Department of Health and Human Servces 
OFFICE OF 
INSPECTOR GENERAL 
OFFICE FOR CIVIL RIGHTS' OVERSIGHT 
OF THE HILL-BURTON PROGRAM 
AUGUST 199  OFFCE OF INSPECfOR GENRA 
The mission of the Offce of Inspector General (OIG), as mandated by Public Law 95-452, as
amended, is to protect the integrity of the Department of Health and Human Servces
' (HHS)
programs as well as the health and welfare of beneficiaries served by those 
programs. This
statutory mission is carred out through a nationwide network 
of audits, investigations, and
inspections conducted by three OIG operating components: the Office of Audit Servces, the
Offce of Investigations, and the Offce of Evaluation and Inspections. The OIG also informs 
the Secretary of HHS of program and management problems and recommends courses to 
correct them. 
OFFCE OF AUDIT SERVICE 
The OIG's Offce of Audit Servces (OAS) provides all auditing servces for HHS, either by
conducting audits with its own audit resources or by overseeing audit work done by others. 
Audits examine the performance of HHS programs and/or its grantees and contractors in 
carryng out their respective responsibilties and are intended to provide independent 
assessments of HHS programs and operations in order to reduce waste
, abuse, and
mismanagement and to promote ecnomy and effciency throughout the Department. 
OFFCE OF INTIGATIONS 
The OIG's Office of Investigations (01) conducts criminal, civil, and administrative 
investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of 
unjust enrichment by providers. The investigative 
effort of 01 lead to criminal convictions 
administrative sanctions, or civil money penalties. The 01 also oversees State Medicaid fraud 
control units which investigate and prosecute fraud and patient abuse in the Medicaid 
program. 
AN 
OFFICE OF EVALUATION  INSPECfONS 
The OIG's Office of Evaluation and Inspections (OEI) conducts short-term management and
program evaluations (called inpections) that focus on issues of concern to the Department 
the Congress, and the public. The findings and recommendations contained in these inspection 
report generate rapid, accurate, and up-to-date information on the efficiency, vulnerabilty, 
and effectivenes of departmental programs. This report was 
prepared in the Chicago
Regional Offce under the direction of Wiliam C. Moran, Regional Inspector General and
Natalie Con, Deputy Regional Inspector General. Project staff: 
REGION  HEUAR1ES 
John M. Traczyk (Project Leader) 
Ruth Folchman

