The 2010 Report 

to the Secretary: 

Rural Health and 

Human Services Issues
 

NACRHHS
 

The National Advisory Committee on 

Rural Health and Human Services 

May 2010 
Acknowledgements 

The 2010 Report to the Secretary is the culmination of a year of collective effort by the National Advisory 

Committee on Rural Health and Human Services (NACRHHS). I would like to thank each of the Committee 

members for their hard work and acknowledge the subcommittee chairs of each of the three chapters: Todd 

Linden, Health Care Provider Integration; Maggie Blackburn, Rural Primary Care Provider Workforce; and 

Donna Harvey, Home and Community Based Care for Rural Seniors. Meghana Desale, Jenna Kennedy, 

Laura Merritt, and Kai Smith, Truman Fellows with the Office of Rural Health Policy (ORHP) at the Health 

Resources and Services Administration (HRSA), provided research support and assistance in drafting key 

sections of the final report. Beth Blevins edited the report. 

The Committee benefited from the hospitality and rich information provided by various individuals connected 

with the Committee’s two field meetings in 2009. The opportunity for the Committee to learn about rural 

health and human services delivery in the field from those who are actually providing the services was critical 

in informing this report and the recommendations that are included. The number of people who helped to 

make the field meetings possible is far too many to list here, but I want to acknowledge the help of a few 

individuals. 

In June 2009, the Committee visited Rapid City, South Dakota. Marcia Taylor of Rapid City Regional Hospital 

Hospice, Jason Petik of Custer Regional Hospital, and Kent Olsen of Hans P. Peterson Memorial Hospital 

all hosted informative site visits. NAC members Dave Hewett and Deb Bowman assisted in planning the site 

visits. 

The South Dakota meeting also featured important presentations by a number of individuals including Sidney 

Goss of the South Dakota School of Mines and Technology, Tom Dean of Horizon Health Care, Matt Michels, 

a health law attorney, Scot Graff of Community HealthCare Association of the Dakotas, Deb Bowman of the 

South Dakota Department of Social Services, State Senator Jean Hunhoff, Cindi Slack of Sanford Health, 

Bruce Vogt of the Sanford School of Medicine at the University of South Dakota, Charles Hart of Regional 

Health System, and Sandra Durick and Josie Petersen, both of the South Dakota Office of Rural Health. 

In September 2009, the Committee visited Sacramento, California. Dennis Dudley of the San Francisco 

Regional Office of the Administration on Aging played a key role in coordinating the meeting. Dr. Thomas 

Nesbitt, a former Committee member, also was critical in planning the meeting and also presented to the 

Committee. In addition, the Committee benefited from site visits hosted by Anne Platt of Sutter Amador 

Hospital in Jackson, California, Teresa Rincon of Sutter Health’s eICU Hub in Sacramento, and Deanna Lea 

of the Area 4 Agency on Aging. John Rigg of the California Hospital Association also provided important 

counsel in planning the meeting and arranging site visits. 

In addition, the Committee benefitted from presentations at the September meeting from Mario Gutierrez of 

the Rural Policy Research Institute Human Services Panel, Samantha Wilburn of the California State Office 

of Rural Health, Desiree Rose of the California Rural Health Association, Cathryn Nation of the University 

of California, Harry Foster of Family HealthCare Network, Jim Davis of the California Commission on 

Aging, Lynn Daucher of the California Department of Aging, Clay Kempf of the California Association of 

Area Agencies on Aging, Kevin Erich of Frank R. Howard Memorial Hospital, and Esteban Verduzco and 

Christopher White, medical students in the University of California, Davis’s Rural-PRIME program. 
The Committee thanks the many individuals who helped research, analyze, and prepare valuable data for this 

report including the Rural Assistance Center and the Rural Health Research Centers supported by HRSA. 

The report also benefited from the assistance of Federal staff, including Tom Morris, Carrie Cochran, Michelle 

Goodman, and Sherilyn Pruitt of ORHP; and Dennis Dudley from the Administration on Aging. Finally, I 

would particularly like to thank Jennifer Chang for her work. 

The Committee is grateful to many others, too numerous to mention, for their support of the Committee’s 

mission to inform and make recommendations to the Secretary and others on the state of health and human 

services in rural America. 

Sincerely,
 

The Honorable David M. Beasley, Chair
 
The National Advisory Committee on Rural Health and Human Services (NACRHHS) is a citizens’ panel 

of nationally recognized rural health and human services experts. The Committee, chaired by former South 

Carolina Governor David Beasley, was chartered in 1987 to advise the Secretary of the U.S. Department 

of Health and Human Services (HHS) on ways to address health problems in rural America. In 2002, the 

Committee’s mandate was expanded to include rural human services issues and a 21-member limit was set. 

The Committee’s private and public-sector members reflect wide-ranging, first-hand experience with rural 

issues, including medicine, nursing, administration, finance, law, research, business, public health, aging, 

welfare, and human services. Members include rural health professionals as well as representatives of State 

government, provider associations, and other rural interest groups. 

Each year, the Committee highlights key health and human services issues affecting rural communities. 

Background documents are prepared for the Committee by both staff and contractors to help inform members 

on the issues. The Committee then produces a report with recommendations on those issues for the Secretary 

by the end of the year. The Committee also sends letters to the Secretary after each meeting. The letters 

serve as a vehicle for the Committee to raise other issues with the Secretary separate and apart from the report 

process. 

The Committee meets three times a year. The first meeting is held during the winter in Washington, D.C. The 

Committee then meets twice in the field, in June and September. The Washington meeting serves as a starting 

point for setting the Committee’s agenda for the coming year. The field meetings include rural site visits and 

presentations by the host community, with some time devoted to ongoing work on the yearly topics. 

The Committee is staffed by the Office of Rural Health Policy, located within the Health Resources and 

Services Administration at HHS. Additional staff support is provided by the Administration on Aging at 

HHS. 

About the Committee 
 

 

 

CHAIRPERSON 

The Honorable David M. Beasley 

Former Governor of South Carolina 

Darlington, SC 

Term: 04/01/06 – 03/31/10 

VICE CHAIRPERSON 

The Honorable Larry K. Otis 

Former Mayor of Tupelo, MS 

Research Fellow 

Mississippi State University 

Term: 08/01/07 – 07/30/11 

MEMBERS 

Graham Adams, PhD 

CEO 

South Carolina Office of Rural Health 

Lexington, SC 

Term: 11/01/07 – 10/30/11 

April M. Bender, PhD 

Owner, Partnerships for Quality 

Hannawa Falls, NY 

Term: 08/01/07 – 07/30/11 

Maggie Blackburn, MD 

Assistant Professor 

Department of Family Medicine and Rural Health 

Florida State University College of Medicine 

Tallahassee, FL 

Term: 11/01/07 – 10/30/11 

Deborah Bowman 

Secretary 

South Dakota Department of Social Services 

Pierre, SD 

Term: 08/01/07 – 07/30/11 

B. Darlene Byrd, MNSc, APN 

Owner, APN HealthCare 

Cabot, AR 

Term: 11/01/07 – 10/30/11 

Larry Gamm, PhD 

Director 

Center for Health Organization Transformation 

School of Rural Public Health, Texas A&M 

College Station, TX 

Term: 11/01/08 – 10/31/12 

Sharon A. Hansen, PhD 

Director 

Community Action Partnership Head Start 

Killdeer, ND 

Term: 07/01/06 – 06/30/10 

David Hartley, PhD, MHA 

Research Professor 

Muskie School of Public Service 

University of Southern Maine 

Portland, ME 

Term: 07/01/08 - 06/30/10 

Donna K. Harvey 

Executive Director 

Hawkeye Valley Area Agency on Aging 

Waterloo, IA 

Term: 08/01/07 – 07/30/11 

David R. Hewett, MA 

President and CEO 

South Dakota Association of 

Health Care Organizations 

Sioux Falls, SD 

Term: 07/01/06 – 06/30/10 

Thomas E. Hoyer, Jr., MBA 

Consultant 

Rehoboth Beach, DE 

Term: 07/01/06 – 06/30/10 

The 2010 NACRHHS Report 

The National Advisory Committee on Rural 

Health and Human Services 
Todd Linden, MA 

President and CEO 

Grinnell Regional Medical Center 

Grinnell, IA 

Term: 11/01/07 – 10/30/11 

A. Clinton MacKinney, MD, MS 

Family Physician, Senior Consultant 

St. Joseph, MN 

Term: 07/01/06 – 06/30/10 

Karen Perdue 

Associate Vice President for Health 

University of Alaska Fairbanks 

Fairbanks, AK 

Term: 07/01/06 – 06/30/10 

Robert Pugh, MPH 

Executive Director 

Mississippi Primary Care Association 

Jackson, MS 

Term: 11/01/07 – 10/30/11 

John Rockwood, Jr., MBA, CPA 

Retired Health System CEO 

Maple City, MI 

Term: 11/01/08 – 10/31/12 

The Honorable Maggie Tinsman, MSW 

Former Iowa State Senator 

Policy Analyst and Consultant 

Davenport, IA 

Term: 11/01/07 – 10/30/11 

2008-2009 Subcommittees 

Home and Community Based Care for Rural Seniors 

Donna Harvey - Chair 

Deb Bowman 

Sharon Hansen 

Tom Hoyer 

Maggie Tinsman 

Rural Primary Care Workforce 

Maggie Blackburn - Chair 

April Bender 

Darlene Byrd 

Larry Gamm 

Larry Otis 

Karen Perdue 

Robert Pugh 

Rural Health Care Provider Integration 

Todd Linden - Chair 

Graham Adams 

David Hartley 

Dave Hewett 

Clint MacKinney 

John Rockwood 

For Committee members’ biographies, please visit 

the National Advisory Committee on Rural Health 

and Human Services’ Web site at http://ruralcommittee.hrsa.gov/. 

The 2010 NACRHHS Report 

The National Advisory Committee on Rural 

Health and Human Services 
Contents 

Executive Summary.............................................................................................................................. 1
 

Home and Community Based Care for Rural Seniors.............................................................. 2
 

Rural Primary Care Workforce..................................................................................................... 13
 

Rural Health Care Provider Integration.................................................................................... 25
 

References.............................................................................................................................................. 36
 

Acronyms............................................................................................................................................... 41
 

Appendix: Key Federal Programs for Integration......................................................................43
 
This is the 2010 Annual Report by the National 

Advisory Committee on Rural Health and Human 

Services (NACRHHS). This year’s report examines 

three key topics in health and human services and their 

effects in rural areas: home and community based 

care for rural seniors, rural primary care workforce, 

and rural health care provider integration. All are 

pertinent and timely issues that the Committee chose 

during its February 2009 meeting. The chapters 

draw from published research and from information 

gathered during site visits to rural South Dakota and 

rural California. 

Home and Community Based Care for Rural 

Seniors 

The elderly population in rural America is growing at 

a rapid rate. An estimated 69 percent of people turning 

65 years old will need some form of long-term care 

in the future. Studies have shown that seniors are 

happier remaining in the home as long as possible, 

but too often seniors are ushered into retirement 

homes without being offered an alternative. Allowing 

seniors to age-in-place is more difficult because the 

existing infrastructure and available resources are 

concentrated on supporting nursing home care. 

The Committee believes that options for home-based 

care need to be expanded in rural areas. Barriers such 

as geographic accessibility, ineligibility, workforce 

shortages, and limited awareness of options all 

affect seniors’ decisions when choosing care. The 

Committee’s recommendations to the Secretary 

include evaluating current laws prohibiting payment 

to family members for care and coordinating with the 

Secretary of Transportation to ensure seniors are able 

to access care. 

Rural Primary Care Workforce 

Declining interest in primary care has most notably 

affected rural communities. An aging rural population 

and a retiring medical workforce exacerbate the 

shortages rural America already faces. Additionally, 

fewer medical school graduates are interested in 

practicing in rural areas. There are 55 primary care 

physicians for every 100,000 people in rural areas, 

compared to the 95 per 100,000 that are needed. An 

expansion of health care insurance would intensify 

the unmet demand for primary care in rural America. 

The Committee recognizes the importance of not only 

attracting primary physicians to rural America, but in 

utilizing physician assistants and advanced practice 

nurses who can act as the sole primary care provider 

in a community. The Committee recommends that the 

primary care system be strengthened through local 

leadership, an emphasis on preventative measures, 

and by attracting and training a workforce dedicated 

to care in rural areas. 

Rural Health Care Provider Integration 

The majority of patient care in the United States is 

uncoordinated due in large part to an incomplete 

transfer of important patient information between 

providers. This fragmentation of care is acutely 

problematic in rural areas, which face higher rates of 

chronic diseases that require greater managed care. 

This is cause for concern since 88 percent of annual 

Medicare spending is concentrated among only 25 

percent of beneficiaries, 75 percent of which have 

one or more chronic diseases. 

The Committee believes that the quality of care 

and efficiency of delivering care will both increase 

if integration — seamless patient and information 

flow among providers — is achieved. In this report 

the Committee recommends specific ways to achieve 

integrated care. These recommendations include 

fixes to Stark regulations to prevent unintentional 

hindrance of provider integration, and a call to 

include rural providers in future demonstrations of 

Accountable Care Organizations (ACO), bundling, 

and patient-centered Medical Homes. 

The 2010 NACRHHS Report 

1 

Executive Summary 
The 2010 NACRHHS Report 

Home and Community Based 

Care for Rural Seniors
 

Chapter Recommendations: 

Dual Eligibles 

1: The Secretary should evaluate whether rural seniors who are dually eligible for Medicare and Medicaid 

are able to take part in programs such as Money Follows the Person, Cash and Counseling, Home and 

Community-Based Services (HCBS), the Program of All-Inclusive Care for the Elderly, and Medicare 

Advantage Special Needs Plans to the same extent as urban seniors. 

2: The Secretary should support an evaluation of current law prohibitions against payment to family 

members for care otherwise covered under Medicare or Medicaid, with a view toward determining whether they should be eliminated in light of current economic conditions. 

Medicare 

3: The Secretary should instruct the Centers for Medicare and Medicaid Services (CMS) to develop a 

uniform assessment tool that works across post-acute care settings and Health and Human Services programs, as required under current law. 

4: The Secretary should work with the Congress to change the requirements for coverage of the “Welcome 

to Medicare” physical to include provision of information about available home-based options for seniors. 

This information should also be a discharge planning function with a “handoff” to the Community Living 

Programs, Eldercare Locator Service, and Aging and Disability Resource Centers (ADRCs). 

5: The Secretary should instruct CMS to find a method for claiming and reporting hospice payments for 

general inpatient services on a Critical Access Hospital (CAH) cost report in a manner that permits the 

CAH to claim the full cost of caring for the hospice patient. 

Transportation 

6: The Secretary should develop a report in coordination with the Secretary of Transportation to identify 

all available legal authorities that provide transportation for those in need of health and human services 

and to determine their effectiveness in serving the elderly population, with particular emphasis on the 

availability and effectiveness of programs for the isolated rural elderly. 

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NFs and SNFs 

 Hawaii and Alaska not to scale 

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Skilled Nursing Facility or SNF/NF (15049) 

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   

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Nursing Facility Only (670) 

Metropolitan Areas 

Sources: OSCAR Provider of Services file, CMS, 2009; U.S. Census Bureau and Office of Management and Budget, 2009.
 

Prepared by the North Carolina Rural Health Research and Policy Analysis Center, Cecil G. Sheps Center for Health Services Research, University of North Carolina at Chapel Hill.
 

The 2010 NACRHHS Report 

certified nursing home beds to seniors is 50 beds per

Rural Significance: Why the thousand. The ratio of nursing beds to seniors in rural 

Committee Chose this Topic counties, however, is 62 per thousand, or 35 percent higher

than the same measure for urban counties.3 The greater 

supply of nursing homes in rural areas, along with a lack 

of home and community-based options for rural seniors, The Supreme Court’s landmark Olmstead decision (1999, may result in increased nursing home placements. Olmstead v. L.C.) and the New Freedom Initiative (2001) 

were a victory for people seeking to receive home and The Committee believes the rural elderly population community-based care in their communities. Some would likely benefit from an expansion in options for advocates for rural seniors saw this as a particularly home and community-based care as alternatives to being promising change given the high percentage of the elderly placed in a nursing home. Yet the Committee has learned 

in rural areas and the health status challenges they face. that rural communities face particular challenges in taking 

advantage of some of the new options emerging post- Approximately 7.5 million of the 50 million people Olmstead. who lived in rural America in 2005 were over age 65.1 

Although the difference in percentage of the elderly This chapter will look at the current state of home and between rural and urban areas is not dramatic (15 community-based care options for rural seniors through percent versus 12 percent), the rural elderly population the lens of the Health and Human Services programs that is growing at a more dramatic rate. In one quarter of focus on this population. This includes an analysis of all non-metropolitan counties, the percentage of elderly key programs in the Centers for Medicare and Medicaid residents already reaches 18 percent. In non-metropolitan Services (CMS) as well as the Administration on Aging areas, 15.3 percent of seniors have at least one limitation (AOA), and how various programs and initiatives in HHS in Activities of Daily Living (ADL) compared to 12.7 meet the needs of rural seniors seeking to remain in their percent in metropolitan areas.2 Nationally, the supply of homes as they age. 

Nursing Facilities (NFs) and Skilled Nursing Facilities (SNFs), 2009 

3
 
 

The 2010 NACRHHS Report 

As people age, they often become less mobile due to 

physical limitations, chronic diseases or disability. They 

may not be able to fully care for themselves, and a 

chronic disease or disability may require constant care, 

supervision, and frequent medical attention. An estimated 

69 percent of people turning 65 years old will need some 

form of long-term care assistance before they die.4 The 

85-and-over population is the fastest growing segment 

of the U.S. population and is expected to grow from four 

million in 2000 to 21 million by 2050, with much of that 

growth concentrated in rural areas.5 Many individuals 

requiring primarily unskilled services may need services 

in such volume and variety as to require professional 

management and supervision. Seniors and their families 

are faced with the decision of how to best access long-term 

care for themselves or their loved ones. The decision can 

be particularly challenging in a rural area where long-term 

care options are limited due to geographic accessibility. 

One ongoing need is to find a way to support better case 

management for individuals with chronic problems. This 

is an issue that cuts across both Medicare and Medicaid, 

which have taken steps in that direction utilizing various 

programs discussed in this report. However, the Committee 

believes larger and more systematic reform is needed. 

