Department  of Health  and Human  Services 
OFFICE OF

NSPECTOR  GENERAL

MEDICAL  ASSISTANCE  FACILITIES

A  DEMONSTRATION  PROGRAM  TO  PROVIDE 
ACCESS  TO  HEALTH  CARE  IN  FRONTIER 
COMMUNITIES 
JULY  1993
 OFFICE OF INSPECTOR GENERAL 
The mission of the Office 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 Sefices  (HHS) 
programs as well as the health and welfare of beneficiaries served by those programs.  This 
statutory mission is carried out through a nationwide network of audits, investigations,  and 
inspections  conducted by three OIG operating components:  the Office of Audit Services, the 
Office of Investigations,  and the Office of Evaluation and Inspections.  The OIG also informs the 
Secretary of HHS of program and management problems and recommends courses to correct 
them. 
OFFICE OF AUDIT  SERVICES 
The OIGS  Office of Audit Services (OAS)  provides all auditing services 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 carrying 
out their respective responsibilities  and are intended to provide independent  assessments of HHS 
programs and operations  in order to reduce waste, abuse, and mismanagement and to promote 
economy  and efficiency throughout the Department. 
OFFICE OF INVESTIGATIONS 
The OIGS  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 efforts 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. 
OFFICE OF EVALUATION  AND  INSPECTIONS 
The OIGS  Office of Evaluation  and Inspections  (OEI)  conducts short-term management and 
program evaluations  (called inspections)  that focus on issues of concern to the Department,  the 
Congress, and the public.  The findings and recommendations  contained  in these inspection 
reports generate rapid, accurate, and up-to-date  information on the efficiency, vulnerability, and 
effectiveness  of departmental programs. 
OEIS Atlanta Regional  Office staff prepared this report under the direction of Jesse J. Flowers, 
Regional  Inspector General and Christopher Koehler, Deputy  Regional  Inspector General. 
Principal OEI staff included: 
Atlanta Region  Headquarters 
Maureen Wilce, Project Leader  Cathaleen  Ahern

Ron Kalil

Paula Bowker

Ruth Reiser

For additional copies of this report, please contact the Atlanta Regional  Office at 404-331-4108.
 Department  of Health  and Human  Services 
OFFICE OF

NSPECTOR  GENERAL

MEDICAL  ASSISTANCE  FACILITIES

A  DEMONSTRATION  PROGRAM  TO  PROVIDE 
ACCESS  TO  HEALTH  CARE  IN  FRONTIER 
COMMUNITIES 
JULY  1993  OEI-04-92-00731
 EXECUTIVE  SUMMARY

PURPOSE 
To  describe  the  Health  Care  Financing  Administrations  Medical  Assistance  Facility 
demonstration  program  and  its effect  on access  to inpatient  health  care  in frontier 
Montana. 
BACKGROUND 
Concerned  that  hospitals  closing in frontier  Montana  left  residents  without  access  to 
basic  health  care,  the  Montana  State  legislature  authorized  a Medical  Assistance 
Facility  (MAF)  program  in 1987.  The  program  was designed  to provide  continued 
access  to health  care  by converting  a full-service  hospital  into  a low-intensity,  short-stay 
health  care  service  center.  Montana  law allows MAFs  to provide  up  to 96 hours  of 
inpatient  care.  MAFs  must  be  located  more  than  35 road  miles  from  the  nearest 
hospital  or be  located  in a county  with  a population  density  of no more  than  6 
residents  per  square  mile. 
Montana  revised  its licensure  rules  to reduce  hospital  staffing  requirements  and 
adapted  other  existing  standards  to the  MAF  concept.  MAFs  are  allowed  to offer  any 
health  service  for which  it is adequately  equipped  and  staffed  to perform. 
Montanas  MAF  program  received  a Health  Care  Financing  Administration  (HCFA) 
demonstration  grant  to fund  planning  and  program  development  activities.  Also, 
HCFA  authorized  a waiver  of over  forty  hospital  Conditions  of Participation  so that 
MAFs  could  receive  Medicare  reimbursement  under  Medicare  Part  A on a cost basis. 
Current  HCFA  waivers  and  grant  for the  MAF  program  are  scheduled  to end  in 1993. 
SCOPE  AND  METHODOLOGY 
In December  of 1992, we visited  and  reviewed  MAF  operations  at each  of four 
Montana  communities  that  had  converted  formerly  closed  hospitals  into  a MAF.  The 
Ws  are  located  in Circle,  Jordan,  Terry  and  Ekalaka.  We  also reviewed  relevant 
State  and  Federal  legislation,  regulations,  setice  records,  and  other  appropriate 
documentation.  We  interviewed  program  officials  in Montana,  HCFA,  and  each  of 
the  four  Montana  communities. 
FINDINGS 
HCFAk MHF &rnonstrationprogramprovidesaccess to inpatientcare injiorvier areas 
without a hospital 
MAFs  provide  up  to 96 hours  - or 4 days - of limited  inpatient  services  in four  frontier 
Montana  communities.  The  average  length  of stay is 2.4 days. 
i  MAFs  also provide  inpatient  care  primarily  to elderly  members  of the  communities  --
72 percent  of MAF  patients  are  over  65 years  of age. 
Finally,  MAFs  provide  24-hour  emergency  health  care  services  and  outpatient  care  to 
the  four  communities. 
M4.Fs facilitate a heukihcare networkinjiontier areas 
MAFs  attract  other  service  providers  to the  facility.  For  example,  each  MAF  offers 
dental  services  once  a week.  Special  care  providers  such  as physical  therapists  and 
mobile  mammography  units  use  the  MAF  as a center  to offer  care  to the  community. 
MAFs  also  serve  as a hub  for a referral  network,  referring  patients  to hospitals  for 
advanced  care,  nursing  homes  and  home  health  services. 
Flexibility in sta~g  is *al  to success of M4Es 
Non-physicians,  such  as a physician  assistant,  admit  patients  and  provide  medical  care 
in MAFs.  They  do so under  the  supervision  of a physician  who  can be  in a different 
town.  Each  MAF  provides  service  within  the  skill level  of its employed  medical 
professionals.  Also, when  a MAF  has no patients,  it may close.  The  flexibility  allowed 
in MAFs  help  attract  and  retain  medical  professionals  in frontier  areas. 
M41?s appar to be cost e@ient 
For  these  four  frontier  communities,  MAFs  appear  to be  cost  efficient  due  to more 
efficient  use  of staff  and  less operating  cost when  compared  to a small  underused 
frontier  hospital.  Further,  MAFs  maybe  located  closer  to patients,  which  encourages 
cost efficient  preventive  health  care  and  reduces  patient  transportation  cost. 
CONCLUSION 
MAFs  hold  promise  as a viable  alternative  for frontier  community  health  care.  The 
MAF  program  is a practical  and  flexible  way to provide  access  to basic  inpatient  and 
emergency  medical  care  in frontier  areas  -- particularly  those  that  are  struggling  to 
keep  a failing  hospital  open,  and  those  that  do not  have  adequate  local  health  care. 
The  results  of this review  and  HCFAS upcoming  formal  evaluation  can be  used jointly 
by HCFA  in determining  whether  to (1) continue  the  MAF  concept  in Montana,  and 
(2) apply  it in additional  frontier  communities. 
ii  TABLE  OF  CONTENTS

