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. 

OEI’S 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 Administration’s 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. 

Montana’s 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 HCFA’S 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..”” oo”o”oo”oo 1


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


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


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


Staffing Flexibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...”””.”


Cost Efficiencies . . . . . . . . . . . . . . . . . . . . . . . . ..............””o””-””


CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...”.”


APPENDICES


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


B: Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..”” ”””” oB-l


10 

11 

12 
--

INTRODUCTION


PURPOSE 

To describe Health Care Financing Administration’s 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, Montana’s 

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 midlevel 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 nonphysician 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

HCFA’S 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 State’s 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 President’s Council on Integrity and Efficiency. 

Appendix B describes our methodology in further detail. 

4

FINDINGS


HCFA’S 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. Circle’s 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 Ekalaka’s 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 hospital’s 

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 Terry’s 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 

1 day 

2 days 

3 days 

4 days 

Average: 2.4 days 

Number of Admissions 

54 (37%) 

23 (16%) 

31 (21%) 

39 (26%) 

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


Gastrointestinal Diseases


Trauma


Neurological Disorders


Previously-diagnosed Cancer


Cardiovascular Disease


Urinary Disorders


Metabolic Diseases


Psychiatric Disorders


Infections


Other Illnesses


are not prohibited from performing 

The physician at the C;rcle ~-

24% 

17% 

1370 

8% 

7% 

5% 

4% 

4?40 

4% 

3% 

11% 

surgeries, none of the four MAFs 

has chosen not to continue his 

Although MAFs 

offer a;y surgery. 

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 

medical professional on duty telephones the 

PRO and describes a patient’s 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 

assistant is admitting a patient, the MAF’s 

medical director, who is a physician, is also 

consulted by telephone. The medical director 

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 MAF’s later insurance 

claim will not be denied upon review. 

Although this is not the customaxy role of a 

PRO, HCFA allowed it for the MAF 

demonstration. 

The chart on the right shows what happens 

when a patient corn-es to a MAF. 

After admission, medical professionals at 

MAFs continue communication with other 

medical professionals. To illustrate, the 

physician or physician assistant at a MAF 

calls the PRO to consult on the 

appropriateness of a treatment plan. In 

routine cases the PRO is again called 

between 48 and 72 hours into the patient’s 

stay to consult on discharge planning in 

accordance with the rules of the program. In 

PATIENT FLOW PROCESS 

Goes to MAF 

PatientNeeds 

Asswsedby 

PhysicianAssistant 

If NecessaryDoctor 

is consulted 

+�

PRO Approves 

Admission 

Patient‘Admitted 

to lvlAF 

J


PatientReceivesup 

to% Hours of Care 

+ 

MAF and PRO 

Plan Dwharge 

I 

.4=————— 

PatkntStabii Patient Treated 

and Transferred and Released 

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, Ekalaka’s 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 patient’s choice. The MAF staff arranges transfers for a patient via road or fixedwing 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 patientprovider relationship is essential to the MAF’s 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 standby 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 HCFA’S 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 

Early 1980’s Governor of Montana created a task force to examine rural health problems 

December 1986 Garfield County Memorial Hospital in Jordan closed 

Februa~ 1987	 Montana’s 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 Jordan’s 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 hospital’s 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 HCFA’S 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 community’s perspective on the adequacy and appropriateness of 

MAF’s 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