Although the population in need of services continues 

to grow and decisions such as Olmstead require less 

restrictive care, neither Federal nor State funding has been 

made available for enough home and community-based 

services to meet the need that exists today. The Committee 

recognizes that this situation represents choices at all 

levels of government, but also believes these choices need 

to be re-examined. 

The Committee agrees with national experts that the 

guiding principles of caring for seniors should include 

independence, choice, dignity, and the ability to live at 

home for as long as possible in order to maintain a higher 

quality of life.6,7 

Despite evidence that home and community-based care 

allows a higher quality of life,8 is preferred by seniors,9 and 

often saves money,10 over 1.8 million people in the United 

States live in nursing homes, funded both by Medicaid 

waivers and privately.11 Different studies disagree on a 

projected overall amount of savings that care in a home 

and community-based system would bring to the Federal 

government, but sources generally agree that nursing 

home care is more expensive than home and communitybased care. The amount of Medicaid dollars that can pay 

for one person to receive nursing home care may pay for 

as many as three people to receive home and communitybased care,12yet 75 percent of Medicaid payments for 

long-term care for older people and adults with physical 

disabilities continues to go to nursing home care.13 

The Committee recognizes that the value of home and 

community-based care is well established; that HHS 

has made these services available under waivers and as 

State Plan services; and that States, to varying degrees, 

have taken advantage of these Medicaid options. The 

Committee recognizes these positive efforts, but has 

identified two kinds of barriers that continue to impede 

access to home and community-based care. 

One barrier is presented by the limitations in the scope and 

availability of services themselves; the second barrier is 

the complexity of the system under which the benefits are 

provided and administered. It is not enough for Federal 

and State governments to enact a variety of programs 

that can, with persistence and skill, be assembled to 

provide the necessary home and community-based care. 

Governments must take the additional step of providing 

a useful interface between the citizens and the programs. 

In terms of scope and availability, the Committee has 

identified several barriers that stand in the way of rural 

seniors receiving home and community-based care. They 

include: 

 lack of access 

 ineligibility 

 lack of awareness about options 

 workforce shortages 

 inadequate funding 

 lack of transportation 

These barriers often lead individuals and families to 

make early nursing home admittance the default choice, 

which is particularly important to be aware of in rural 

areas because it compromises a higher proportion of the 

elderly population.14 This proportion is increasing as parts 

of rural America are becoming more popular retirement 

destinations, the rural elderly “age in place,” and there 

is an outmigration of young people from rural areas.15 

Research also shows a higher percentage of poor elderly 

residents in rural areas than urban areas,16 and a higher 

proportion of elderly people with disabilities in rural areas 

than urban areas17 These populations place an increased 

demand on States’ programs as they seek long-term care. 

4
 
 

 

The 2010 NACRHHS Report 

HHS Program Role
 

The Department of Health and Human Services plays a 

key role in ensuring access to services for seniors, either 

through direct reimbursement of care and services through 

Medicare and Medicaid at CMS or through programs 

authorized under the Older Americans Act through the 

Administration on Aging. 

Medicaid 

The Medicaid program is the primary source of payment 

for both institutional and non-institutional long-term care 

in this country. Medicare has traditionally focused on 

acute and restorative care in institutions and in the home— 

its statute specifically forbids payment for custodial care. 

As a result, Medicaid policies and eligibility requirements 

have a significant influence on rural seniors’ access to 

home and community-based services. Medicaid paid 

for nearly 50 percent of long-term care services in 2004, 

making it the nation’s primary payer of long-term care 

services.18 However, less than one-third of total Medicaid 

spending on long-term care went to home and communitybased services. When a beneficiary is in a nursing home, 

Medicaid will pay for meals and housing, but Medicaid 

will not cover these services outside of this setting except 

in the context of a home and community-based services 

waiver program. Thus, some beneficiaries may not be 

able to afford living at home using Medicaid home health 

and/or personal care services, as these costs are expenses 

they would not continue to personally incur if in a nursing 

home. Many States and communities have not organized 

their home and community-based services into a system 

of care, so beneficiaries may find it easier to navigate 

care in a nursing home setting. Additionally, as a result 

of current economic challenges States are facing, many 

may be cutting back Medicaid services such as home and 

community-based care funding. 

Another rural aspect to keep in mind when considering 

Medicaid’s influence on rural seniors’ access to home 

and community-based services is geography and the 

distances that separate rural seniors from their providers. 

Medicaid can cover transportation services for patients 

but its rates for home care and other services often fail 

to reflect the true cost of travel in rural areas (i.e., the 

actual cost of transportation and the opportunity cost of 

the service time consumed when providers are traveling 

between appoinments). Such payment limitations curtail 

the ability of organizations to serve widely dispersed rural 

patients and result in reduced service levels. 

Medicaid Home
 and
 Community-Based Services
 

In 1981, Congress added section 1915(c) to the Social 

Security Act to authorize States, subject to Federal 

approval, to cover home and community-based services 

under a waiver program. Today, Home and Communitybased Services (HCBS) waivers are the primary vehicles 

through which Federally funded health and health-related 

services are provided to eligible individuals in a home or 

community-based setting. HCBS waivers give States some 

flexibility in Medicaid provisions, which allows them to 

develop and implement creative alternatives to placing 

Medicaid-eligible individuals in hospitals, nursing homes, 

or intermediate care facilities, thereby allowing long-term 

care services to be delivered in community settings. 

Some experts believe there is potential for HCBS waivers 

to decrease overall costs to Medicaid if States would 

require case management services through their Medicaid 

HCBS waiver programs.19 This could be particularly 

beneficial for rural areas because rural populations have a 

higher prevalence of chronic diseases, for which the cost 

of treating is often greatly reduced with intensive case 

management.20,21,22 The Committee would note that such 

management is an integral part of the “patient-centered 

Medical Home” concept, which it endorsed in last year’s 

report. 

Other Medicaid Home
 and
 Community-Based Care
 

The Cash and Counseling program supports seniors who 

want to live independently by giving them a budget to 

hire personal care aids, purchase services, and make 

home modifications.23 Cash and Counseling allows the 

beneficiary to manage a flexible budget and decide which 

services best meet their needs each month. Participants of 

Cash and Counseling select a care coordinator who helps 

them develop a care plan that maximizes quality of life 

in the community. Additionally, Cash and Counseling 

provides a support system to aid in plan management. This 

consumer-directed care program, originally only available 

in Arkansas, Florida, and New Jersey, is now available 

in 15 States and is available to Medicaid beneficiaries 

who receive personal assistance services.24 Participating 

States, in addition to the aforementioned, include Illinois, 

5
 
 

 

 

The 2010 NACRHHS Report 

Iowa, Kentucky, Michigan, Minnesota, New Mexico, 

Pennsylvania, Rhode Island, Vermont, Washington, and 

West Virginia. When the program was evaluated in 2004, 

more than half of the Cash and Counseling participants 

reported that the program had improved their lives a 

great deal.25 Cash and Counseling gives beneficiaries the 

flexibility to pay a family member or friend to provide 

those services. In rural areas, the availability of home 

health agencies and professional caregivers is limited, so 

this is a particularly promising program to help support 

the rural family caregiver workforce. In addition, the 

program can provide participants with some financial 

counseling services. Enrollment processes for Cash and 

Counseling vary by State, and information on eligibility 

and enrollment for all participating States is available at 

cashandcounseling.org.26 

The Need for Integrating Senior Services 

A flaw in the U.S. health care system is the frequent failure 

of its components to coordinate with one another in caring 

for individual patients, often leading to duplicative services 

or gaps in services. 

Rapid City Regional Hospital, part of a non-profit health care 

system, Regional Health, in South Dakota, has been working 

on a solution to this problem in administering home care 

services. The home care services they provide – hospice, 

home health, and homemaker services, among others – are 

administered from offices located at the hospital’s Hospice 

House. This allows nurses, aides, and administrators to 

know the patients’ names and situations and to work as a 

team to assure that the full range of individual needs are met 

by involving all the available services. Providing a central 

location for services and administration is important for the 

active coordination of home care services. 

Because the management of Regional Health System 

believes in providing patient-centered and coordinated care, 

they were also willing to look across program boundaries to 

assure quality care. A pharmacist was hired to work across 

the home care and hospice programs to monitor medications 

and do drug regimen reviews. While it seems like a simple 

choice for a health care system to hire an individual to work 

across several provider types, it is too often the case that 

these needs are ignored because none of the individual 

programs can individually support a full-time equivalent. 

The willingness of Regional Health System’s administrators 

to see its programs as a whole is evidence of its strength. 

Money Follows the Person (MFP) is a concept based on 

the idea that flexibility in spending could help patients 

access and receive the most appropriate level of care 

as they transition among a variety of settings, even if 

funds were originally budgeted for institutional care.27 

In 2001, The New Freedom Initiative created the Money 

Follows the Person Rebalancing Demonstration.28 This 

CMS demonstration has the aim of reducing reliance on 

institutional care by aiding beneficiaries’ transitions from 

institutional care to home and community-based care.29 

The MFP demonstration also allows more flexibility in 

spending, but it takes the concept one step further. It funds 

these transitions for up to one year after an individual 

leaves an institution. MFP demonstration funding will be 

1.75 billion dollars over five years in competitive grants 

to States for a minimum of two years and a maximum of 

five years.30 

An optional benefit under both Medicare and Medicaid, 

the Program of All-Inclusive Care for the Elderly (PACE) 

provides home-based care services for those over age 55.31 

PACE organizations serve nursing home-eligible patients 

with the idea of keeping them in a home-based setting. 

These organizations use a team approach to provide a 

full range of care to enrollees, including primary care, 

social services, restorative therapies, personal care and 

supportive services, nutritional counseling, recreational 

therapy, transportation, and meals. Providers receive 

monthly Medicare and Medicaid capitation payments for 

each eligible enrollee. 

Although PACE has largely been an urban program, 

rural interest in the model is growing. In 2006, CMS 

provided $500,000 to 15 organizations for a rural PACE 

demonstration. This provided start-up funding for the 

development of PACE sites to specifically serve rural 

residents. Expansion beyond these grant-supported 

PACE sites has been limited. Some rural areas struggle 

to meet some of the PACE requirements in terms of 

assembling the care team, enrolling enough participants 

to make a program economically viable, and addressing 

how to provide the broad range of services over a large 

geographic area. Stand-alone rural PACE programs may 

not be financially viable given low population density 

and high fixed costs. However, it may be possible to 

extend services from urban-based PACE providers to 

rural residents since these organizations will already have 

developed many of the economies of scale for providing 

services efficiently. 

Medicare 

Medicare also plays a key role in supporting rural seniors’ 

efforts to receive needed services while aging at home. 

Not all inpatient or rehabilitation services are going to 

be available in every rural area, but basic primary and 

6
 
The 2010 NACRHHS Report 

emergency care, limited inpatient, and post-acute care 

services being available within a reasonable distance is a 

realistic expectation. The emergence of more than 1,300 

Critical Access Hospitals, which offer most of those basic 

services either directly or through arrangement, has played 

an important role in keeping rural seniors viable in their 

home communities. 

Over the years, there has been concern about access to 

basic services for rural seniors due to payment rates for 

primary care, inpatient, and post-acute care services. 

Medicare has a number of special payment designations 

for rural areas designed to address some of those concerns. 

The Medicare Modernization Act of 2003 made it 

possible for beneficiaries to develop Special Needs Plans 

(SNPs) under Medicare Advantage (MA), and Congress 

has affirmed the worth of SNPs by passing subsequent 

legislation to keep this option available. SNPs are 

coordinated care plans targeted for beneficiaries with special 

needs, including individuals who are institutionalized, 

dually eligible for both Medicaid and Medicare, or have 

severe or disabling chronic conditions.32 SNPs can focus 

on monitoring health status, managing chronic diseases, 

avoiding inappropriate hospitalizations, and helping 

beneficiaries move from high risk to lower risk on the care 

continuum. A higher proportion of people with disabilities 

live in rural than urban areas33 and utilizing SNPs could 

allow more rural seniors to live at home with improved 

coordination and continuity of care. 

RECOMMENDATION 

The Secretary should evaluate whether rural seniors 

who are dually eligible for Medicare and Medicaid 

are able to take part in programs such as MFP, Cash 

and Counseling, HCBS, PACE, and MA Special Needs 

Plans to the same extent as urban seniors. 

Assessment and Care Planning 

Instruments
 

Medicare and Medicaid programs both use certain 

assessment instruments, e.g., the Minimum Data Set 

(MDS) instrument for Nursing Facility (NF) care and 

the Outcome and Assessment Information Set (OASIS) 

data set for home health, but their data elements are 

not interchangeable. Medicare and Medicaid efforts 

have continued for almost 20 years to develop uniform 

assessment instruments with uniform data definitions, 

including provisions in the Medicare Prescription Drug, 

Improvement, and Modernization Act of 2003 (MMA) 

and other statutes. These efforts have consistently failed 

because of the difficulty in achieving standardization 

and the ongoing resistance of providers to the burden 

of completing lengthy assessments. This is a concern 

that affects both rural and urban providers. It can create 

challenges for some low-volume rural home health 

agencies that do not have a great deal of experience with 

OASIS. Failure to conduct this assessment properly has 

a downstream effect on both patient and provider. It can 

result in the home health agency shortchanging itself on 

reimbursement while the patient may not get the level of 

services needed. 

RECOMMENDATION 

The Secretary should instruct CMS to develop a 

uniform assessment tool that works across post-acute 

care settings and HHS programs as required under 

current law. 

Informing Rural Seniors 

The Committee believes that home and community-based 

care options should be explained to seniors long before 

they are in a time of crisis. When it becomes apparent 

that an individual requires long-term care, there is 

little time to act. Planning for long-term care, although 

difficult, is essential. Knowing the types of options and 

what resources are available is invaluable, when the time 

comes. While statistics can be used to anticipate what 

percent of the population will need long-term care, people 

cannot anticipate when they, as individuals, will require 

long-term care, or what level of assistance they will need. 

Opportunities exist for CMS to collaborate with 

rural providers to encourage rural seniors to access 

home and community-based systems of care. One 

potential opportunity for collaboration is during the 

beneficiary’s Welcome to Medicare exam. This would 

allow the beneficiary to learn about accessing home 

and community-based services and begin long-range 

planning. At this time, the provider could give the 

patient information about the National Eldercare Locator 

Service, Administration on Aging (AoA) programs, such 

as National Elder Services, and HHS’ National Center for 

Long Term Care Information, which distributes the “Own 

Your Own Future” starter kit. Discharge planners may 

7
 
 

 

The 2010 NACRHHS Report 

also refer seniors in need of advanced care to an Aging 

and Disability Resource Center (ADRC). 

The need to inform seniors of their care options is 

particularly important at the time of discharge from a 

hospital or a skilled nursing facility. Medicare’s hospital 

conditions of participation (CoPs) contain strong and 

detailed requirements for discharge planning, and 

appropriately so. However the typical discharge planning 

tends to focus heavily on nursing home placement, both 

skilled and non-skilled, reflecting an institutional bias that 

is not consistent with Federal and State efforts to focus 

on a broader range of options for seniors. The challenge 

is how to revise the CoPs to reflect these options and 

to provide discharge planners with the information and 

resources to assist patients and families in gaining access 

to home and community-based care. 

Following an episode of acute care, discharge planners 

help patients make the transition to the next care setting. 

In many hospitals, a nursing home is the current default 

option. This may be due, in part, to discharge planners 

being more knowledgeable about hospital and nursing 

home resources than they are about community resources. 

Providing education on home and community-based 

services and the resources available to those involved in 

discharge planning could help decrease the number of 

people referred to nursing homes who do not require that 

level of care. 

RECOMMENDATION 

The Secretary should work with the Congress 

to change the requirements for coverage of the 

“Welcome to Medicare” physical to include provision 

of information about available home-based options 

for seniors. This information should also be included 

as a discharge planning function with a “handoff” to 

the Community Living Programs, Eldercare Locator 

Service, and Aging and Disability Resource Centers. 

Family as Caregivers 

The preferred means of care for the elderly is most often 

by family and friends. Training family and friends to care 

for seniors in their neighborhood would provide seniors 

the comfort of remaining in their homes. Unfortunately, 

there are multiple deterrents to this option. There are 

some provisions, such as State practice acts for health 

practitioners, which can prevent care by family, friends 

or lower level practitioners. In some cases, Nurse Practice 

Acts permit nurses to teach certain skilled services 

(injections, for example) to family members but prohibit 

them from teaching friends and neighbors how to care for 

elderly neighbors in their homes. Another disincentive 

is the prohibition under both Medicare and Medicaid of 

paying relatives for care. The original prohibitions, enacted 

in the 1960s, were based on the assumption that such 

services would otherwise be available to the beneficiary 

at no cost. That assumption is no longer valid in today’s 

world, in which most family members routinely work 

outside the home. Family members willing to provide 

care often cannot do so without some source of income. 

The Committee believes that both of these problems 

should be remedied: that State practice acts for health care 

practitioners, at all levels, should be examined and revised 

to allow for broader training for family caregivers and that 

Medicare and Medicaid program prohibitions against the 

payment of relatives be re-examined in light of today’s 

employment market. 

RECOMMENDATION 

The Secretary should support an evaluation that 

examines current law prohibitions against payment 

to family members for care otherwise covered 

under Medicare or Medicaid, with a view towards 

determining whether they should be eliminated in light 

of current economic conditions. 

Hospice 

The Committee believes it is important to address home 

and community-based service options along the entire 

care continuum. Hospice services primarily provided in 

the home are covered by Medicare, Medicaid, and most 

private insurance companies. Rural seniors tend to “age 

in place,” so the availability of hospice providers in rural 

areas is very important. Some rural areas face a challenge 

in providing hospice general inpatient services (GIP) and 

respite days to hospice patients in communities with a 

CAH. GIP days for hospice services have the potential to 

dilute the overall inpatient payments for other Medicare 

services. The Committee is concerned this may act as a 

disincentive for CAHs to partner with hospices to provide 

needed care to rural beneficiaries. Many CAHs operate 

with small operating margins, and concern over the bottom 

line may cause them to avoid hospice patients if providing 

8
 
 

The 2010 NACRHHS Report 

services to them has a negative effect on their overall rate. 

