more than 8.1 million people -- including 3 million people who have no health insurance -- in urban and rural underserved communities across the country. The centers are a vital source of needed health care for low income populations, with two-thirds of those served having incomes below the federal poverty level and 86 percent below twice that level. Nearly half of all health center patients are children and adolescents, and 31 percent are women of child-bearing age. Last year, health centers provided prenatal care, delivery, and postpartum care to nearly 400,000 mother-infant pairs -- 1 of every 10 live births in the U.S. The ability of local health centers to serve the growing numbers of underserved Americans over the years has been aided by their close relationship with another federal program, the National Health Service Corps (NHSC). Originally established in 1970, the NHSC has recruited and placed thousands of primary care physicians and other health professionals in areas with severe primary care health care shortages. Most NHSC placements over the years have been at health centers, and today slightly more than half of the nearly 2000 NHSC-placed health professionals are found at health centers. Initially, all NHSC professionals were federal employees, and as such were covered for .medical malpractice claims under the FTCA. Beginning in 1983, however, the employment of these professionals was transferred to their local sponsoring organizations. While local health centers did receive some additional federal support to compensate for this transfer of employment responsibility, no provision was made for the cost of privately-purchased malpractice insurance for these new health center employees. Center for Health Policy Research Health Centers' Experience With Private Malpractice Insurance During the mid-1980s, the entire health care industry experienced a surge in malpractice insurance costs and a serious decline in the availability of coverage, in particular affecting providers of obstetrical care. By 1989, health center organizations were paying in excess of $50 million annually in malpractice premiums, an amount that exceeded 10 percent of their federal grant support. Some health centers reported malpractice premium increases exceeding 500 percent in a single year, and many were notified that their carriers would no longer offer coverage for obstetrical care services'. When numerous attempts to secure private-sector remedies proved unsuccessful, the health centers turned to the Congress for relief, leading to the passage and enactment of the Federally Supported Health Centers Assistance Act of 1992 (P.L. 102-501). Health Centers' Experience Under FTCA Coverage The new Act brought health centers under the protective coverage of the FTCA for medical, surgical, dental and related activities that fall within the scope of each health center's approved project?. It also extended FTCA coverage to officers, employees, and certain contractors of covered health centers for activities that fall within the scope of their employment or contract with the center. However, the Act excluded from FTCA coverage several important elements that typify a health center's clinical practice, including: 'From testimony provided at a Hearing on Medical Liability and the Delivery of Obstetrical Care, held by the House Committee on Small Business, Subcommittee on Regulation, Business Opportunities and Energy, October 12, 1989. 2A health center's approved project generally includes all activities that are supported within its federally-approved budget, which includes both federal grant support and other expected revenues, such as Medicare or Medicaid payments. Center for Health Policy Research Claims involving incidents which occurred prior to January 1, 1993 (inasmuch as All activities that fall outside the scope of a covered health center's approved Contracted part-time health professionals who are not obstetrical care providers and whose contract involves an average of less than 32.5 hours of work per week during the period of their contract with the health center. In addition, the language of the Act left unclear whether governing board members of local health center organizations who are not elected officers of the organizations would be covered for claims filed against them. These exceptions and uncertainties affected virtually every covered health center in one way or another, making the continued purchase of private malpractice insurance for some activities or personnel a must. Many centers also faced the need to purchase extended coverage for any future claims involving incidents that occurred prior to 1993. During this initial period, health centers encountered significant difficulties in their attempts to secure both prior acts coverage and continuing coverage for service gaps or excepted personnel at reasonable prices. Many centers were unable to find an insurer offering "gap" coverage at any price; even where coverage was available, most insurers were either unable or unwilling to account for the new FTCA coverage in calculating their rates, offering no more than marginal reductions in premium rates. For prior acts coverage, which require a single premium, quotes averaged two to three times the centers' previous annual costs for full malpractice coverage. These difficulties were further exacerbated by a dispute between the federal agencies Center for Health Policy Research The George Washington University for Health Policy Research 4 charges with implementing the new law over whether coverage would include services furnished to individuals who are not registered patients of the health centers. Virtually all health centers engage in such activities, such as operating or participating in school health clinics, communitywide immunization campaigns or health fairs. Health center physicians are often required to provide occasional emergency room coverage as part of their duties at hospitals in which they have admitting privileges, or they may participate in "shared call" arrangements with non-center physicians, especially in rural communities. Although the proposed rule implementing P.L. 102501, issued in August, 1994, did extend coverage to services furnished to non-patients in certain circumstances, the matter was not fully resolved until issuance of the final rule on May 8, 1995. Uncertainty as to the true scope of FTCA coverage was so great that, when the final rule was issued, only 119 of the estimated 600 eligible health center organizations had dropped their continuing private malpractice coverage to bring themselves fully under the scope of the FTCA. Some of these problems were resolved with enactment of the Federally Supported Health Centers Assistance Act of 1995 (P.L. 104-73). The new Act: Extended and made permanent the coverage of health centers under the FTCA; Codified the provisions of the May 8, 1995 rule extending coverage for services Extended coverage to contracted part-time physicians who are licensed or certified in a primary care field. For most centers, the further clarity provided by the 1995 Act finally made their FTCA Center for Health Policy Research coverage both real and workable. Over the past year, 84 percent of all eligible health centers have brought themselves and their personnel fully under the coverage of the FTCA. While many centers must still maintain limited private coverage for activities that remain outside the scope of their approved project, most have found that such coverage is now available at reasonable prices, most notably through a self-insuring risk retention group established by health centers in the Western states. Even the premiums for prior acts coverage have dropped because insurers now accept their past three years of FTCA coverage as encompassing almost half of the typical sevenyear period that a commercial prior acts policy would cover. Thus, today most centers report that they are pleased with the FTCA coverage and that they are -- or will soon be -- realizing substantial savings in their malpractice costs. Lessons From the Health Center Experience While some of the lessons learned from the health centers' experience with FTCA coverage over the past 3 years are undoubtedly unique to them, others may well have applicability to tribal organizations. For example: (1) (2) The exclusion of certain part-time health center contract providers is similar to the exclusion of tribal subcontractors from FTCA coverage. Health centers have been able to convert some of these contract providers to employee status, or to increase their contracted time above the minimum threshold, thus bringing them under FTCA protection. It is not clear that such options exist for addressing the exclusion of tribal subcontractors, unless the relationship between the tribal organizations and the subcontractors is changed or the legislation is amended to bring some or all subcontractors into coverage. Most tribal organizations engage in activities that are outside the scope of their 638 contract or compact, just as most health centers are involved in activities outside the scope of their approved federal project. While some health centers have been able to secure federal approval for bringing certain activities (e.g., Center for Health Policy Research |