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Personal Services Contracts, Independent Contractors, and Medical Malpractice Liability


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My question concerns the applicability of the Federal Torts Claims Act to medical malpractice suits involving "personal services contract" health care workers. Let me provide some background.

10 USC 1089(a) states that the Federal Torts Claim Act provides the exclusive legal process for filing medical malpractice claims against health care workers employed by certain federal agencies. It also states that the FTCA remedies are equally applicable to similarly situated health care workers who are not civil service employees, but who are "serving under a personal services contract entered into under section 1091 of this title or a subcontract at any tier under such a contract that is authorized [under] section 1091."

It's not clear to me what "serving under" means, exactly:

  • Does it apply to HCWs working as independent contractors under a personal services contract awarded to them individually?
  • Does it apply to HCWs working as direct employees of a federal contractor awarded a personal services contract?
  • Does it apply to HCWs working as independent contractors for a federal contractor awarded a personal services contract?

I'm most interested in the third question, but I included the first two to highlight potential differences that might affect your answers.

It's important because 10 USC 1089( B) states that in such FTCA cases, the DOJ will defend the malpractice suit, which would enable HCWs to sign on as independent contractors without the need for medical malpractice liability insurance.

I've come across some literature -- some of it over 10 years old -- suggesting that the DOJ has interpreted this very narrowly, and has scrutinized each HCW subjected to a malpractice suit to determine whether the HCW is an "employee" or not of the U.S. government. If the DOJ believes the HCW is an independent contractor and not an employee of the government, it may not defend the suit because it alleges 10 USC 1089 is inapplicable. Apparently, at one point or another, the DOJ has answered each of the three questions posed above in the negative, but maybe not in every case.

I wonder what standard of law would govern the question of whether or not an employee-employer relationship exists -- under IRS laws governing such relationships for tax purposes; anti-discrimination laws, used for EEOC purposes; or state agency laws used for tort purposes? As noted in another discussion here, there seem to be different expectations and/or standards applied in determining whether an employee-employer relationship exists in personal services contracts.

And what if a court/tribunal finds that the government and the federal contractor are joint or co-employers?

I'll offer my own answer as a starting point to the discussion:

As provided in 10 USC 1089, the FTCA applies to HCWs subject to a medical malpractice suit if they are found to be an "employee" of the agency they serve, regardless of whether the agency is the sole employer, or a joint employer. A HCW will be an "employee" of the agency if

(i) they are any of the following:

(a) a direct civil service employee,

( B) directly awarded a personal services contract by the agency,

© directly employed by a federal contractor who was awarded a personal services contract, or

(d) they are an independent contractor of the federal contractor awarded a personal services contract; and

(ii) an analysis of the factual circumstances of the services provided shows that, under state agency law, the federal government agency is found to be an employer or a joint or co-employer of the HCW.

I recognize this does not apply to all federal agencies, but only those identified in 10 USC 1089. Also note that personal services contracts for medical services often do not require medical malpractice liability, either by the federal contractor or its employees and independent contractors.

Apologies for the length -- just hoping to address potential questions in advance and provide a frame of reference for the discussion.

Best regards,

CC

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An intriguing question. The specific language you are referring to is:

This subsection shall also apply to such a physician, dentist, nurse, pharmacist, or paramedical or other supporting personnel (or the estate of such person) serving under a personal services contract entered into under section 1091 of this title or a subcontract at any tier under such a contract that is authorized in accordance with the requirements of such section 1091.

I would interpret this to apply to anyone providing the services required by a contract entered into under section 1091, regardless of whether the person is providing the services as ( 1 ) the individual who entered into the personal services contract, ( 2 ) an employee of the individual or business that entered into the personal services contract, ( 3 ) an individual subcontractor (at any tier) of the individual or business that entered into the personal services contract, or ( 4 ) an employee of a subcontractor that entered into the personal services contract. In fact, without seeing the research you did, I find it hard to understand how the DoJ would refuse to defend someone because he or she was not a Federal employee, unless that refusal related to a contract that was not entered into under section 1091. Can you provide more details about why DoJ would refuse to defend someone performing services under a contract entered into under section 1091?

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wvanpup,

Sure, thank you for your interest.