RECOMMENDATION 

The Secretary should instruct CMS to find a method 

for claiming and reporting hospice payments for 

general inpatient services on a CAH cost report in a 

manner that permits the CAH to claim the full cost of 

caring for the hospice patient. 

Administration on Aging

 Programs
 

Congress passed the Older Americans Act (OAA) in 

1965, in response to concern by policymakers about a 

lack of community social services for persons over 60. 

The legislation established authority for grants to States 

for community planning, nutrition, supportive services, 

research and development projects, and personnel 

training. Administration on Aging (AoA) programs play 

a key role in providing home and community-based 

services to seniors through a national network of 56 State 

Agencies on Aging, 629 Area Agencies on Aging, nearly 

20,000 service providers, 244 Tribal organizations, and 

two Native Hawaiian organizations representing 400 

Tribes. The mission of AoA is to help elderly individuals 

maintain their dignity and independence in their homes 

and communities through comprehensive, coordinated, 

and cost effective systems of long-term care, and livable 

communities across the United States. 

Title III of the OAA authorizes a number of programs and 

services. Title III, Part B provides flexible funding to State 

agencies and local agencies that they can use to provide 

a wide range of needed supportive services. This includes 

home and community-based support services as well as 

case management and transportation; information and 

assistance; in-home services, such as personal care, chore, 

and homemaker assistance; and community services, such 

as legal, mental health, and adult day care services. These 

services are generally provided to individuals who do not 

qualify for Medicaid-funded programs and services. 

Title III-C covers nutrition services, including Meals on 

Wheels and congregate meals at senior centers, community 

centers, and churches. These programs play a key role in 

rural communities, which the Committee has witnessed 

during multiple site visits over the past few years. Many 

rural seniors are both socially and geographically isolated 

and these meals programs offer a way to create a link 

between rural residents and local service providers. 

Title III-D Preventative Health funding is provided to 

Area Agencies on Aging to address disease prevention and 

health promotion education and activities to encourage 

healthier living for older persons. Many Area Agencies 

on Aging have adopted evidence-based chronic disease 

and fall prevention programs to address this issue. The 

AoA works closely with the CDC to ensure an appropriate 

focus for these funds. 

The National Family Caregiver Support Program 

(NFCSP) is also part of Title III-E and provides grants to 

States and Territories, and funds a range of supports that 

assist family and informal caregivers. Studies have shown 

that the NFCSP services can reduce caregiver depression, 

anxiety, and stress for the caregivers, thus enabling 

them to provide care longer and avoiding or delaying 

the need for costly institutional care. The Committee 

has previously examined the rural implications of the 

National Family Caregiver Support Program in its 2006 

report and reiterates that, while NFCSP is successful and 

has expanded its scope of services, the program funding 

has not expanded and is in great need of enhancement. 

Inadequate funding results in service gaps and availability 

issues. 

The Aging and Disability Resource Centers (ADRC), cofunded by CMS and AoA, provides grants to 45 States 

to develop “one-stop shops” for all of the long-term care 

services within a community. In 2008, an additional two 

new States were funded, bringing the total number of 

States receiving funding to support ARDC to 45.34 The 

States without ADRC grants are North Dakota, South 

Dakota, Nebraska, Utah, and Oklahoma,35 each a State 

with a large rural population. By creating a single point 

of entry into a community’s long-term care system, the 

ADRC help individuals make informed decisions based 

on the options that are available. One barrier that the 

Committee identified to rural seniors receiving home 

and community-based care was the fragmentation of 

services within the community.36 ADRC begin to address 

this issue by simplifying the process of identifying and 

acquiring services. ADRC are funded through Title IV of 

the OAA under the Choices for Independence initiative.37 

AoA estimates that by 2004, ADRC were serving 600 

counties.38 

Beginning in June 2007, 12 States began participating in 

an 18-month effort called the Community Living Program, 

also known as the Nursing Home Diversion Grant 

Program.39 The State grantees receiving, in combination, 

$8.8 million dollars are Arkansas, Connecticut, Georgia, 

9
 
 

 

The 2010 NACRHHS Report 

Illinois, Kentucky, Maryland, Michigan, Minnesota, New 

Hampshire, New Jersey, Vermont, and West Virginia.40 

The initiative was funded and administered by the State 

Units on Aging in partnership with the Area Agencies on 

Aging. The program targeted those who were at risk for 

being placed in a nursing home and/or at-risk for Medicaid 

spend-down. It provided flexible funding to individuals 

and allowed them to participate using models such as Cash 

and Counseling. It also focused on complementing and 

supporting family caregiving, not replacing the systems 

that are already in place.41 

Rural Communities
 and
 Block Grant Funding
 

Many of the Federal programs for seniors, such as AoA 

programs, allocate money in the form of block grants to 

States. When distributed at the State-level, formulas used 

to determine funding are typically based on population. 

Often, this results in rural programs not being allocated 

sufficient funds to mount a credible effort. This is because 

there are certain fixed costs associated with starting a 

program, regardless of the number of people the program 

will serve. Block grants should take these fixed costs into 

account and keep in mind that rural areas are not easily 

able to leverage economies of scale, and allocate the 

budget accordingly. This would help prevent funding 

from being completely consumed before a rural program 

can start serving beneficiaries. 

The Centers
 for
 Disease Control and Prevention
 

Centers for Disease Control and Prevention (CDC) 

administers several disease management and population 

health programs for rural seniors. CDC’s Healthy Aging 

Program is an effort to integrate public health and aging 

networks. By promoting health, the program aims to keep 

seniors healthy while maintaining a high quality of life.42 

CDC partnered with AoA and over 11 State Agencies 

on Aging to support State-Based Examples of Network 

Innovation, Opportunity, and Replication (SENIOR) 

Grants.43 By promoting collaboration between local public 

health systems and Area Agencies on Agings, the grants 

aimed to foster good health among seniors.44 Similar to 

the SENIOR Grants, the Racial and Ethnic Approaches 

to Community Health (REACH) grants helped promote 

community health and eliminate disparities. 

Cross Cutting Issues
 

The Promise of Technology 

Rapid advances in telecommunications technology 

holds promise for expanding access to information and 

services regardless of geographic location. Over the past 

10 years, the explosion of information available through 

the Internet has created new ways to inform clients about 

important services. In addition, telehealth technology has 

expanded the range of clinical services available to rural 

seniors through direct video consultations and remote 

home monitoring. Both of these tools, used correctly and 

efficiently, can be part of a strategy that helps rural seniors 

remain independent and living on their own. Technology, 

however, is only a tool and there are still challenges in 

taking full advantage of these services to benefit rural 

seniors. 

The percent of seniors taking advantage of new technologies 

has increased for Internet usage from 12 percent in 2000 

to 37 percent in 2008.45 As time passes and technology 

becomes widely implemented, a new group of people 

will age in to the “Senior” classification. This group will 

have had more exposure to using technology than current 

seniors, and will therefore be more comfortable with it. 

Problematically, rural residents do not have the same level 

of Internet access as their urban counterparts. Broadband 

technology enables greater information-carrying capacity 

and faster Internet access,46 which is important to medical 

data transmission. In 2007, 70 percent of rural households 

with in-home Internet access had broadband access while 84 

percent of urban households with in-home Internet access 

had broadband access.47 The Federal Communications 

Commission released a report on a Rural Broadband 

Strategy acknowledging that the Commission and other 

Federal agencies have not collected sufficient data to 

indicate what the current state of broadband is in rural 

America. The Commission has been charged to develop 

a national broadband plan by February 17, 2010 that will 

detail an actionable plan to ensure that every American 

has broadband access.48 On the plus side, the American 

Recovery and Reinvestment Act of 2009 further addresses 

the broadband issue by including significant funding to 

support broadband deployment through programs at the 

U.S. Department of Commerce and U.S. Department of 

Agriculture (USDA). 

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The 2010 NACRHHS Report 

VA Depends on Home Monitoring 

The Veterans Health Administration (VHA) uses 

telehealth to treat veterans in over 30,000 homes. The 

VHA provides patients who would benefit from daily 

monitoring with a computerized device to take home. 

The device sends information, such as vital signs, disease 

management data, and e-health information, that goes 

to the National VHA Care Coordination. Other medical 

services provided over telehealth include high resolution 

imaging, telepresence, telepathology, and mental health 

counseling. Currently, the VHA is attempting to reach 32 

percent of the veteran population in rural areas. 

The Committee was particularly impressed by the quality 

of the leadership in providing telehealth at the VHA. Lori 

Aberly, the Chronic Disease Risk Manager for the Fort 

Meade Veterans Health Care System, is highly committed 

to the possibilities of telemedicine and enabling veterans 

to successfully accept and use the equipment in their 

homes. In order to work properly, telehealth programs 

require strong commitment to the education of patients 

and consistent follow-up to assure that the equipment is 

working correctly and the patients are using it correctly. 

As in the case of Fort Meade’s Chronic Disease 

Management initiative, it was clear that the commitment 

of the individuals running this program was a key factor 

in its success. 

Fort Meade’s Chronic Disease Management initiative 

provides portable telehealth devices to rural patients 

who qualify for chronic disease risk management. The 

patients use the device daily to communicate their vital 

signs to doctors at Fort Meade. This allows better care 

management and immediate response when the patient is 

at risk. In addition, daily management can lengthen the 

time between doctor visits, thus reducing costs for the 

health care system. Some patients drive more than four 

hours to go to Fort Meade, so reduction in doctor visits is 

valuable to them in terms of both time and costs. 

With proper funding and leadership, the Committee 

believes that telemedicine can significantly improve the 

health of rural seniors, and would like to see this efficient 

system expanded. 

Telehealth services continue to expand and play an 

important role in ensuring access to a broader range 

of services in some rural communities. The use of 

tele-home monitoring technology appears to be a costefficient way of monitoring seniors’ health status. The 

equipment costs have come down considerably in recent 

years. Telehealth, however, still faces some regulatory 

challenges, ranging from cross-State licensure of 

telehealth providers to reimbursement. Additionally, 

there is only a small range of services that CMS will 

reimburse clinicians for under Medicare. 

Workforce Shortages 

Increased demand does not always result in an equal 

supply, and this is especially evident when examining 

the health care workforce shortages in rural areas. As the 

rural population ages and there is continued out-migration 

of young adults from farm-dependent communities, the 

workforce available to care for this elderly population 

will become stretched even more thinly.49 To address 

these shortages, rural residents and providers have 

needed to adapt to meet some of the workforce needs. For 

example, some States’ Medicaid programs and grants now 

allow legally responsible relatives to be paid to assist the 

beneficiary through the aforementioned CMS program 

Cash and Counseling.50 Also, some States have modified 

their Nurse Practice Acts to allow trained caregivers to do 

the tasks normally performed by a nurse. Medicaid also 

provides limited funding for personal assistant services.51 

While a step in the right direction, these advancements 

are limited. Cash and Counseling is only operating in 15 

States and additional modifications to more State’s Nurse 

Practice Acts would allow more family and friends to be 

caregivers. 

Transportation 

Getting people to needed services is a problem across 

the aging population but is particularly acute for rural 

residents. Medicare does not pay for transportation 

generally. Medicaid can cover some basic transportation 

costs but budgets and capacity for these services is 

limited. Some rural clients may be difficult to reach 

during bad weather conditions because they live along 

unpaved roads or in mountainous terrain. In many cases, 

payment for transportation of patients or travel expenses 

for caregivers and providers is determined on an average 

basis and embedded in the payment rates for the services 

themselves. When home care options rely on health 

care practitioners commuting to the patient, not only is 

service time lost, but paying professionals to commute is 

an ineffective use of monetary resources. This is known 

in the rural health care community as “windshield time.” 

If not specifically addressed, these rural issues can result in 

many problems, including “institutionalization of people 

with disabilities solely as a result of the lack of adequate 

transportation to medical appointments,” according to a 

2005 National Council on Disability report.52 Federal 

11
 
The 2010 NACRHHS Report 

grant funding for transportation remains very limited 

and is primarily offered through the Department of 

Transportation. Better utilization of transportation 

mechanisms already in place, such as bus routes, would 

be beneficial. 

RECOMMENDATION 

The Secretary should develop a report in coordination 

with the Secretary of Transportation to identify all 

available legal authorities to provide transportation 

for those in need of health and human services 

and to determine their effectiveness in serving the 

elderly population with a particular emphasis on the 

availability and effectiveness of these programs to 

serve the isolated rural elderly. 

Accessible Housing 

One prerequisite of being able to age in place is accessible 

housing that meets the needs of the individual. The U.S. 

Department of Housing and Urban Development (HUD) 

offers a number of options for seniors who wish to stay 

in their homes or to continue living independently in an 

apartment. However, the availability of these programs in 

rural areas varies from community to community. Rural 

seniors can receive help from a HUD-approved housing 

counselor in or near their community by contacting their 

local HUD organization. If appropriate, a rural senior 

could apply for a reverse mortgage through HUD. For lowincome rural seniors who need to rent a place to live, HUD 

offers subsidized housing, public housing, and vouchers53. 

USDA also has a number of services for rural seniors, 

including a housing search service, loan programs, and 

assistance with repairs for low-income individuals.54,55 

The Committee notes that, too often, providers and 

programs are not meeting the needs of the beneficiaries 

because they view their functions too narrowly and fail 

to see the larger picture. The Committee has repeatedly 

stressed the need for improved leadership in rural 

communities so that disparate activities can be unified 

around the beneficiaries’ needs rather than program 

requirements. The Committee recognizes the importance 

of individual efforts at the local level in achieving the kinds 

of coordination that can make a service system work for its 

users. The challenge lies in making existing programs work 

more effectively, particularly for rural communities given 

the demographic challenges they face. Policymakers also 

face ongoing challenges in assessing current regulations 

to determine if they pose unintended barriers that affect care 

delivery. Perhaps the most challenging task facing HHS is 

how to better coordinate both its programs and services to 

meet the needs of the rural elderly. Certainly, the need to 

provide better information about services and care options 

tops that list. The recommendations included in this chapter 

offer a step forward in that direction. 

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The 2010 NACRHHS Report 

Rural Primary Care Workforce
 

Chapter Recommendations: 

Title VII and VIII Programs 

1: The Secretary should work with the Congress to re-authorize Title VII and VIII of the Public Health Service 

Act to include the authority for allocating funding to better meet emerging workforce needs in the health 

professions based on the most current data and projections available. 

2: The Secretary should work with the Congress to ensure that any reauthorization of Title VII of the Public 

Health Service Act includes demonstration authority. 

3: The Secretary should expand the Critical Shortage Facility list used for Nursing Scholarship and Nursing 

Loan Repayment programs to include Critical Access Hospitals. 

National Health Service Corps 

4: The Secretary should work with the Congress to revise the legislation that defines “primary care” used 

by the National Health Service Corps Scholarship and Loan Repayment programs to create an exclusion 

for awardees employed by rural hospitals with less than 50 beds, so that time spent seeing patients in the 

emergency room, a nursing home, or hospital outpatient clinic will count toward the 32 hours of required 

weekly clinical time. 

Medicare Graduate Medical Education 

5: The Secretary should revise regulations to define an “integrated rural training track” as: 

-At least four rural block months to include a rural public and community health experience. During a 

rural block rotation, the resident is in a rural area for a minimum of four weeks or a month. 

-A minimum of three months of obstetrical training or an equivalent longitudinal experience. 

-A minimum of four months of pediatric training to include neonatal, ambulatory, inpatient, and 

emergency experiences through rotations or an equivalent longitudinal experience. 

-A minimum of two months of emergency medicine rotations or an equivalent longitudinal experience. 

13
 
The 2010 NACRHHS Report 

6: The Secretary should revise the regulations for “Community Preceptors” to allow preceptors to volunteer 

their time in serving as preceptors to residents. 

7: The Secretary should redefine the definition of “all or substantially all” to allow the cost of GME residency 

training to be shared between hospital and non-hospital based providers. 

Medicare Reimbursement 

8: The Secretary should work with the Congress to increase the Medicare cap for RHCs and rural FQHCs to 

match the rate for urban FQHCs. 

Shortage Areas 

9: The Secretary should ensure that when regulations for shortage areas are updated the process should only 

update the Medically Underserved Areas and Medically Underserved Population process and maintain the 

basic methodology for the Health Professional Shortage Areas regulations. 

10: The Secretary should ensure that when the shortage area regulations are revised, protections are put 

in place to reduce the “yo-yo” effect of removing resources from a community when it loses its Health 

Professional Shortage Area designation due to the addition of less than five primary care providers in the 

rational service area or county. 

11: The Secretary should work with the Congress to revise the regulations for the Health Professional Shortage 

Area Medicare bonus payment to Advanced Practice Nurses and Physician Assistants. 

International Medical Graduates 

12: The Secretary should remove the HPSA score requirement from the HHS J-1 Visa Waiver regulations and 

expand the list of potential practice sites to include Critical Access Hospitals, Sole Community Hospitals, 

Medicare Dependent Hospitals, and any Section 1886(d) hospital with less than 50 beds. 

14
 
 

 

The 2010 NACRHHS Report 

Rural Significance: Why the 

Committee Chose this Topic 

Primary care providers serve an essential role in our health 

care system by supporting prevention and wellness efforts, 

coordinating continuity of patient care, and managing 

chronic illnesses. Rural communities are particularly 

reliant on primary care providers as the leading source of 

health care. Currently, the national demand for primary 

care providers exceeds supply. Interest in a primary care 

career for physicians is declining nationwide, but has 

most notably affected rural areas. Twenty percent of 

the nation’s population lives in rural America, yet only 9 

percent of physicians practice in rural areas.56 

In 2005, there were 55 primary care physicians for every 

100,000 people in rural areas compared to 93 in urban 

areas.57 The estimated requirement for primary care 

physicians per 100,000 people is 95; this indicates a 

significant shortage of physicians in nonmetropolitan areas 

and a small shortage in metropolitan areas.58 Moreover, a 

recent study indicated that there is a greater percentage 

of aging generalists who are likely to retire soon in rural 

areas compared to urban.59 The average age of rural 

physicians was 47.2 years in 1997 and almost 50 percent 

of primary care physicians have indicated they plan to 

reduce their practice hours or stop practicing completely 

between 2009 and 2011.60,61 

Additionally, dwindling interest in primary care is 

exacerbating workforce shortages. Fewer medical school 

graduates, who could replenish the diminishing supply of 

generalists, have choosen to enter primary care than in 

years past. In 2009, about 42 percent of family practice 

residencies matched with U.S. medical school graduates 

compared to 75 percent in 1996.62,63 Both the American 

Association of Medical Colleges (AAMC) and the 

Council on Graduate Medical Education (COGME) have 

released statements projecting a shortage in primary care 

physicians. 