PAGE

EXECUTIVE  SUMMARY

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..  ooooooo  1

FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...-.......-.  5

Accessing  Care  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..      .5

Facilitating  Networks  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..  .9

Staffing  Flexibility  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....
 10 
Cost  Efficiencies  . . . . . . . . . . . . . . . . . . . . . . . . ..............o-
 11 
CONCLUSION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....
 12 
APPENDICES

lkChronology  OnMAFDevelopment  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..A-l

B:  Methodology  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..    oB-l
 INTRODUCTION

PURPOSE 
To  describe  Health  Care  Financing  Administrations  Medical  Assistance  Facility 
demonstration  program  and  its effect  on access  to inpatient  health  care  in frontier 
Montana. 
BACKGROUND 
Hospital  Closures  In Rural  Areas 
Generally,  closure  of a rural  hospital  had  little  effect  on access  to medical  care  for 
most  people.  The  Office  of Inspector  General  (OIG)  reported  that  193 rural  hospitals 
closed  over  a five year  period  -- 1987 through  1991.  In most  instances,  another 
hospital  was available  within  20 miles  of a hospital  that  closed.  However,  some 
community  residents  such  as those  in frontier  communities  have  difficulty  in accessing 
health  care  when  their  hospital  closes. 
Frontier  areas  are  sparsely  populated,  and  are  located  in areas  with  a high need  for

stand-by  care.  Typically,  frontier  communities  populations  include  a high  percentage

of elderly  people  whose  need  for medical  care  may be  greater  than  that  for a working-

age  person.  Also, the  limited  mobility  of elderly  people  makes  access  to health  care  in

remote  areas  difficult.  Further,  the  working  age  population  of frontier  communities

are  usually  engaged  in high risk occupations  such  as farming  and  mining.  Finally,

tourists  to some  frontier  communities  often  engage  in dangerous  activities  such  as rock

climbing.  When  a frontier  community  does  not  have  a local  hospital,  needed

emergency  medical  care  and  acute  inpatient  sewices  are  often  much  further  away than

20 miles.

When  referring  to hospital  care,  frontier  communities  are  defined  as counties  with

fewer  than  6 persons  per  square  mile.  Although  46 percent  of the  land  area  in the

United  States  meets  this definition,  less than  1 percent  of the  population  lives in

frontier  areas.  Nationally,  11 percent  of rural  hospitals  are  in frontier  areas.

Medical  Assistance  Facilities  In Frontier  Montana

One  option  to a local  hospital  for health  care  is a Medical  Assistance  Facility  (MAF).

MAFs  offer  limited  inpatient  care  and  a variety  of outpatient  and  emergency  services.

In the  early  1980s, realizing  many  hospitals  in Montana  were  in danger  of closing, the

governor  of Montana  created  a task  force  to study the  future  of rural  hospitals.  This

task  force  included  State  health  care  officials  and  representatives  from  the  Montana

Hospital  Association.  The  task  force  concluded  the  following.

