Process for Determining That an Individual Shall Not Be Deemed an Employee of the Public Health Service
Final rule.
CFR Part: "28 CFR Part 15"
RIN Number: "RIN 1105-AB37"
Citation: "89 FR 55511"
Document Number: "Docket No. CIV 150; AG Order No. 5968-2024"
Page Number: "55511"
"Rules and Regulations"
Agency: "
SUMMARY: This rule sets forth a process by which the Attorney General or a designee may determine that an individual shall not be deemed an employee of the
DATES: This rule is effective on
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION: This rule finalizes, with some changes, a proposed rule that the Department of
In
In
In
In
In [Sec.]
A change was made to
In addition, minor clarifications were made to
Changes were also made to the reinstatement procedures in
Finally, the Department notes that since the date of publication of the proposed rule on
Discussion
The Federally Supported Health Centers Assistance Acts of 1992 (Pub. L. 102-501) ("FSHCAA") and 1995 (Pub. L. 104-73) amended section 224 of the Public Health Service Act (42 U.S.C. 233) to make the Federal Tort Claims Act ("FTCA") (28 U.S.C. 1346(b), 2672) the exclusive remedy for medical malpractice claims for personal injury or death brought against qualifying federally supported health centers and certain statutorily identified categories of individuals, to the extent that the centers and these individuals, as the case may be, have been "deemed" by the
In 1996, the Health Insurance Portability and Accountability Act (Pub. L. 104-191) amended section 224 of the Public Health Service Act to provide that, subject to certain conditions, a "free clinic health professional" providing "a qualifying health service" for the free clinic may be "deemed" to be a
And in 2016, the 21st Century Cures Act (Pub. L. 114-225) amended section 224 of the Public Health Service Act to provide that, subject to certain conditions, a "health professional volunteer" at an entity "deemed" to be a
This rule will apply to any individual "deemed" to be a
Section 233(i) of title 42 provides that the Attorney General, in consultation with the Secretary, may, on the record, determine, after notice and an opportunity for a full and fair hearing, that an individual physician or other licensed or certified health care practitioner who is an officer, employee, or contractor of an entity described in 42 U.S.C. 233(g)(4) shall not be deemed to be an employee of the
A final determination by the Attorney General under 42 U.S.C. 233(i) that an individual physician or other licensed or certified health care professional shall not be deemed to be an employee of the
This rule establishes a process for creating the record and providing the full and fair hearing before the Attorney General makes a final determination under 42 U.S.C. 233(i).
The first step, pursuant to
Section 15.13(a) requires the initiating official to provide notice to the individual in question that an administrative hearing will be held to determine whether treating the individual as an employee of the
Section 15.18 provides that an individual who is dissatisfied with the final determination may seek rehearing within 30 days after notice of the determination is sent, and
Discussion of Comments
The Department received ten public comments on the proposed rule during the comment period, which closed on
Several comments were received from membership organizations of federally supported health centers that receive Federal grant money under 42 U.S.C. 254b, as well as one federally supported health center that offered comments on its own behalf. These comments generally sought additional guidance on how the rules and criteria set forth in 42 U.S.C. 233(i)(1) would be applied. A few other commenters expressed more general concerns about the consequences of de-deeming determinations. Summaries of these comments and the Department's responses to them are set forth below.
1. Some commenters requested that the Department provide additional guidance on how the statutory criteria for determining whether treating an individual physician or certified health care provider as a
Response: The Department does not adopt the changes suggested in these comments. The purpose of these regulations is procedural: to establish the process and procedures used to create a record and provide an individual medical provider the opportunity for the "full and fair hearing" required by section 233(i)(1) before the Attorney General makes a "final determination" that an individual "shall not be deemed to be" an employee of the
Section 233(i) requires a full and fair hearing to determine whether any one of these factors or combination of factors supports a determination that treating an individual physician or certified health care provider as a
The commenters recognized that "strict definitions" for these criteria would be impracticable. The Department agrees with the commenters. In addition to the impracticality of adopting strict definitions, the Department also observes that the application of the criteria set forth in the statute will necessarily depend on the specific facts and circumstances of each individual case.