It is important to consider the role and supply of primary 

care providers, as policymakers work to improve our 

health care delivery system. This is particularly relevant 

in rural areas where it can be difficult to recruit or retain 

a physician. Physician Assistants (PAs) and Advanced 

Practice Nurses (APNs) provide essential primary care 

services and serve as the sole primary care provider in 

many communities. 

A broader expansion of health care insurance, or an 

emphasis on developing Patient-Centered Medical Homes 

(PCMH), would likely increase the need for primary care 

providers. In Massachusetts, where universal health 

insurance coverage has almost been achieved, patients 

have difficulty making appointments with primary 

care providers. The Boston metropolitan area has the 

longest average doctor wait times nationwide, and 

rural communities there are having an even harder time 

recruiting and retaining primary care providers.64,65 Future 

health care reform efforts should examine solutions for 

rural and underserved communities that give them the 

ability to adequately compete for primary care providers. 

In order to keep our rural communities healthy, the 

Committee finds that primary care systems must be 

strengthened through a variety of approaches. Local 

leadership and organizational partnerships are needed 

to leverage limited rural resources. A cultural shift from 

treating the symptoms of illnesses to one that concentrates 

on preventing diseases and maintaining wellness through 

services that support and lead to healthier lifestyles 

is necessary. The payment systems, both public and 

private, should reflect the importance of primary care as 

the backbone of the health care system. While there is a 

Federal role in developing a successful rural health care 

system, States and health sciences schools also have a 

responsibility to produce more primary care physicians, 

APNs, and PAs to meet the growing need. 

As recommended by the Committee in its 2009 Report, it 

is essential to collect data to analyze national health care 

workforce needs. 

HHS Program Role
 

HHS administers a number of programs and provisions 

that affect the primary care workforce. This includes 

a number of training prorgrams designed to support 

the development and placement of these clinicians in 

underserved areas. In addition to these programs, HHS, 

through the Centers for Medicare and Medicaid Services 

(CMS) also administers the Medicare program. Medicare 

reimbursement to physicians as well as Medicare support 

for the training of physicians also afects the supply of 

available primary care providers. 

Title VII and Title VIII Programs 

Improvement of the supply of rural primary care 

providers begins with the education and training of health 

professions students so that they are prepared to work 

with the rural underserved population. Title VII of the 

15
 
 

 

The 2010 NACRHHS Report 

Public Health Service (PHS) Act established multiple 

programs administered by Health Resources and Service 

Administration’s (HRSA) Bureau of Health Professions 

(BHPr) that focus on educating and training primary care 

providers who can provide culturally appropriate health 

services to underserved populations, including rural 

areas. 

One Title VII program is the Area Health Education Center 

(AHEC) Program, which contributes to expanding the 

supply of primary care professionals who are adequately 

trained and interested in working in rural areas. AHECs 

promote partnerships between academic institutions and 

communities to train health care providers in communitybased settings and to improve the supply, distribution, 

diversity, and quality of the health care workforce. 

While the initiatives and achievements of AHECs vary 

by State, certain AHECs have been exceptional in their 

work with rural communities. Rural communities may 

not have the financial resources needed to provide their 

students with targeted health care opportunities and 

experiences. Therefore, AHEC programs can play a 

useful role in developing the interest and basic science 

education needed to encourage rural students to enter 

health professions. 

A Grow-Your-Own Approach 

Like most States, Missouri has rising health care costs, 

large numbers of elderly and poor, and insufficient access 

to health care in rural areas. 

Since 1994, the University of Missouri (MU) School of 

Medicine has relied on its Rural Track Pipeline Program 

to reach out to high school students, undergraduates, 

and medical students and provide them with the support 

they need to follow their dream of practicing in a rural 

community. 

The sequential programs provide students with ongoing 

exposure to rural medicine. Programs include the AHEC 

Career Enhancement Scholars program, carried out by 

regional AHECs and designed to expose and recruit K-12 

students to the world of health care at the local level, the 

Bryant Scholars Pre-Admission Program to encourage 

college freshman to commit to medical school and a career 

in rural health care, the Summer Community, the Rural 

Track Clerkship Program, and the Rural Track Elective 

Program, which allow second, third, and fourth-year 

medical students, respectively, to participate in a clinical 

program in rural community settings around the State. 

The Missouri Physician Placement Service (MPPS) then 

works to match the practice desires of the physician with 

communities in need. Half of the participants eventually 

practice in rural towns with 50,000 population or less. 

Most of the other Title VII funding is separated by 

medical field or by health profession based on the initial 

legislation. For example, HRSA supports primary care 

training programs for physicians through the Training in 

Primary Care Medicine and Dentistry program. Another 

BHPr program, the Preventive Medicine Residency 

program, supports educational institutions in developing, 

maintaining, and improving residencies in Preventive 

Medicine. Title VIII funding contains several Federal 

programs targeted to support nursing education and 

training: the Nursing Education, Practice, and Retention 

Program; the Advanced Education Nursing Program; and 

the Advanced Education Nursing Traineeship. 

Primary care physicians who have participated in Title 

VII programs are between two and four times more 

likely to practice in underserved areas.66 Additionally, 

Title VII funding supports the training of over 10,000 

underrepresented minority graduates each year, including 

people from rural areas. Training rural minorities is 

essential because they are more likely to return to rural 

underserved areas to practice.67 While data does not exist 

on the specific impact of Title VII programs on students’ 

later career choices, some studies have looked at health 

care professionals who have chosen to provide primary 

care services for their communities and whether or not 

they had prior exposure to Title VII programs. More than 

60 percentVIII6

of the physicians who work in Community 

Health Centers and more than 57 percent of National 

Health Service Corps (NHSC) physicians were involved 

in a Title VII program during medical school.68 

Title VIII funding is currently broken down into small 

amounts by profession. While this categorical division 

is an equalizer among professions and keeps provider 

associations content, it limits everyone to the same amount 

each year, thereby limiting potential impact. HRSA 

should be able to target funds based on demonstrated need 

and provide those professions with a substantive amount 

of funding. Title VII and Title VIII are currently up for 

reauthorization, which provides an opportunity for the 

basic structure to be readdressed. Under current statutes, 

HRSA has no flexibility to spend funds. There is a need for 

some discretionary funding so the HRSA Administrator 

can fund activities beyond the current avenues, and to 

target dollars for workforce needs as they emerge. 

NHSC placements are determined to be rural if they self-establish that they are in a rural community. 

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The 2010 NACRHHS Report 

RECOMMENDATIONS
 

The Secretary should work with the Congress to 

re-authorize Title VII and VIII of the Public Health 

Service Act to include the authority for allocating 

funding to better meet emerging workforce needs in 

the health professions based on the most current data 

projections available. 

The Secretary should work with the Congress to ensure 

that any re-authorization of Title VII of the Public 

Health Service Act includes demonstration authority. 

The Secretary should expand the Critical Shortage 

Facility list used for Nursing Scholarship and Nursing 

Loan repayment programs to include Critical Access 

Hospitals. 

National Health Service Corps 

The National Health Service Corps (NHSC) programs are 

designed to improve the supply of physicians, dentists, 

nurse practitioners, physicians assistants, and certified 

nurse-midwives in both rural and urban underserved 

areas.69 HRSA’s Bureau of Clinician Recruitment and 

Service (BCRS) administers the NHSC programs, 

which include the Scholarship and Loan Repayment 

programs. In return for each year of financial support 

for their health professions education, NHSC Scholars 

and Loan Repayors agree to dedicate a year of service in 

an underserved area. The NHSC targets a wide range of 

health professions students who focus on primary care, 

including physicians, advanced practice nurses, physician 

assistants, and dentists. 

NHSC is an important source of primary care for rural areas, 

as approximately 60 percent of the NHSC’s placements 

are in rural areas.70 Many health care professionals who 

begin working in rural areas as a Scholar or Loan Repayor 

choose to continue their careers in those areas. In fact, 76 

percent of the clinicians who had received NHSC funding 

were still working with the same underserved population 

a year after they had fulfilled the service requirement.71 

Since these clinicians continue to focus broadly on 

primary care, the effect of the NHSC Scholarship and 

Loan Repayment programs can be felt long after the 

financial support ends. 

Although the NHSC programs are currently providing 

support for a significant number of primary care providers 

in rural areas, there are many more health professionals 

and students who are interested in and willing to serve 

in underserved areas. In the past several years, less than 

20 percent of applicants received awards. The NHSC 

programs received an increase in Federal investment 

for Federal fiscal years (FY) 2009 and 2010 from the 

American Recovery and Reinvestment Act (ARRA). An 

additional $300 million was allocated through ARRA 

and BCRS was able to grant $71 million in new awards 

for NHSC loan repayment and $9 million for additional 

awards for NHSC scholarships in 2009.72 

State Partnerships Keys to Recruitment and Retention 

Workforce recruitment and retention has long been a 

challenge in rural areas, but in South Dakota a unique 

partnership between the State Office of Rural Health and 

rural communities like Phillip have paid off. 

The Committee took a site visit to Phillip, South Dakota 

during its June meeting and saw firsthand how the local 

health system, Phillip Health Services, works closely with 

the South Dakota State Office of Rural Health to address 

workforce challenges. 

The State Office is working with the community to update 

its health shortage areas, which will help the community 

qualify for programs like the National Health Service Corps, 

as well as other Title VII funding. The State Office also 

links the programs to other loan repayment and recruitment 

resources to help them fill needs not only in terms of 

medical services, but also allied health and nursing. 

The NHSC places a large number of clinicians in primary 

care ambulatory settings; however, the requirements can 

make it difficult to place clinicians in certain rural settings. 

All of the NHSC Scholars and Loan Repayors are required 

to work full-time in an underserved community and 32 of 

the minimum 40-hour work week must be spent providing 

direct clinical services in the community. The definition 

of direct clinical services does not include time spent 

seeing patients in the emergency room, a nursing home, 

or hospital outpatient clinics. Therefore, the requirement 

often precludes rural hospitals and CAHs from serving as 

practice sites for NHSC clinicians. Furthermore, frontier 

areas or other very rural areas may be disadvantaged in 

recruiting NHSC Scholars and Loan Repayors, since 

these settings are so remote they may not be able to offer 

the patient volume for a full-time professional. There 

is no part-time option for NHSC Scholars and Loan 

Repayors, which could be more attractive to the younger 

17
 
 

 

 

 

The 2010 NACRHHS Report 

generation of primary care providers who are willing to 

work in underserved areas, but may also want a more 

flexible work schedule. 

RECOMMENDATIONS 

The Secretary should create a part-time option for 

National Health Service Corps Scholarship and Loan 

repayment recipients. 

The Secretary should work with the Congress to revise 

the legislation that defines “primary care” used by 

the National Health Service Corps Scholarship and 

Loan programs to create an exclusion for awardees 

employed by rural hospitals with less than 50 beds, so 

that time spent seeing patients in the emergency room, 

a nursing home, or hospital outpatient clinics counts 

toward the 32 hours of required weekly clinical time. 

Federal Support for Graduate Medical Education
 

Teaching hospitals and associated ambulatory settings 

offer resident physicians supervised, hands-on training in 

a particular area of expertise; this phase of their training is 

called “graduate medical education” (GME). The Centers 

for Medicare and Medicaid Services (CMS) plays a key 

workforce role through its payments to GME programs. In 

2007, CMS spent $8.8 billion to support residency training, 

most of which was targeted to large academic health 

centers and other hospital-based programs. CMS’GME 

payments are, by far, the largest funding source for these 

residency programs in the United States. About 40 percent 

of CMS’ GME payments are for Direct GME (DGME), 

which covers part of the cost of operating a residency 

program. The remaining percent of the payments are for 

Indirect GME (IME), which helps to cover the added 

patient care costs associated with teaching settings. 

Both DGME and IME payments are based on the number 

of full-time equivalent (FTE) residents a hospital has, up 

to a maximum of its total approved slots, which is known 

as its residency cap. Since the initial determination in 

1996 of these residency caps, several minor adjustments 

have been made to the benefit of rural communities, 

such as increases in the FTE cap for rural hospitals with 

residency programs, and a national redistribution in 2003 

of “unused” slots to residency programs with a need for 

additional slots, during which priority was given to rural 

hospitals. 

Current legislation allows the Secretary of HHS to adjust 

the residency caps for non-rural hospitals that either have 

a Rural Training Track (RTT) or an integrated rural track. 

Although RTTs account for less than 2 percent of family 

medicine slots, at least 75 percent of their graduates 

choose to work in rural areas.73,74,75 In order to qualify as 

an RTT, CMS requires residents to spend more than half 

of a three-year residency program in a rural setting. Rural 

advocates have pushed for more flexibility in the amount 

of rural-based community training necessary to qualify 

for an RTT. Some rural advocates would like to lower 

the threshold for rural training by supporting residency 

programs that have an integrated rural track. While CMS 

does recognize and provide exceptions to hospitals with 

RTTs, there is no government definition for “integrated 

rural track” and, therefore, the exception is not applied. 

These exceptions are only applied to the creation of new 

programs, so successful rural family medicine residency 

programs would not be eligible for additional GME 

payments. 

Despite the slight adjustments for rural residency caps, 

the overall number of Medicare GME residency slots has 

not changed much since 1996, although there has been a 

significant increase in the U.S. population and its health 

care needs. Over the past several years, some teaching 

hospitals have chosen to create new residency positions 

without Medicare funding, causing the number of residents 

in GME programs nationwide to increase by 6.3 percent 

between 2002 and 2006.76 However, the majority of these 

new residency spots were for subspecialty fellowships 

rather than primary care. In fact, the total number of 

family medicine residency slots has actually decreased 

by over 600 slots in the past decade.77 The most recent 

study that examined the location of family medicine 

residencies was completed by the Washington, Wyoming, 

Alaska, Montana, and Idaho (WWAMI) Rural Health 

Research Center based on data from 2000.78 It noted that 

92.4 percent of family residency programs were in urban 

areas, 6.4 percent in large rural areas, 1.1 percent in small 

rural areas, and no programs existed in isolated small rural 

areas. Even though 12.8 percent of the population lived 

in small rural and isolated small rural areas in 2000, only 

2.2 percent of residents had trained in those locations. 

Problematically, the small patient volume in rural areas 

makes supporting a residency program difficult. 

In addition to preparing future rural physicians, the 

presence of a residency program holds several other 

benefits to the rural community. Rural hospitals with 

18
 
 

 

 

 

 

The 2010 NACRHHS Report 

residency slots tend to be more successful in recruiting 

and retaining physician staff.79,80 The resident, as an 

addition to the medical staff, can help relieve a rural 

physician of some night call responsibilities, improve the 

financial viability of a rural hospital through increased 

admissions, and expand access to health care for the 

rural community.81,82 Since the Accreditation Council for 

Graduate Medical Education (ACGME) does not track 

whether residency programs are located in rural or urban 

areas, it is difficult to note national trends in the expansion 

or closure of rural programs and the number of residents 

training in rural communities. 

What is known is that the number of medical students 

choosing to enter rural residency programs is declining. 

The average fill rate for RTTs from 2003 to 2008 was 

52 percent.83 In the 2009 Residency Match, only 74 

percent of the 47 residency slots available in RTTs were 

filled compared to 91 percent of overall family medicine 

residency slots.84 Rural advocates note that an increase 

in the number of rural slots is not sufficient to address 

the problem of training primary care physicians for 

rural practice; there is also an immediate need to make 

these rural training slots more attractive to prospective 

residents in order to achieve higher fill rates. Legislation 

that was introduced, but not passed, in the 110th Congress 

supported an increase in the residency caps.85 In order 

to increase residency caps, legislation would have 

required HHS to determine whether a hospital seeking 

to expand its residency program would have been able 

to fill the additional slots within three years.86 Based on 

recent data for fill rates, many rural residency programs 

probably would not have qualified for expansion, 

despite the continuing need for more rural residents. 

Most residencies are located in large urban hospitals and 

academic health centers with an emphasis on specialty 

training. Many experts on primary care believe that 

the current residency training model needs to move 

beyond the hospital setting and into community-based 

training sites, where most health care takes place. To 

adequately train rural primary care residents, they need 

to be exposed to settings such as doctors’ offices, where 

primary care is actually delivered. Current regulations 

19
 
 

The 2010 NACRHHS Report 

present financial disincentives for residency programs 

to send their residents off-site for training, as noted by 

both COGME and the Medicare Payment Advisory 

Commission (MedPAC). In determining the number of 

FTEs in a residency program, CMS distinguishes between 

time spent providing patient care and time spent in nonbillable GME activities. The need to log patient care and 

non-patient care hours separately for each off-site setting 

presents an enormous administrative burden for residency 

programs that prepare residents for rural medical practice. 

California’s Rural PRIME Program Supports 

Rural Training
 

Esteban Verduzco and Christopher White, medical students 

at the University of California, Davis, always had an 

interest in rural health, and thanks to a new program they 

are getting a chance to learn about it on the ground. 

Both of these medical students are part of the University 

of California’s “Programs in Medical Education” (PRIME). 

The program is designed to address the growing shortage of 

physicians in underserved rural communities. While similar 

programs exist in other states, PRIME is a unique and new 

approach in California. PRIME exists to expose medical 

students to rural practice, establish mentorships between 

rural physicians and medical students, and combine the 

M.D. with a Masters in Public Health. PRIME has more 

student diversity than is typical, and has given a new focus 

to health disparities. 

Verduzco and White both testified to the Committee at 

the June meeting and said the program will help them in 

their plans to become small-town doctors. They also noted 

that PRIME places particular emphasis on telemedicine 

training, which has been shown to improve access to 

specialty care for rural communities that would otherwise 

not have regular access to specialists. 

To receive Medicare GME payments for the time that 

residents spend providing patient care outside of the 

hospital, the residency program needs to meet a number 

of requirements. The payment can be made either 

to the hospital or to certain non-hospital providers, 

including FQHCs and RHCs, if either one incurs “all 

or substantially all” (currently 90 percent) of the costs 

of the training program. Therefore, if the costs are split 

between the two entities so that neither incurs 90 percent 

of the costs, neither entity would be eligible for GME 

payments. These costs of training include reasonable 

compensation to the teaching physician for the time spent 

in non-patient care GME activities. However, many of 

these physicians prefer to volunteer their time and while 

this volunteerism is not outright prohibited by the current 

“Community Preceptor” regulation, it would not meet the 

requirement to provide reasonable compensation. Hence, 

residency programs tend to lose GME payments for the 

time residents spend in outpatient settings. 