Thomas F. Komaniecki

Margaret Shell

To obtain a copy of this report, call the Chicago Regional Offce at (312) 353-4124.  Department of Health and Human Servces 
OFFICE OF 
INSPECTOR GENERAL 
OFFICE FOR CIVIL RIGHTS' OVERSIGHT 
OF THE HILL-BURTON PROGRAM 
001 
AUGUST 199 OEI-05- EXECUTIVE 
SUMMAR 
PUROSE 
This inspection examines the effectiveness of the processes used by the Office for 
Civil
Rights (OCR) to monitor compliance with the community servce obligation of health care 
facilties assisted by the Hil-
Burton program. 
BACKGROUN 
In 1946, Congress passed the Hospital Survey and Construction Act, commonly known as
the Hil-Burton Act. Since 1946, more than $4 bilion in Hil-Burton funds have aided 
nearly 6 900 hospitals and other health care facilities in 4 000 communities across the 
United States. 
Recipients of Hil-Burton grants agree to make available, in perpetuity, the servces
offered by the constructed facility to all persons residing in their servce 
area. This 
agreement is commonly known as the Hil-Burton community servce obligation and
prohibits a facilty from 
discriminating practices. Such practices include discrimination 
against patients when providing non-emergency servces and denial of emergency 
servces
to persons unable to pay. The cooperation of facilties that have received Hil-Burton
grants is important to achieving the Secretary s strategic goal to improve access to health
care for all Americans. 
The OCR has responsibilty for ensuring compliance with several different 
civil rights and
nondiscrimination statutes. In the 2-
year period 1989 and 1990, OCR closed, under all of
its authorities, 330 post-
grant reviews involving discrimination against persons based on
their medical condition, handicap, race, abilty to payor other 
factors. Thirt-six percent
were specifically for Hil-Burton compliance. When OCR 
conducts a post-
grant review
they can assess facility compliance with all of the statutory provisions binding on the 
facility for which they have jurisdiction. Although, for reporting purposes, post-grant
reviews are categorized under only one authority. 
During this same period, OCR received and processed 3 
562 discrimination complaints.
Less than 4 percent of the complaints received by OCR specifically involve 
allegations of
Hil-
Burton noncompliance. 
MEODOLOY 
We intervewed OCR headquarters 
' staff and OCR staff in the eight regional 
offices that 
account for most of the Hil-Burton workload. Data on the number of facilties 
investigated and the number of compliance reviews conducted was obtained from OCR 
headquarters.  FIINGS 
Over the past 4 years, OCR has developed a comprehensive procedures manual for 
conduct of investigations and routine compliance reviews. These national guidelines
coupled with the checks and balances of supervsory review
, have improved OCR
investigative processes. Nevertheless, our inspection found that: 
Investigative procedures could be strengthened by using some unannounced 
visits. 
No formal or uniform follow-up procedures exist to ensure facilties take 
corrective action when they are found to be out of compliance. 
The OCR authority to enforce 
compliance with Hil-Burton regulations is limited. 
An opportunity exists for improving the investigative process by sharing staff 
expertise. 
RECOMMATIONS 
Medical facilties built with Hill-Burton funds are prohibited from discriminating through
the community servce obligation. The efforts of OCR to enforce Hil-
Burton and other 
legislation intended to prevent discrimination helps ensure health care 
access to a 
significant segment of the American public. 
To strengthen Hil-Burton enforcement efforts, OCR should: 
consider unannounced visits whenever possible to validate 
systems that facilties 
use in complying with the community servce obligation under the Hil-Burton 
program 
develop a follow-up system to monitor compliance agreements that ensures 
facilties take adequate and prompt action to bring their community servce 
programs into compliance 
seek legislative authority that allows for administrative action against facilties that 
fail to comply with their Hil-Burton community servce obligation or fail to take 
timely corrective action when their program is found to be out of compliance
, and 
determine whether technical assistance 
guides and methodologies developed in 
individual regions can be shared nationally.  An exit conference was held with OCR to discuss this inspection s findings and
recommendations. At that meeting, OCR agreed in principle with the recommendations. 
Subsequently, OCR provided wrtten, technical comments which we considered in 
preparing this final report. 
The Assistant Secretary for Planning and Evaluation (ASPE) recommended that we delete 
recommendations callng for unannounced inspection visits unless they could be done cost 
effectively. We continue to believe that unannounced 
visits can be an effective 
enforcement tool. We do agree, and indeed had meant to emphasize, that their use 
should be selective. The ASPE was also not supportive of additional enforcement 
authority for OCR believing that Medicare funds could be suspended if Hil-
Burton 
requirements were violated. We stil believe that the various enforcement tools that we 
have recommended would be useful to OCR and provide the flexibilty OCR needs to 
ensure compliance with Hil-Burton requirements. The complete text of OCR and ASPE 
respectively. 
comments can be found in Appendices A and  ......... 
...... ... 
.. .. 
. . . . . . ..  ....    ....  . ...    ....    ....    .....     ......      ......    . ..... .    ......     . ....    . ..... .    .... .     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     .....     ....    ....    ....    ....    ....    ....    ....    ....    ....  . .. .  . .. .   ...  .  . . . . . .. 
TABLE OF 
CONTENTS

PAGE 
.......................................... i

INODUCfON . 
FIINGS 
. . . . . . . . . . . . . . . . . . . 5

Unannounced Visits. . . . . . . . . . . . . . . . . . . . . 
. . . . . . . . . . . . . . . . . . . . . . . . 5

Follow-up Procedures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 
 . . . . . . . . . . 6

