Will the Fairness for Injured Patients Act adversely impact community clinics?

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No. Updating California’s 45-year-old medical negligence cap will help the primarily low-income Californians served by community clinics by improving their access to justice if they are harmed by medical negligence. 

Furthermore, federally funded community clinics are immunized from medical malpractice liability. This protection for health centers did not exist in 1975, when California’s cap on medical malpractice damages was enacted. But it does today, and it is available at no cost to these federally-funded clinics, leaving them with immunity from malpractice liability and no malpractice premiums to pay. 

For more than 20 years, clinics that receive federal funding pursuant to the Health Center Program established by Section 330 of the Public Health Service Act are eligible for coverage under the Federal Tort Claims Act (FTCA) The federal government pays all costs of defending such clinics from medical malpractice suits and pays any claims resulting from those suits, all at no cost to the clinics.

In 1992 Congress enacted the Federally Supported Health Centers Assistance Act (FSHCAA), establishing a demonstration program under which health centers (community-based and patient-directed organizations that provide primary health care to the medically underserved) were treated as federal employees under the FTCA (28 U.S.C. § 1346 et seq.) In 1995 Congress amended the FSHCAA to make permanent FTCA coverage of both health centers and health center officers, directors, employees and contractors.  It thus immunized both centers and their personnel from medical malpractice liability, and eliminated the need for them to buy medical malpractice insurance.  

In 1996, Congress enacted the Health Insurance Portability and Accountability Act (HIPAA), which amended the FTCA so that it covered not only health centers and center personnel but also volunteers at free clinics. And in 2010, the Affordable Care Act expanded FTCA coverage again so that it applied to free clinic officers, directors, employees and contractors as well as volunteers. (42 U.S.C. § 233)

Four different types of health centers are designated as eligible to receive federal funding under the Public Health Service Act and to be treated as federal employees for purposes of the FTCA: Community Health Centers, Migrant Health Centers, Health Care for the Homeless Centers, and Public Housing Primary Care Centers. The FTCA provides protection to both full- and part-time employees, including clinicians, administrators, directors, nurses, and other personnel; officers and governing board members; all full-time contractors (those working at least 32.5 hours a week); and part-time contractors in the fields of family practice, obstetrics and gynecology, general internal medicine, and general pediatrics.

In addition, the FTCA covers not only services rendered at community health center sites but also services rendered on behalf of the health center at alternative settings, including those in connection with hospital on-call arrangements, cross coverage arrangements, community outreach and interventions, emergencies due to natural disasters, health fairs, and clinical training. Finallythe FTCA covers not only volunteers at free clinics but also free clinic officers, governing board members, employees, and contractors.

Adjusting the 1975 cap on damages will benefit low-income victims of medical negligence without affecting the ability of community health centers to care for those in need of their services.

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