.  Physicians  may not  always be willing and  available  to work  in remote  locations. 
1  .	 Low utilization  in some  small  hospitals  does  not  warrant  full services  being 
offered. 
.	 Conditions  of Participation,  required  for hospitals  to receive  Medicare  payment, 
are  too  difficult  for some  communities  to fulfill. 
.	 Communities  and  the  State  would  have  to continue  pouring  money  into  hospitals 
to keep  them  open,  using visiting physicians,  exhausting  nursing  staff,  perpetually 
recruiting,  and  diverting  funds  from  patient  care. 
	 Communities  need  access  to primary  and  emergency  care,  which  could  be 
provided  by something  other  than  a hospital. 
By 1987, some  small  rural  hospitals  in Montana  began  closing  and  residents  in those 
communities  were  left without  basic  health  care  services.  At that  time,  Montanas 
State  Legislature  referred  back  to the  task  force  recommendations  and  authorized  a 
MAF  program. 
The  Montana  Legislature  designed  the  MAF  program  to provide  continued  access  to 
health  care  by converting  what  once  was a full-service  hospital  into  a low-intensity, 
short-stay  health  care  service  center.  Montana  law allowed  MAFs  to provide  up  to 96 
hours  (4 days)  of inpatient  care.  MAFs  must  be  located  more  than  35 road  miles 
from  the  nearest  hospital  or be  located  in a county  with  a population  density  of no 
more  than  6 residents  per  square  mile. 
The  Montana  Hospital  Association,  working  with State  health  care  officials,  drafted 
licensure  rules  for the  MAFs.  The  rules  allow care  in MAFs  to be  provided  by mid-
level  practitioners,  i.e., physician  assistants  or nurse  practitioners,  under  the 
supervision  of a medical  director,  who is a physician.  The  medical  director  may be 
located  in another  town.  Only one  MAF  staff member  must  be  on duty  or on call at 
all times.  The  rules  also allow MAFs  to offer  any services  provided  that  the  medical 
director  determines  the  staff has the  expertise  and  the  facility has  adequate 
equipment.  However,  patients  with serious  illnesses  or injuries  are  stabilized  at a 
MAF  and  transported  to full-service  hospitals.  In  1989, to allow non-physicians  to 
operate  with  such independence,  the  Montana  Legislature  expanded  the  role  of non-
physician  providers  under  its State  law. 
When  possible,  the  Montana  Hospital  Association  and  State  health  care  officials 
adapted  existing  standards  to MAFs  instead  of drafting  an entirely  new set  of licensing 
rules.  For  example,  the  lab requirements  at MAFs  are  the  same  as the  Health  Care 
Financing  Administration  (HCFA)  requirements  for a Rural  Heath  Clinic  (RHC). 
Further,  staffing  requirements  followed  the  standards  existing  at nursing  homes. 
2
 HCFAS Demonstration  Project 
The  State  authorized  the  Montana  Hospital  Research  and  Education  Foundation 
(MHREF),  a non-profit  organization  affiliated  with the  Montana  Hospital  Association, 
tohelpimplement  the  MAF  program.  To finance  plarming  of MAFs,  MHREF 
applied  for and  received  a HCFA  demonstration  grant. 
MHREF  sent  information  and  invitations  to 23 small  rural  Montana  hospitals  to 
participate  in the  demonstration  project.  Nine  hospitals  in Montana  agreed  to 
participate  in the  demonstration,  three  as MAFs  (Jordan,  Circle  and  Ekalaka)  and  six 
others  as part  of a control  group.  Residents  of the  three  demonstration  sites were 
ve~  receptive  to the  MAF  concept,  according  to research  done  by the  University  of 
North  Dakota. 
To be  part  of the  demonstration,  each  community  was required  to develop  a plan  for 
what  the  MAP  would  do and  how it would  be  supported.  The  MHREF  director 
provided  technical  assistance  to each  of the  communities,  but  each  community  applied 
to HCFA  and  to the  State  health  department  to receive  a Certificate  of Need.  The 
demonstration  allowed  for adding  MAF  sites that  were  not  included  in the  original 
program.  Other  communities  desiring  a MAF  had  to follow the  same  application 
process.  Terry,  Montana  did apply,  and  in January  of 1992 became  part  of the  MAF 
demonstration.  On  December  31, 1992, a fifth Montana  community,  Culbertson, 
received  a Medicare  provider  number  as a MAF,  but  this MAF  was not  included  in 
our  evaluation. 
HCFA  waived  numerous  hospital  requirements  so that  MAFs  could  receive  Medicare 
reimbursement.  Over  forty  Conditions  of Participation  had  to be waived  to allow 
reimbursement  under  Medicare  Part  ~  the  part  of Medicare  which  pays for hospital 
care.  Significantly,  HCFA  waived  many  hospital  staffing  requirements  and  allowed  the 
Peer  Review  Organization  to have  a consultative  role  in the  MAFs. 
In  1990, HCFA  authorized  a cost-based  reimbursement  system  for MAFs.  Therefore, 
MAFs  became  the  first limited-service,  acute-care  facilities  funded  for reimbursement. 
HCFA  also  agreed  to allow Medicaid  payments  based  on the  States  law.  The  HCFA 
waivers  and  grant  for the  MAF  program  are  scheduled  to end  in 1993. 
HCFA  selected  Abt  and  Associates  to evaluate  the  demonstration.  Ekalaka,  Circle 
and  Jordan  and  the  six comparison  sites  are  being  studied  in a two-part  evaluation. 
The  first  part,  released  in 1992, described  and  compared  the  communities  in detail.  It 
also assessed  the  activities  involved  in beginning  operation  of the  three  MAFs.  The 
second  phase  of the  evaluation  will be  released  in 1993 and  will assess the  operation 
of the  MAFs. 
A chronology  of events  in the  development  of the  Medical  Assistance  Facility  program 
is presented  in Appendix  A. 
3
 SCOPE  AND  METHODOLOGY 
In December  of 1992, we visited  and  reviewed  MAF  operations  in each  of the 
communities  -- Circle,  Jordan,  Terry  and  Ekalaka.  At  each  community,  we 
interviewed  the  MAF  administrator,  health  care  provider(s),  and  community  leaders. 
We  also visited  and  interviewed  the  referral  hospital  staff for two of the  MAFs.  We 
intemiewed  Montana  program  officials  and  HCFA  staff, by phone. 
Finally,  we reviewed  relevant  State  and  Federal  legislation  and  regulations,  and 
previous  evaluations  and  cost information  submitted  to HCFA. 
We  conducted  this inspection  in accordance  with the  Quality Standards for Inspections 
issued  by the  Presidents  Council  on Integrity  and  Efficiency. 
Appendix  B describes  our  methodology  in further  detail. 
4
 FINDINGS