2. Some commenters requested that the Department expand the scope of the regulations to specify the form and substance of the consultation that the Attorney General undertakes with the Secretary before finding that an individual should be provided notice of a hearing to determine whether treating that individual as an employee of the
Response: The Department does not adopt the change suggested in these comments. The statute does not require that the Department's regulations specify the form and substance of the Attorney General's consultation with the Secretary. Moreover, a requirement for public disclosure of such consultations would not be warranted given the predecisional, deliberative nature of the consultation process between agencies.
3. Some commenters requested that the Department, when notifying an individual that a proceeding has been initiated under 42 U.S.C. 233(i), be required to provide both the specific information upon which the Department will rely and the standards that will apply for evaluating the criteria set forth in 42 U.S.C. 233(i). The commenters suggested that providing such information in the hearing notice would reduce discovery costs and increase efficiency of the hearing process.
Response: In response to these comments, the Department has added language in
4. One commenter requested that the Department state the period of time after which a de-deemed practitioner may apply for reinstatement.
Response: The final rule provides that a de-deemed practitioner may apply for reinstatement not sooner than five years after the time for seeking rehearing of the initial determination to de-deem a practitioner has expired. 28 CFR 15.20(a).
5. One commenter requested that the Department clarify the events and informational exchanges that will or could set into the motion the de-deeming process.
Response: The statute and final rule provide this information. When the Department's initiating official, in consultation with the Secretary, finds, based upon a review of available information, that treating an individual as an employee of the
6. A few commenters expressed concern that the de-deeming process could be initiated to rescind FTCA coverage while a lawsuit was pending and requested that the rule allow only for prospective de-deeming. Another commenter suggested adoption of a "safety period"--a designated period of time during which a "deemed" employee cannot be subject to "de-deeming"--that would apply where litigation is anticipated involving acts or omissions of a practitioner who has been deemed to be an employee of the
Response: The Department agrees that de-deeming should be prospective only (as the statute requires) but does not adopt the "safety period" suggestion. The statute provides that the Attorney General's decision to de-deem an individual shall apply only to acts or omissions occurring after the date that notice of the Attorney General's final determination that an individual not be deemed to be a
7. One commenter expressed concern that the proposed rule might have untoward consequences, such as difficulty in securing quality replacement personnel or loss of liability coverage while a lawsuit is pending.
Response: The Department does not adopt further changes in response to these comments. There should be no loss of liability coverage while a lawsuit is pending, as the Attorney General's final determination that a practitioner is de-deemed is effective only as to acts or omissions that occur after such a determination is received by the entity employing that practitioner. 42 U.S.C. 233(i)(2). Moreover, a final de-deeming determination is applicable only to the individual who was subject to the hearing and final determination.
The Attorney General's de-deeming determination does not require or compel a health center to terminate a practitioner. Entities may choose to employ "de-deemed" practitioners, but they can no longer rely on the protections of 42 U.S.C. 233(g) or similar statutes, as the case may be, as a substitute for medical malpractice liability coverage for that practitioner if that practitioner is subject to a medical malpractice claim for acts or omissions occurring after receipt of a final de-deeming determination, for so long as the final determination remains effective.
8. One commenter expressed concern that final determinations are vested in the Attorney General or the Attorney General's designee and suggested that the recommendations of the presiding administrative law judge be binding or that three-judge panels be established for purposes of making final determinations.
Response: The Department does not adopt the changes requested in this comment. Under 42 U.S.C. 233(i), the "final determination" on whether to de-deem an individual "under this subsection" is vested in the "Attorney General." The Department is not free to re-write the statute. Moreover, because section 233(i) provides that the Attorney General's final determination shall be made "on the record" "after notice and an opportunity for a full and fair hearing," the provisions of sections 554, 556, and 557 of the APA are applicable to these hearings. See 5 U.S.C. 554(a), (c)(2) (section 554 applies "in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing"; such hearings and decisions on contested issues are to be conducted "in accordance with sections 556 and 557"). This rule provides for a hearing and recommended decision by an administrative law judge and a final determination by the agency, consistent with the foregoing provisions of the APA. Any review of the Attorney General's "final determination" is governed by the APA, so further review of that final determination by an Article III court is possible. The Department also declines to render the presiding administrative law judge's decision binding. Providing for a recommended decision that is further reviewed by the adjudicating official, with discretionary review by the Attorney General, adds further layers of review and therefore reduces the risk of an erroneous determination.