Medicare GME payments support the training of 

physicians; however, there is no equivalent program to 

support the training of Physician Assistants (PAs) or 

Advanced Practice Nurses (APNs). Although the U.S. 

Government Accountability Office (GAO) did note that if 

Advanced Practice Nurses and physicians were counted 

as primary care providers, the supply of primary care 

professionals would have increased slightly in recent 

years. The number of primary care physicians grew an 

average of 1 percent a year while PAs grew by 4 percent 

a year and APNs grew by 9 percent a year.87 Due to the 

decline of rural primary care physicians, APNs and PAs 

are playing a greater role in rural areas; 20 percent of 

APNs 88 and 22 percent of PAs89 work in rural areas. 

Medicare GME for nursing and allied health education 

was established in 1965. The majority of the funding 

was directed at the hospital-based educational programs. 

Throughout the years the regulations have not kept pace 

with the changes in nursing education and Medicare 

money was shifted to third party payers, e.g., Health 

Maintenance Organizations (HMOs). The HMO 

reimbursement did not include subsidies for education 

programs, therefore reducing money for medical and 

nursing education. The education settings for nursing 

education has since moved from the hospital-based 

setting to the academic setting where the community and 

student bear a greater percentage of the educational cost. 

Now less than 7 percent of registered nurses are trained 

through the hospital–based diploma programs.90 However 

there are increasing numbers of APNs being trained in 

academic centers, yet there is no GME money to assist 

the hospitals with training expenses. Additionally, when 

APNs are hired by the academic centers they assist in the 

training of the medical students, residents, and fellows. 

Under current Medicare GME regulations, there is no 

reimbursement allowance for the training of APNs in 

academic centers, nor is there reimbursement allowance 

for APNs assisting with the training of medical students, 

residents, and fellows.91 

The Committee believes the current Medicare GME 

system perpetuates a training model that focuses on 

urban-based specialty training which undermines the 

ability to attract, train, and place primary care providers in 

rural communities. Medicare GME regulations should be 

reevaluated to address the education funding of physicians 

as well as other primary care providers. 

20
 
 

 

 

 

The 2010 NACRHHS Report 

RECOMMENDATIONS 

1. The Secretary should revise regulations to define 

an “integrated rural training track” as: 

-At least four rural block months to include a 

rural public and community health experience. 

During a rural block rotation, the resident is in 

a rural area for a minimum of four weeks or a 

month. 

-A minimum of three months of obstetrical 

training or an equivalent longitudinal experience. 

-A minimum of four months of pediatric training 

to include neonatal, ambulatory, inpatient and 

emergency experiences through rotations or an 

equivalent longitudinal experience. 

-A minimum of two months of emergency 

medicine rotations or an equivalent longitudinal 

experience. 

2. The Secretary should revise the regulations for 

“Community Preceptors” to allow preceptors to 

volunteer their time in serving as a preceptor to 

residents. 

3. The Secretary should redefine the definition of 

“all or substantially all” to allow the cost of GMA 

residency training to be shared between hospital and 

non-hospital base providers. 

Medicare Reimbursement 

Numerous studies have shown that a heavier emphasis 

on prevention and quality chronic care management can 

provide better health care outcomes while cutting costs. 

However, the current payment system is procedure-driven 

for both rural and urban areas. Many specialty services 

are paid at a much higher level than standard primary 

care procedures, which typically promote wellness and 

coordinate patient care. Ultimately, this creates economic 

incentives that influence the choices medical students 

make. Between 1995 and 2004 primary care salaries 

increased by 21 percent, however in the same time period, 

specialists’ salaries increased by 38 percent. The already 

large and growing income gap between specialists and 

generalists reduces the likelihood that a medical student 

would pursue primary care by 50 percent, would work in 

an FQHC or RHC by 30 percent, and would work in a 

rural area by 20 percent.92 However, there is a growing 

recognition of the need to address the reimbursement 

inequity. The CY 2010 Medicare Physician Fee Schedule 

regulation made two changes that improved payments 

for primary care providers. The first was the elimination 

of consultation codes, which redistributed funds into 

primary care evaluation and management payments. The 

second was to use new survey data for physician practice 

expense methodology, which more accurately paid for 

specialty services and increased payments for primary 

care. COGME has also noted that these trends could be 

eliminated by bringing primary care incomes to just 60 

percent of specialty income.93 In order to encourage more 

students to enter primary care professions and work in 

rural areas, it is essential to address the current system of 

financing health care and ensure that reimbursement for 

primary care services reflects their relative value to the 

health care system and the population. 

Safety Net Clinics Receive Enhanced 

Reimbursement
 

Both RHCs and FQHCs mainly provide primary care 

services to their patient populations, making them an 

important part of the rural primary care safety net. A safety 

net includes providers that deliver a significant level of 

health care and related services to uninsured, Medicaid, and 

other vulnerable populations. RHCs and FQHCs receive 

cost-based reimbursement based on an average of the 

historical costs of that facility per patient visit, up to a certain 

cap. The 2009 Medicare reimbursement cap for RHCs is 

$76.84 per visit. For FQHCs, the cap differs depending on 

whether the facility is in a nonmetropolitan ($102.58 per 

visit) or metropolitan ($119.29 per visit) area. An increase 

in the reimbursement cap for RHCs and rural FQHCs can 

help reduce the income gap and remove a significant barrier 

to recruitment of rural primary care physicians. 

Under Medicare’s current Physician Fee Schedule (PFS), 

there are several ways to directly improve primary care 

reimbursement. Relative Value Units (RVUs) determine 

the value of a physician’s services and are used by CMS 

to calculate Medicare payments for physician services. 

When there is a rapid increase in value for a service, an 

external advisory committee may choose to recommend 

an increase in the RVU for that service. Since primary 

21
 
 

 

 

The 2010 NACRHHS Report 

care physicians tend to bill for a smaller number of 

services and use fewer billing codes, it is unlikely that 

primary care services would be frequently targeted for 

an increase in their RVUs. An increase in the RVUs for 

primary care services would help reflect the actual value of 

those services. The Sustainable Growth Rate (SGR) was 

established as a way to prevent rapid increases in the cost 

of physician services. If payment for a physician service 

exceeds a target set by the SGR formula, the payments 

are automatically adjusted. For the past several years, this 

has resulted in potential payment reductions; however, 

Congress has annually prevented the adjustments from 

actually occurring. Reallocation of funding to primary 

care services can occur through a revised SGR formula 

or by adding a primary care modifier to the current 

SGR formula, an option that has been recommended by 

MedPAC for a number of years. As mentioned earlier, 

Medicare also currently provides HPSA bonus payments 

for certain services that are provided in underserved areas 

or for underserved populations. 

Another option would be to shift reimbursement from Feefor-Service to Pay-for-Performance, in which providers 

are reimbursed for meeting certain quality markers. Initial 

demonstrations by CMS have linked Pay for Performance 

with performance improvement. The CMS Health 

Buddy initiative from the Health Hero Network, which 

incorporates technology into chronic care management, 

uses this reimbursement approach and initial results 

suggest that it is effective in reducing hospitalizations and 

improving the quality of care provided.94 

RECOMMENDATION 

The Secretary should work with the Congress to 

increase the Medicare cap for RHCs and rural FQHCs 

to match the rate for urban FQHCs. 

Federal Designations 

In order to target funding toward high-need areas, Federal 

programs use a number of designations to identify 

areas or populations that are underserved. A frequently 

used designation to determine eligibility is the Health 

Professional Shortage Area (HPSA). Communities must 

apply for designation as a HPSA, and status is reviewed 

annually by HRSA’s Bureau of Health Professions (BHPr). 

The purpose of the primary care HPSA designation is to 

identify geographic areas, populations, or facilities that 

have a shortage of primary care providers. In 2009, 

68 percent of all whole or partial county primary care 

HPSA designations were in nonmetropolitan counties 

compared to 32 percent in metropolitan counties. 95 More 

information about designations is at http://bhpr.hrsa.gov/ 

Shortage/hpsadesignation.htm. 

This HPSA designation is directly used by at least 

16 Federal programs in allocating resources.96 When 

including all Federal programs that take HPSA 

designations into consideration, that number increases to 

roughly 40 programs.97 Since rural areas may not have as 

easy access to multiple sources of funding as urban areas, 

they are often more dependent on the HPSA designation 

in order to receive needed resources. One such Federal 

program that is very important to rural areas is the HPSA 

bonus payment. Medicare provides a 10 percent bonus on 

a quarterly basis to physicians who provide professional 

services in geographic primary care HPSAs. In 2008, 

45 percent of nonmetropolitan counties qualified for 

the primary care bonus payment. Thus, changes to the 

criteria for determining HPSA eligibility can significantly 

impact rural areas. 

The “Catch-22” of Being Underserved 

Federal programs can often be a boon in helping provide 

primary care resources in a community, but they are not 

without their challenges. 

Philip Health Services in Philip, South Dakota is an 

example of a community-owned health care facility that has 

sufficient but limited staff. Currently, Philip Health Services 

has a family Nurse Practitioner, a Physician Assistant, and 

two physicians, both nearing retirement. Should one of the 

physicians retire, Philip Health Services would become 

eligible to be designated as a Health Professional Shortage 

Area (HPSA). This designation would give them the ability 

to apply for other Federal resources such as the HPSA 

Bonus payment for physicians through CMS, which can be 

useful recruitment tools. However, once they successfully 

recruit new providers, their HPSA designation status would 

be in jeopardy, as would the recruitment tool used to attract 

the new physicians. Communities such as Philip are one or 

two providers away from being designated as a shortage 

area; they are in a constant cycle of designation and dedesignation. 

While researching the benefits and limitations of the HPSA 

designation, the Committee heard from several rural experts 

about the workforce “yo-yo” effect. The current HPSA 

de-designation threshold creates an artificial dichotomy 

between a community or population that is underserved 

22
 
 

 

The 2010 NACRHHS Report 

and one that is adequately served. When the number 

of providers in a community falls short of the specified 

full-time equivalents (FTEs) and is eligible to receive a 

HPSA designation, it is also able to apply for a number 

of other Federal resources. However, if it crosses the dedesignation threshold, the community is at risk of losing 

these additional resources, which can hinder the ability 

to retain their existing health care providers. The current 

process can create a perverse incentive to be underserved 

enough to stay just below the de-designation threshold 

in order to receive these additional, and often temporary, 

resources rather than to address the underlying problems 

of recruiting and retaining health care professionals in 

a community. Over the past 15 years, there have been 

two efforts at revising the shortage designation process 

and both have been met with public resistance. Despite 

the aforementioned shortcomings of the current systems, 

it appears that a number of key constituent groups may 

prefer a flawed status quo over a chance at a more rational 

but untested process. 

Nursing workforce development has been supported 

though Title VIII since 1964. It provides funding for 

academic nursing center programs for all levels of 

nursing education. Funding opportunities range from 

grant and loan forgiveness programs for individual nurses 

pursuing advanced practice nursing education, to grants to 

academic institutions for the development or continuation 

of advanced nursing education programs. Two Title VIII 

programs are designed to recruit registered nurses to work 

in facilities that have a critical shortage of nurses: the Nurse 

Education Loan Repayment Program and the Nursing 

Scholarship Program (NSP). The Nurse Education Loan 

Repayment Program repays 60 to 85 percent of nursing 

student loans in return for at least two years of practice in 

a Critical Shortage Facility (CFS).98 Similarly, NSP award 

recipients are required to work full-time in a CSF for a 

specified number of years. The approval process for a site 

to become a CSF is categorical; if a facility falls into one 

of the CSF categories, registered nurses can count their 

years of service in that facility toward NSP repayment. 

The current list includes Rural Health Clinics (RHCs) 

and Federally Qualified Health Centers (FQHCs), among 

others, but does not include Critical Access Hospitals 

(CAHs). If CAHs were considered safety net providers 

they would be designated as a HSPA, enabling nurses to 

count their years of service at CAHs. 

RECOMMENDATIONS
 

The Secretary should ensure that when regulations 

for shortage areas are updated the process should 

only update the Medically Underserved Areas 

and Medically Underserved Population process 

and maintain the basic methodology of the Health 

Professional Shortage Areas regulations. 

The Secretary should ensure that when the shortage 

area regulations are revised, protections are put 

in place to reduce the “yo-yo” effect of removing 

resources from a community when it loses its Health 

Professional Shortage Area designation due to the 

addition of less than five primary care providers in 

the rational service area or county. 

The Secretary should work with the Congress to 

provide the authority to include Critical Access 

Hospitals as safety net providers, which are given 

automatic HPSA designation. 

The Secretary should work with the Congress to 

revise the regulations for the Health Professional 

Shortage Area Medicare bonus payment to Advanced 

Practice Nurses and Physicians Assistants. 

International Medical Graduates 

International Medical Graduates (IMGs) are physicians 

who have completed their medical education in another 

country, but practice in the United States. Almost one 

in four physicians practicing in the United States is an 

IMG.99 Additionally, 45 percent of CAHs have at least 

one IMG.100 They play an important role in rural primary 

care because they are often more likely to start in the 

United States with a family practice residency and are 

more likely to practice in rural areas.101 It is estimated 

that if all IMGs in primary care practice were removed, 

one out of every five “adequately served” rural counties 

would become underserved. The percentage of rural 

counties with physician shortages would rise from 30 

percent to 44.4 percent.102 

Outside of residency programs, it can be very difficult 

to track where IMGs are practicing, both in terms of 

geographic locations and specialty. This difficulty arises 

because the current data does not distinguish between 

the different types of IMGs (i.e., H1-B Visa, J-1 Visa 

Waiver, and U.S. citizens who studied abroad). The H1-B 

Visa allows U.S. employers to hire foreign workers in 

23
 
 

 

The 2010 NACRHHS Report 

specialty occupations. Physicians who had been practicing 

in another country can enter the United States with a H1-B 

Visa. International medical students who completed their 

training in the United States on a J-1 student visa can 

have their two-year home residency requirement waived 

through the U.S. Department of State’s J-1 Visa Waiver 

program. 

One avenue of obtaining a J-1 Visa Waiver is through State 

Health Departments, which manage the Conrad State 30 

program. The Conrad 30 program allows each State to 

issue up to 30 waivers per year to J-1 visa holders. In 2001, 

the average number of Conrad 30 program applicants was 

18 per State, but the average number of placements was 

13.5 per State.103 Physicians can also apply for the J-1 

Visa Waiver through several U.S. governmental entities 

including the U.S. Department of Health and Human 

Services (HHS), the Department of Veterans Affairs (VA), 

the Department of the Interior’s Bureau for Indian Affairs 

(BIA), the Appalachian Regional Commission (ARC), 

and the Delta Regional Commission (DRC). 

The HHS J-1 Visa Waiver activity has the potential to 

increase the number of rural physicians, because it is not 

capped, but few foreign physicians apply through the 

HHS program. The HPSA score requirements are often 

too high, so that there are few attractive practice sites; 

these physicians may not be interested in the obligation to 

practice in a RHC or FQHC; or, it may simply be easier 

to apply via the H1-B process or the Conrad 30 program. 

Currently the current HPSA score requirement for the 

HHS/HRSA J-1 visa waiver program is a 7. There is also 

evidence that the number of J1 applicants has declined 

over the past 10 years. Although the J-1 Visa Waiver 

program and the Conrad 30 program provide an important 

source of physicians for rural and underserved areas, 

the Committee recognizes that these programs are not a 

perfect solution. A greater reliance on foreign physicians 

to practice in rural and urban underserved areas in the 

United States may take providers away from developing 

countries that likely have just as great a need, if not more, 

for health care professionals. 

RECOMMENDATION 

The Secretary should remove the HPSA score 

requirement from the HHS J-1 Visa Waiver regulations 

and expand the list of potential practice sites to 

include Critical Access Hospitals, Sole Community 

Hospitals, Medicare Dependent Hospitals, and any 

Section 1886(d) hospital with less than 50 beds. 

24
 
The 2010 NACRHHS Report 

Rural Health Care 

Provider Integration
 

Chapter Recommendations: 

Stark 

1: The Secretary should work with the Inspector General to develop regulations so that rural practitioners 

can be compensated for driving time at a fair market value. 

2: The Secretary and the Inspector General should work together to assess the impact of the inurement 

rules on the ability of rural hospitals to hire practitioners in Health Professional Shortage Areas. 

Medicare Demonstrations 

3: The Secretary should ensure that future demonstrations on quality improvement and care coordination, 

such as Accountable Care Organizations, payment bundling, and Medical Homes, incent the cooperation 

of the full range of rural providers. 

Medicare Survey and Certification: 

4: The Secretary should place a moratorium on approval of any new specialty hospitals in order to 

determine the impact on access to care for Medicare beneficiaries, with particular emphasis on access to 

specality services for rural beneficiaries. 

Medicare Reimbursement 

5: The Secretary should revise current regulations so the sole emergency medical service providers (EMS) 

owned and operated by Critical Access Hospitals must be only a minimum of 25 miles (15 miles in 

mountainous terrain) from the nearest EMS provider in order to qualify for cost-based reimbursement 

rather than the requirement of 35 miles. 

Federal Grant Programs 

6:The Secretary should work with Congress to reauthorize and support funding for the Healthy Communities 

Access Program with revisions to support projects that focus on development and implementation 

of Medical Home components, e.g., incorporation of HIT and EHRs, chronic care management, and 

medication management. 

7: The Secretary should work with Congress to authorize and support the development of a Critical Access 

Hospital Health Information Technology Grant Program under the Medicare Flexiblity program. 

8: The Secretary should encourage the use of existing authorities and funding from the National Library 

of Medicine at the National Institutes of Health to make competitive grants and contracts to support the 

adoption of HIT by rural health care providers, given their current low level of HIT adoption. 

