ASSESSMENT OF ACCESS TO PRIVATE LIABILITY INSURANCE FOR TRIBES AND TRIBAL ORGANIZATIONS WITH SELF-DETERMINATION CONTRACTS/COMPACTS Phyllis C. Borzi, J.D., M.A. Karen R. Silver, M.P.H. Sara Rosenbaum, J.D. Barbara E. Karshmer, J.D., Consultant Center for Health Policy Research The George Washington University Medical Center Prepared for the U.S. Department of Health and Human Services February 1998 Acknowledgments We wish to thank all of the tribes and tribal organizations who participated in the study, our project officer, Tom Hertz, from the Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services (DHHS), and the other members of the Technical Advisory Committee for their encouragement and assistance. Our special thanks to the tribal representatives who participated in the tribal consultation meeting in Washington, D.C.: Deanna Bauman, Health Administrator, Oneida Community Health Center, Oneida, WI Charles Head, Self-governance Coordinator, Cherokee Nation of Oklahoma, Tahlequah, OK Thanks also to Bobo Dean, Partner, Hobbs, Straus, Dean & Walker, Washington, D.C., for his participation in the tribal consultation meeting. Finally, we would like to thank the insurance brokers and insurance company representatives who participated in this study for their assistance during our information gathering process. The views expressed in this report are those of its authors, and do not necessarily reflect the views of the members of the Technical Advisory Group, or of the Federal government. Center for Health Policy Research Executive Summary Introduction This study examines issues surrounding tribal experiences with private liability insurance and the Federal Tort Claims Act (FTCA). The primary purposes of the study are: (1) to examine access to private liability insurance by tribes and tribal organizations operating programs under the Indian Self-Determination and Education Assistance Act (ISDEAA), P.L. 93-638, and the coordination of that insurance with the immunity from tort liability for self-determination contractors and compactors and their employees provided under the FTCA; (2) to identify barriers to the appropriate pricing of private liability insurance; and (3) to recommend strategies that will assist tribes, tribal organizations, and other contractors and self-governance compactors to reduce the need for private liability insurance, as well as its cost. Findings The principal findings of the study are as follows: 1. 2. The immunity from tort liability provided by the FTCA can be very beneficial for tribes and tribal organizations involved in P.L. 93-638 activities. Working with knowledgeable brokers, some tribes and tribal organizations report that they have been able to reduce their private liability insurance premiums substantially and, in some cases, completely drop certain types of coverage (e.g., medical malpractice) because of the FTCA. Some tribes and tribal organizations involved in P.L. 93-638 contracting, however, may not have fully realized the benefits of the FTCA, because of the uncertainty, confusion, and lack of understanding among tribes, brokers, and insurance companies as to what activities are covered by the FTCA, when private sector coverage is unnecessary or duplicative, or how a FTCA claim proceeds through the system. This problem persists despite the publication of regulations under Title I of the Indian Self-Determination and Education Assistance Act Amendments ("1996 Regulations"), issued in June, 1996, which contain useful information about the FTCA for P.L. 93-638 contractors and compactors. Center for Health Policy Research 3. 4. 5. 6. The difficulty that tribes and tribal organizations have in determining what private coverage they need to supplement their FTCA immunity may be compounded by what they describe as inconsistencies in how Federal personnel determine that particular claims are covered under the FTCA. Tribes, tribal organizations, and brokers report that there does not appear to be a uniformly applicable framework for coverage or a precedent-based decision-making system the results of which are available publicly. It is, therefore, hard for tribes, tribal organizations and insurers to judge the types of claims that might be covered under the FTCA and even harder to evaluate the extent to which private liability insurance is necessary or duplicative. This appears to be more of a problem with non-medical claims. Notwithstanding the perception of self-determination contractors and brokers that there is no way to predict when the FTCA will apply to a particular tort claim because this decision requires a case-by-case analysis, a general framework for analysis of the FTCA's applicability to tort claims involving P.L. 93-638 contractors and their employees can be constructed that provides some assistance in assessing the likelihood that private liability insurance may be needed. Tribes and tribal organizations report that the lines of communication between themselves and the Federal agencies involved in FTCA decision-making need to be improved. Tribes and tribal organizations report difficulties in determining a claim's status and resolution and receiving timely responses to tribal inquiries as to whether a claim will be covered or not by the FTCA. Many insurance companies are unfamiliar with the FTCA and its applicability to selfdetermination contractors. Other insurers are uncertain about the reach of the FTCA and the process for filing an FTCA claim. As a result, some insurers may misconstrue, underestimate, or disregard the value of the FTCA in designing private liability insurance coverage for tribes and tribal organizations and in determining premiums to be charged for that insurance coverage. Because the level of sophistication about tribal tort immunity through the FTCA varies substantially, the number of insurers willing to write tribal coverage, while growing, is still relatively small. This is surprising because insurers routinely sell coverage to state and local governmental entities that have basic grants of immunity under statutes that are similar to the FTCA and therefore would have the same need as tribes for only supplementary private insurance coverage. Recommendations The principal recommendations of the study are as follows: 1. A clearinghouse could be created through which tribes and tribal organizations could share information about their experiences with the Center for Health Policy Research 2. 3. 4. 5. purchase of private liability insurance. In addition, to facilitate networking among tribes, a web page could be created. The web page could include general information on the FTCA and list the designated regional contact people within the responsible agencies who can be contacted for more specific assistance. The Secretaries of Health and Human Services and the Interior, in conjunction with the Department of Justice, could conduct informational meetings in various regions to acquaint tribes, tribal organizations, brokers, and insurance companies with the basic principles of immunity from tort liability provided for self-determination contractors under the FTCA. The purpose of these meetings would be: (a) to assist tribal self-determination contractors to better understand the immunity from tort liability provided under the FTCA in order to improve their ability to purchase non-duplicative private liability insurance; and (b) to assist brokers and insurance companies to develop appropriate insurance products. Informational materials could be developed for distribution to P.L. 93-638 contractors. These materials should be written in clear and understandable layperson's language. They would generally describe the immunity provided to self-determination contractors under the FTCA and identify (to the extent possible) the types of activities that may not be protected so as to assist tribes in understanding the extent to which they may need supplemental private liability insurance. These materials could be used by the tribes to share with brokers and representatives of insurance companies who are unfamiliar with the FTCA. The Handbook for Tribes on How to Reduce Private Liability Insurance Costs (which is part of this report) and the 1996 Regulations could serve as starting points. To maximize the usefulness of these materials for tribes in their negotiations with insurance companies, any guidance should be issued by the Federal government, since privately issued materials on the FTCA may be perceived as less authoritative. Principles for determining more clearly when private liability insurance duplicates tribal FTCA immunity could be developed and communicated to all P.L. 93-638 contractors and compactors. In addition, examples of insurance contract language that does not duplicate the FTCA could be identified and shared with and among tribes, tribal organizations, brokers, insurance companies, and the Federal government. If they have not yet done so, tribes and other P.L. 93-638 contractors and compactors should designate a tribal tort claims liaison with the Federal agencies for purposes of the FTCA, as the 1996 Regulations instruct. Similarly, the agencies should provide the tribal contractors with a list of key Center for Health Policy Research |