Regulatory Flexibility Act
The Attorney General, in accordance with the Regulatory Flexibility Act, 5 U.S.C. 605(b), has reviewed this final rule and, by approving it, certifies that it will not have a significant economic impact on a substantial number of small entities because it pertains to personnel and administrative matters affecting the Department. This rule merely sets forth the process for a hearing used to determine whether certain individual health care providers should no longer be "deemed" to be "employees of the
Executive Orders 12866, 13563, and 14094: Regulatory Planning and Review
This final rule has been drafted and reviewed in accordance with Executive Order 12866, "Regulatory Planning and Review," Executive Order 13563, "Improving Regulation and Regulatory Review," and Executive Order 14094, "Modernizing Regulatory Review."
The Department has assessed the costs and benefits of this final rule and believes that its benefits justify its costs.
As an initial matter, this final rule only establishes a process for removing a statutorily conferred deemed status applicable to an individual provider who is determined to expose the Government to an unreasonably high degree of risk of loss for one or more statutorily enumerated reasons. As further explained below,
When the FSHCAA was amended and extended in 1995,
In light of the foregoing, this final rule assures the procedural protections
The Department does not expect that the process created by the final rule will have systemic or large-scale costs because it is only the rare individual provider who would be subject to the procedures under this rule based on the statutory criteria of 42 U.S.C. 233(i); proceedings against an individual provider under this rule are expected to be infrequent and will, therefore, affect only a small fraction of providers, health centers, or, potentially, their patients.
The majority of costs associated with the final rule, then, would come in the individual instances of its application, which are not feasible to predict. The administrative process will impose some defense costs on the particular individual who is the subject of the hearing, but [Sec.]
While it is not feasible to estimate these costs with precision, the Department notes that the litigation costs incurred in defending medical malpractice suits in court frequently exceed
The Department also observes that losses in covered medical malpractice actions against deemed centers and their personnel are borne by the public fisc through the payment of judgments and settlements and other expenses. Each year, the Department transmits to the Secretary and
In addition to the increasing numbers of providers eligible for malpractice protections under 42 U.S.C. 233(g) and similar statutes, the amount of money paid by
Neither the criteria set forth in 42 U.S.C. 233(i) nor the final rule contemplates that an individual provider subjects the Government to an unreasonably high degree of risk of loss merely by subjecting
The Department further notes that, unlike with actual Federal employees, over whom Federal agencies exercise plenary control and have various means of addressing risk through disciplinary action or termination, individual providers deemed to be
The Attorney General's authority to exclude an individual provider who poses an unreasonably high degree of risk of loss through a section 233(i) proceeding provides
In the event that treating an individual provider as a
For several reasons, it is not feasible to estimate the costs to specific, individual providers of having to procure malpractice insurance in lieu of relying on deemed
FOOTNOTE 1
For example, State-filed malpractice premiums, before applied insurer discounts, average between roughly
FOOTNOTE 2 Compare Gallagher Health Care,
The Department further observes that, while premiums may vary by location or specialty, an individual provider subject to a proceeding governed by this rule could come from any location or specialty; the only factor common to a provider subject to a proceeding under this rule will be a threshold finding, triggering the process under this rule, that the provider may expose
The Department acknowledges as well that if an individual provider is no longer deemed to be an employee of the
In any event, the Department expects that substantial benefits will justify any costs incurred in finding replacements, as any individual who is replaced after being excluded from coverage following a proceeding under this rule will be one who has been determined to create an unreasonably high degree of risk of loss on claims for malpractice. It is anticipated that, in the usual case, the individual's replacement will provide reduced risk of loss for
Based on the expectation that the process will be used sparingly and only for an individual provider who exposes
Executive Order 13132: Federalism
This final rule will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Therefore, in accordance with Executive Order 13132, the
Executive Order 12988: Civil Justice Reform
This final rule meets the applicable standards provided in sections 3(a) and 3(b)(2) of Executive Order 12988.