Enforcement Authority 
. . . . . . . 7

Sharing Staff Exertise. .  . . . . . . 7

RECO  NDATIONS 
............................................ 8

APPENICE

A: 
OCR Comments 
. . . . .. A
B: ASPE Comments
 . . . . . . . . " B- INTRODUCTION
PUROSE 
This inspection examines the effectiveness of the processes used by the Office for 
Civil 
Rights (OCR) to monitor compliance with the community servce obligation of health 
care facilties assisted by the Hil-
Burton program. 
BACKGROUN 
Lelatie Backgwu 
In 1946, Congress passed the Hospital Survey and Construction Act, commonly known
as the Hil-Burton Act. Since 1946, more than $4 billon in Hil-Burton funds have 
aided nearly 6 900 hospitals and other health care facilties in 4 000 communities 
across the United States. 
The Hil-Burton Act authorized Federal grants to assist States and communities in 
constructing needed hospital and public health centers. Hil-Burton recipients are
required to: 
provide a reasonable amount of uncompensated care to persons unable to 
pay, and 
make available, in perpetuity, the servces offered by the constructed facilty 
to all persons residing in the territorial area of the applicant. 
This second requirement is commonly referred to as the "community servce 
obligation.  If a facilty continues operations without a change of status, OCR will 
continue to enforce the community servce obligation even though the facilty has
completed its uncompensated care obligation. The OCR considers a change of status
to occur when the initial Hill-Burton recipient transfers ownership or control to 
another entity. If control transfers to an ineligible entity (Le., a for profit corporation)
the obligation to provide community servce terminates except under limited 
circumstances. 
Today, the Hil-Burton community servce obligation could playa vital role in ensuring
access to the American health care system. The emergence of AIDS, the resurgence
of other infectious diseases such as measles and tuberculosis coupled with efforts by 
government and private sector to control spiraling health care costs 
changed the 
health care environment in the United States. Limits on the amount paid for patient 
care, increased numbers of uninsured, misunderstandings of AIDS and inadequate 
resources to deal with the infectious disease 
epidemics has created the temptation for 
some facilties to transfer persons to publicly supported facilties or 
to refuse to  ...
provide emergency and other medical care.
The Hi-Burton community servce obligation prohibits a facilty from:
discriminating against patients when providing non-emergency servces;
denying emergency servces to persons unable to pay; 
deciding not to participate in governmental (Federal, State, and local) 
third-part payer programs, if eligible to do SO 
discriminating against beneficiaries of governmental third-
part payment

programs;
making exclusionary admissions policies, including the exclusion of patients 
who do not have a physician with staff privileges at the facilty; and 
requiring a cash deposit at time of servce.
The cooperation of facilties that have received Hil-Burton grants is important to
achievig the Secretarys strategic goal to improve access to health care for all
Americans.
In December 1980, the HHS Secretary delegated to OCR the responsibility for
ensuring facilty compliance with all aspects of the community servce obligation. In 
addition to their Hil-Burton responsibilties, OCR is also responsible for monitoring 
and ensuring compliance with Title VI of the Civil Rights Act of 1964, Section 504 of 
the Rehabilitation Act, the Age Discrimination Act and other laws designed to prevent
discrimination. The OCR also coordinates its Hil-Burton activities with the patient 
dumping investigations conducted by the Health Care Financing Administration 
(HCF A) Offce of Inspector General.
This study focuses on the processes used by OCR to monitor compliance 
with Hil-

