non-Health Center

patients.

Health Center litigation defense

or damages not covered by the FTCA

include the following:

• Automobile/Patient Transportation

• Billing Errors and Omissions

• Civil Rights Violations

• Contract Indemniﬁcation

• Criminal Acts

• Data Security Cyber Liability

• Defamation

• Discrimination

• Employment Practices

• Fiduciary

• Fraud

• General Liability (slips and falls)

• HIPAA Privacy or Security

Violations

• Medical Waste

• Property/Fire Damage

• Sexual Harassment or Abuse

• Theft

• Workers Compensation

Health Care Providers Who

Are Not Employed By or Are

Not Under Contract With the

Health Center

The FTCA does not cover pro-

viders who are not employed by or

have not contracted directly with the

Health Center. For the FTCA to

cover an individual, there must be a

documented contractual relationship

between the Health Center and the

individual provider. If the agreement

is with the provider’s medical group

or professional medical corporation,

the provider will not be covered by

the FTCA. Compensation should be

paid by the covered entity directly to

the individual contract provider. In

addition, the following healthcare

providers and employees are not covered

by the FTCA: volunteers; part-time

contract dentists; part-time contract

behavioral health providers; part-time

contract specialists in most ﬁelds; Board

members/ofﬁcers for anything other than

medical malpractice; medical residents

who are not employed by the Health

Center; medical students or other train-

ees; licensed or certiﬁed providers not

included in the Health Center scope of

service; and (with certain exceptions)

individuals providing services outside

the approved scope, services, and

locations of the Health Center.

Hospital-Related Activities

Inpatient hospital care to a covered

patient is considered part of the conti-

nuity of care of the patient and covered

Federally Qualiﬁed Health Center Federal Tort Claims Act Insurance Coverage

continued from page 39

Volume 27, Number 3, February 2015 The Health Lawyer

continued on page 42

by the FTCA if the hospital services are

within the Health Center’s scope of

project and the covered provider’s scope

of employment. However, hospital-

related activities such as periodic

hospital call or hospital emergency

department coverage are only covered

by the FTCA if required by the hospital

as a condition for obtaining hospital

admitting privileges. In order to be cov-

ered by the FTCA, the Health Center

will have to provide HHS with docu-

mentation that the hospital call

coverage and/or emergency department

coverage in question was a condition of

employment at the Health Center and

required by the hospital as a condition

of maintaining hospital privileges.

Hold Harmless and

Indemniﬁcation Clauses

Organizations that contract with

the Health Center may require that

hold harmless or indemnification

clauses be incorporated into their con-

tracts with the Health Center. As

noted above, FTCA coverage does not

include such indemnification cover-

age. To the extent that the Health

Center is responsible for any losses

incurred as a result of indemniﬁcation

clauses in any of its contracts, the

Health Center should obtain appro-

priate private insurance coverage for

such claims.

Coverage Determinations

If a Health Center is not sure

whether or not a particular activity is

covered by the FTCA, the Health

Center may submit a request for a

particularized determination of FTCA

coverage. The coverage determina-

tion request should include sufﬁcient

detail for HRSA to determine: (1)

what services are being provided; (2)

who provides the services; (3) where

the services will be provided; (4) why

Health Center staff are needed to

provide such services; and (5) how

the services benefit Health Center

patients.

The request for particular-

ized determination must also provide

a narrative explanation, signed by the

Chief Executive Ofﬁcer of the covered

entity, setting forth how the request

satisﬁes the criteria listed above. Job

descriptions/positions and other rele-

vant agreements or arrangements must

be attached to the request to show

how the covered entity will implement

the activity for which FTCA coverage

is sought. All particularized coverage

determination applications or ques-

tions should be submitted in writing to

[email protected].

The Impact of Mergers

and Acquisitions on FTCA

Deeming

When covered entities merge to

form a new corporate entity, the new

corporation must apply for FTCA cover-

age. No employee, contractor, or ofﬁcer

of the new corporation will have FTCA

coverage until a deeming application

from the new corporation is approved by

HRSA/BPHC. If a covered entity is

absorbed by a non-deemed Health

Center, the staff from the deemed

corporation will no longer be covered

under FTCA. If a covered entity

absorbs a non-deemed Health Center,

the staff from the non-deemed Health

Center will be covered under FTCA if

they meet all deeming requirements.