HCFAS  MAF  DEMONSTRATION  PROGRAM  PROVIDES  ACCESS  TO 
NEEDED  INPATIENT  CARE  IN FRONTIER  AREAS  WITHOUT  A HOSPITAL 
MAFs  Pruvide  Limited  Inpatient  Acute  Care  In Frontier  Montana  Communities 
The  MAF  concept  allowed  limited-service,  inpatient,  acute  care  in eastern  Montana  to 
be  provided  locally.  At  each  of the  four  MAP  Montana  communities,  access  to 
inpatient  care  was considered  essential  because  of the  long  distances  and  inaccessibility 
of other  health  care  providers.  We briefly  describe  each  of the  four  MAFs  we visited 
below. 
Circle,  Montana  W  The  McCone  County  MAF  and  Nursing  Home  opened 
first, in December  1990.  Circles hospital  had  closed  in July of 1990.  Circle  is a 
town  of 450 residents,  but  the  MAF  provides  access  to health  care  to a county 
of 1500 people.  The  nearest  hospital,  which  provides  administrative  services  for 
the  MAF,  is 45 miles  away.  The  MAF  services  are  currently  provided  at two 
locations.  The  MAF  provides  outpatient  care,  emergency  care,  x-ray and 
laboratory  services  at the  former  hospital  facility in Circle.  It provides  inpatient 
care  at a nursing  home  a few miles  away.  Currently  the  Circle  community  is 
expanding  the  nursing  home  to combine  all services  into  one  facility.  One 
doctor,  who  is nearing  retirement,  continues  to practice  at the  MAF,  along  with 
a physician  assistant. 
Ekak@  Montana  U  The  Dahl  Memorial  MAF  and  Nursing  Home  serves 
the  600 residents  of Ekalaka  and  many  of the  1000 other  people  living in Carter 
County.  When  Ekalakas  15-bed  hospital  closed  in 1988, the  nearest  hospital 
care  was 35 miles  due  north.  Yet  road  conditions  occasionally  made  the  35 
mile  trip  to the  hospital  for inpatient  care  impossible.  Following  the  hospitals 
closure,  a RHC  opened.  The  community  pursued  the  MAF  option  and  opened 
it in June  1991.  One  physician  assistant  provides  care  at the  ten-bed  inpatient 
facility.  The  MAF  also offers  county  public  health  services  and  the  only 
pharmacy  in the  county.  Ekalaka  is pursuing  a Federal  grant  to extend  care  to 
the  south  end  of the  county,  via a weekly  clinic. 
Jor@  Montana  H  The  Garfield  County  Health  Center  serves  one  of the 
most  isolated  places  in the  continental  United  States.  The  nearest  hospital  is 
85 miles  away.  The  town  of Jordan  has  about  500 people  with  approximately 
1100 others  living within  the  county.  Garfield  County  is about  the  size of 
Connecticut.  The  last  doctor  ceased  practicing  in town  in  1986 and  the 
Garfield  County  Memorial  Hospital  closed.  It was the  absence  of health  care 
options  in the  community  that  inspired  the  local  State  representative  to 
introduce  the  MAF  concept  to the  Legislature  in 1987.  A physician  assistant 
was hired  and  plans  were  made  to open  a two-bed  MAF,  which  is collocated 
5  with  a nursing  home.  In this instance,  the  community  faced  delays  in opening 
the  MAF.  They  had  difficulties  financing  renovations  to create  the  MAF. 
Further,  the  insurer  who had  provided  the  former  hospital  with malpractice 
insurance  denied  coverage  to the  MAF.  Jordan  overcame  these  difficulties  and 
the  MAF  opened  August  of 1991. 
Terry,  Montana  MAE  The  Prairie  Community  MAF  and  Nursing  Home  was 
the  first MAF  to open  which was not  one  of the  original  three  demonstration 
communities.  This  MAF  serves  Terrys  900 residents  and  many  of the  900 
other  residents  of Prairie  County.  Terry  was also the  first  community  to plan 
on becoming  a MAF  before  its hospital  closed.  Prairie  Community  Hospital 
was failing  due  to low occupancy  and  difficulty  in retaining  physicians.  The 
hospital  closed  in mid-1991,  when  the  last  physician  ceased  practicing  in the 
community.  As soon  as it was certified,  in January  1992, the  MAF  opened  in 
the  former  hospital  building.  This  two-bed  MAF  is located  37 miles  from  the 
nearest  hospital,  and  is staffed  by a physician  assistant. 
Inpatient  Stays At MAFs  Averaged  2.4 Days 
The  chart  below  shows the  lengths  of inpatient  stays in all MAFs  since  each  of their 
opening  until  December  of 1992.  State  law limits  inpatient  acute  care  in MAFs  to 96 
hours.  Inpatient  stays at the  four  community  hospitals,  prior  to closure,  also  averaged 
less than  96 hours. 
Length  of Stay By MAF  Admissions 
Length  of Stay  Number  of Admissions 
1 day  54 (37%) 
2 days  23 (16%) 
3 days  31 (21%) 
4 days  39 (26%) 
Average:  2.4 days  147 Total  Admissions 
6
 MAFs  Provide  Care  For  A Variety  Of Illnesses  and  Injuries 
Within  the  four-day  limit  on inpatient  care,  patients  can receive  care  for a variety  of 
illnesses.  The  chart  below  shows the  percentage  of patients  receiving  medical  services 
by type  of illnesses  or injuries. 
I
Reasons  for Inpatient  Admissions  to MAFs 
Respiratory  Illnesses
 24% 
Gastrointestinal  Diseases
 17% 
Trauma
 1370 
Neurological  Disorders
 8% 
Previously-diagnosed  Cancer
 7% 
Cardiovascular  Disease
 5% 
Urinary  Disorders
 4% 
Metabolic  Diseases
 4?40 
Psychiatric  Disorders
 4% 
Infections
 3% 
Other  Illnesses
 11% 
Although  MAFs  are  not  prohibited  from  performing  surgeries,  none  of the  four  MAFs 
offer  a;y  surgery.  The  physician  at the  C;rcle  ~- has  chosen  not  to continue  his 
surgical  practice.  Physician  assistants  at the  four  MAFs  are  not  trained  to perform 
surgery  independently.  Patients  needing  surgeries  are  referred  to other  facilities. 
MAFs  Provide  Inpatient  Care  Primarily  To The  Elderly 
The  MAPs  provide  inpatient  semices  primarily  to elderly  members  of the 
communities.  The  following  chart  shows basic  demographic  information  on patients 
admitted  to the  four  Montana  MAFs. 
MAF  Patient  Profile 
Sex:  Age:  Payment  Source: 
Male  42%  Under  65  28%  Medicare  72% 
Female  58%  Over  65  72%  Medicaid  5% 
Other  23V0 
MAF  Guidelines  Are  Designed  To Assure  That  Admissions  Are  Appropriate 
MAFs  provide  treatment  within  the  scope  of the  services  offered.  To  assure  that  only 
appropriate  illnesses  are  treated,  MAFs  follow strict  procedural  requirements.  The 
physician  or physician  assistant  at  a MAF  must  notify  the  Peer  Review  Organization 
7  (PRO)  before  any patient  is admitted.  The  PATIENT  FLOW  PROCESS 
medical  professional  on duty telephones  the 
PRO  and  describes  a patients  condition  to a 
nurse  or a physician  at the  PRO.  Together 
they  decide  (1) if the  patient  requires 
treatment  which  is within  the  authorized 
scope  of services  the  MAP  is capable  of 
providing,  and  (2) if the  proposed  treatment 
is medically  necessary.  Further,  if a physician  Goes to MAF 
assistant  is admitting  a patient,  the  MAFs 
medical  director,  who  is a physician,  is also 
PatientNeeds 
consulted  by telephone.  The  medical  director  Asswsedby 
PhysicianAssistant 
is sometimes  called  by the  PRO  to discuss 
cases  as well.  The  consultation  with the  PRO 
offers  a second  opinion  on each  case  and 
helps  assure  that  the  MAFs later  insurance  If NecessaryDoctor 
claim will not  be  denied  upon  review.  is consulted 
Although  this is not  the  customaxy  role  of a 
+
PRO,  HCFA  allowed  it for the  MAF  PRO Approves 
Admission 
demonstration. 
PatientAdmitted 
The  chart  on the  right  shows what  happens 
to lvlAF 
when  a patient  corn-es to a MAF.  -- J