Burton obligations. The processes used by OCR to monitor Hil-
Burton compliance

are similar to the processes used to monitor all of the statutory 
provisions binding on
facilties falling under OCR jurisdiction.
Pres 
Descrtin of 
When OCR conducts a post-grant review, they can assess facilty compliance with all 
of the statutory provisions binding on the facilty but tyically select the strongest 
Federal statutes require that physicians affiated with Hill-Burton assisted facilites must also 
partcipate in governmental third-part payer programs. However 42  C.F.R.  124.603(d)(2) states that to
be in compliance with this requirement "  a facility does not have to require all of its staff physicians to 
accept medicaid "  statutes for which they have jurisdiction. For reporting purposes
, post-
grant reviews
are categoried under only one statutory authority. Post-grant reviews are generated
internally within OCR and can be targeted based on triennial survey results, media
interest, frequency of complaints, and other factors. Complaint investigations result
from specifc allegations made by an individual or group of individuals. If a facilty has
been a Hil-Burton recipient, its compliance with the community service obligation can
be examined whenever OCR has reason to conduct a civil rights 
or discrimination 
review. 
The OCR mails all Hil-Burton assisted hospitals, nursing homes and other Hil-Burton 
assisted facilities providing health or social servces a standard reporting form. The 
information obtained from this form is used to determine facilties that potentially are 
in noncompliance with Hil-Burton regulations. Facilties that are potentially in
noncompliance can be targeted for further review. In addition
, individual regional 
offces can, and often do, target facilties for compliance reviews based on the number 
of complaints and other factors. 
The OCR uses a number of different techniques to validate facilty compliance with 
the Hil-Burton community servce obligation. During onsite reviews
, OCR 
investigators attempt to visually observe the operations of specific areas of the facilty. 
They also examine facility notices, documents and usually will select a random sample 
of emergency room or other hospital records for review. In 
addition to these on site 
activities, investigators attempt to verify actual practice through third parties such a 
advocacy groups. Statements from facilty staff, patients and other parties, coupled
with documents, provide the primary evidence used by OCR to determine 
compliance. 
In the 2 year period 1989 and 1990, OCR closed, under all of its authorities, 330 post-
grant reviews involving discrimination against persons based on their medical 
condition, handicap, race, ability to payor other factors. Thirty-six percent of the
reviews were conducted specifcally to ensure for Hil-Burton compliance. In addition 
to the post- , OCR received and processed 3 562 discrimination 
grant reviews
complaints. 
If a facilty is found to be out of compliance
, OCR undertakes negotiations with the 
facilty to brig its program back into compliance. When OCR and the facilty agree 
to a corrective plan of action, a wrtten agreement between OCR and the facility is
executed. When the facilty has completed all of the corrective actions it notifies OCR 
and OCR offcially closes the monitoring of the case. When an agreement cannot be 
reached or the corrective actions are not implemented, the case can be referred to the 
Department of Justice (DOJ) for action.  MEODOLOY
The OCR has jurisdiction over civil rights and nondiscrimination codified in several 
statutes. Ths inspection is limited to OCR responsibilty for the oversight and
monitoring of the Hil-Burton community servce obligation. This inspection did not 
look at how OCR handles each of the other authorities over which it has investigative 
jurisdiction. 
We intervewed OCR headquarters' staff and OCR staff in the eight regional offces 
that account for most of the Hil-Burton workload. The eight regional offces visited 
during this study were Boston, New York, Philadelphia, Atlanta, Chicago, Dallas 
Kansas City, and San Francisco.
During our visit to the regional offces we gathered information on the flow of data 
and the handling of complaints and routine compliance reviews. We analyzed the 
processes used by OCR to ensure compliance with Hil-Burton provisions. 
Data on the number of facilties investigated by regional OCR offces was obtained.
Similar data on the number of compliance reviews conducted by the regional offices 
was also obtained from OCR headquarters and from regional offces. 
The complaint 
and compliance review data collected from OCR 
systems were for the years 1989 and 
1990.  FINDINGS
The OCR has developed a comprehensive procedures manual for conduct of 
investigations and post-grant reviews. These national guidelines, coupled with the 
checks and balances of supervsory review, have greatly improved OCR compliance 
and investigative processes. 
Selection of facilties for post-
grant reviews is made from each of the statutory areas
over which OCR has investigative responsibilty. While reviews are opened under 
specific authorities, OCR may find durig the course of their investigation violations in 
areas other than the program under which the investigation was initiated. When this 
occurs, the case will be documented to reflect noncompliance with the appropriate 
statute. A case opened as a potential Hil-Burton violation may be closed indicating 
violations of Title VI of the Civil Rights Act of 1964; likewise, a case opened under 
Title VI could be closed with findings of noncompliance with the Hil-Burton 
community servce obligation. 
In 1989 and 1990, OCR completed 119 post-grant reviews specifically to ensure facilty 
compliance under Hil-Burton. During this same period, less than 4 percent of the 
562 complaints received and processed by OCR specifically involve allegations 
Hil-Burton noncompliance. Hil-Burton violations may have been examined during 
the course of other investigations. 
Each region has autonomy in the selection of facilities it will review. While criteria 
exists to identify facilities with high probabilty of being in violation of various civil 
rights and nondiscrimination statutes, each region can request deleting or adding 
facilities to reflect the critical issues affecting their region. For example, two regions
