This case involves the interpretation of a U.S. Public Health Service "employee" under the Federally Supported Health Center's Assistance Act. The Act was enacted in 1992 to reduce the growing cost of malpractice insurance to private nonprofit health centers that provide services to medically underserved populations. The Act essentially makes the U.S. government the medical malpractice insurer for qualifying § 245(b) health centers, their officers, employees and contractors allowing these "deemed" health centers to forego obtaining private malpractice insurance. A doctor is considered a U.S. Public Health Service Employee within the meaning of § 233 of the Act if at the time he allegedly committed malpractice he was performing medical services as an employee of a legal entity that has contracted with a FSHCAA eligible health care entity.
Dr. Youngblood entered into an employment contract with Capstone Health Services Foundation for a term of one year. Under the terms he became of member of the OB/GYN Dept. of the University of Alabama School of Medicine, Tuscaloosa. Capstone contracted to obtain professional liability insurance for Dr. Youngblood. Not long afterwards, Capstone entered into a provider agreement with West Alabama Health Services Inc. Capstone agreed to provide OB/GYN services to Medicaid eligible woman at West Alabama facilities. The contract provided that Capstone would maintain malpractice insurance for its employees. Dr. Youngblood treated Maggie Dedrick while he was providing OB/GYN services to a West Alabama Clinic. He was "on call" pursuit to the provider contract between Capstone and West Alabama. Capstone billed West Alabama for the services rendered by Youngblood to Dedrick. Dedrick filed a malpractice action claiming negligent acts occurred during the treatment of her pregnancy. Dedrick filed the action in an Alabama State Court, however Youngblood removed the case to Federal Court on the ground that he was a covered employee under § 233 of the Act. The District Court held that Youngblood was not a public health service "employee" under § 233 at the time of the alleged medical malpractice and remanded the case back to State Court. The physician appealed and the 11th circuit reviewed the case.
The Act defined a public health service employee to include a "entity described in § 233(g)(4) and any officer, governing board member or employee of such an entity, and any contractor of such an entity who is a physician or other licensed or certified healthcare practitioner." 42 U.S.C. § 233(g)(1)(A) (Subject to paragraph 5). Paragraph 5 states an individual may be considered a contractor of an entity...only if... (a) the individual normally performs an average of at least 32 ½ hours of service per week for the entity for the period of the contract or (b) in the case of an individual who normally performs less than 32 ½ hours per week of service for the entity for the period of the contract, the individual is a licensed or certified provider of services in the fields of family practice, general internal medicine, general pediatrics, or obstetric and gynecology. Although Youngblood is a licensed physician who provided services to the patients of West Alabama in the area of Obstetrics, he did so pursuant to his contractual relationship with Capstone not based on any contractual relationship with West Alabama. Youngblood is an employee of the contractor Capstone, therefore the statutory expansion of government liability under FTCA does not apply in this case because there is no direct contractual relationship between the eligible entity and the physician, Dr. Youngblood. The decision of the United States District Court for the Northern District of Alabama is affirmed and the case is remanded to State Court.
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