Is it worth it to apply for FTCA coverage?

With so many health centers recently granted Federally Qualified Health Center (FQHC) status, many leaders are considering the new federal benefits they now have access to. One of the most valuable benefits FQHCs are eligible for is medical malpractice insurance through the Federal Tort Claims Act (FTCA) program. But for most leaders, applying for FTCA coverage amidst all of their other competing priorities feels daunting. Is it really worth it? What’s it going to take to apply for and maintain FTCA coverage? Will there be a net positive return on our investment? Let’s walk through some of these questions together.

The FTCA program is managed and overseen by the Health Resources and Services Administration (HRSA). So, naturally, many of the FTCA requirements are also requirements of HRSA’s Health Center Program. But there are some distinct requirements that go beyond the base Health Center Program regulations. This blog post assumes that the reader’s health center is already following these regulations as outlined in the HRSA Compliance Manual and has demonstrated this compliance successfully during Operational Site Visits (OSVs) and in alignment with the HRSA Site Visit Protocol.

Spoiler Alert: We think FTCA coverage is absolutely worth it. At an estimated 3 hours a week of work in exchange for a significant financial savings of $8k to $56k per provider every year? For us, it’s a no-brainer.

But as your health center is considering the benefits and responsibilities of FTCA coverage, it is important to approach the opportunity with your eyes wide open and knowing the commitments above and beyond basic health FQHC requirements upfront.

Risk Management Program

The first and most basic requirement for developing and maintaining FTCA status is that a health center must develop and maintain an ongoing risk management program to “reduce the risk of adverse outcomes that could result in medical malpractice or other health or health-related litigation”. The program must address risk management across the full range of health center activities (for example, patient management including scheduling, triage, intake, tracking, and follow-up). As we will discuss later in this post, activities include healthcare risk management training for health center staff, the completion of quarterly risk management assessments, and annual risk management reporting to the governing board. We will discuss each of these areas in greater detail in the following paragraphs.

Quarterly Risk Assessments

Arguably the most time-consuming additional FTCA requirement is the completion of quarterly risk assessments. Check out our blog post on this topic here. Completing effective and efficient risk assessments takes time and practice, so health center leaders should invest in training and resources to help their risk management staff be set up for success. But beyond risk assessments being an FTCA requirement, we believe that this is a good practice for all health centers to complete to lower the risk of patient safety events and improve the quality of care.

Credentialing and Privileging

Though health centers are already required to credential and privilege their staff, there are just a few subtle differences that FTCA-deemed entities must adhere to. First, health centers are required to credential and privilege their clinical staff “upon hire and on a recurring basis”. But for FTCA-deemed health centers, the requirement is upon hire and at least every two years.

Additionally, if the health center chooses to have a credentialing and privileging policy and procedure that incorporates temporary credentialing and/or privileges, those temporary credentialing and privileging procedures must align with the guidelines in the current Temporary Privileging of Clinical Providers by Federal Tort Claims Act (FTCA) Deemed Health Centers in Response to Certain Declared Emergency Situations - PAL 2024-01. For FTCA-deemed health centers, use of temporary credentialing and privileging is not allowed for situations not outlined in PAL 2024-01 and therefore should not appear in the health center’s general policies and procedures. Read more in our related blog post.

And finally, during the FTCA application period (both initial and annual redeeming), health centers must manually enter the names and last credentialing/privileging dates for all of their staff. Depending on the number of clinical staff employed by the health center, this manual data entry can be very time-consuming with each application, and ample time should be budgeted for this each year.

Annual Report to the Board

Each year, FTCA-deemed health centers must provide a comprehensive report to the governing board, summarizing the risk management activities for the prior calendar year, and setting a plan for the coming year. Though most health centers are reporting to their board on these topics, there are some special FTCA requirements to be aware of. Read more in our blog post here.

Training

Personnel training is already a requirement for health centers. Your health center is likely already requiring staff to complete training on HIPAA and confidentiality and infection control or bloodborne pathogens. However, FTCA requires a few additional trainings annually that must be completed and demonstrated with documentation with each annual redeeming application submission. Read more in our blog post here.