Conclusion

Whether advising a claimant or

medical care provider in tort/medical

malpractice litigation, attorneys should

have a good understanding of the

FTCA. Health Centers that wish to

qualify for FTCA coverage should be

prepared for FTCA coverage compli-

ance audits and on an ongoing basis

should ensure that they meet the

FTCA program requirements. Health

Centers should adopt, implement,

review and update appropriate policies

and procedures related to risk manage-

ment, medical record documentation,

credentialing, quality improvement

and quality assurance. Health Centers

should also maintain documentation

of monitoring and audits of policies

and procedures, and should maintain

quality of care review committee min-

utes and reports to demonstrate that

the Health Center has reduced the

risk of medical malpractice and the

risk of lawsuits. If the Health Center

has had any lawsuits, it should docu-

ment how it has addressed the issues

raised in the lawsuit(s) and the sys-

temic changes it has made to reduce

the risk of re-occurrence.

The FTCA provides important

malpractice coverage for qualifying

Health Centers. The intent of the

FTCA Medical Malpractice Program

is to increase the availability of funds

to Health Centers to provide primary

healthcare services through savings of

approximately $209 million per year in

premiums.

By reducing or eliminat-

ing the Health Center’s malpractice

insurance premiums, Health Centers

have more money to increase the

number of patients served, increase the

scope of services such as health educa-

tion and case management, reduce

barriers to care and implement expanded

programs for quality assurance and risk

management that beneﬁts patients and

the community. It is in the best inter-

est of each Health Center to ensure

that its program complies with the

FTCA so that it can be eligible for

FTCA coverage.

As of March 2009, the most

recent data available speciﬁc to Health

Centers, a total of 2,594 administra-

tive claims and 800 federal lawsuits

had been ﬁled against Health Centers

with FTCA coverage. Of those ﬁled

claims and lawsuits, HHS settled 185

claims during the administrative pro-

cess, and the DOJ settled or tried 454

lawsuits in federal court, for a total of

approximately $298 million paid to

resolve the settlements and lawsuits.

Of the remaining 1,955 claims, 646

were disallowed during the administra-

tive review process, and 1,309 claims/

lawsuits were outstanding as of March

2009.

Having FTCA coverage can

indeed be very helpful.

The Health Lawyer Volume 27, Number 3, February 2015

Michael A. Dowell is

a healthcare law part-

ner with the law ﬁrm

of Hinshaw &

Culbertson in Los

Angeles, CA. His

practice focuses on

advising federally qualiﬁed health centers/

look-alikes, community health centers,

community clinics, nonproﬁt hospitals

and health systems, and outpatient

services providers on nonproﬁt formation

and organizational matters, licensure and

federal qualiﬁcation, nonproﬁt gover-

nance, federal grants and procurement

law, Section 330 Public Health Service

Act compliance, the Section 340B

pharmacy discount program, mergers,

acquisitions, joint ventures, afﬁliations,

tax-exempt bond ﬁnancing, tax-exempt

organization regulation and policy, politi-

cal activity and federal election campaign

law, business transactions, general

contracts and agreements, healthcare

regulatory, fraud and abuse, data privacy

and cyber security, reimbursement and

professional practice issues, including

compliance with the Stark physician

self-referral law, federal and state anti-

kickback laws, and corporate practice and

fee-splitting restrictions. Mr. Dowell

assists healthcare providers and businesses

in developing and implementing proac-

tive approaches to identify and address

existing and potential compliance chal-

lenges. He may be reached at 310-909-8000

or mdowell@hinshawlaw.com.

Carol D. Scott is a

healthcare law part-

ner with the law ﬁrm

of Hinshaw &

Culbertson in Los

Angeles, CA. She

represents clinics,

physicians, medical groups, as well as

psychiatric faciltities, pharmacies, resi-

dential care facilities and other types of

healthcare providers. She also represents

companies afﬁliated with the healthcare

industry. She advises clients in all phases

of operational, regulatory and compliance

issues, including licensure, certiﬁcation

and accreditation, conversion and privati-

zation; Medi-Cal, Medicare and other

third party billing, coverage and reim-

bursement disputes; compliance with

state and federal anti-kickback and Stark

self-referral issues; corporate practice and

referral issues; bylaws review and revision;

credentialing; patient care issues; safe

medical device reporting; medical records;

voluntary disclosures; and antitrust issues.

