Dedrick v. West AL Women's Health

                                                                       [ PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT

                             __________________

                                No. 98-6499
                           ____________________
                      D.C. Docket No. 98-00961-CV-C-W


MAGGIE DEDRICK, individually, & as
mother & next friend of LAKENDRA DEDRICK,
deceased minor,

                                                         Plaintiff-Appellee,

                                     versus

DR. CLIFTON YOUNGBLOOD, et al.,

                                                         Defendant-Appellant

                              _________________

                  Appeal from the United States District Court
                     for the Northern District of Alabama
                             _________________

                               (January 12, 2000)



Before BLACK, Circuit Judge, GODBOLD and FAY, Senior Circuit Judges.

GODBOLD, Senior Circuit Judge:

     This case involves the interpretation of a public health service employee under
the Federally Supported Health Centers Assistance Act.            The Act was enacted in

1992 to reduce the growing costs of malpractice insurance to private nonprofit health

centers that provide health services to medically underserved populations, commonly

referred to as “§ 245(b) health centers” or “eligible entities.” 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 forgo obtaining private malpractice insurance. Youngblood based

his appeal on an expanded interpretation of the definition of a contractor under § 233.

       We must decide whether 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. It appears that

we are the first circuit to address this issue.1 The district court remanded the case after

it determined that Dr. Youngblood was not a contractor with provider coverage under

the definition provided in § 233 of the Act. We agree that Youngblood is not a


       1
         The parties indicate that the court should be persuaded by a recent Tenth Circuit
case. We agree that the contractual relationship in this case is similar to that in Duplan v.
Harper, 

188 F.3d 1195, 1198

 (10th Cir. 1999). Dr. Harper was an employee of a
corporation, Med-National, Inc., that contracted with the U.S. Air Force to provide
medical services at Tinker AFB. The incident giving rise to Duplan’s claim arose during
Dr. Harper’s treatment of Duplan pursuant to the Tinker-Med-National contract. The
Tenth Circuit reversed a finding of the district court and held that Harper was not an
employee of the government. However, the court did not address the key issue in this
case: whether Harper would be considered a contractor with Tinker under § 233.

                                              2
covered provider under § 233 and affirm the decision of the district court.

      Determining the contractual relationship of the parties is essential to properly

interpreting this statute.2 Youngblood entered into an employment contract with

Capstone Health Services Foundation for a term of one year. Under the terms of the

contract Youngblood became a member of the OB-GYN Department of the University

of Alabama School of Medicine, Tuscaloosa.             Capstone contracted to obtain

professional liability insurance for Youngblood. Shortly after Youngblood entered

into his employment contract with Capstone, Capstone entered into a provider

agreement with West Alabama Health Services, Inc. Capstone agreed to provide OB-

GYN related services to Medicaid eligible pregnant women at West Alabama

facilities. The contract provided that Capstone would maintain malpractice insurance

for its employees.

      Youngblood treated Maggie Dedrick while he was providing OB-GYN services

to a West Alabama clinic. Youngblood concedes that at the time he provided the

services he was “on-call” for West Alabama pursuant to the provider contract between

Capstone and West Alabama. Capstone billed West Alabama for the services



      2
          There is no need to employ a control test to determine whether Youngblood is an
employee of the government because there is no dispute that Youngblood qualifies only
under the contractor exception if he qualifies at all. Although Youngblood does not
dispute that all services rendered to West Alabama were pursuant to the provider contract
between Capstone and West Alabama, he does dispute the district court’s requirement for
a direct contractual relationship between him and West Alabama.

                                            3
rendered by Youngblood to Dedrick.

      Dedrick filed a malpractice action against Youngblood in Alabama state court

for alleged negligent acts that occurred during the treatment of her pregnancy.

Youngblood removed the case to federal court on the ground that he was a covered

employee under § 233 of the Act. He contends that federal jurisdiction was proper

because of the special relationship between the Act and the Federal Tort Claims Act,

28 U.S.C. § 1346

(b). The Act provides the exclusive remedy for medical malpractice

of employees or contractors of the Public Health Service. However, 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 to state court.

      The Act defined a Public Health Service employee to include “an 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 health care practitioner (subject to paragraph 5).” 

42 U.S.C. § 233

(g)(1)(A). Paragraph (5) states:

      an individual may be considered a contractor of an entity . . . only if ..
      A)    the individual normally performs on average of at least 32 ½ hours of
            service per week for the entity for the period of the contract. § 233(g)(5);
            or
      B)    in the case of an individual who normally performs less than 32 ½ hours
            of service per week 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
            obstetrics and gynecology.

                                          4


42 U.S.C. § 233

(g)(5).