25
 
 

The 2010 NACRHHS Report 

Rural Significance: Why the 

Committee Chose this Topic 

The current U.S. health care system is largely fragmented, 

causing patient care to be uncoordinated. This frequently 

stems from incomplete transfer of a patient’s care between 

providersI

,1causing practitionersII2to be without important 

patient information, medical records or the patient’s 

care plan. Studies show that fragmentation and lack of 

care management, especially for patients with multiple 

conditions or chronic diseases, result in inefficiencies and 

higher costs to the health care system.104,105 Fragmentation 

of health care is especially problematic for rural 

populations because rural residents have higher rates 

of chronic disease than their urban counterparts,106,107,108 

including heart diseases, hypertension,109 cancer,110 

diabetes, and obesity.111 

The Committee believes that quality of patient care 

will improve if policymakers and regulators promote 

care coordination that provides seamless patient and 

information flow among and between providers along the 

continuum of care. Specifically, the Committee finds that 

achieving integration will align rural health care services, 

improve clinical quality, provide cost reductions, and 

increase patient access to care. Achievement of this goal 

will improve the health status of people living in rural 

areas by offering enhanced health care quality, service, 

and efficiency. 

There is not a single model of integration that fits all rural 

areas. However, the Committee anticipates that models 

would encompass logical geographic areas that could 

deliver the full range of health services necessary for 

the population that it serves while being large enough to 

achieve significant economies of scale. This integrated 

structure should be inclusive to all types of health care 

providers in the impacted region and coordinate the 

efforts of varying providers and practitioners (e.g., 

community health clinics, home health agencies, mental 

health services, and other health professionals), as 

appropriate and feasible, in order to serve the full needs of 

a defined population. The legal structure of the integrated 

organization may vary from ownership to contractual 

arrangements. Regardless, the Committee believes that 

strong incentives will be required, either through payment 

I The term provider will henceforth refer to an entity that provides health care (e.g., CHC, RHC, CAH, etc.). 

II The term practitioner will henceforth refer to all health 

care professionals who administer medicine (e.g., Physician 

Assistants, Registered Nurses, and Medical Doctors). 

What Is Integration? 

Several types of integration exist. Horizontal integration 

occurs when a health care delivery organization extends 

its core product or service, or when two or more similar 

providers maintain an interrelationship. Horizontal 

integration ranges from formal integration, such as 

combining the offering of medical services and use of 

facilities, to less formal relationships, such as collectively 

maintaining voluntary health councils. 

Vertical integration links services at different stages 

in the production process and is overseen by a single 

organizational entity. One example would be the 

integration of EMS, primary care, and post-acute services 

if all were under one organization. Vertical integration 

can be achieved by offering new services and establishing 

joint ventures, alliances, and formal networks. Vertical 

integration is also achieved through the collaboration 

of separately owned provider types at all levels of care, 

such as RHCs, specialty care providers, and tertiary care 

facilities. 

arrangements or regulatory means, to ensure an optimal 

level of participation among regional health providers. 

Elements of an integrated model or structure would 

include the following attributes: 

•		 fair and adequate reimbursement for rural health 

care providers, based on historical costs and 

patients served. 

•		 leveraged technology to permit more services to 

be delivered locally through health information 

technology and telemedicine networks, including 

electronic intensive care units (eICU) and other 

applications, mobile technologies that could be 

shared among providers, and specialty clinics 

utilizing specialists from tertiary institutions that 

are part of the organization. 

•		 centralized services such as purchasing/materials 

management, laundry, information systems 

support, credentialing, human resources, Chief 

Information Officers, and certain financial 

functions—all of which would achieve cost 

savings. 

•		 close working relationships with primary care 

physicians through care coordination models, 

such as the Medical Home, which would promote 

continuity of care and encourage preventative 

care. 

26
 
 

 

 

 

 

 

The 2010 NACRHHS Report 

The U.S. Department of Health and Human Services (HHS) 

can have an impact, either directly or indirectly, on the 

ability of health care providers to work together through 

regulations and grant programs. The Committee believes 

that the Secretary of HHS should support integrated health 

care as a fundamental Departmental strategy. On the policy 

side, Medicare payment regulations, provider-based rules, 

and Stark and Anti-kickback regulations play a key role 

in how providers may or may not integrate with other 

provider types. On the program side, HHS administers 

a number of grant programs that promote either formal 

or informal integration. These include grants to support 

health information technology and grants focused on rural 

integration at the community level. 

Stark and Other Regulations 

Affecting Integration
 

A number of HHS regulations created to prevent money 

from adversely influencing health care decisions may 

have unintended consequences on providers’ ability 

to collaborate. Established in 1972, the Federal Antikickback Law makes it a felony for anyone to knowingly 

and willfully receive or pay anything to influence referral 

decisions involving Federal health care programs, 

including Medicare and Medicaid.112 Since the Antikickback Law was published, many safe harbors, or 

exceptions to the law, have been published.113 

Related to Anti-kickback provisions, Stark Laws govern 

physician self-referral for Medicare and Medicaid 

patients. Physician self-referral is broadly defined as a 

physician referring a patient to a facility for “designated 

health services” in which the physician, or a physician’s 

immediate family member, has a financial interest.114 

There are many exceptions to Stark Laws, including 

one which exempts designated health services provided 

by physician-owned providers if substantially all (not 

less than 75 percent) “of the designated health services 

furnished by the entity are furnished to individuals 

residing in a rural area.”115,116 

In addition to the rural exception, HHS created an 

exception to Stark Laws on health information technology 

(HIT) in October 2006 that is especially pertinent to rural 

providers. The HIT exception and its related safe harbor 

and IRS guidance allow hospitals to purchase HIT systems 

for physicians in affiliated practices.117 The HIT exceptions 

remove regulatory barriers that were preventing physicians 

from being integrated with hospitals’ electronic health 

record (EHR) systems allowing for further integration and 

improvements in care coordination. 

Due to the complexity of Stark Laws, the Committee 

believes providers may forgo exercising the rural exceptions 

in order to avoid facing penalties. For example, Stark 

Laws prohibit providers from compensating physicians 

for the time they spend traveling to outreach clinics. 

Regulators would argue that these outreach services would 

need to be provided at fair market value for services to 

meet the personal services exception, but whether driving 

is a service remains unclear. The Committee is concerned 

that this may act as a disincentive in providing access to 

needed services in rural communities.118 The Committee 

believes that appropriate safeguards built into a driving 

time exception would avoid inappropriate utilization 

while allowing for necessary referral patterns. 

Over time, updates to Stark Laws have triggered unintended 

consequences that stymie health care integration. A maze 

of regulatory definitions, special rules, and exceptions 

has resulted from the practice of making exceptions to 

exceptions. Some proposals around pay-for-performance, 

Accountable Care Organizations, and payment bundling 

are problematic under Stark Laws because they may not fit 

within a current exception.119 Because these programs link 

physician payments to the volume or value of physician 

referrals, they may not qualify for Stark exceptions under 

the current compensation arrangement.120 

Other health care regulations prevent providers from 

offering services that are priced below market value to 

practitioners. These rules, called inurement rules, prevent 

hospitals and other providers from influencing referrals 

and admissions from a particular practitioner. Inurement 

rules can adversely affect some severely underserved 

rural areas where a provider must pay above average rates 

to attract a clinician to a particularly challenging practice 

environment. 

The Centers for Medicare and Medicaid Services (CMS) 

has regulations that have focused on administrative 

integration of commonly owned components through 

its provider-based regulations. These rules apply to 

providers and facilities considered to be an integral part 

of a main, or parent, facility. Provider-based regulations 

affect integration because they allow provider-based 

facilities to reallocate overhead costs to the parent facility. 

Provider-based designation integrates the following 

facility components: licensure, ownership and control, 

administration and supervision, clinical services, financial 

operations, and public awareness. Like many CMS 

regulations that incentivize provider collaboration, the 

focus of the integrated activities is on the provider and its 

administrative functions rather than on patient care. Thus, 

27
 
 

The 2010 NACRHHS Report 

RECOMMENDATIONS
 

The Secretary should work with the Inspector 

General to develop regulations so that rural 

practitioners can be compensated for driving 

time at a fair market value. 

The Secretary should work with the Inspector 

General to assess the impact of the inurement 

rules on the ability of rural hospitals to hire 

practitioners in Health Professional Shortage 

Areas. 

these programs help providers coordinate administrative 

functions and build economies of scale, which increases 

efficiency and enables better continuity of care. 

Other regulations that influence integration are CMS’ 

Conditions of Participation (CoPs) and Conditions for 

Coverage (CfCs), which certain specialized providers 

must meet in order to participate in Medicaid or Medicare 

programs.121 While many CoPs are basic standards 

regarding health and safety, some CoPs can increase 

integration because they require providers to integrate with 

other facilities. One of the CAH CoPs requires the CAH to 

have an agreement with at least one other network hospital 

for patient transfers and referrals, sharing electronic 

patient data, credentialing, and quality assurance.122 

CoPs and CfCs are different for every provider type, and 

they have been written for approximately 20 specialized 

providers, including CAHs, RHCs, FQHCs, and a number 

of other providers that serve rural patients. 

The Role of Medicare Provider
 

Payment in Integration
 

The current U.S. health care system is based on a feefor-service model where payment is established on 

individual services rendered. This is how the majority 

of payers operate, including Medicare’s prospective 

payment system,123 and to some extent, insurance 

companies.124 Because providers are paid individually 

per procedure, there is limited financial incentive for feefor-service providers to coordinate a patient’s care with 

other providers. The lack of integration and coordination 

contributes to higher health care costs, inefficiencies, and 

lower quality of care. This is cause for concern because 

88 percent of annual Medicare spending is concentrated 

among only 25 percent of beneficiaries125 and 75 percent 

of these high-cost beneficiaries have been diagnosed with 

one or more chronic conditions,126 often requiring a higher 

level of care and coordination among providers. Thus, 

payment systems that incentivize provider collaboration, 

increase accountability among providers, and improve 

the quality of care could be especially beneficial to rural 

patients. 

Payment Models That Incentivize Integration 

CMS is in the process of developing methodologies to 

encourage further collaboration among providers. One 

CMS payment method that encourages rural providers to 

collaborate is the Critical Access Hospital (CAH) Method 

II Billing or “Optional (Elective) Payment Method.” (See 

map on page 29.) It allows CAHs to jointly bill for both 

facility and professional physician costs for outpatient 

services. Each practitioner providing services to CAH 

outpatients can elect to reassign his or her billing rights 

to the CAH. The professional services can then be 

billed at 115 percent of the allowable amount127 while 

the CAH can receive cost-based reimbursement for the 

facility portion.128 The increased reimbursement rate for 

physicians can help CAHs attract practitioners and also 

eases administrative burden on physicians by centralizing 

billing through the CAH, which encourages collaboration 

between providers and physicians. 

Recognizing the importance of improving health care 

quality and efficiency, Congress has authorized CMS to 

conduct several demonstrations to encourage provider 

collaboration and accountability through payment 

incentives. 

One payment method currently being considered by 

Congress is bundling payments for episodes of care. 

Bundled payments would allow Medicare to disburse one 

global payment for all services provided to a beneficiary 

during an episode of care, specifically for a given acute 

hospitalization and post-acute episode, across multiple 

providers. In its June 2008 Report to the Congress, the 

Medicare Payment Advisory Commission (MedPAC) 

recommended that Medicare bundle payments for services 

around a hospital admission because hospital visits were 

the largest factor in explaining spending differences 

among providers.129,130 Currently, CMS is exploring the 

concept of bundled payments for episodes of care in 

the Medicare Acute Care Episode demonstration. In the 

early 1990s, Medicare tested the concept in the Medicare 

Participating Heart Bypass Center demonstrations and 

found that, on average, quality of care remained high 

and spending on post-discharge care decreased.131 While 

the concept of payment bundling may hold potential for 

28
 
The 2010 NACRHHS Report 

Location of Critical Access Hospitals 

Information Gathered Through July 30, 2009 

Alaska
 

and Hawaii
 

not to scale
 

Sources: US Census Bureau, 2008; CMS Regional Office, 

ORHP, and State Offices Coordinating with MRHFP, 2009. 

Legend

( ) = N

Critical Access Hospital (1,305) 

Metropolitan County 

Nonmetropolitan County 

State Not Eligible or Not Participating 

*Note: Core Based Statistical Areas are current as of the November 2008 update.

 Nonmetropolitan counties include micropolitan and counties outside of CBSAs. 

Produced By: North Carolina Rural Health Research and Policy Analysis Center, Cecil G. 

Sheps Center for Health Services Research, University of North Carolina at Chapel Hill. 

improving coordination of care, it is not clear how it would 

operate outside of large integrated delivery systems. As 

a result, policymakers need to consider how these models 

will impact small rural providers, particularly independent 

hospitals. 

Congress is also considering utilizing the Accountable 

Care Organization (ACO) as a method to increase provider 

integration. ACOs are an integrated set of providers 

responsible for the quality and cost of health care for a 

defined population of Medicare beneficiaries. The focus 

of an ACO is on developing integrated health systems that 

span the continuum of care in a community. For example, 

an ACO may include a hospital and its primary care 

physicians, along with specialists, affiliated clinics, and a 

number of other post-acute providers.132,133 Similar to the 

bundled payment concept, ACOs hold potential for rural 

areas where the need for care coordination is high. If rural 

providers are able to become more integrated players in 

larger health system coordination, care for rural patients 

may improve. 

While ACOs offer many potential benefits for rural 

patients and providers, ACOs should be designed with the 

unique situations of rural providers in mind as the push for 

efficiency may limit access to care in rural communities. 

The Committee believes integration should initially focus 

on physician and hospital care reimbursed under Medicare 

and Medicaid, but should expand to engage other providers 

and payers with the goal of integrating health care and 

human services along the care continuum. 

CMS is conducting a number of demonstrations on 

similar payment incentives. CMS is testing concepts 

embodied in the ACO model in its Physician Group 

Practice Demonstration. This demonstration is designed 

to encourage providers to reduce spending through 

improved care coordination. If the participating practices 

are able to improve the quality and efficiency of care, they 

will be able to share in a portion of the resulting savings. 

The Committee believes this model of integration should 

be extended to other providers in rural communities that 

accrue to Medicare. 

Gainsharing is another payment method that could 

encourage providers to collaborate. Gainsharing is the 

idea that practitioners who reduce spending, either by 

29
 
 

 

The 2010 NACRHHS Report 

appropriate use of services or reduced readmissions, 

should be able to take part in the resulting savings.134 

The latter is an area in which cost savings can be found: 

MedPAC reported in June, 2008 that “18 percent of 

Medicare hospital admissions result in readmissions 

within 30 days of post-discharge.” These readmissions 

accounted for $15 billion in spending in 2005, $12 billion 

of which was deemed “potentially preventable.”135 The 

Committee recognizes the potential early savings that 

can be realized through gainsharing but is concerned that 

long-term savings may be more difficult to achieve. 

Regardless, gainsharing is currently not permitted, as Stark 

and Anti-kickback laws currently prohibit providers, such 

as hospitals, from sharing savings with the practitioners 

due to potential conflict of interest. Congress has mandated 

that CMS conduct two demonstrationsIII3

that will allow 

participating practices to share a portion of any savings 

with their practitioners.136,137 These demonstrations 

began in 2007 and will evaluate if gainsharing promotes 

increased quality and reduces spending. 

RECOMMENDATION 

The Secretary should ensure that future 

demonstrations on quality improvement and 

care coordination, such as Accountable Care 

Organizations, payment bundling, and Medical 

Homes, incent the cooperation of the full range 

of rural providers. 

Organization Factors Impacting Integration 

The integration of health care services in rural America can 

also be impacted by organizational factors ranging from 

a procedure-driven reimbursement system to individual 

provider choices that undermine coordination and 

collaboration. These factors can result in segmentation 

of health care services ranging from mental health, 

emergency services, and pharmacy to acute and post-acute 

care. The Committee believes the organizational focus of 

rural providers should be on care coordination with the 

intent of establishing seamless patient and information 

flow between providers along the continuum of care. 

III Section 646 of the Medicare Prescription Drug, Improvement, 

and Modernization Act of 2003 (MMA) amends title XVIII (42 

U.S.C. 1395 et seq.) of the Social Security Act , giving authority 

for the Physician-Hospital Collaboration Demonstration. 

Section 5007 of the Deficit Reduction Act of 2005 (DRA) gives 

authority for the Medicare Hospital Gainsharing demonstration. 

The organizational culture among providers within a 

community can impact integration, specifically when 

providers do not see the importance of collaboration. One 

example of this is the non-willingness of “communitybased physicians to take emergency department (ED) calls 

or follow their patients into the hospital...”138 which, in turn, 

has created an increased demand for hospitalists.139 A high 

level of communication and coordination must take place 

between a primary care provider and a hospitalist in order 

to achieve a seamless care transition for a patient.140 If there 

is a breakdown in any part of this line of communication, 

then the transition can create a fragmentation of care. 

There are different reimbursement methodologies and 

regulations that may encourage certain specialties to 

break away from a community’s health care continuum. 

One such regulation is the “whole hospitals exception,” 

which permits physicians to establish their own specialty 

Mental Health Services and Integration 

In both of its 2009 site visits in California and South 

Dakota, the Committee visited communities where the least 

integrated aspect of the health care system is mental health 

services. 

The expansion of the Community Health Centers (CHCs) 

program, through the American Recovery and Reinvestment 

Act and through previous expansions since 2001, has added 

mental health services in many underserved rural areas. 

However, because approximately only 33 percent of CHCs 

are located in rural communities, there are many rural areas 

not served by CHCs. One way to better integrate mental 

health care with rural providers is to encourage Rural Health 

Clinics (RHCs), which are exclusively located in rural 

areas, to provide mental health services. While CHCs often 

provide these services, the 3,751 RHCs in the United States 

rarely do. 

A recent project at the Maine Rural Health Research Center 

examined 2,526 cost reports and found that only 90 (about 

3.5 percent) employed either a doctoral-level psychologist 

or a clinical social worker. Barriers to providing mental 

health services include: poor reimbursement rates; chronic 

shortages of mental health professionals; administrative 

burden caused by complex and inconsistent regulations, 

licensing and reimbursement policies; high copays and 

deductibles for those with insurance; and limited resources to 

help administrators deal with these barriers. As other health 

care providers seek greater levels of integration through 

regional networks, Medical Homes, and accountable health 

organizations, the Committee hopes to see more consistency 

in eliminating barriers and facilitating the inclusion of 

mental health services. 

30
 
The 2010 NACRHHS Report 

hospital that is designed to provide a few specialized 

services for selected patients. Such facilities may focus 

on cardiac care, orthopedics, and/or neurological services. 