have chosen to use complaint files and media articles to target facilties accused of 
using admissions policies that discriminate against AIDS patients. Another region is 
focusing on facilities that refuse to provide care to Medicaid patients while another is 
focusing on facilties that refuse to provide emergency care to uninsured patients. 
OC 
Findig #1: The  inestigatie procures could be strengtened by the use of 
unannounce viits. 
some 
The investigative community and other oversight agencies have long recognized the 
deterrent effect of unannounced, random sight visits and audits. The mere possibilty 
of being selected at random for verification of information previously provided to the 
government has a positive effect on compliance. The possibilty of unannounced 
visits 
coupled with appropriate enforcement authority would provide an incentive for Hil-
Burton facilties to monitor their operations to ensure compliance with civil rights 
statutes at all times and not just during announced regulatory visits.  Once facilties have been selected for review, OCR tyically conducts an announced
onsite visit to investigate the community servce programs operated by Hil-
Burton
grantees. The same procedure applies to complaints filed 
against facilties alleging 
communty servce noncompliance. As previously mentioned, OCR investigations 
frequently determine whether a facilty might be in violation of other civil rights 
nondiscrimination statutes. 
According to OCR staff, most investigations and compliance reviews are conducted on 
site with visits to facilties scheduled in advance. This is done to ensure that 
administrative and other facilty staff are present to answer any questions OCR staff 
may have regarding the way a facility implements its community servce obligation 
under the Hil-Burton program. Advance scheduling of on site visits enables facilties 
to collect documentation about their community servce program and to have it 
available for OCR examination.
While we did not independently investigate this, OCR staff felt that announced visits 
can provide facilities with enough lead time to ensure that OCR investigators will find 
nothing wrong with their community servce obligation program. Announced 
visits 
may alter the way a facilty handles its community servce obligation for that brief 
period when OCR is onsite. 
Findig #2: No formal or unorm follow-up procdures  tae 
exit to ensure facities 
correcte acton when they are found to be out of compliance. 
Facilities whose community servce programs are found to be out of compliance are 
sent a letter of findings specifyg the corrective actions to be taken. During 1989 and 
1990, 46 percent (55 of 
119) of the post-grant reviews required facilities to take some
remedial action to bring their community servce program into compliance. More 
often than not, corrective actions were discussed with these facilties before a formal 
letter of findings was issued by OCR. In many cases, OCR and facilties have 
negotiated settlement agreements designed to bring the facility's community servce 
program back into compliance before an offcial notice of findings is sent to the
facility. If a compromise cannot be reached or a facilty refuses to take 
corrective
action, OCR regional offces must refer the case to OCR headquarters for a 
decision
on whether to pursue legal action through DOJ. 
We found wide variance in how individual OCR staff monitor facilties that have 
agreed to take corrective action on findings of noncompliance. The data system 
maintained by OCR headquarters does enable the regional 
office to input a follow-up 
action date. However, regional offce staff told us that untimely updating of data 
bases by the region, coupled with a lack of uniform definitions and standardized 
procedures, deterred them from using the system developed by OCR headquarters. 
Consequently, each region, and often individuals within the region, have developed 
their own personal systems that they use to remind themselves to follow up on a 
facility's efforts to bring their community servce program into compliance.  It was our overall impression, from discussions with OCR staff, that while 
investigations were conducted conscientiously, follow-up actions were viewed as 
nonproductive, if not undesirable, work. In almost all cases, a letter or other 
documentation from the Hill-Burton facility was accepted as suffcient evidence that 
the facilty had undertaken corrective action. Very few corrective actions are verified 
through third parties or by onsite visits. 
OC 
Findig #3: The  authority to enforce compliance with Hi-Buron regulations is
lited. 
Unlike Civi Monetary Penalties and sanction authorities 
available to other 
Department programs, such as Medicare and Medicaid, the OCR has no such 
administrative remedies to ensure that recalcitrant facilties bring their 
community
servce programs into compliance. The Medicare program also has the authority to 
suspend government funds pending the resolution of investigations. 
The lack of enforcement authority leaves OCR with two alternatives, either reach
settlement with the noncompliant facilty or refer the case for further 
action. Since 
OCR has little clout to force compliance, settlements between regional offices and 
facilties may not be suffcient to ensure that a facilty does not 
discriminate against 
patients unable to pay for medical care. Further action 
against a facilty requires that
the regional offce case be sent to OCR headquarters for consideration and referral to 
DOJ. The absence of suffcient internal enforcement options creates 
delays in 
resolving problems and hinders OCR's abilty to force compliance. 
opportty 
Findig #4: An  exits for improvig the investigatie process by sharg
sta exprt. 
During our regional office visits, we found individual staff members and regions that 
have developed techniques that augment the national procedures. 
Several have 
developed their own technical assistance gudes and other investigative tools. They
have also developed techniques to faciltate compliance reviews and complaint 
investigations. In the Philadelphia regional offce, we found a system to coordinate 
complaints received by HCF A and OCR. In the San Francisco regional office we 
found a regional training manual. These guides and methodologies are not shared
with other regional offce staff and, in most cases, are confined to the region that 
developed them.
 RECOMMENDATIONS

