I am Dr. Marilyn Gaston, Director of the Bureau of Primary Health Care, the organization within
the Health Resources and Services Administration (HRSA) that implements safety net health
care programs providing primary health care services to underserved populations. These include
the National Health Service Corps (NHSC) and the Federally Qualified Health Centers (FQHCs),
including community and migrant health centers, health care for the homeless programs, health
care for public housing residents, and the FQHC "Look-Alike" certification. In connection with
these programs, we also manage the underserved area designation processes, which I will
discuss. I will also address HRSA's views on some of the issues raised by the General
Accounting Office (GAO) report on the Rural Health Clinic (RHC) program.
THE SAFETY NET
Safety net programs are a critical part of the health care delivery system in the Nation. That
system is now changing rapidly and dramatically. Safety net providers are more essential than
ever to assure access to health services for uninsured and other underserved populations. The
safety net is severely strained by massive erodes, resources shrink and managed care and
competitive changes as insurance coverage the marketplace is transformed by forces. We must
act now to strengthen these programs and their ability to care for those otherwise without access
In 1995, 40 million persons, 10 million of them children, lacked health insurance and presumably
lacked access to a primary care provider. Furthermore, Nation has been growing expected to
continue to the number of uninsured persons in the steadily since 1990 and the increase is
between 45 and 53 million within the next five years, depending on the changes made in
Medicaid. Safety net providers are especially vulnerable as they are care for the poor; they have
less able to smaller proportions of paying patients to begin with and they can no longer shift
decreased payment rates. Existing access problems, costs due to especially in isolated rural areas
and among vulnerable and hard to serve populations, are being exacerbated by changes in the
health care infrastructure and reductions in safety net capacity.
RHCs and FQHCs are both intended to be safety net providers which enhance access in
underserved areas, and both receive cost-based reimbursement through Medicaid and Medicare
all-inclusive per visit rates. As GAO points out, it is important to recognize that some RHCs are
true safety net providers. These RHCs are providing care to the underserved populations on
which their certification is based, including not only Medicaid and Medicare patients but also the
special populations that are some underservice designations. Furthermore, some provide care for
the uninsured and underinsured to their abilities.
Many factors influence the extent to which access to care is actually increased by an entity,
including but not limited to commitment to the underserved, provider capacity, and finances
available to provide access to needed care. It is important to keep in mind that the requirements
for RHCs and FQHCs are markedly different, both in terms of what is required of them and how
their applications are processed.
DISCUSSION OF THE DESIGNATION PROCESSES
The portion of the RHC effort that HRSA clearly has responsibility for is the shortage
area/underserved population designation process, so let me address this in some detail.
Two types of designations are required by the PHS Act: Medically Underserved Areas and
Populations (MUA/Ps) and Health Professional Shortage Areas (HPSAs). Both safety net
programs prior to their use for other programs such as Rural Health Clinics.
The MUA/P designations are intended to identify areas and population groups with a shortage of
primary care health services; this type of designation has been required for grant funding as a
health center under section 330 of the PHS Act since 1975. The criteria for these designations
are required to include indicators of health status, ability to pay for and access to health services,
and availability of health professionals. Historically MUA/P designation has used an index
approach; the variables currently included in the index are infant mortality rate, percentage of the
population below the poverty level, percentage of population over 65, and primary care physician
to population ratio.
The HPSA designations are intended to identify areas that have a shortage of primary care health
professionals. A HPSA designation (under section 332 of the PHS Act, as amended in 1976),
allows a community to request National Health Service Corps health professionals. Historically,
HPSA designation has primarily emphasized the primary care physician to population ratio, with
high poverty and/or infant mortality used to indicate areas and populations of unusually high
need, requiring a lower population-to-primary care physician ratio for designation.
A third type of designation used by the Rural Health Clinics program is Governor's designations.
These are made by State Governors using State criteria and data, after the criteria are first
reviewed by HRSA.