Specialty hospitals have an impact on integration of health 

care services in rural areas in a number of ways. While 

it may not be feasible nor advisable to remove existing 

physician-owned hospitals, the Committee believes a 

moratorium should be placed on future development of 

these facilities for several reasons, including: 

•		 Specialty hospitals may increase the overall cost 

of health care through increased numbers of 

self-referrals and procedures performed. This 

increased utilization and its associated costs has 

a significant impact on the Medicare program as 

a whole and, consequently, on rural beneficiaries 

and providers. 

•		 Specialty hospitals may limit access to specialty 

care for rural populations. As more specialists 

choose to practice almost exclusively in specialty 

hospital settings, there is a concern that there will 

be fewer specialists available to receive referrals 

in rural communities. Additionally, opportunities 

at specialty hospitals may create disincentives 

for urban-based specialists to take part in circuitriding arrangements where they conduct periodic 

specialty clinics in rural community hospitals. 

•		 Relative to rural community hospitals, specialty 

hospitals treat smaller percentages of Medicaid 

patients. Specialty hospitals attract patients who 

are less sick, leaving rural community hospitals to 

care for a higher proportion of high acuity patients 

with insurance that reimburses at lower rates. 

•		 Specialty hospitals are not required to provide 

emergency medical services through Emergency 

and Medical Treatment and Active Labor Act 

(EMTALA) requirements that other acute-care 

hospitals are required to follow. Currently 45 

percent of specialty hospitals have 24-hour 

emergency departments while 92 percent of 

general hospitals do. This can result in higher 

acuity patients going to rural community hospitals 

that provide a wide range of services to all patients 

regardless of their ability to pay. 

RECOMMENDATION 

The Secretary should place a moratorium on 

approval of any new specialty hospitals in order 

to determine the impact on access to care for 

Medicare beneficiaries. 

Another area of the health care sector that could benefit 

from greater integration is pharmaceutical services, 

particularly in rural areas that struggle to attract and retain 

pharmacists. Independent pharmacists provide essential 

services to residents of small towns and continue to serve 

many of the nation’s communities as the sole provider 

of pharmacy services. Research from the University 

of North Carolina and the University of Nebraska 

shows that communities with only one pharmacist face 

increasing challenges in ensuring access to the full range 

of pharmaceutical services needed. The researchers noted 

that 216 rural placesIV4

lost every one of their pharmacies 

between May 2006 and December 2008, and 118 rural 

places dropped from more than one pharmacy to only 

one.141 

Due to these closures some rural patients have limited 

access to prescription drugs because the nearest retail 

pharmacy may be a long distance away from a patient’s 

home or the hospital from which the patient was discharged. 

In these instances, rural patients often rely on mail order 

for their prescriptions. However, mail order pharmacies 

do not provide the patient counseling and medication 

management that are needed for high quality care, nor 

do they provide critical support to the local health care 

system. Most sole community pharmacists (83 percent) 

provided important services for other health care providers 

and facilities in their local health care system including 

hospitals, nursing homes, and home health agencies. 

Finally, trauma care and emergency medical services 

(EMS) in rural areas are an essential component of access 

to care and need to be better integrated into the rural health 

care delivery system. In order for EMS to be financially 

viable in remote areas, they usually need to be owned and 

operated out of a hospital or other central point of health 

care delivery. The Committee has heard from several 

rural CAH administrators that they lose financially when 

they try to formally integrate emergency medical services 

IV Rural places are defined as Zip codes in rural (nonmetro

politan and nonmicropolitan) counties or ZIP codes within 

metropolitan or metropolitan countries with Rural-Urban Com

muting Area (RUCA) codes of 4.0 or higher. 

31
 
The 2010 NACRHHS Report 

Ensuring Access to Specialty Care 

Access to specialty care has long been a challenge for rural 

communities, and that is certainly true in the Black Hills 

region of South Dakota. 

At Custer Regional Hospital (CRH) in Custer, South 

Dakota, the Committee members heard firsthand about 

the challenges local physicians face in ensuring access to 

needed specialty care such as neurology and orthopedics. 

Typically, the patients are referred to Rapid City Regional 

Hospital (RCRH), which can draw on a larger pool of 

clinical resources. But even RCRH can face challenges on 

nights and weekends. While rural areas have long struggled 

with attracting specialists even on a traveling circuit basis, 

smaller urban areas such as Rapid City also face challenges 

in attracting these clinicians. The medical staff from CRH 

also noted that some specialists practice only in specialty 

hospitals which may not take referral calls on nights and 

weekends. Telehealth technology may offer a lifeline and 

increase access to specialty services; RCRH is looking into 

expanding the use of this technology. Hospitals in eastern 

South Dakota in the Sioux Falls area have been able to use 

this technology to improve access to these services. 

by operating a hospital-based ambulance service. The 

administrators say the hospitals lose money when billing 

for ambulance services under the Medicare ambulance fee 

schedule due to the combination of low volume and high 

fixed costs. 

Currently, there is a provision within Medicare that 

allows some CAH-based ambulance services to receive 

cost-based reimbursement for ambulance services 

provided there is no other ambulance service wthin 35 

miles. Some rural advocates have questioned why CMS 

adopted a 35-mile standard for this distance requirement 

because the statute does not specify what constitutes 

a sole-community ambulance service. CMS officials 

appeared to defer to the 35-mile standard by citing the 

use of that mileage standard for another reference to “sole 

community” status in Medicare law dealing with sole 

RECOMMENDATION 

The Secretary should revise current regulations 

so the sole emergency medical service providers 

(EMS) owned and operated by Critical Access 

Hospitals must be only a minimum of 25 miles 

(15 miles in mountainous terrain) from the 

nearest EMS provider in order to qualify for costbased reimbursement rather than the requirement 

of 35 miles. 

community hospitals (SCHs). The Committee believes 

that this creates a contradiction. CAHs have their own 

statutorily based mileage standard of being 35 miles from 

another provider (15 in mountainous terrain). It is not 

clear why CMS chose to use the SCH standard rather than 

the CAH standard. 

Federal Grant Programs
 

There are several types of grant programs that encourage 

provider integration in rural areas. A number of these 

grants require multiple providers to collaborate in order 

to receive funding, while others promote integration by 

requiring grant recipients to provide a broad range of 

services, such as primary care, dental, mental, and other 

health services. Grants can often support partnerships 

between government-funded health providers and private 

foundations. (Note: Please see Appendix A for further 

information about the grant programs mentioned in this 

section.) 

Grants to Communities 

Grant opportunities to communities may facilitate 

integration by promoting the coordination of networks, 

helping consortiums initiate and thrive, and supporting 

the building of the infrastructure necessary for integration. 

The Health Resources and Services Administration’s 

(HRSA) Office of Rural Health Policy (ORHP) is 

one entity that administers these types of grants. In 

acknowledgement of the need for providers to work 

together in an integrated fashion and the time that it takes 

to establish relationships, ORHP offers Rural Health 

Network Planning grants with the purpose of improving 

the coordination of health services and strengthening the 

existing health care systems’ rural communities. This 

integration of functions and services helps to overcome 

the fragmentation of health care services in rural areas, 

improves coordination of those services, and achieves 

economies of scale. ORHP’s Rural Health Care Services 

Outreach grants encourage the development of new 

and innovative health care delivery systems in rural 

communities that lack essential health care services. 

The emphasis of this grant program is on collaboration, 

requiring the grantee to form a consortium with at least 

two additional and separately owned partners. ORHP’s 

Medicare Rural Hospital Flexibility (Flex) program 

provides grants to help rural communities integrate 

their health care systems. This can include helping to 

establish EMS systems and developing system-wide 

32
 
 

 

 

The 2010 NACRHHS Report 

quality improvement programs. Additionally, CAHs that 

participate in Flex must all have referral relationships with 

an upstream referral hospital. Given that CAHs have a 

limitation on the number of beds and length of stay, these 

facilities often triage patients and refer them to a larger 

facility or they may receive patients for post-acute care 

services in their swing beds. 

The Community Health Center (CHC) program is funded 

and regulated by HRSA and is authorized under Section 

330 of the Public Health Service Act.142 CHCs play a critical 

role in providing care to underserved populations through 

integration of several outpatient health and human services 

under one roof including primary medical care, dental care, 

and mental health/substance abuse services.143 However, 

CHC board and governance requirementsV5

may create 

challenges for clinical integration beyond the immediate 

primary care services provided at the CHC. Thus, CHCs 

and other community providers must creatively design 

integrative strategies that promote care coordination, 

shared information, and seamless patient transitions. 

V To be eligible for a Section 330 Grant, a CHC must be governed by a board with a user majority of at least 51 percent. 

From 2000 to 2005, HRSA administered the Community 

Access Program (CAP) and its successor, the Healthy 

Communities Access Program (HCAP) grants. The 

grantees for these programs, comprised of health providers, 

were charged with improving access to health services by 

developing or strengthening integrated community health 

care delivery systems that coordinate health care services 

for individuals who were uninsured or underinsured.144 

Some consortia developed coordinated systems with 

system-wide case management, coordinated referrals, or 

integrated management information systems.145 A total of 

193 grants have supported 158 communities (34 percent of 

which were awarded to rural communities)146 in 42 States. 

Funding for HCAP grants ended at the close of Federal 

fiscal year 2005 because the program was assessed by the 

U.S. Office of Management and Budget to be duplicative of 

other efforts.147 However, an independent study conducted 

by the National Opinion Research Center reported that 

HCAP grantees were able to develop “systems of care that 

coordinated health services among primary care providers, 

hospital systems and other secondary and tertiary care 

providers.”148 The Committee continues to believe 

33
 
The 2010 NACRHHS Report 

in the potential for integration through this program 

and supports the reauthorization of HCAP funding. 

Health Information Technology 

Health Information Technology has the potential to help 

disparate rural providers from across the spectrum of care 

to better coordinate the care of their patients. Tools such 

as electronic medical records (EMRs) can be especially 

useful for rural Americans who travel to numerous 

providers to seek care. Beyond quality of care, HIT has 

the ability to improve population health, monitor chronic 

disease, and improve access to health care in rural areas. 

The American Recovery and Reinvestment Act (ARRA) 

provided approximately $25 billion in health information 

technology (HIT) across the health care sector. There are 

incentive payments to Medicare and Medicaid providers to 

encourage them to adopt electronic health records (EHRs) 

between 2011 and 2015. There are also grants available to 

the States to encourage health information exchange, to 

train workers in HIT, and to support adoption of EHRs in 

community health centers. 

In addition to the ARRA funding, HHS has a number of 

programs that have focused on HIT adoption over the past 

few years. In 2007 the Flex program, through a one-time 

appropriation of $25 million, provided funding to create 

health information exchanges (HIE) through the Critical 

Access Hospital Health Information Technology Network 

Grant program. The State grantees were required to create 

a network that included at least one CAH, as well as any 

ambulatory and specialty providers with which it regularly 

worked. The State networks were required to implement 

HRSA-created Health Center Controlled Networks 

(HCCN) to improve the operational effectiveness 

and clinical quality at CHCs through the provision 

of management, financial, technological, and clinical 

support services. HCCN integration activities are wideranging and include coordinating the acquisition of highcost, highly specialized personnel or large infrastructure 

systems, developing clinical guidelines, providing services 

such as accounting or human resources management, and 

maximizing purchasing power. One key component of 

the HCCN grant is the support of HIT implementation. 

This allows providers to enhance their technical or quality 

improvement infrastructure using HIT, in order to improve 

clinical, operational, and technical activities. The majority 

of HCCN grants focus on CAH networks that feature 

vertical integration rather than horizontal integration. 

Electronic Intensive Care Units 

Most small rural hospitals do not have the volume or staff 

to fully staff an intensive care unit (ICU), but that does not 

mean they cannot offer the full range of ICU services. 

In California, the Committee was able to see the use of an 

Electronic Intensive Care Unit (eICU) at Sutter Health’s 

eICU’s Sacramento hub, which links rural hospitals in the 

region with an urban tertiary care center to provide remote 

intensive care services. This allows a patient with complex 

needs to be cared for in their home rural hospital by their 

local providers with the watchful eye of intensive care 

specialists hours away. Sutter officials say the eICU can 

result in shorter patient stays, lower morbidity, improved 

quality and access to specialists for rural residents. The 

Sutter eICU has also been able to gather regional-level 

data on a real-time basis, a benefit which allowed them to 

identify, evaluate, and analyze outbreaks of H1N1 and the 

effectiveness of treatments. This information was passed 

along and utilized by health officials in Sacramento. 

Rural Networks of Care 

For many years, rural providers have learned that working 

together in formal and informal networks is a necessity to 

keep the doors open. 

There are variety of factors driving this, including limited 

economies of scale, workforce challenges, and the 

need to share costs. For many operating in these fragile 

frameworks, these networks are necessary to provide a 

basic level of stability for their local health care delivery 

system. The collaboration needed to make a rural network 

viable is not necessarily easy, but there are a number of 

organizations that have become national models, such as 

the Rural Wisconsin Health Cooperative in Sauk City, 

Wisconsin or SISU in Duluth, Minnesota, which mostly 

serves the northern part of Minnesota. 

Organizations like this have long been a virtual community 

under the auspices of the National Cooperative of Health 

Networks (NCHN), a national association of health 

networks and strategic partners whose mission is to assist 

health alliances through education, networking, and 

collaboration. 

The success of networking as a rural survival strategy was 

not lost on Congress, which in 1996 created the Rural 

Network Development grant program to support efforts 

to build viable health care networks in rural communities. 

The Agency for Healthcare Research and Quality 

(AHRQ) has also assisted providers in implementing HIT. 

AHRQ’s HIT initiative works to harness the power of HIT 

34
 
 

The 2010 NACRHHS Report 

to improve the health of all Americans through improved 

quality of care and increased efficiencies. The HIT 

initiative includes more than $260 million in grants and 

contracts in 41 States to support and stimulate investment 

in HIT, especially in rural and underserved areas. It 

also includes additional resources for rural communities 

including the ARHQ National Resource Center for HIT at 

http://healthit.ahrq.gov. 

In addition, the National Library of Medicine at the 

National Institutes of Health (NIH) funds informatics 

and HIT through the Applied Informatics Grant. This 

grant is mainly for large academic research centers to use 

information technology to optimize the utility of clinical 

and research information. While these grants have been 

helpful to those communities, the Committee believes 

that the low rates of HIT adoption in rural areas warrant 

increased outreach to and special consideration for rural 

areas. 

RECOMMENDATIONS
 

The Secretary should work with Congress to 

reauthorize and support funding for the Healthy 

Communities Access Program with revisions to 

support projects that focus on development and 

implementation of Medical Home components, 

e.g., incorporation of HIT and EHRs, chronic 

care management, and medication management. 

The Secretary should work with Congress to 

authorize and support the development of a 

Critical Access Hospital Health Information 

Technology Grant Program under the Medicare 

Flexiblity program. 

The Secretary should encourage the use of 

existing authorities and funding from the 

National Library of Medicine at the National 

Institutes of Health to make competitive grants 

and contracts to support the adoption of HIT by 

rural health care providers, given their current 

low level of HIT adoption. 

35
 
The 2010 NACRHHS Report 

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Agriculture, Economic Research Service, April 2007. Web. 7 

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Survey, 2006. National Center for Health Statistics. Vital 

Health Stat 10(235). 2007. 

21. Glasgow, N, L. Morton, and N. Johnson. Critical Issues in 

Rural Health. Hoboken: Blackwell Publishing, 2004. 

22. Bennett, K. J., B. Olatosi, and J.C. Probst. “Health 

Disparities: A Rural – Urban Chartbook.” South Carolina Rural 

Health Research Center. Print. June 2008. 

23. “Program Overview.” Cash & Counseling. 2007. Web. 7 

Jan 2010. <http://www.cashandcounseling.org/about/index_ 

html>. 

24. “C&C FAQ.” Cash & Counseling. 2007. Web. 3 Apr 2010. 

<http://www.cashandcounseling.org/about/FAQ>. 

25. Mathematica Policy Research, Inc. “Cash and Counseling 

Evaluation Changes Policymakers’Approach to ConsumerDirected Care.” Mathematica. 2009. Web. 14 Sept. 2009. 

26. “Participating States.” Cash & Counseling. 2007. Web. 

28 Jun 2009. <http://www.cashandcounseling.org/about/ 

participating_states>. 

27. Centers for Medicare & Medicaid Services. “Real Choice 

Systems Change Grant Program. Money Follows the Person 

Initiatives of the Systems Change Grantees.” U.S. Department 

of Health and Human Services: Centers, 2 Sep 2009. Web. 

<http://www.cms.hhs.gov/RealChoice/downloads/MFP.pdf>. 

28. Centers for Medicare & Medicaid Services. Overview: 

New Freedom Initiative. Web. 12 Dec 2009. <http://www.cms. 

hhs.gov/NewFreedomInitiative/>. 

29. “Deficit Reduction Act: Money Follows the Person 

Grants.” Centers for Medicare & Medicaid Services. Web. 18 

Jul 2010. <http://www.cms.hhs.gov/DeficitReductionAct/20_ 

MFP.asp>. 

30. “HHS Provides Funding to States for Alternatives to 

Nursing Home Care in Medicaid.” U.S. Department of Health 

& Human Services. 2006. Web. 23 Oct 2009. <http://www.hhs. 

gov/news/press/2006pres/20060726.html>. 

31. “What is PACE?.” National Pace Association. 2002. 

Web. 9 Aug 2009. <http://www.npaonline.org/website/article. 

36
 
The 2010 NACRHHS Report 

asp?id=12>. 

32. “Overview Special Needs Plans.” Centers for Medicare 

& Medicaid Services. 2007. Web. 16 May 2009. <http://www. 

cms.hhs.gov/specialneedsplans/>. 

33. “ People with Disabilities Frequently Asked Questions.” 

Rural Assistance Center. 2 June 2009. Web. 1 July 2009. 

34. Administration on Aging. “Aging and Disability Resource 

Centers: A Joint Programof the Administration on Aging and 

Centers for Medicare & Medicaid Services.” U.S. Department 

of Health and Human Services. Oct 2008. Web. 8 Jan 2010. 

<http://www.agingcarefl.org/ADRC/AOA_ADRC.pdf>. 

