Health Center Regulatory Issues

Update on the CDC’s Guidance on Vaccine for Children Deputization Arrangements

On June 8, 2012, NACHC issued an Alert addressing the Guidance and sample Memorandum of Understanding (MOU) issued by the Centers for Disease Control and Prevention (CDC), with input from the Health Resources and Services Administration (HRSA) and the Centers for Medicare and Medicaid Services (CMS). That Guidance authorized Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) to “deputize” local health departments to administer Vaccine for Children (VFC) immunizations to underinsured children (Guidance for Use of Vaccines for Children (VFC) Deputization to Extend Access to Underinsured Children with VFC Vaccine, April 2012).  This Alert serves as an update, providing additional information regarding actions that have occurred since the first Alert and updating our advice accordingly.

In the June 2012 Alert, we suggested that the MOU raises several concerns by failing to adequately protect FQHCs from liabilities; specifically, the MOU indicates that under the deputization arrangement the deputized provider acts as the “agent” of the FQHC, but fails to include any assurances or representations that the FQHC will be held harmless from liabilities arising from: (1) allegations of inappropriate diversion of VFC vaccines; (2) insufficient oversight and monitoring of the deputized providers; and/or (3) the acts or omissions of the deputized providers, whether in connection with the actual provision of the vaccines or in complying with all VFC provider responsibilities and requirements. Accordingly, we advised in that Alert that all health centers  proceed with caution prior to executing VFC deputization arrangements, and, as necessary,  secure legal advice to ensure that the MOU includes adequate safeguards and/or “hold harmless” clauses, which, at a minimum, protect participating FQHCs from liabilities associated with the actions or omissions of the deputized provider (examples of which were provided in the Alert).

Since that time, NACHC has held several discussions and traded written correspondence with both HRSA and CDC officials regarding our concerns.  Specifically, we sought g : (1) an official written opinion from the Office of Inspector General (OIG) indicating that the deputization authorization is consistent with and allowed under the VFC statute, and that given the CDC prior approval necessary to implement any proposed deputization arrangement, the participating FQHCs will not be exposed to allegations of diversion or misappropriation of vaccines; and (2) revisions to the sample MOU that would hold the FQHC harmless from any liabilities arising from the acts or omissions of the deputized providers that are related to the provision of vaccines to underinsured children pursuant to the MOU.

On November 12, 2012, NACHC received a written response from the CDC regarding our concerns – unfortunately, the CDC’s response was not what we had hoped for.  In that letter, the CDC indicated that: (1) they do not believe that FQHCs are exposed to allegations of diversion since the CDC (not the FQHC) distributes the vaccines to the deputized provides; and (2) since both the sample MOU and the details of the arrangement itself already include appropriate “provisions to mitigate legal risk,” the CDC will not approve revisions to add hold harmless clauses to the sample MOU.

While CDC’s response was generally unhelpful, we note there are a couple of positive developments.  First, despite the CDC’s warning that it would not approve revisions to the MOU, we have been informed that a few state awardee agencies (working in conjunction with their State Primary Care Associations) have modified the sample MOU to provide “hold harmless” safeguards consistent with the provisions described in NACHC’s June 2012 Alert.  Second, the fact that the CDC explicitly stated in writing that “there is no reason to believe that FQHCs would be at risk of charges for diverting vaccine” could be used to mitigate potential allegations should they arise.

Nevertheless, we continue to urge that, prior to executing deputization arrangements, health centers should seek to revise the MOU to include certain safeguards and “hold harmless” clauses consistent with the provisions suggested in the prior Alert.  NACHC will continue to monitor developments and will provide updates as they arise.