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Testimony on Safety Net Health Care Programs by Marilyn H. Gaston, M.D.
Director, Bureau of Primary Health Care
Health Resources and Services Administration
U.S. Department of Health and Human Services

Before the House Committee on Government Reform and Oversight, Subcommittee on Human Resources
February 13, 1997

Mr. Chairman:

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.


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 to care.

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.


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.


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 applicants.

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.


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.


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.


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.


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 programs.


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.


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, services.


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 process.

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.


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 reasonable.

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 populations.

Thank you for the opportunity to present today.

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