Posting FTCA Deeming Notice on Website and in Brochures

Though a simple requirement, the FTCA-deemed health center must inform patients using plain language that it is a deemed Federal Public Health Service (PHS) employee via its website, promotional materials, or within an area of the health center that is visible to patients. For example: “This health center receives HHS funding and has Federal Public Health Service (PHS) deemed status with respect to certain health or health-related claims, including medical malpractice claims, for itself and its covered individuals.”

Documentation of Scope

Since FTCA only covers services that are considered to be within the scope of project for the health center, it is important for an FTCA-deemed health center to ensure its scope is documented accurately. Pay special attention to the health center’s scope of project as documented on Forms 5A and 5B. To learn more about the health center’s scope of project, read our related blog post.

Claims Log

Once a health center is FTCA-deemed, health centers must maintain a log of any medical malpractice claims or allegations that have been presented to the health center. The log must include:

• Name of provider(s) involved

• Role(s) in Health Center

• Specialty

• Other staff named in the claim

• Nature of allegation

• Date of occurrence

• Date claim filed

• Summary of allegations

• Details on whether the claim or allegation has been resolved or settled

• Summary of the health center’s internal analysis and implemented steps to mitigate the risk of such claims in the future

The ultimate purpose of this log is to ensure that the lessons learned from the claim, as well as the mitigation steps that were put in place as a result of the claim, stay in place and that these efforts result in a lower risk profile in the future.

Policies and Procedures

Though there are numerous policies and procedures that overlap with the requirements of the general health center program, there are a few additional policies that are explicitly required of the FTCA-deemed health center. One example includes maintaining a compliant “Claims Management” policy. Other required policies are listed in the FTCA Site Visit Document List, as well as the most recent FTCA Program Assistance Letter.

Human Resources

Each FTCA-deemed health center must designate a “Risk Manager” and a “Claims Manager” for the organization. This can be the same person, one person holding each role, a contracted fractional person, or their responsibilities may be added to the job description of an existing employee. One of the most common questions we receive is “How much more time will it take someone to meet the FTCA requirements?” Of course, there is no exact number, and each health center is a little different. However, our team at RegLantern provides fractional risk management services, and we have landed on the average of 3 hours a week for what it takes to complete the additional work required by FTCA. Now, there are some weeks where your risk management staff may not perform any FTCA-required activities, and other weeks may be nothing but FTCA-required work (specifically the weeks leading up to the submission of the FTCA application).

This average number assumes that the health center already has someone maintaining credentialing and privileging files and processes, as well as maintaining and tracking general personnel training; both requirements that are already required for health centers. If the average hours per week is 3 hours, this means this generally totals around 156 hours each year, or an additional 0.075 full-time equivalent (FTE). For most health centers, it’s difficult to justify hiring an entire 1.0 FTE employee to manage the FTCA-required activities. In the majority of cases, health centers either outsource these responsibilities to a fractional contractor (like the services we provide at RegLantern), or divide up the work between other roles, the most common being a quality manager or a clinical operations lead. Whoever is chosen for the work, the staff member(s) should have a strong background in clinical quality and risk management, and improvement science. (To learn more about RegLantern’s Fractional Risk Manager services, please contact us here.)

FTCA Site Visits

When a health center is initially deemed, this can sometimes trigger an FTCA Site Visit. FTCA Site Visits do not occur on a regular cadence as the HRSA Operational Site Visits do. Though these are relatively rare (15-20 FTCA Site Visits each year), they do happen and should be anticipated. There are varying reasons why a health center may be selected for an FTCA Site Visit, including initial deeming application submission, issues or concerns with submitted annual redeeming applications, or claims filed against the health center. Similar to HRSA OSVs, FTCA Site Visits follow the FTCA Site Visit Protocol and tend to be less structured than OSVs.

Annual Redeeming Application

As we have mentioned numerous times throughout this post, health centers must submit an annual application each year in order to maintain FTCA coverage. Generally, HRSA opens the FTCA application in the Electronic Handbooks (EHBs) in February or March, and applications are due around the end of June (dates vary from year to year). If health centers are keeping up with their risk management work year-round, the application process is not overly burdensome. But time should be budgeted for this season, and it will take some focused time committed to completing this process by the deadline. This is an extremely important part of the FTCA requirements so it is critical that health centers take this seriously.

Who is covered under FTCA?