She also represents clients in transac-

tional matters concerning purchase, sale,

merger and acquisition transactions, due

diligence and risk management; establish-

ing and unwinding joint ventures;

contract drafting and negotiation; the

Health Insuracne Portabiity and

Accountability Act (“HIPAA”); legal

audits; peer review, medical staff and

physician assistance issues. She may be

reached at 310-909-8000 or cscott@

hinshawlaw.com.

Endnotes

28 U.S.C. § 2671 et seq.

Commissioners of the State Ins. Fund v. United

States, 72 F. Supp. 549 (S.D.N.Y. 1947).

Id.

25 U.S.C. § 450f (d) and 25 U.S.C.

§ 458aaa–15.

FSCHAA extended FTCA protections under

28 U.S.C. § § 1346(b), 2401(b), and 2679-81

to eligible Health Centers funded under

Section 330 of the Public Health Service Act

so that Health Centers did not have to spend

grant dollars purchasing costly medical mal-

practice insurance. See Public Law 102-501

(1992) and Public Law 104-73 (1995).

H.R.Rep.No. 102-823(1), 102nd Cong., 2nd

Sess. (1992). Health Center Program grantees

are organizations that receive grants under the

Health Center Program as Authorized under

section 330 of the Public Health Center Act,

as amended. Grantees are sometimes referred

to as federally funded Health Centers.

Health Centers are regulated by the Bureau of

Primary Health Care (“BPHC”) under the

Health Resources and Services Administration

(“HRSA”) of the U.S. Department of Health

and Human Services (“HHS”). The term

“Health Centers” includes Health Centers sup-

ported by federal grants, Health Centers that

have been determined to meet the deﬁnition of

a Health Center but do not receive Section

330 funds under the Health Center program,

and outpatient health programs and facilities

operated by tribal organizations. However,

FTCA coverage is only available to Health

Centers funded under Section 330.

See America’s Health Centers, NAT’L ASS’N

OF COMMUNITY HEALTH CENTERS FACT

SHEET (National Association of Community

Health Centers, Bethesda, MD), March

2014 www.allhealth.org/briefingmaterials/

AMERICASHEALTHCENTERSMARCH

2014_4G.PDF.

John T. Hammerlund, “Community Health

Centers and Rising Malpractice Premiums:

An Overview of the Community Health

Center Program and Proposed Solutions to

the Malpractice Insurance Rate Crisis,” 1

Cornell Journal of Law and Public Policy 135-

174 (1992).

Id.

“Cost to the Government for Providing

Medical Malpractice Coverage to Community

and Migrant Health Centers,” Ofﬁce of the

Inspector General, Department of Health and

Human Services, March 25, 1996, P. 3.

42. U.S.C. § 233.

HRSA has approved FTCA coverage for

Health Center treatment of non-patients in

the following situations: school based clinics,

health fairs, immunization campaigns, migrant

outreach, homeless outreach, hospital call and

emergency room coverage, after-hours cross

coverage, continuity of care, clinical research,

teaching activities, emergency events, and

activities under other grant funding.

42 C.F.R. § 6.6.

http://bphc.hrsa.gov/ftca/about/index.html.

Jacqueline C. Leifer, Molly S. Evans, Robert A.

Graham, and Emilie T. Pinkham, Federally-

Qualified Health Centers: From Safety Net

Provider to Cornerstone of Health Reform? J.

Health & Life Scr. L., Oct. 2014, American

Health Lawyers Association, www.healtlawyers.

org/JHLSL.

See, HHS OIG 2015 Work Plan, which can

be found at http://oig.hhs.gov/reports-and-

publications/archives/workplan/2015/FY15-

Work-Plan.pdf.

Martin J. Bree, “HRSA Initiates Random

FTCA Audits; Malpractice Coverage At

Stake,” Feldesman Tucker Health Care Blog,

September 18, 2014, www.feldesmantucker.

com/hrsa-initiates-random-ftca-audits-

malpractice-coverage-stake.