PatientReceivesup 
After  admission,  medical  professionals  at  to%  Hours of Care 
MAFs  continue  communication  with other  + 
medical  professionals.  To illustrate,  the  MAF and PRO 
Plan Dwharge 
physician  or physician  assistant  at a MAF 
I 
calls the  PRO  to consult  on the 
.4= 
appropriateness  of a treatment  plan.  In 
routine  cases  the  PRO  is again  called  PatkntStabii  Patient Treated 
and Transferred  and Released 
between  48 and  72 hours  into  the  patients 
stay to consult  on discharge  planning  in 
accordance  with  the  rules  of the  program.  In 
more  unusual  cases,  the  medical  director,  the  P  3,  and  specialists  in other  hospitals 
will all be  consulted.  MAFs  routinely  send  medical  test  results  to other  hospitals  to 
confirm  that  patients  are  being  treated  correctly.  In this way the  PRO  monitors  the 
care  of all MAF  patients.  Although  there  was some  confusion  concerning  the  skill 
levels  of the  physician  assistants  for the  first few cases,  the  four  MAFs  report  no 
problems  working  with the  PRO. 
MAFs  Also Provide  Emergency  And  Outpatient  Health  Care  Services  To  Their 
Communities 
Because  of the  institutional  presence  of a MAF  in the  four  Montana  communities, 
other  health  services  are  available.  In addition  to inpatient  medical  care,  MAFs 
8  provide  a variety  of emergency  health  care  services.  All MAFs  offer  24-hour 
emergency  services,  and  all four  MAFs  use the  former  hospital  emergency  room  to 
treat  patients.  MAFs  stabilize  and  transfer  patients  requiring  more  advanced  care, 
such  as patients  in cardiac  arrest  or victims  of life-threatening  accidents.  MAFs  also 
offer  basic  laboratory  and x-ray services. 
Although  not  required  to do so under  Montana  law, the  four  MAFs  offer  outpatient 
care.  In the  MAFs,  the  former  hospital  emergency  room  is also used  for outpatient 
care.  Further,  the  physician  at  the  Circle  MAF  and  physician  assistants  at all MAFs 
provided  general  medical  selvices,  including  outpatient  care,  through  their  general 
practice  in the  community.  The  physician  assistants  at each  of the  MAFs  told  us that 
through  the  MAF  and  their  private  practices,  they  treat  as many  as one  hundred 
patients  a week  on an  outpatient  basis.  Nurses  at the  four  MAFs  also provide  public 
health  services  and  home  health  care  in the  community. 
MAFS  FACILITATE  A HEALTH  CARE  NETWORK  IN FRONTIER  AREAS 
All four  MAFs  have  encouraged  other  services  to locate  at  the  facility.  The  former 
hospital  space  is used  for other  health  services  which would  not  be  available  to the 
community  otherwise.  In Circle,  the  new building  which  is being  constructed  will 
provide  space  for  additional  services.  Each  of the  four  MAFs  offers  dental  services 
one  day a week.  Special  care  service  providers  such as physical  therapists  and  mobile 
mammography  units  are  allowed  to use the  facilities  to provide  care  to the  community 
on a visiting basis.  The  Montana  Mental  Health  Service  provides  counseling  services 
to the  community  from  the  MAF  facility.  Public  health  offices  are  also located  in the 
centers.  In Ekalaka,  the  physician  assistant  and  staff at the  MAF  provide  public 
health  services  through  a contract  with the  community.  Also,  Ekalakas  pharmacy, 
which was threatened  with  closure,  is now operated  out  of the  MAF  center. 
For  services  which  the  MAF  cannot  provide,  all four  of the  MAFs  have  formal  referral 
agreements  with transfer  facilities.  For  example,  if a patient  comes  to the  MAF  and 
needs  to be  transferred  for more  sophisticated  care  than  the  MAF  is able  to offer, 
medical  professionals  at the  MAF  stabilize  the  patient  and  obtain  emergency 
ambulance  services  for transfer  to needed  care.  Each  MAF  has  formalized 
agreements  with several  hospitals.  All MAFs  have  agreements  with the  nearest 
hospitals  as well as hospitals  in Billings, Montana,  over  a hundred  miles  away. 
Therefore,  MAFs  transfer  patients  directly  to the  hospital  that  offers  the  level  of care 
the  patients  need.  If several  hospitals  offer  the  same  level  of care,  MAF  staff respect 
the  patients  choice.  The  MAF  staff arranges  transfers  for  a patient  via road  or fixed-
wing plane  to hospitals  offering  the  appropriate  level  of care.  The  four  MAFs  report 
no problems  transferring  patients  to other  facilities. 
Each  of the  four  MAFs  also has agreements  with nursing  home  facilities.  Local 
nursing  homes  rely on the  MAFs  for health  care  services  for their  elderly  patients. 
Each  of the  four  MAFs  is collocated  with a nursing  home.  By collocating,  MAFs  and 
nursing  homes  are  able  to share  staff.  This  arrangement  allows nurses  working  at the 
9  nursing  home  to also work  at the  MAF,  maximizing  efficiency.  Shared  staffing  also 
coordinates  patient  treatment. 
Finally,  MAFs  contract  with home  health  care  providers  to offer  a referral  network  to 
appropriate  non-acute  care.  Because  of the  requirements  to have  referral  agreements, 
the  boards  of the  MAFs  have  arranged  for  a full range  of services  to be  available 
through  referrals  to the  community.  For  example,  home  health  care  services  were  not 
available  in Circle,  before  the  MAF  developed.  Now the  MAF  contracts  with  a home 
health  agency  in Wibeaux,  Montana  to provide  services  as needed. 
FLEXIBILITY  IN STAFFING  IS CRITICAL  TO  SUCCESS  OF  MAFS 
MAFs  Allow An Expanded  Role  For  Non-physicians 
Non-physician  providers  admit  patients  to the  MAF.  HCFA  accepted  Montana  State 
policies  which  expanded  the  role  of physician  assistants  and  nurse  practitioners.  This 
meant  that  even  though  the  four  Montana  communities  were  unable  to recruit  and 
support  a resident  physician  who could  operate  a hospital,  they  could  still have 
inpatient  care  available.  In accordance  with Montana  rules,  each  MAF  has  a medical 
director  who is a physician.  However,  except  for the  Circle  MAF,  the  medical 
directors  are  located  in a different  town.  The  medical  directors  are  required  to visit a 
MAF  once  a month  to review  patient  charts,  but  in practice  they visit more  frequently 
and  are  regularly  consulted. 
The  medical  directors  are  the  sponsoring  physicians  for the  physician  assistants 
working  at the  MAR,  In accordance  with  the  MAF  rules,  the  sponsoring  physicians 
decide  what  services  the  physician  assistants  are  allowed  to perform,  The  physician 
assistants  at the  four  MAFs  are  highly experienced  professionals.  The  medical 
directors  allow them  to independently  perform  those  services  for which  they  are 
trained. 
MAFs  Have  Unique  Staffing  Requirements 