DESIGNATION AS A FIRST NEED SCREEN
I want to emphasize that underservice designations are designed as the first screen in determining
need for health resources and services. For example, HPSA designation is the first screen in
determining need for providers placed by the National Health Service Corps, but other scoring
mechanisms are them used to determine priorities among HPSAs and among primary care
delivery sites in HPSAs before available NHSC assignees (scholars or loan repayors) are
allocated to the HPSAs of greatest need.
Similarly, MUA/P designation is the first screen in determining potential need for a health center
grant. However, an application is also required that confirms the need in the designated
community and allows relative scoring of the need of the community as compared to other
Candidates for Federally Qualified Health Center (FQHC) Look-Alike status, which HRSA is
responsible for reviewing and recommending to HCFA for certification, are also required to
provide additional information on need beyond serving an MUA or MUP. They are asked to
identify existing resources in the community that provide primary health care to the underserved.
Also, they must document the lack of sufficient health care resources in the service area to meet
the primary health care needs of the target population.
UPDATE OF DESIGNATIONS
There is a statutory requirement that the list of federally designated HPSAs be annually
reviewed, revised as necessary, and published. To continuously update the HPSA list, each year
States are requested to submit current data, with emphasis on those HPSAs whose designations
are older than 3 years. For health center programs, updates regarding the need of the area or
population group for health services are presented in the continuation applications of grant
funded centers and recertification applications of FQHC Look-Alikes.
COUNTING OF FEDERAL PROVIDERS IN THE DESIGNATION PROCESS
The NHSC and other Federal providers are not included in practitioner counts in designating
HPSAs, and for MUA/P designation purposes providers at FQHCs are also excluded. Therefore,
these designations reflect the situation in the absence of Federal resources. To do otherwise
would result in a "Catch-22" situation, where placement of a Federal or federally-funded
clinician might require dedesignation of the area, in turn requiring removal of the clinician.
Because the federal providers are not included at the designation stage, it is critically important
that they be included at a subsequent stage of the allocation process. For example, the NHSC
placement process considers the NHSC clinicians already placed in a HPSA in determining the
number of new NHSC assignees that can be added; the Health Center grant process takes into
consideration the locations and service areas of other FQHCS.
COUNTING NONPHYSICIAN PROVIDERS
At the present time, we do not include nonphysician providers (nurse practitioners, physician
assistants and certified nurse midwives) in the counts of primary care providers for designation
purposes. We have not done so up to now for several reasons.
When the Rural Health Clinics Act was first passed, there was a concern that counting nurse
practitioners and physician assistants for designation purposes would prevent designation of
rural areas where they practiced, thus precluding their eligibility for RHC certification.
At this time, a major concern is that the use of nonphysician providers varies widely from State
to State. In States whose laws permit them to practice relatively independently, it is appropriate
to count these providers.
There has also been a lack of data on the location and practice patterns of nonphysician
providers. We understand that these data may now be more readily available allowing a
reasonable estimate of FTEs available for primary care in the future.
OTHER USES OF DESIGNATIONS
The original statutory intent. of the MUA/P and HPSA designations was to identify communities
in development or National Health Service Corps assistance. However, over 25 other Federal
programs, as well as some State programs, also use the MUA/P and/or HPSA designation in
screening for need and allocation of resources. These include certification of rural health clinics
(RHCs) which must be located in either MUAs, HPSAs, or Governor-designated area; the
10 percent Medicare incentive payment to physicians practicing in geographic HPSAs; the
placement of foreign trained physicians through the J1 visa waiver program; and a number of
Bureau of Health Professions grant programs that offer preference for applicants that have some
involvement with a designated community. The fact that these other programs use these
designations to guide allocation of their resources can be considered in revising the designation
process, but should not obscure the original purposes of this process.
On the other hand, HRSA would not support the creation of separate underserved designation
criteria specifically for the RHC program. The MUA/HPSA designation criteria, particularly
with the revisions and updates we plan, can work for the RHC program as well as other
RESPONSE TO GAO REPORT
MAXIMIZING CONTRIBUTION TO THE SAFETY NET
Given the changing health care market and budgetary pressures at the Federal and State
levels, it is critical that Federal grant programs and financing mechanisms for health care services
maximize their contribution to the safety net for underserved populations. Those providers
types that are reimbursed at higher Medicaid and Medicare rates than others because of their
includes FQHCs and RHCS, should beheld accountable for receiving the special subsidy. It is
imperative that the FQHC or RHC provide increased access to health care for a substantial
number of underserved persons in the target population.