United States Department of Health and

Human Services Health Resources Services

Administration Federal Tort Claims Act

Health Center Policy Manual (Supersedes

PIN 2011-01), July 21, 2014, http://bphc.hrsa.

gov/policiesregulations/policies/ftcahcpolicy

manualpdf.pdf.

Title 42, part 6 (42 C.F.R. part 6).

HRSA policies are generally reflected in

Policy Information Notices and Program

Assistance Letters. Policy Information

Notices (“PINs”) deﬁne and clarify policies

and procedures that grantees funded under

Section 330 must follow. Program Assistance

Letters (“PALs”) summarize and explain items

of signiﬁcance for health centers, including,

Federally Qualiﬁed Health Center Federal Tort Claims Act Insurance Coverage

continued from page 41

Volume 27, Number 3, February 2015 The Health Lawyer

for example, HRSA program implementation

activities, recently enacted laws, ﬁnal regula-

tions, and/or new HHS initiatives.

United States Department of Health and

Human Services, Health Resources Services

Administration Program Assistance Letter

2014-09, Notice of Federal Tort Claims Act

(FTCA) Health Center Policy Manual Update,

page 1 (July 21, 2014). http://bphc.hrsa.gov/

policiesregulations/policies/pal201409pdf.pdf.

FTCA Manual Subsection I.C.4.

PAL 2014-03, “Calendar Year 2015

Requirements for Federal Tort Claims Act

(FTCA) Medical Malpractice Coverage for

Health Centers,” February 3, 2014 (PAL 2014-

03). PAL 2014-03 describes the process for

Health Center Program grantees to submit

FTCA deeming applications for CY 2015.

Id.

Federal Tort Claims Act Health Center Policy

Manual, Section I(A.2), July 21, 2014. See

also PAL 2014-9, which explains recent

amendments to the FTCA Health Center

regulations.

Note 5, supra.

Section 224(h)(1) of the Public Health Service

Act.

Section 224(h)(2) of the Public Health Service

Act.

Section 224(h)(3) of the Public Health Service

Act.

Please note that an FTCA deeming applica-

tion is not considered complete until all

required documentation has been completed

and submitted through the EHB, and if

required by HRSA, a site visit has been

completed.

42 U.S.C. § 233(h)(2); See also HRSA PINs

PIN 2001-16 and 2002-22.

Note 5, supra.

Id.

28 U.S.C. §§ 2672, 2675; 28 C.F.R.

§§ 14.2-14.4.

28 U.S.C. § 2401(b) and 2675(a); 28 C.F.R.

§ 14.2(a). Form SF-95 is available at: www.gsa.

gov/portal/forms/download/116418. See, e.g.

Hart v. Dep’t of Labor ex rel. United States 116

F.3d 1338 (10th Cir. 1997) (afﬁrming dismissal

of plaintiff’s claim because the completed

administrative claim was ﬁled with the attor-

ney general rather than the Department of

Labor).

Id. See also Adams v. United States, 615 F.2d

284 (5th Cir. 1980) (ﬁnding presentation of

claim satisﬁed provided the agency has sufﬁ-

cient notice of the incident to investigate and

the claim states a sum of certain damages).

28 U.S.C. § 2675(b). A Westlaw guide on using

jury verdicts to assess damages can be found at:

http://west.thomson.com/documentation/

westlaw/wlawdoc/wlres/verdqr06.pdf.

28 C.F.R. § 14.2(a).

28 U.S.C. § 2401(b).

McMillan v. United States, 46 F.3d 377, 381

Cir. 1995) (“under the FTCA, the limi-

tations period is not tolled during the

minority of the putative plaintiff; rather his

parents’ knowledge of the injuries is imputed

to him”).

Chomis v. United States, 377 F.3d 607, 615

(6th Cir. 2004) (“courts have uniformly held

that mental incompetency, standing alone,

will not toll the running of the statute of limi-

tations under the FTCA”).

Gonzales v. United States, 284 F.3d 281 (2002)

– a Health Center case where a plaintiff ﬁled

a suit within the Massachusetts three year

statute of limitations. The court held that the

claim is time barred, dismissing plaintiff argu-

ments re: discovery rule, equitable tolling and

fraudulent concealment.