MAFs  have  unique  staffing  arrangements  because  HCFA  waived  many  staffing 
requirements.  MAFs  are  not  staffed  after  regular  working  hours  when  no patients 
have  been  admitted  for inpatient  care.  Under  the  Medicare  hospital  Conditions  of 
Participation,  registered  nurses  must  always be  on duty.  This works  in hospitals  since 
most  hospitals  always have  patients.  The  MAFs,  however,  frequently  have  times  when 
no patients  are  under  care.  The  MAFs,  on average,  have  patients  under  care  only 
about  17 percent  of operating  days.  When  no patients  have  been  admitted,  MAF 
medical  staff do not  have  to be  present,  but  are  on-call. 
When  a patient  has  been  admitted,  the  four  MAFs  provide  24-hour-a-day  nursing 
care.  A registered  nurse  is on duty at least  8 hours  a day, and  licensed  practical 
nurses  provide  care  at other  times.  The  MAFs  have  an arrangement  with the 
collocated  nursing  homes  to share  nursing  staff.  As a result,  nurses  at the  nursing 
10  home  also monitor  patients  admitted  to the  MAF.  The  nursing  home  nurses  also 
cover  the  emergency  care  at the  MAF  until  the  on-call  MAF  medical  staff arrive. 
Because  the  medical  professionals  at the  MAF  are  the  only providers  in the 
communities,  they  are  always on-call to provide  emergency  medical  care.  However, 
MAFs  have  modified  rules  to ease  the  burden  on the  medical  professionals.  The 
physician  or non-physician  provider  must  be within  one  hour  of the  MAF,  rather  than 
actually  in the  facility,  and  a registered  nurse  must  be within  20 minutes  of the  MAF. 
Each  MAP  also has  agreements  with local  ambulance  semices  that  if the  medical 
professionals  are  not  available  for any reason,  the  patient  will be  transported  directly 
to another  emergency  care  facility. 
The  Flexibility  Of MAFs  Attracts  And  Helps  Retain  Medical  Professionals  In Frontier 
Areas 
The  MAFs,  by virtue  of being  able  to offer varied  practice  settings,  are  an attractive 
worksite.  Consequently,  administrators  told  us they  can  recruit  and  retain  staff more 
easily.  The  physician  assistants  said they  came  to work  specifically  in a MAF  because 
they wanted  an opportunity  to practice  more  independently.  Nurses  told  us that  their 
morale  has increased  because  of the  ability to practice  inpatient  and  emergency  skills. 
Administrators  told  us that  some  staff members  are  choosing  to obtain  more  training, 
such  as advanced  degrees  or specific  skills to broaden  their  role  at the  MAF.  For 
example,  in Ekalaka  the  physician  assistant  has  already  trained  to perform  x-rays. 
Retention  of staff  allows the  provider  and  patient  to develop  a trusting  relationship. 
An  early  opinion  study by MHREF  on the  MAF  concept  showed  that  such a patient-
provider  relationship  is essential  to the  MAFs  success. 
MAFS  APPEAR  TO  BE  COST  EFFICIENT 
Although  data  is limited,  MAFs  appear  to be  cost efficient  for the  four  communities 
when  compared  to a small  underused  frontier  hospital.  Community  officials  in the 
four  Montana  communities  told  us that  the  MAFs  have  reduced  costs.  They  noted 
that  under  the  M/U? concept  they  are  able  to use  staff more  efficiently  and  operate  at 
less cost than  before  their  former  hospital  closed.  Each  community  subsidizes  the 
MAFs  with tax dollars.  Community  members  see the  efficiencies  of the  MAF  as a 
way to provide  medical  care  without  the  high tax burden  of their  former  hospital. 
This  is especially  important  as the  tax base  has  declined  in some  communities.  Also, 
the  four  communities  are  finding  that  some  of the  money  not  spent  on staffing  and 
maintaining  a full-service  hospital  can be  spent  on staff training. 
MAFs  save transportation  expenses  for patients  because  they  do not  have  to travel 
great  distances  for care.  The  cost of and  access  to transportation  are  often  problems 
for  elderly  patients  such as those  treated  in MAFs.  The  ability  to treat  and  stabilize 
patients  locally in cases  of emergency  may also reduce  ambulance  and  air  ambulance 
costs.  Further,  it allows provision  of care  faster. 
11  Critical  to success  of the  MAFs  was the  waiver  granted  by HCFA  which  allowed 
MAFs  to receive  cost based  reimbursement  rather  than  reimbursement  under  the 
Diagnostic  Related  Groups  (DRG)  system  that  is used  to pay for most  Medicare 
services  at hospitals.  Not  enough  data  is available  yet  to measure  average  MAF  costs 
against  comparable  DRG  payments;  however,  the  costs could  be  lower.  First,  MAFs 
employ  fewer  people.  Second,  MAFs  can  close when  no patient  is present.  Third, 
rules  allow non-physicians  and  non-RNs  to provide  care  which  should  lower  staffing 
costs.  Fourth,  cross-utilizing  staff and  services  between  the  nursing  facility  and  the 
MAF  reduces  overhead  and  increases  efficiency.  Finally,  the  MAF,  by specifically 
limiting  its services,  may forgo  expensive  and  little-used  equipment  that  would  also 
increase  costs. 
Although  not  easily quantifiable,  community  officials  said that  MAFs  financially  benefit 
the  community  in other  ways.  They  said that  if receiving  medical  care  is convenient 
and  it is provided  by familiar  people  in a familiar  environment,  people  usually  choose 
to obtain  care  for an illness  sooner.  Treating  an illness before  a crisis occurs  is better 
for the  patient  and  usually  more  cost-effective.  Further,  they  said  that  before  the 
MAF,  patients  tended  to (1) postpone  care  for an illness  rather  than  travel  long 
distances  for it, and  (2) forgo  follow-up  and  preventive  care  services. 
CONCLUSION 
The  isolation  of frontier  communities  can make  access  to health  care  difficult.  Many 
frontier  communities  cannot  adequately  support  a hospital,  but  have  a need  for stand-
by inpatient  and  emergency  care.  Some  communities  may be  going  to extreme 
measures  to save underused  hospitals  because  they  know  of no  other  way to retain 
medical  care. 
MAFs  hold  promise  as a viable  alternative  for frontier  community  health  care.  The 
MAF  program  is a practical,  flexible,  and  efficient  way to provide  local  access  to basic 
inpatient,  outpatient,  and  emergency  care  in frontier  areas.  Further,  MAFs  offer  an 
institutional  presence  which  fosters  other  health  care  services,  such  as nursing  homes, 
pharmacy  services  and visiting  health  care  services. 
The  results  of this review  and  HCFAS upcoming  formal  evaluation  can be  used jointly 
by HCFA  in determining  whether  to  (1) continue  with  the  MAF  concept,  and  (2) 
apply  it in additional  frontier  communities. 
12
 APPENDIX  A