Unfunded Mandates Reform Act of 1995
This final rule will not result in the expenditure by State, local, and Tribal governments, in the aggregate, or by the private sector, of
Small Business Regulatory Enforcement Fairness Act of 1996
This final rule is not a major rule as defined by section 251 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804. This final rule will not result in an annual effect on the economy of
List of Subjects in 28 CFR Part 15 Claims, Government contracts, Government employees, Health care, Immunization, Nuclear energy.
For the reasons set forth in the preamble, the Attorney General amends part 15 of title 28 of the Code of Federal Regulations as follows:
PART 15--CERTIFICATIONS, DECERTIFICATIONS, AND NON-DEEMING DETERMINATIONS FOR PURPOSES OF THE FEDERAL TORT CLAIMS ACT
1. The authority citation for part 15 is revised to read as follows:
Authority: 5 U.S.C. 301, 554, 556, 557, and 8477(e)(4); 10 U.S.C. 1054, 1089; 22 U.S.C. 2702, 28 U.S.C. 509, 510, and 2679; 38 U.S.C. 7316; 42 U.S.C. 233, 2212, 2458a, and 5055(f); and sec. 2, Pub. L. 94-380, 90 Stat. 1113 (1976).
2. The heading for part 15 is revised to read as set forth above.
3. Designate [Sec.]
Subpart A--Certification and Decertification in Connection With Certain Suits Based Upon Acts or Omissions of Federal Employees and Other Persons
SEC
4. Add reserved [Sec.]
5. Add subpart B to read as follows:
Subpart B--Determination of Individuals Deemed Not To Be Employees of the
Sec.
15.11Purpose.
15.12Definitions.
15.13Notice of hearing.
15.14Conduct of hearing.
15.15Discovery.
15.16Recommended decision.
15.17Final determination.
15.18Rehearing.
15.19Effective date of a final determination.
15.20Reinstatement.
Subpart B--Determination of Individuals Deemed Not To Be Employees of the
(a) The purpose of this subpart is to implement the notice and hearing procedures applicable to a determination by the Attorney General or the Attorney General's designee under 42 U.S.C. 233(i) that an individual health care provider shall not be deemed an employee of the
(b) Section 233(i) of title 42 provides that the Attorney General, in consultation with the Secretary of
As used in this subpart:
Adjudicating official means the Assistant Attorney General for the Civil Division of the
Entity means an entity described in 42 U.S.C. 233(g)(4).
Individual means an individual physician or other licensed or certified health care practitioner who is or was an officer, employee, or contractor of an entity described in 42 U.S.C. 233(g)(4); a health professional, officer, employee, or contractor of a free clinic as described in 42 U.S.C. 233(o); or a health professional volunteer as described in 42 U.S.C. 233(q).
Initiating official means a Deputy Assistant Attorney General of the Civil Division of the
Parties means an individual, as defined in paragraph (c) of this section, and the initiating official, as defined in paragraph (d) of this section.
Secretary means the Secretary of
Unreasonably high degree of risk of loss is a determination based on consideration of one or more of the following statutory criteria--
(1) The individual does not comply with the policies and procedures that the entity or the sponsoring free clinic has implemented pursuant to 42 U.S.C. 233(h)(1);
(2) The individual has a history of claims filed against him or her as provided for under 42 U.S.C. 233 that is outside the norm for licensed or certified health care practitioners within the same specialty;
(3) The individual refused to reasonably cooperate with the Attorney General in defending against any such claim;
(4) The individual provided false information relevant to the individual's performance of his or her duties to the Secretary, the Attorney General, or an applicant for or recipient of funds under title 42, chapter 6A, United States Code; or
(5) The individual was the subject of disciplinary action taken by a State medical licensing authority or a State or national professional society.
(a) Whenever the initiating official, in consultation with the Secretary, finds, based upon available information gathered or provided, that treating an individual as an employee of the
(b) The notice of hearing shall be in writing and shall be sent by registered or certified mail to the individual at the individual's last known address, or to the individual's attorney in the event the Attorney General has received written notice that the individual has retained counsel.