Medical facilties built with Hill-Burton funds are prohibited from discriminating 
through the community servce obligation. If it were not for this and other legislation 
preventing discrimination and the efforts of OCR to enforce 
legislation a significant 
segment of the American public would find it even more diffcult to obtain medical 
care. 
To strengthen Hil-Burton enforcement efforts OCR should: 
1) 
Consider unannounced visits whenever possible to validate systems that facilties 
use in complying with the community servce obligation under the Hil-Burton 
program. 
Advance notice reduces the amount of time reviewers spend in the field 
and ensures that appropriate documentation will be available for reviewers. 
However, arrving a day early, or conducting an unannounced onsite visit at 
one facilty while doing an announced visit at another, would not only 
provide a truer picture of facility operations but also have a deterrent 
effect on other facilties. 
2) Develop a follow-up system to monitor compliance agreements that ensures 
facilties take adequate and prompt action to bring their community servce 
programs into compliance. 
While the current system used by OCR has the capabilty of generating 
notices that follow-up action is needed, it is not currently used to do so 
because the monitoring section of the case information system may not be 
updated in a timely manner by all regional offices. The OCR should 
develop a uniform regional system, or update the current system more 
frequently, to ensure follow-up actions are taken. 
3) Seek legislative authority that allows for administrative action against facilties that 
fail to comply with their Hil-Burton community servce obligation or fail to take 
timely corrective action when their program is found to be out of compliance. 
The abilty to assess civil monetary penalties, impose sanctions and restrict 
a facilty's receipt of Federal grants and other payments would have a 
deterrent effect on facilties and strengthen OCR' s abilty to bring 
recalcitrant facilties and repeat offenders into compliance.  4) Determine w(cid:1) hether technical assistance guides and methodologies developed in 
individual regions can be shared nationally. 
Other investigative agencies share investigative tools and methodologies 
developed by peers. The OCR should explore methods that would enable 
them to share the expertise developed in one regional office with other 
regional office staff. 
CO~NT 
AGENCY 
We received comments on our draft report from OCR and the 
Assistant Secretary for 
Planning and Evaluation (ASPE). 
Prior to our finalizing this report we met with OCR to discuss our findings and 
recommendations. At that meeting, OCR agreed in principle with our report findings 
and recommendations. 
The ASPE recommended that we delete our recommendation that OCR conduct 
unannounced inspection visits. They feel that unannounced visits are too costly to 
warrant their use. The ASPE also feels that our recommendation that OCR seek 
legislative authority that would allow them to take administrative action against 
facilities is premature since other options may already be available. The ASPE 
specifically mentions cutting off Medicare funds as an alternative. The full text of 
ASPE' s comments can be found in Appendix B. 
Our final report has been modified to incorporate the technical comments offered by 
both agencies. The full text of OCR's comments can be found in Appendix A. 
COMM  TH DRA 
OIG REPONSE TO  ON  REPORT 
We have discussed with OCR how unannounced visits might be conducted using 
existing resources. We did not propose extensive use of unannounced visits by OCR. 
Our suggestion is that OCR staff conduct unannounced compliance visits to nearby 
facilities at the completion of regularly scheduled inspection visits. Such visits would 
not be an indepth analysis such as that conducted at scheduled inspections. The
unannounced visits would be limited to time available. Compliance would be observed 
and if time permtted or severity of infractions warranted a more indepth investigation
would be undertaken. 
Unannounced visits playa key role in ensuring that facilties are vigilant in complying 
with their community servce obligation. The IRS requires that tax returns be fied 
and that records be maintained to substantiate returns. No such provision exists that
would require hospitals to document and maintain records on every person that may 
have sought, but not received, medical care from them. How then does one ensure  that persons in need of medical care have not been denied care or that a facilty acted 
in such a way as to discourage a person from pursuing care at their facilty? To deter 