Chronology  Showing Development Of The Me&i  Assistance Facility Program In Montana 
Early1980s  Governor of Montana created a task force to examine rural health problems 
December 1986  Garfield County Memorial Hospital in Jordan closed 
Februa~  1987	 Montanas State Legislature authorized a Medical Assistance Facility (MAF) 
program and Montana Hospital Research and Education Foundation 
(MHREF),  a non-profit organization affiliated with the Montana Hospital 
Association, was authorized to help implement the MAF program 
June 1987  Dahl Memorial Hospital in Ekalaka closed 
June 1988  HCFA funded a planning and development demonstration  grant 
January 1989	 MHREF sent letters inviting small rural hospitals to participate in the 
demonstration 
February 1989	 Montana legislature expanded the role of non-physician providers under 
State law, allowing them to prescribe medicines and to provide any service 
their sponsoring physician authorizes 
March 1989	 Nine hospitals in Montana agreed to participate  in the demonstration, three 
as MAFs (Jordan, Circle and Ekalaka) and six others as part of a control 
group 
April 1990  HCFA authorized a cost-based reimbursement system for MAFs 
July 1990  McCone County Hospital in Circle closed 
December  1990	 HCFA waived over forty Conditions of Participation so that MAFs could 
receive Medicare reimbursements under Medicare Part A 
December  1990  The first MAF in Circle opened 
June 1991  MAF in Ekalaka opened 
August  1991  Jordans MAF opened 
January 1992  MN? in Terry opened 
December  1992  Roosevelt Memorial HosDital in Culbertson converted to a MAF 
A -1
 APPENDIX  B