In general, FTCA liability protection for medical malpractice is extended “to any eligible officer, governing board member, employee, or qualified contractor of a covered entity, subject to the requirements of the PHS Act (including subsection 224(i))” (FTCA Policy Manual). For more details on the specific details, review our blog post on this topic.

Financial and Recruitment/Retention Benefits

According to HealthcareDealHub.com in 2026, medical malpractice coverage costs providers between $8,017 (for psychiatrists) and $59,392 (for OB/GYN providers) on average each year. Multiply this by each provider, and the cost to the health center is high! And if the health center requires providers to purchase their own malpractice insurance, this is a significant burden placed on each provider and could contribute to staff turnover or difficulty in recruiting providers. FTCA coverage pays off most in cost savings and provider recruitment and retention. From a simple math perspective, an investment of 3 hours a week to maintain FTCA compliance and submit annual redeeming applications could save hundreds of thousands (and for some, millions) of dollars every year. Not to mention the attractiveness of health-center-provided medical malpractice insurance to a potential provider you are trying to recruit (and then retain). So, except for a very few rare cases, FTCA coverage is a no-brainer for most health centers.

Applying for FTCA Initial Deeming

Health centers may submit an initial deeming application via HRSA’s Electronic Handbooks (EHBs) at any time during the year when the system is open to accept applications. If EHBs is closed for maintenance, these blackout dates will be communicated in EHBs notifications within the system and via e-mail to active EHBs users. At the beginning of each calendar year (usually January or February each year), HRSA releases a Program Assistance Letter (or “PAL”) that outlines the FTCA application requirements for each calendar year. Once a health center has decided to apply for FTCA coverage, go to the HRSA PINs and PALs website and look for the current calendar year’s FTCA PAL. This will be the guidance the health center will use to understand what is required to be submitted for each application. For calendar year 2026, the FTCA PAL is PAL 2026-01. HRSA recommends health centers submit initial deeming applications in EHBs at least two months before the desired coverage start date. Depending on the health center, the time to complete the application varies. In general, RegLantern recommends health centers plan for one month to actually gather and upload documents and complete the questions in the application. The work itself, however, should begin at least 6 months prior to when the health center plans to submit the initial FTCA application. So, adding up these dates, this means a health center should begin working on building an FTCA-compliant risk management program and completing the required activities no less than 9 months prior to the date the health center hopes to be covered under FTCA. 

Initial FTCA applicants should expect to begin working toward applying a minimum of 9 months prior to when they hope to be deemed.

After reviewing HRSA’s technical assistance resources, award recipients submitting an initial deeming application should consult with Health Center FTCA Program staff if they have any additional questions. Once a complete initial deeming application is submitted, HRSA will conduct its review within 30 days. Please note that an FTCA deeming application is not considered complete until all required documentation has been submitted through EHBs, and, if required by HRSA, a site visit has been completed. Entities are responsible for ensuring that the information needed to complete their application has been successfully submitted to HRSA through EHBs. Entities that do not submit a complete application in a timely manner may not receive deemed status, with associated FTCA coverage. If additional information or clarification is needed, HRSA may notify the entity through EHBs, and the entity will be given 10 business days from the date of the EHBs notification to provide the requested information to complete its application. If the requested information is not submitted within 10 business days of notification, the FTCA deeming application may be considered incomplete and voided. If the application is voided, the award recipient will be notified and will need to submit a new initial deeming application to obtain deemed status. Within 30 days after a complete initial deeming application has been received by HRSA, HRSA will notify the contact person(s) identified by the health center of a final determination through EHBs. FTCA coverage will begin on the effective date identified by HRSA on the “Notice of Deeming Action” (NDA). Initial deeming applicants should not consider a deeming application approved until they receive written documentation confirming the deeming determination from HRSA and should therefore maintain private malpractice insurance until they receive an NDA from HRSA.

Our RegLantern team provides assistance with initial FTCA deeming applications, annual redeeming FTCA applications, and fractional risk manager services. To learn more, schedule a 15-minute call with our RegLantern team to explore options.

AI Disclaimer

This blog post was created 100% without the assistance of generative Artificial Intelligence (AI). It was written by a real, living (albeit fallible and quirky) human (specifically, Kyle Vath). The content is purely educational and not to be viewed as legal advice.