would be violators the IRS uses random audits in addition to auditing records of 
taxayers whose returns fail certain edit screens. 
Regarding cutting off Medicare/Medicaid funds, we continue to believe that additional 
enforcement authority would be usefu to OCR. We believe that such authority would 
provide the flexibilty OCR needs to ensure compliance with Hil-Burton requirements.  APPENDIX A 
CI 
OFFCE FOR  RIGHT
CO~NT  TH DRA 
ON  REPORT  .... . . .
. - . . . "
" 'OC"
DEPARTMENT Of HEALTH a. HUMAN SERVICES  Of 
of the Seretar 
Office for Civil Rights 
Washington, D.C. 20201
DATE  1992 
24 JUL 
FROM Edward Mercado
Director 
Office f  /J
1 Rf 
Report: 
SUBJECT: OIG Draft  Office for Civil Rights Oversight
of the Hill-Burton Program
, OEI-05-90-0026l 
Emilie  Baebel(cid:1)
Chief(cid:1)
Public 
Heal th and Human Services Branch
Office 
of the Inspector General
This is in reply to your July 8, 1992 request for OCR comments
regarding the above-referenced report. 
In both the Executive Sumary 
and at page one, the report refers to
the Hospital Survey and Construction Act, 
passed in 1946, and
describes it as requiring provision of community services to all
persons residing or employed in a facility' area. 
s service  This
Act 
, commonly known as Hill-Burton
, is codified in Title VI of the
Public Health Service Act. 
Ti tIe VI does not require provision of
communi ty services to those employed in the service 
area. The
communi ty services requirement for those employed in the service 
area applies only to recipients of assistance under Title XVI of 
the Public Health Service Act
, enacted in 1974. 
The third paragraph of page one closes: "
If control transfers to an 
sic) noneligible entity... OCR will not require the new owner to 
honor the community service obligation.  " This sentence 
may imply
othbalti gOCaRt iohans.  discretion to excuse a new owner from honoring an
ineligible entity 
Transfer to an 
obligation  terminates the
, except under limited circumstances. 
first 
The 
sentence of the third paragraph on page two
begins: "  , which
Since January 1980, pursuant to an MOA... , OCR has been
breesgpoinns:i b" le for monitoring,  is misleading. This sentence should
In December 1980, Secretary Patricia Harris delegated to
OCR the responsibility of insuring compliance with 
all aspects 
of. 
mOno npi atoger stw aon, dt heen dfroafrtc ersep.o Trth ilsi sltiss at  ninumcbleurd eofs  s"ttahteut Ceso nwshoilcihd aOteCdR
Omnibus Reconciliation Act of 1986 (patient dumping). 
OCR is not
responsible for monitoring and ensuring compliance with the Act
although OCR coordinates its Hill-Burton activities with the COBRA
acti vi 
ties of HCFA and OIG. 
A - Page 2 - OCR Comments 
HFooiltln-oBteu rotnoen o n page two states that m(pu)shyt saiclisaons  paaffritliciaipteadt ewi itnh
assisted facili ties 
governmental third-party  This incorrectly
payer programs. 
suggests that all physicians are required to participate in these 
pfroagramsc.  ili ty  See 42 C. F. R. S 124. 603 (d) (2) (" To be in compliance a
does not have to require all of its staff physicians to 
accept medicaid" 
On page six , the phrase " to a compromise designed" in paragraph
, should be omitted. 
one, Finding #2  OCR does not compromise with
enforcement of the law. We do negotiate settlement agreements. 
In the next paragraph , still on page six , sentence three begins:
However , regional office staff told us that untimely updating.
The phrase, " 
in the region " should be inserted after " untimely
updating. " 
Related to this, in paragraph two of the second Recommendation 
page eight, the phrase  it is not currently used to do so because
the. . . " should continue with " moni toring section of the case
information system may not be updated in a timely maner by all
regional offices,  instead of " 
system is not updated timely. 
Finally, the last sentence of Finding #3, page seven , in discussing
hcaasse s referred to DOJ for enforcement, states: " Historically, DOJ
accepted few cases, leaving OCR with few options to force
compliance. " This sentence inaccurately suggests that DOJ has
routinely declined to enforce cases referred by OCR. 
Please continue to apply our previous comments on the draft report 
where appropriate. 
You may contact Marcella Haynes at 619-0671  if you have any
questions or comments. 
Thank you for the opportunity to review the draft report. 
A - APPENDIX 
ASISAN  PLAG AN 
SECRTARY FOR  EVALUATION
COMM 
TH DRA REORT 
ON  -"....
"'Ir. 
0t 
s... , 
DEPARTMENT OF HEALTH a. HUMAN SEJVICES
of th 
WIIIg
9 19  . D.C- 201 
Richard 
TO: P. Kusserow 
Inspector General 
Assistant Secretary for
FROM:
Planning and Evaluation 
SUBJECT:  OIG Draft Report on OCR Hill-Burton Oversight 
This report deals with OCR' s enforcement of the Hill-Burton

