El Rio Santa Cruz Neighborhood Health Center, Inc. v. U.S. Department of Health & Human Services

396 F.3d 1265, 364 U.S. App. D.C. 529, 2005 U.S. App. LEXIS 1966, 2005 WL 286070
Court of Appeals for the D.C. Circuit·Decided February 8, 2005·No. 04-5089·Published·Cited by 141 cases

Opinions

Opinion for the Court filed by Circuit Judge ROGERS.

Concurring opinion filed by Circuit Judge HENDERSON.

[1267] ROGERS, Circuit Judge.

The Federally Supported Health Centers Assistance Act of 1995 (“FSHCAA”), Pub.L. No. 104-73, 109 Stat. 777 (codified as amended at 42 U.S.C. § 233), makes federally-funded community health centers and their employees, officers, and individual contractors eligible for medical malpractice coverage under the Federal Tort Claims Act (“FTCA”), 28 U.S.C. § 1346 (2000), to the same extent as federal employees of the United States Public Health Service. See 42 U.S.C. § 233(g). The El Rio Santa Cruz Neighborhood Health Center, Inc. (“the Center”) in Arizona and physicians before the court provide obstetric and gynecological services for patients of the Center. As a non-profit clinic that receives federal funds, the Center receives professional liability coverage from the federal government pursuant to the FSHCAA. See id. When the physicians were sued in the Arizona State court for malpractice, the Center notified the United States Department of Health and Human Services (“HHS”) of the suit and submitted information for a determination of the physicians’ coverage under the FTCA. HHS denied the physicians coverage because they had contracted with the Center through their professional corporations. Joined by the Center, the physicians filed a separate lawsuit challenging the denial of coverage under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701-706, and the district court ruled in their favor.

HHS appeals the grant of summary judgment to the Center and the physicians, challenging both the district court’s jurisdiction under the APA and its findings that HHS failed to examine relevant evidence, namely the physicians’ separate guarantees to the Center of their personal performance, and to treat similar cases similarly. Upon de novo review, we hold that the district court had jurisdiction of the APA claim because the removal remedy under the FSHCAA was not an. adequate remedy that precluded APA review, and that HHS was arbitrary and capricious in failing to address evidence before it in concluding that the physicians were ineligible for medical malpractice coverage pursuant to the FSHCAA. Accordingly, we affirm the grant of summary judgment remanding the matter to HHS.

I.

A.

Under the FTCA, 28 U.S'.C. §§ 1346(b), 2672-80, and Public Health Service Act (“PHSA”), 42 U.S.C. § 233 (2000), Congress protected officers and employees of the Public Health Service from personal liability for the negligent or wrongful act or omission while acting within the scope of their employment by providing that the United States may assume any such liability. 28 U.S.C. § 2672. In enacting the FSHCAA, 42 U.S.C. § 233(g), Congress extended FTCA coverage for Public Health Service employees to public or nonprofit private entities receiving federal funds under the PHSA, 42 U.S.C. § 254b, and to their officers; board members, employees, and contractors who are physicians or other licensed or certified health care practitioners, and meet certain criteria. Id.' § 233(g)(1)(A); see id. § 233(e), (h), (i). Upon approval by the HHS Secretary of an application, such individual is “deemed to be an employee of the Public Health Service.” Id. § 233(g)(1)(F). The Attorney General, upon notice from a deemed defendant, shall defend against, or compromise, civil actions or proceedings for such damage or injury. Id. § 233(b), (d). The remedy against the United States, as relevant here, for “damages for personal injury, including death, resulting from the performance of medical, surgical, dental, or related functions ... by any [1268] commissioned officers or employee of the Public Health Service” is “exclusive.” Id. § 233(g)(1)(A). Congress enacted the FSHCAA to relieve-, publicly funded health centers of the burden of rising malpractice insurance costs. H.R.Rep. No. 104-398, at 5-6 (1995), reprinted in 1995 U.S.C.C.A.N. 767, 769; H.R.Rep. No. 102-823(11), at 5-6 (1992).

In order to be considered for FTCA coverage, a health center must submit an application to the HHS Secretary verifying that the health center, and the appropriate officer, board member, employee, or contractor of the . health center, meet FSHCAA requirements. .42 U.S.C. § 233(g)(1)(D); see id. § 233(g)(l)(B)-(C), (h). The Secretary is required to determine within 30 days of receipt of the application whether the applicant is to be deemed covered by the FTCA. Id. § 233(g)(1)(E).. Once the Secretary has determined that an applicant is covered, this determination is final and binding upon the Secretary, Attorney General, and other parties to a civil action or proceeding. Id. § 233(g)(1)(F). However, the Attorney General, in consultation with the Secretary, and after notice and opportunity for a hearing, may determine, based on five criteria, that covering an .individual health care professional “would expose the Government to an unreasonably high degree of risk of loss,” and that the individual “shall not be deemed to be an employee of the Public Health Service” for FSHCAA purposes.. Id. § 233(i).

Once a civil action or proceeding is filed in state or local court against a public health or non profit entity or its officers or employees or contractors, the statute provides for two circumstances in which the case can be removed to the federal district court. First, if the Attorney General appears in state or local court within 15 days after being notified of the filing of the case and advises that the Secretary has deemed the defendant to be a Public Health Service employee, the ease shall be removed to the federal district court. Id. § 233(0(1); see id. § 233(c). Second, if the Attorney General fails timely to appear, the case shall be removed to federal district court upon petition by a defendant. Id. § 233(0(2). The case then shall be stayed until the district court conducts a hearing and determines the appropriate forum or procedure for the assertion of the claim. Id.

B.

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El Rio Santa Cruz Neighborhood Health Center, Inc. v. U.S. Department of Health & Human Services, 396 F.3d 1265, 364 U.S. App. D.C. 529, 2005 U.S. App. LEXIS 1966, 2005 WL 286070 (D.C. Cir. 2005).

396 F.3d 1265 (El Rio Santa Cruz Neighborhood Health Center, Inc. v. U.S. Department of Health & Human Services) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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