METHoDomGY

To understand  the  Medical  Assistance  Facility  (MAF)  concept,  we reviewed  Federal 
and  State  legislation  and  regulations.  We  interviewed  Montana  State  officials  and 
Health  Care  Financing  Administration  (HCFA)  staff to determine  how the  MAF 
concept  was created  and what  it is expected  to accomplish. 
To  determine  what  factors  led  to implementation  of the  MAF  concept,  we interviewed 
community  leaders  and  health  care  professionals  who were  instrumental  in converting 
a former  hospital  into  a MAF. 
Using  standardized  interview  guides,  we focused  interviews  with  community  members, 
health  care  professionals  and  State  and  HCFA  staff on the  following  issues. 
Community  concern  about  a hospitals  closing 
Conceptualization  and  communication  of converting  a former  hospital  into  a 
Application  for HCFA  funding 
Establishing  associations  and  protocols  with  other  hospitals  which will accept 
transfer  patients 
Conversion  of a physical  facility to meet  MAF  requirements 
Change  in the  health  care  community  necessary  to accommodate  new 
arrangements  created  by a MAF 
To  determine  what  services  are  provided  by MAFs  in the  four  Montana  communities 
of Circle,  Ekalaka,  Jordan,  and  Terry,  we reviewed  legislation,  regulations,  service 
records  and  correspondence  files.  We  also reviewed  the  health  care  services 
prescribed  at each  former  hospital  as recorded  in HCFAS Hospital  Cost  Reporting 
Information  System  (HCRIS).  We  then  compared  those  semices  to the  services 
provided  through  the  MAF  concept.  In this manner,  we could  identify  services  that 
were  formerly  provided  by the  hospitals,  but  not  provided  by the  MAFs. 
To  determine  other  health  services  available  to  a community  and  where  they  are 
located,  we interviewed  health  care  providers  and  community  leaders. 
B-1
 To  describe  the  health  care  network  role  of MAFs,  we reviewed  records,  such  as 
referrals,  and  interviewed  health  care  professionals  in hospitals  receiving  transfer 
patients. 
To determine  a communitys  perspective  on the  adequacy  and  appropriateness  of 
MAFs  semices  we interviewed  health  care  professionals  and  community  leaders  in 
each  of the  four  Montana  communities.  We also  determined  their  perspectives  on 
how standards  and  processes  they  followed  affected  implementation  of the  MAF 
program.  We interviewed  State  and  HCFA  staff  to determine  their  perspectives  on 
successes  of MAFs.  We  also gathered  information  on access  to care  issues  from 
Montana  and  national  sources.  Finally, we reviewed  the  first HCFA  evaluation  of the 
MAFs. 
To  determine  which  services  are  used  by residents  in a community  served  by a MAF, 
we used  records  and  documents  of both  the  former  hospital  and  the  MAF.  We 
supplemented  this information  with interviews  with health  care  professionals. 
B-2