28 U.S.C. § 2401(b). See, e.g., Willis v. United

States, 719 F.2d 608.

Note 7, supra at 21-22.

28 U.S.C. § 2675(a); See e.g., McNeil v.

United States, 508 U.S. 106, 113 (1993),

where a pro se plaintiff ﬁled suit four months

before filing his administrative claim, the

Supreme Court unanimously held that “the

FTCA bars claimants from bringing suit until

they have exhausted their administrative

remedies.”

28 U.S.C. § 2675; 28 C.F.R § 14.9.

28 U.S.C. § 1346(b).

28 U.S.C. § 1402(b).

See Upchurch v. Piper Aircraft Corp., 736 P.2d

439, 440 (8

Cir. 1984) (holding United

States waived venue objection by not includ-

ing it in answer).

28 U.S.C. § 2678.

“Scope of project,” generally refers to activi-

ties for which the Health Center has been

approved by HRSA to engage in.

42 C.F.R. § 51c.303(c), 42 C.F.R. § 56.303(c),

and 42 U.S.C. § 254b(k)(3)C).

Pursuant to 42 U.S.C. § 254b(n), Health

Centers are required to establish and maintain

such records as the Secretary of HHS shall

require.

42 C.F.R. § 51c.303(c), 42 C.F.R. § 56.303(c),

and 42 U.S.C. § 254b(k)(3)C).

42 U.S.C. § 254b(k)(3)(I)(ii).

PIN 2001-16.

See PIN 2002-22.

Primary source veriﬁcation is veriﬁcation by

the original source of a speciﬁc credential to

determine the accuracy of a qualification

reported by a practitioner. Secondary source

verification is verification by sources other

than primary sources.

See PIN 2002-22 Table: Comparative

Summary of Requirements for Credentialing

and Privileging “Licensed or Certiﬁed Health

Care Practitioners.”

“Human Resources Insights: Tips for Health

Center Credentialing and Privileging,

National Association of Community Health

Centers, May 2013.

Id.

Alternatively, the Board may delegate this

responsibility (via resolution or bylaws) to an

appropriate individual or committee, to be

implemented based on policies and proce-

dures approved by the Board (including

methods to assess compliance with these poli-

cies and procedures).

Martin J. Bree, “Managing FTCA Risk, a Key

Component of an Enterprise Risk

Management Program,” Bi-State Primary

Care Association Meeting, May 14, 2013.

Martin J. Bree, “HRSA Initiates Random

FTCA Audits; Malpractice Coverage At

Stake,” Feldesman Tucker Health Care Blog,

September 18, 2014, www.feldesmantucker.

com/hrsa-initiates-random-ftca-audits-

malpractice-coverage-stake.

PAL 2014-03, February 3, 2014.

Stephen J. Frew, JD, “Avoiding the Traps that

Lead to Liability,” Johnson Insurance

Services, LLC, http://c.ymcdn.com/sites/www.

nvpca.org/resource/resmgr/Website_PDFs/04_

Frew_-_FQHC_Risk_9-8-14.pdf.

Note 5, supra.

National Association of Community Health

Center Analysis: Federal Tort Claims Act

Coverage: Reducing Exposure for Common

“Gap” Areas, September 2009.

Id. See 78 Fed. Reg. 58202, September 23,

2013. Examples of care to non-Health Center

patients that the Secretary has approved:

school based clinics, school-linked clinics,

health fairs, immunization campaigns,

migrant camp outreach, homeless outreach,

periodic hospital call or emergency room cov-

erage, and cross-coverage activities.

Id.

FTCA Manual, Section C.4.

Note 7 supra.

Only 190 claims were ﬁled in 2011. Diagnosis

and treatment related incidents were the larg-

est amount of claims, closely followed by

obstetrics-related incidents. Christopher W.

Gibbs, JD, MPH, “FTCA Medical Malpractice

Basics and Program Updates”, Department of

Health and Human Services, Health Resources

and Services Administration, Bureau of

Primary Health Care, Ofﬁce of Quality and

Data (2014).

“Federal Tort Claims Act: Information Related to

Implications of Extending Coverage to Volunteers

at HRSA Funded Health Centers,” United

States Government Accountability Office

Report GAO-09-693R (June 24, 2009).