requirement that hospitals serve commnity residents. I

pleased that OIG has found such a considerable improvement in OCR

investigative 
reviews. I agree with most findings. However, I
recommend some changes, as follows: 
unannounced 
inspection visits.
The draft report recommends 
A scheduled visit assures that hospital staff and records

are readily available without delay. 
It is hard to believe

visit 
that there is significant extra deterrent value if the 
is unscheduled. One analogy is tax compliance, where IRS

audits are carefully scheduled in advance and rarely or

never unannounced. 
Furthermore, unannounced inspections
consume addi tional resources and decrease the total numer 
of inspections possible. If a substantial cost-

effectiveness rationale specific to frequent Hill Burton

violations cannot be developed, this finding and

recommendation should be dropped.

The report finds that enforcement sanctions are limited, and

recommends legislation to add civil money penalties. While 
I agree that the "H-bomb" of prosecution by the Justice

Department is a weak sanction, it is my understanding that

Medicare funds can be cut off if the institution does not
comply. 
OCR and HCFA should develop procedures to enable 
effective use of this more practical sanction, and explore

other options, before legislation is recommended. Nothing
in this document suggests that such options have been fully

explored. 
The report states that "
physicians affiliated with Hill-Burton

assisted facilities 
governent third-
must also participate in 
party payer programs" such as Medicaid. 
This is incorrect. The
facility 
must assure service to Medicaid patients, and the best
method is to give some Medicaid participating physicians

admi t  physicians
ting privileges, but nothing requires any or all 
affiliated with the hospital to participate in Medicaid. 
cc: 
Ed Mercado