Try these links:

https://www.jagcnet.army.mil/DOCLIBS/ARMYLAWYER.NSF/c82df279f9445da185256e5b005244ee/5230ba510359c87585256e5b0054d907/$FILE/Claims.pdf

(the main article that puts doubt on whether the military will defend independent contractors working under a PSC)

http://www.usuhs.mil/ogc/pdf/mhln12.pdf
(pp. 10-11, briefly)

http://www.dtic.mil/whs/directives/corres/pdf/600006p.pdf
(see Section 3, "The term does not include any contract provider who is not a personal services contract employee.")

http://www.apd.army.mil/pdffiles/r27_20.pdf
*see the following sections
2–2b(4)( B):
"When the conduct of a health care provider performing services under a personal service contract is implicated in a claim, the CJA, MCJA, or claims attorney should consult with USARCS to determine if that health care provider can be considered an employee for purposes of coverage."

2-15(f)(1)©:
"Health care providers hired under personal services contracts under the provisions of 10 U.S.C. § 1089 are not
considered to be independent contractors but employees of the United States for tort claims purposes."

http://www.apd.army.mil/pdffiles/p27_162.pdf

This has a lengthy discussion of the issues beginning on p. 71 of the actual document (p. 87 of the adobe file)

Thanks for your interest, and I'm sorry if this is more of a legal discussion at this point, and not much like the typical regulatory/procedural questions posed in the forums.

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All:

I don't mind legal discussions since we have numerous attorneys registered to post here. However, I want to remind everyone that this forum does not provide any legal advice to anyone from anyone.

Thanks for adding this -- I probably should have included a similar disclaimer to my original post -- it's quite possible that the premise of my question is founded on a faulty legal conclusion or assumption. Any feedback received will not be regarded as legal advice, but I appreciate any suggestions or ideas!

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Thanks for the information. I quickly read the first article, which you described as the main article on the subject. Lack of time precludes me from reading the other material.

I am not sure if there are any contract questions involved in this discussion, except perhaps contract requirements concerning liability insurance, but this is still an interesting question.

After reading the article, I have a different perspective on your question. 1091 authorizes personal services contracts with individuals; it does not say anything about contracts with corporations and therefore probably does not authorize personal services contracts with corporations (if there is even such a thing as a personal services contract with a corporation). My interpretation (which does not matter because the issue is for DOJ and the Claims Service) is that 1089 applies to anyone providing services under a personal services contract with an individual, whether under the contract or under a subcontract (including a subcontract with a corporation since the services would still be provided under a contract authorized by 1091). It seems as if whether 1089 applies to contracts with corporations depends on a wide range of circumstances, as described in the article. It also seems that application of 1089 to these contracts is a question more of fairness than of actual coverage (which seems strange since waivers of sovereign immunity are usually strictly construed and would not depend on questions of fairness.

Bottom line: things are just as murkey as you described them.

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After reading the article, I have a different perspective on your question. 1091 authorizes personal services contracts with individuals; it does not say anything about contracts with corporations and therefore probably does not authorize personal services contracts with corporations (if there is even such a thing as a personal services contract with a corporation).

Thanks for taking time to look at it. I think you might be reading 1091 a little too narrowly. The authority to enter into PSCs is not explicitly limited to individuals. 1091(a) establishes the authority for PSCs: "The Secretary of Defense. . . and the Secretary of Homeland Security. . . may enter into personal services contracts to carry out health care responsibilities in such facilities, as determined to be necessary by the Secretary."

There is a limitation on individuals, which you may be referring to, but that is only in 1091©, which describes procedures that are only applicable to PSCs with individual persons. 1091(d) states that the procedures described in 1091© are not applicable when a PSC is entered into "with entities other than individuals" (i.e., business entities).

I agree though, it's all a little convoluted. I'm not aware of any tribunal decisions that have resolved these issues, but if anyone has any further guidance, I'd be delighted to investigate further!

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I did not dig deep but on the civilian side I experienced this question many years ago when working for the Indian Health Service. Here is a link that may help as well as suggesting internet searches that include HHS/Public Health Service/Indian Health Service and possibly even related to Job Corps.

http://www.ihs.gov/riskmanagement/index.cfm?module=dsp_rm_ftca

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