(c) The notice shall contain:
(1) A statement of the nature and purpose of the hearing;
(2) The factual allegations and, where appropriate, the law asserted in support of the proposed action;
(3) The name of the administrative law judge;
(4) A statement of the nature of the action proposed to be taken; and
(5) A statement of the time, date, and location of the hearing.
(d) The hearing shall be initiated not sooner than 60 days of the date on the written notice of hearing.
(a) An administrative law judge appointed in accordance with 5 U.S.C. 3105 shall preside over the hearing.
(b) Pursuant to 5 U.S.C. 556(b), the administrative law judge is to conduct all proceedings in an impartial manner. The administrative law judge may disqualify himself at any time. An individual may move to disqualify the appointed administrative law judge only upon the filing, in good faith, of a timely and sufficient affidavit of personal bias or other ground for disqualification of the administrative law judge, such as conflict of interest or financial interest. If such affidavit is timely filed, the adjudicating official shall determine the matter as part of the record and final determination in the case.
(c) The administrative law judge shall have the following powers:
(1) Administer oaths and affirmations;
(2) Issue subpoenas authorized by law;
(3) Rule on offers of proof and receive relevant evidence;
(4) Take depositions or have depositions taken when the ends of justice would be served;
(5) Regulate the course of the hearing;
(6) Hold conferences for the settlement or simplification of the issues by consent of the parties or by the use of alternative means of dispute resolution;
(7) Inform the parties as to the availability of one or more alternative means of dispute resolution, and encourage use of such methods;
(8) Dispose of procedural requests or similar matters;
(9) Make or recommend decisions;
(10) Require and, in the discretion of the administrative law judge, adopt proposed findings of fact, conclusions of law, and orders;
(11) Take any other action that administrative law judges are authorized by statute to take; and
(12) All powers and duties reasonably necessary to perform the functions enumerated in paragraphs (c)(1) through (11) of this section.
(d) The administrative law judge may call upon the parties to consider:
(1) Simplification or clarification of the issues;
(2) Stipulations, admissions, agreements on documents, or other understandings that will expedite conduct of the hearing;
(3) Limitation of the number of witnesses and of cumulative evidence; and
(4) Such other matters as may aid in the disposition of the case.
(e) At the discretion of the administrative law judge, parties or witnesses may participate in hearings by video conference.
(f) All hearings under this subpart shall be public unless otherwise ordered by the administrative law judge.
(g) The hearing shall be conducted in conformity with 5 U.S.C. 554-557 (sections 5-8 of the Administrative Procedure Act).
(h) The initiating official shall have the burden of going forward with the evidence and shall generally present the Government's evidence first.
(i) Technical rules of evidence shall not apply to hearings conducted pursuant to this subpart, but rules designed to assure production of the most credible evidence available and to subject testimony to cross-examination shall be applied where reasonably necessary by the administrative law judge. The administrative law judge may exclude irrelevant, immaterial, or unduly repetitious evidence. All documents and other evidence offered or taken for the record shall be open to examination by the parties, and opportunity shall be given to refute facts and arguments advanced on either side of the issues. A transcript shall be made of the oral evidence except to the extent the substance thereof is stipulated for the record.
(j) During the time a proceeding is pending before an administrative law judge, all motions shall be addressed to the administrative law judge and, if within the administrative law judge's delegated authority, shall be ruled upon. Any motion upon which the administrative law judge has no authority to rule shall be certified to the adjudicating official with a recommendation. The opposing party may answer within such time as may be designated by the administrative law judge. The administrative law judge may permit further replies by both parties.
(a) At any time after the initiation of the proceeding, the administrative law judge may order, by subpoena if necessary, the taking of a deposition and the production of relevant documents by the deponent. Such order may be entered upon a showing that the deposition is necessary for discovery purposes and that such discovery could not be accomplished by voluntary methods. Such an order may also be entered in extraordinary circumstances to preserve relevant evidence upon a showing that there is substantial reason to believe that such evidence could not be presented through a witness at the hearing. The decisive factors for a determination under this subsection, however, shall be fairness to all parties and the requirements of due process. A deposition may be taken orally or upon written questions before any person who has the power to administer oaths and shall not exceed one day of seven hours.