REVISIONS TO THE DESIGNATION PROCESS
While there is no statutory requirement to periodically review MUA/P designations, we have
undertaken the task of combining and improving the existing processes for designation of HPSAs
and MUA/Ps. As part of this effort, over the past few years we have convened two panels of
outside experts to obtain their views on needed changes and later to react to our proposals. In
addition, we have shared our proposed revised approaches with numerous interested groups,
including our State partners in the designation process.
Our revision is intended to accomplish a number of goals simultaneously. The new approach
would consolidate the two existing procedures and sets of criteria, which currently result in two
overlapping lists of designations. In their place, we will have one procedure with consistent
criteria that generates an integrated list, with primary care HPSAs as a subset of MUA/Ps. As a
result, in the future the MUA/Ps and HPSAs will be updated simultaneously. The schedule will
be like that used now for HPSAS, where each year those designations more than three years old
must be updated.
The revised process is designed to make maximum use of data available nationally and reduce
the effort at State and community levels associated with information gathering for designation
and updating; to expand the State role in the designation process, especially in defining rational
service areas; and to incorporate better measures of or proxies for health status and additional
indicators of access barriers.
With respect to counting mid-level providers, we plan to begin counting nurse practitioners,
physician assistants and certified nurse midwives, once a determination is made that a sufficient
number of States have adequate data. We will count these practitioners in those States whose
laws permit them to independently provide services traditionally considered to be physicians,
ASSESSMENT OF NEED
The HRSA believes that the effectiveness of RHCs in fulfilling the goals of the program would
be improved by 1) requiring, within the RHC certification process, additional assessments of
need beyond the underservice designation and 2) implementing a recertification process for
RHCs that includes assessment of need. These changes would ensure more rational and strategic
placement of RHCS.
HRSA is supportive of the GAO conclusion that the current RHC eligibility criterion of location
in an underserved area does not go far enough to ensure that the program is directed and
maintained in needy communities with critical shortages of primary care providers. HRSA
recognizes that some of the issues raised in the report will be remedied by a revised designation
We support HCFA's efforts to explore additional tests of need for RHCs beyond presence in a
designated area and have been working with them in their efforts.
Before an entity is given the FQHC or RHC status, we must require documentation of the lack of
sufficient health care resources in the service area to meet the primary health care needs of the
target the lack of sufficient health care resources in the service area to meet the primary health
care needs of the target population. The FQHCs and RHCs should not be excluded from serving
overlapping service areas, but they as applicant should be required to demonstrate that there is
need for another provider with that status.
HRSA also agrees with the GAO recommendation to require periodic recertification of RHCs to
ensure that clinics continue to meet eligibility and need requirements. Currently, there is no
recertification requirement based on need for RHCS. If a recertification process is not a viable
alternative, other ways to monitor RHCs could be examined.
HRSA has been collaborating with HCFA in determining how to increase State involvement in
the RHC and FQHC Look-Alike certification processes. Our objective is to obtain information
from key State stakeholders at the time in the certification processes.
COSTS AND PAYMENTS
As GAO identified, the costs of facility-based RHCs are often higher than those for independent
RHCS. Given that finding, it may make sense to also implement payment limits and
cost-reporting requirements for facility-based RHCs. HRSA believes that steps should be taken
to improve the current cost reimbursement system. These steps should include an examination of
the current cap for reimbursement of visits to independent RHCs to determine if the cap is
We believe that consideration of any change from cost reimbursement should include a thorough
analysis potential effects on the RHCs' ability operation, and in underserved rural communities.
HRSA believes there is room for improvement in designations of underservice and in the RHC
program. We also believe that RHCs, like health centers, are critical participants in maintaining
the fragile safety net of providers who serve underserved populations. We must continue to work
together to ensure that appropriate providers are able to deliver needed care to underserved
Thank you for the opportunity to present today.