      Although Youngblood is an employee of Capstone and has no separate contract

with West Alabama, he contends that the statute does not exclude him because it does

not explicitly require direct contractual relations with West Alabama for him to be

“deemed” an employee. Youngblood contends that the Act permits an individual

physician to be “deemed” a Public Health Service employee if that physician performs

services for a public health entity pursuant to a contract.           However, strict

interpretation requires that a contractor be an “individual” who contracts with an

eligible entity. 

42 U.S.C. § 233

(g)(1)(A); § 233(g)(5).

      Suits brought under the FTCA are generally limited to those claims arising from

the negligent conduct of government employees. 

28 U.S.C. § 1346

(b). The FTCA

retains sovereign immunity over claims against contractors. See Tisdale v. U.S., 

62 F.3d 1367, 1371

 (11th Cir. 1995). However, when a statute like the Act expands the

liability of the government we must strictly construe the language used by Congress

because the inclusion of contractor liability serves as an expanded waiver of sovereign

immunity. See, e.g., Department of the Army v. Blue Fox, Inc., 

119 S. Ct. 687, 691

(1999).

      The expanded definition of a “contract employee” under § 233(g) of the Act to

certain contractors of qualified health centers is clearly not an unlimited extension to

all contractors. The text of § 233(g) states “or any contractor of such an entity who

                                           5
is a physician or other licensed or certified health care practitioner.” 

42 U.S.C. § 233

.

We interpret the personal pronoun “who” as identifying only individual physicians

who contract with eligible entities, not organizations or foundations who contract with

eligible entities.3

       The statutory language of the Act requires us to distinguish contracts by which

an individual physician contracts with the eligible entity and those where the

physician uses a separate entity, such as Capstone, to contract with the eligible entity.

West Alabama contracted with Capstone, his employer. 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. Whether Youngblood

would have qualified as a contractor if there was a contract between him and West


       3
        Judge Fay’s dissenting opinion relies without citation upon Congressional intent. The
legislative history discusses at some length the need that the Act was addressing.
However, both the 1992 and 1994 legislative histories state that the purpose of the Act is
to relieve the financial burden imposed on eligible health centers by the costs of
malpractice insurance. I cannot find any language stating that the purpose of the Act is to
relieve the cost of malpractice insurance from any physician who treats any of the eligible
entity’s patients See H.R. Rep. No. 398, 104th Cong., 1st Sess. 1995, 1996
U.S.C.C.A.N. 767; H.Rep. No. 823(I), 102d Cong., 2nd Sess. 1992, 1992 U.S.C.C.A.N.
2627.

       In the case of contractors providing health services to [eligible] health
       center patients, coverage is provided only to contractors who are licensed or
       certified health care practitioners.

H.R. Rep. No. 398, 104th Cong., 1st Sess. 1995, 1996 U.S.C.C.A.N. 767, at § 11.

                                              6
Alabama is irrelevant. Youngblood is an employee of the contractor – Capstone. The

statutory expansion of government liability under the FTCA does not apply in this

case because there is no direct contractual relationship between the eligible entity and

the physician.4

      A doctor who wishes to be a covered employee is not precluded simply because

he is a member of a group or a professional corporation. He is only precluded if he

contracts with an eligible entity through another entity or group.5 Therefore, because

§ 233(g) sets forth an initial requirement that a qualified individual first must have

contracted with a covered entity, Youngblood was not qualified under the Act because

he never contracted with West Alabama.

      AFFIRMED.

FAY, Senior Circuit Judge, dissenting:

      The majority opinion is sound and well reasoned. My concern is that the

majority is creating a road block to the successful implementation of the


      4
         We decline to address the concerns raised by Youngblood at oral argument
regarding whether an individual doctor who contracts with an eligible entity through his
professional corporation would be protected. Those facts are not before this court.
      5
         We will not rewrite the statutory language of § 233(g)(1)(A) to expand the
definition of contractors covered under the statute to include physicians like Youngblood
who perform services for an eligible entity pursuant to an intermediate contract signed by
a practice group or clinic. Youngblood’s policy arguments suggesting that this
interpretation of the statute will preclude any physician employed by a clinic or entity
cannot overcome the express language of the statute. These concerns are more properly
disposed of by Congress.

                                            7
Congressional scheme designed to provide medical services to the indigent.

      It is a fact of life that one of the major costs of practicing medicine is the

high cost of malpractice insurance. In an attempt to secure the services of those

doctors necessary to carry out the Federally Supported Health Centers Assistance

Act, the Act provides financial malpractice protection to those doctors who qualify

by placing their conduct under the Federal Tort Claims Act.

      There is no question that Dr. Youngblood would be covered by the Act had

he contracted directly, as an individual physician, with West Alabama. The

majority holds that because there were intermediate or sub-contracts between West

Alabama, Capstone and individual physicians (or their professional corporations)

the doctors are not protected. It seems to me that such a holding flies in the face of

Congressional intent. I would hold otherwise and, therefore, respectfully dissent.




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