The Department of Justice (DOJ) has issued a Notice of Proposed Rulemaking Determination That an Individual Shall Not Be Deemed an Employee of the Public Health Service regarding “de-deeming”.  The NPRM was released March 6, 2015.  This proposed rule explains and interprets section 233(i) of the Federally Supported Health Centers Assistance Act.  This paragraph authorizes the Attorney General, in certain circumstances, to bar an individual clinician from participation in the FTCA program and requires a notice and hearing before the de-deeming can take effect. Comments must be submitted on or before May 5, 2015.

The NPRM outlines criteria and a process by which the DOJ can determine that an individual shall not be deemed an employee of the Public Health Services for purposes of FTCA as it may expose the Government to an unreasonably high degree of risk of loss. Proposed criteria, which mirror the statute, include one or more findings that the individual:

• Did not comply with procedures set by the health center to reduce the risk of malpractice;
• Has a history of malpractice claims filed against him or her (outside the norm for similarly licensed or certified providers in that specialty);
• Refused to reasonably cooperate with the Attorney General (AG) in defending the claim;
• Provided false information relevant to his or her duties in relation to the claim; and/or
• Was the subject of disciplinary action taken by a state medical licensing authority or a state or national professional society.

The proposed Rule provides for due process in connection with a proposed determination to “de-deem” an individual, as outlined below:

• Using the proposed criteria, a DOJ “Initiating Official” makes a determination that treating an individual as an employee of the Public Health Service for FTCA purposes may expose the Government to an unreasonably high degree of risk of loss.
• After consultation with the Secretary of DHHS, the DOJ Initiating Official notifies the individual that an administrative hearing will be held.
• Both parties have a brief period for discovery and depositions, to the extent allowed by an administrative law judge (ALJ).
• ALJ conducts a hearing, submits written findings of fact, conclusions of law, and a recommended decision to the “Adjudicating Official.”
• Both parties have 30 days to submit certain additional materials in response to the ALJ’s findings and recommendations.
• Adjudicating Official makes a final agency determination.
• A “de-deemed” individual may seek a rehearing if (s)he disagrees with the determination and, if unsuccessful, may apply for reinstatement after a period of time.
• If an individual is “de-deemed,” DOJ will notify the National Practitioner Data Bank (NPDB) of the issuance of a final order deeming an individual not to be an employee of the Public Health Service under this rule.

Our initial concerns about the criteria and process under the proposed rule:

• What constitutes an unreasonably high degree of risk of loss?
• What is “outside the norm”?
• How many claims constitute a “history” of malpractice claims?
• What does it mean to be the “subject” of disciplinary action? What if an individual was not, in fact, disciplined?
• Is notification to the National Practitioner Data Bank (NPDB) an appropriate sanction when de-deeming an individual?

Health centers that are interested in reading the Notice and providing comments can find it here.