(b) Each deponent shall be duly sworn, and any adverse party shall have the right to cross-examine. Objections to questions or documents shall be in short form, stating the grounds upon which objections are made. The questions propounded and the answers thereto, together with all objections made (but not including argument or debate), shall be reduced to writing and certified by the person before whom the deposition was taken. Thereafter, the person taking the deposition shall forward the deposition and one copy thereof to the party at whose instance the deposition was taken and shall forward one copy to the representative of the other party.
(c) A deposition may be admitted into evidence as against any party who was present or represented at the taking of the deposition, or who had due notice thereof, if the administrative law judge finds that there are sufficient reasons for admission and that the admission of the evidence would be fair to all parties and comport with the requirements of due process.
Within a reasonable time after the close of the record of the hearings conducted under
(a) In hearings conducted under
(b) Prior to making a final determination, the adjudicating official shall give the parties an opportunity to submit the following, within thirty days after the submission of the administrative law judge's recommendations:
(1) Proposed findings and determinations;
(2) Exceptions to the recommendations of the administrative law judge;
(3) Supporting reasons for the exceptions or proposed findings or determinations; and
(4) Final briefs summarizing the arguments presented at the hearing.
(c) The adjudicating official shall, within a reasonable time after receiving the parties' submissions, consult with the Secretary and then make a final determination. Copies of the final determination shall be served upon each party to the proceeding. Subject to paragraph (d) of this section, the final determination made by the adjudicating official under this rule shall constitute the final agency action.
(d) Within 30 days of any final determination made by the adjudicating official, the Attorney General may exercise discretion to review the final determination. In the event the Attorney General exercises discretion to review a decision, the Attorney General's final determination shall constitute the final agency action.
(a) An individual dissatisfied with a final determination under
(b) The adjudicating official may require that another oral hearing be held on one or more of the issues in controversy, or permit the dissatisfied party to present further evidence or argument in writing, if the adjudicating official finds that the individual has:
(1) Presented evidence or argument that is sufficiently significant to require the conduct of further proceedings; or
(2) Shown some defect in the conduct of the adjudication under this subpart sufficient to cause substantial unfairness or an erroneous finding in that adjudication.
(c) Any rehearing ordered by the adjudicating official shall be conducted pursuant to SEC SEC 15.14 through 15.16.
(a) A final determination under
(b) A final determination shall be effective upon the date the written determination is received by such entity or free clinic.
(c) A final determination that an individual provider shall not be deemed to be an employee of the
(d) The Attorney General will inform the National Practitioner Data Bank of any final determination under
(a) Not sooner than five years after the time for rehearing has expired, and no more often than once every five years thereafter, an individual who has been the subject of a final determination under
(b) In support of the petition for reinstatement, the individual shall submit relevant evidence relating to the period since the original proceedings under this subpart and a statement demonstrating and explaining why treating the individual as an employee of the
(c) Upon receiving a petition for reinstatement, the initiating official shall forward the petition, together with an evaluation and recommendation on whether the petition makes a prima facie case for reinstatement, to the adjudicating official. The adjudicating official shall determine, in the adjudicating official's discretion, whether the petition makes a prima facie case that the individual provider no longer would expose
(d) If the adjudicating official determines that a prima facie case has been made for reinstatement, an administrative law judge shall be appointed in accordance with 5 U.S.C. 3105 and shall conduct such proceedings pursuant to [Sec.]
(e) Following proceedings conducted under paragraph (d) of this section, the adjudicating official shall make the final determination on the basis of the record, findings, conclusions, and recommendations presented by the administrative law judge, which shall include the record from the original determination and any petition for rehearing. Copies of the adjudicating official's final determination shall be furnished to the parties. The adjudicating official's final determination shall constitute the final agency action.
(f) A determination that an individual is reinstated pursuant to this section shall be distributed in the same manner as provided in
Dated:
Attorney General.
[FR Doc. 2024-14696 Filed 7-3-24;
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