35. Ibid. 

36. Harvard Law School “Our Fragmented Health Care 

System: Causes and Solutions.” The Petrie-Flom Center 

for Health Law Policy, Biotechnology, and Bioethics. Jun 

2008. Web. 10 Nov 2009. <http://www.law.harvard.edu/ 

programs/petrie-flom/workshops_conferences/Conferences/ 

Fragmentation/ProgramMay29.pdf>. 

37. National Health Policy Forum. “The Basics: Older 

Americans Act of 1965.” April 21, 2008. 

38. National Health Policy Forum. “Trading Places: Real 

Choice Systems Change Grants and the Movement to 

Community-Based Long-Term Care Supports.” May 30, 2007. 

39. “HHS Announces $8.8 Million for New Nursing 

Home Diversion Programs: Grants Help Seniors Maintain 

Independence.” U.S. Department of Health and Human 

Services. 14 Sep 2007. Web. 28 Feb 2010. <http://www.hhs. 

gov/news/press/2007pres/09/pr20070924a.html>. 

40. Administration on Aging. “Nursing Home Diversion 

Modernization Grants Program.” U.S. Department of Health 

and Human Services. Sep 2007. Web. 6 Mar 2010. <http:// 

www.cashandcounseling.org/about/news/20070926-103317/ 

AoANHDMGFactSheet.pdf>. 

41. Ibid. 

42. Dr. Wayne Giles. Feb. 19, 2009. Remarks to the 

NACRHHS. 

43. “History of Grant Programs.” Centers for Disease Control 

and Prevention. Web. 4 June 2009. <http://www.cdc.gov/ 

aging/states/history.htm>. 

44. Ibid. 

45 “More Seniors Are Learning To Use Computers.” RedOrbit, 

Inc.. 14 Mar 2008. Web. 19 Apr 2009. <http://www.redorbit. 

com/news/ technology/1295523/more_seniors_are_learning_ 

to_use_ computers/index.html>. 

46. Borade, Gaynor. “Difference between Dial Up and 

Broadband Connection.” www.buzzle.com. 30 Jun 2009. Web. 

1 Jun 2009. <http://www.buzzle.com/articles/differencebetween-dial-up-and-broadband-connection.html>. 

47. “Broadband Internet Adoption and Use: Dial-Up Versus 

Broadband Internet Use.” Broadband Internet’s Value for 

Rural America. Web. 18 Jul 2009. <http://www.ers.usda.gov/ 

publications/err78/err78c.pdf>. 

48. Copps, Michael J. Bringing Broadband to Rural America. 

Rep. Federal Communications Commission, 2009. Print 

49. Berger, Liza. “Rural Caregiving.” Today’s Caregiver. 

Jan. 2010. Web. 15 Jan. 2010. < http://www.caregiver.com/ 

channels/rural/articles/rural_caregiving.htm>. 

50. “The ‘Cash and Counseling Model’ Vision Statement.” 

Vision Statement. July 2006. Web. 5 May 2009. < http://www. 

cashandcounseling.org/resources/20060807-100150>. 

51. Ibid. 

52. “The Current State of Transportation for People with 

Disabilities in the United States.” National Council on 

Disability. 13 Jun 2005. Web. 26 Jan 2010. <http://www.ncd. 

gov/newsroom/publications/2005/pdf/current_state.pdf>. 

53. “Information for Senior Citizens.” www.HUD.gov. 08 Jan 

2010. U.S. Web. 4 Oct 2009. <http://www.hud.gov/groups/ 

seniors.cfm>. 

54. “Rural Development Multi-Family Housing Rentals.” 

United States Department of Agriculture. 21 Aug 2006. 

Web. 1 Jun 2010. <http://rdmfhrentals.sc.egov.usda.gov/ 

RDMFHRentals/propdispservlet?st=33&cnty=19&pr 

oj=1067>. 

55. “Rural Development Housing & Community Facilities 

Programs.” USDA. Web. 18 May 2009. <http://www.rurdev. 

usda.gov/rhs/common/indiv_intro.htm>. 

56. Affordable Health Care for America. Rep. Rural America 

ed. Washington: House Ways and Means Committee, 2009. 

Print. 

57. Steinwald, A. B. “Primary Care Professionals: Recent 

Supply Trends, Projections, and Valuation of Services.” 

Testimony before the Committee on Health, Education, 

Labor, and Pensions, U.S. Senate. Washington, D.C.: U.S. 

Government Accountability Office. 

58. “Exhibit 22. Estimated Requirements for Patient Care 

Physicians per 100,000 Population, by Patient Age and 

Physician Specialty, 2000.” Physician Supply and Demand; 

Projections to 2020. HRSA. October 2006. 

59. Skillman SM. Update: University of Washington 

WWAMI Rural Health Research Center. Presented at National 

Organization of State Offices of Rural Health Region E 

Meeting, Laramie, Wyoming. 20 August 2009 

60. Florizone, Allan. “SMA survey of rural physicians.” www. 

cma.ca. 1997. Web. 14 Mar 2010. <http://www.cma.ca/index. 

cfm/ci_id/37400/la_id/1.htm> 

61. The Physicians’ Foundation. “The Physicians’ Perspective: 

Medical Practice in 2008.” 2008. Boston, MA. 

62. National Residency Match Program. March 19, 2009. 

“Advance Data Tables: 2009 Residency Match.” 

63. Schneeweiss, R., R.A. Rosenblatt, S. Dovey, L. Hart, F.M. 

Chen, S. Casey, and G Fryer. February 2003. “The Effects of 

the 1997 Balanced Budget Act on Family Practice Residency 

Training Programs.” Journal of Family Medicine. Vol. 35, no. 

2. 93-9. 

37
 
The 2010 NACRHHS Report 

64. Sack, K. “In Massachusetts, Universal Coverage Strains 

Care.” The New York Times 5 Apr. 2008. Print. 

65. Merritt Hawkins & Associates. “Survey: Average Wait 

for a Doctor Appointment Over Two Months in Some Cities.” 

6 May 2009. Web. 30 May 2009. < http://www.ncpa.org/sub/ 

dpd/index.php?Article_ID=17954>. 

66.“Public Health Services Act Title VII and Title VIII.” 

American Public Health Association. Web. 7 July 2009. 

<http:// www.alpha.org/NR/rdonlyres/13E647B5-E51B-4A47-

91A8-652EE973A2DB/0/TitleVIIandTitleVIII.pdf.> 

67. Ibid. 

68. Landon, B. NRHA Testimony at Senate HELP Committee 

on Workforce Training Challenges. February 2008. 

69. “National Health Service Corps Scholarship.” U.S. 

Department of Health and Human Services. Web. 6 Oct 2009. 

<http://nhsc.hrsa.gov/scholarship/>. 

70. Affordable Health Care for America. Rural America ed. 

Washington: House Ways and Means Committee, 2009. Print. 

71. Health Resources and Services Administration. “Fiscal 

Year 2009 Justification of Estimates for Appropriations 

Committees.” Department of Health and Human 

Services. Web. 18 Feb 2010. <ftp://ftp.hrsa.gov/about/ 

budgetjustification09.pdf>. 

72. Bureau of Clinician Recruitment and service. “HRSA 

Program Specific Plan, American Recovery and Reinvestment 

Act, Health Professions Training Programs- $300 million.” 

US Department of Health and Human Services. Web. 25 June 

2009. <http://www.hhs.gov/recovery/reports/plans/nhsc.pdf>. 

73. Fryer, G. E., S.M. Dovey, and L.A. Green. “The effect of 

accredited rural training tracks. American Family Physician. 

Vol. 62, no. 22. 2002. 

74. Daniels, Z. M., B.J. Vanleit, B. J. Skipper, M.L. Sanders, 

and R.L. Rhyne. “Factors in recruiting and retaining health 

professionals for rural practice.” Journal of Rural Health. 23, 

no. 1. (Winter 2007): 62-71. Print. 

75. Pathman, D. E., B.D. Steiner, B. D. Jones. “Preparing 

and retaining rural physicians through medical education.” 

Journal of Academic Medicine. 74. (1999): 810-20. Print. 

76. Iglehart, J. K. “Medicare, Graduate Medical Education, 

and New Policy Directions.” New England Journal of 

Medicine. 359, no. 6 (August 7, 2008) 643-50. Print. 

77. Ibid. 

78. Hart, G., D. M Lishner, E.H. Larson, F.M. Chen, C.H. 

Andrilla, T. Norris, R. Schneeweiss, T. Henderson, and 

R. Rosenblatt. “Pathways to Rural Practice: A Chartbook 

of Family Medicine Residency Training Locations and 

Characteristics.” WA: WWAMI Rural Health Research Center. 

(2005). Print. 

79. Connor, R. A. , S.D. Hillson, and J.E. and Kralewski. 

“Association between rural hospitals’ residencies and 

recruitment and retention of physicians.” Academic Medicine. 

69, no. 6 (1994): 483-8. 

80. Catalano, R.A. “Investment in a Rural Residency Program: 

A Case Study.” Journal of Rural Health. 16, no. 3. (Summer 

2000): 224-229. 

81. Ibid. 

82. Ibid. 

83. Longenecker, R. (April 2009). Personal Communication. 

84. Longenecker, R. (April 2009). Personal Communication. 

85. “The Resident Physician Shortage Reduction Act of 2007” 

Govtrack.us. Web. 3 March 2009. <http://www.govtrack.us/ 

congress/bill.xpd?bill=s110-588>. 

86. Iglehart, J. K. “Medicare, Graduate Medical Education, 

and New Policy Directions.” New England Journal of 

Medicine. 359, no. 6 (August 7, 2008): 643-50 

87. Steinwald, A. B. “Primary Care Professionals: Recent 

Supply Trends, Projections, and Valuation of Services.” 

Testimony before the Committee on Health, Education, 

Labor, and Pensions, U.S. Senate. Washington, D.C.: U.S. 

Government Accountability Office. 

88. Towers, J. (February 2009). Remarks to the NACRHHS 

February Meeting. 

89 American Academy of Physician Assistants (October 6, 

2002). “2002 AAPA Physician Assistant Census Report.” 

Alexandria, VA. 

90. Thies, K.M., and D. Harper. “Medicare funding for nursing 

education: Proposal for a coherent policy agenda.” Nursing 

Outlook. (2004): 52, 297-303. 

91. Ibid. 

92. The Robert Graham Center. “What Influences Medical 

Student & Resident Choices.” Web. <http://www.grahamcenter.org/online/etc/medialib/graham/documents/publications/ 

mongraphs-books/2009/rgcmo-specialty-geographic.Par.0001. 

File.tmp/Specialty-geography-compressed.pdf>. 

93. “Letter to DHHS Secretary and Congress concerning 

primary care crisis and health care reform.” Council on 

Graduate Medical Education. Web. 5 May 2009. <http://www. 

cogme.gov/cogmeletter.htm>. 

94. Finerfrock, B. (February 2009). Remarks to the 

NACRHHS February Meeting. 

95. HRSA Geospatial Data Warehouse. (May 2009). 

“Designated Health Professional Shortage Areas (HPSA) 

Statistics.” 

96. Brand, M. (February 2009). “HHS Role and the Health 

Workforce.” Remarks to the NACRHHS February Meeting. 

97. Jordan, A. (May 2009). Personal Communication. 

98. American Nurses Association. “Title VIII: Funding for 

Nursing Workforce Development Programs.” Department 

of Government Affairs. American Nurses Association. 

Web. 25 Aug 2009. <http://www.nursingworld.org/ 

MainMenuCategories/ANAPoliticalPower/Federal/LEGIS/ 

TitleVIII.aspx>. 

38
 
The 2010 NACRHHS Report 

99. “Health Departments’ Use of International Medical 

Graduates In Physician Shortage Areas.” Health Affairs. Web. 

9 July 2009. < http://content.healthaffairs.org/cgi/content/ 

full/22/5/241>. 

100. NLM Gateway. “International Medical Graduate 

Physicians in America’s Smallest Rural Communities.” U.S. 

National Institution of Health. Web. 11 Jun 2009. <http:// 

gateway.nlm.nih.gov/MeetingAbstracts/ma?f=102275557. 

html>. 

101. Ibid. 

102. “Health Departments’ Use of International Medical 

Graduates In Physician Shortage Areas.” Health Affairs. Web. 

9 July 2009. < http://content.healthaffairs.org/cgi/content/ 

full/22/5/241>. 

103. Ibid. 

104 Schoen, Cathy, Robin Osborn, Sabrina K.H. How, Michelle M. Doty, and Jordon Peugh. “In Chronic Condition: 

Experiences Of Patients With Complex Health Care Needs, In 

Eight Countries, 2008.” Health Affairs 28.1 (2009): w1-w16. 

Web. 13 Nov. 2008. 

105 Ibid. 

106 JR, Pleis, Lethbridge-Çejku M. “Summary Health Statistics For U.S. Adults: National Health Interview Survey, 2006.” 

Vital Health Stat 10.235 (2007). Print. 

107 Glasgow, Nina, Lois Wright and Nan E. Johnson. Critical 

Issues in Rural Health. Ames: Blackwell, 2004. Print. 

108 Bennett, K. J., B. Olatosi, and J.C. Probst. “Health Disparities: A Rural – Urban Chartbook.” South Carolina Rural 

Health Research Center. Print. June 2008. 

109 JR, Pleis, Lethbridge-Çejku M. “Summary Health Statistics For U.S. Adults: National Health Interview Survey, 2006.” 

Vital Health Stat 10.235 (2007). Print. 

110 Glasgow, Nina, Lois Wright and Nan E. Johnson. Critical 

Issues in Rural Health. 

111 Bennett, Kevin J., Bankole Olatosi, and Janice C. 

Probst. Health Disparities: A Rural -- Urban Chartbook. 

112 “Fact Sheet: Federal Anti-Kickback Law and Regulatory 

Safe Harbors.” U.S. Department of Health and Human Services, Office of Inspector General. Web. <http://www.oig.hhs. 

gov/fraud/docs/safeharborregulations/safefs.htm>. 

113 “What Is The Anti-kickback Rule?” American Academy 

of Family Physicians. Web. 8 July 2009. <http://www.aafp. 

org/online/en/home/practicemgt/regulatory-compliance/ 

faqsstarkcompliance/antikickback.html>. 

114 “42 U.S.C.S. §1395nn.” Cornell University Law 

School. Web. 4 Feb. 2010. <http://www.law.cornell.edu/ 

uscode/42/1395nn.html>. 

115 “Social Security Act, Section 1877(d)(2).” Social Security 

Administration. Web. <http://www.ssa.gov/OP_Home/ssact/ 

title18/1877.htm>. 

116 “Social Security Act, Section 1886(d)(2)(D).” Social 

Security Administration. Web. <http://www.ssa.gov/OP_Home/ 

ssact/title18/1886.htm>. 

117 Susan Schalla and LaVerne Woods. May 2007. 

“IRS Guidance Clarifies That Tax-Exempt Hospitals 

May Share Health Information Technology With 

Physicians.” Web. <http://www.dwt.com/LearningCenter/ 

Advisories?find=24502#_ftn1>. 

118 Michaels, Matt. (June 9, 2009). Remarks to the 

NACRRHS, June Meeting. 

119 American Health Lawyers Association, Public Interest 

Committee. “A Public Policy Discussion: Taking the Measure 

of the Stark Law.” American Health Lawyers Association. 

Web. 7 Aug. 2009. <http://www.healthlawyers.org/Resources/ 

PI/Policy/Documents/Stark%20White%20Paper.pdf>. 

120 Ibid. 

121 “Overview: Conditions for Coverage (CfCs) and 

Conditions of Participation (CoPs).” Centers for Medicare 

and Medicaid Services. Web. <http://www.cms.hhs.gov/ 

CFCsAndCOPs/>. 

122 “Title 42--Public Health.” Code of Federal 

Regulations. Web. <http://edocket.access.gpo.gov/cfr_2002/ 

octqtr/42cfr485.616.htm>. 

123 Sasse, Bejmamin and Kerry, Weems. “Is Government 

Health Insurance Cheap?” Editorial. The Wall Street Journal 

14 Apr. 2009, A15 sec. Print. 

124 Miller, Mark and A. Bruce Steinwald. “Medicare Payment 

System Design: An Overview.” National Health Policy Forum. 

Jan. 2009. Presentation.
	

125 United States. Congressional Budget Office. “MIPPA
	

Report: Improving Medicare’s Chronic Care Demonstration 

Programs.” MedPAC. 1 Mar. 2009. Presentation. 

126 Ibid. 

127 “Critical Access Hospital Fact Sheet.” Centers for Medicare and Medicaid Services. Web. Apr. 2009. <http://www. 

cms.hhs.gov/MLNProducts/downloads/CritAccessHospfctsht. 

pdf>. 

128 “Critical Access Hospitals Certification and Compliance.” 

Centers for Medicare and Medicaid Services. Web. <http:// 

www.cms.hhs.gov/Certificationandcomplianc/04_CAHs.asp>. 

129 “Report to the Congress: Reforming the Delivery System.” Medicare Payment Advisory Commission. Web. June 

2008. <http://www.medpac.gov/documents/Jun08_EntireReport.pdf>. 

130 Lisk, Craig and Anne. Mutti. “Moving Toward Bundled 

Payments Around Hospitalizations.” Presentation to the 

Medicare Payment Advisory Commission. Nov. 2007. <http:// 

www.medpac.gov/transcripts/1107_bundling_hosp_AM_pres. 

pdf>. 

131 “Details for Medicare Participating Heart Bypass Center 

Demonstration.” Centers for Medicare and Medicaid Services. 

Web. <http://www.cms.hhs.gov/demoprojectsevalrpts/MD/ 

ItemDetail.asp?ItemID=CMS063472>. 

39
 
The 2010 NACRHHS Report 

132 Fisher, Elliott S., Douglas O. Staiger, Julie P.W. 

Bynum, and Daniel J. Gottlieb. “Creating Accountable Care 

Organizations: The Extended Hospital Medical Staff.” Health 

Affairs. January/February, 26.1 (2007): w44-w57. 

133 Norman, Jane. “MedPAC Probes Effectiveness of 

Accountable Care Organizations.” CQHealthbeat. Web. April 

20, 2009. <http://www.commonwealthfund.org/Content/ 

Newsletters/Washington-Health-Policy-in-Review/2009/ 

Apr/April-20-2009/MEDPAC-Probes-Effectiveness-ofAccountable-Care-Organizations.aspx>. 

134 Baucus, Max. “Call To Action: Health Reform 2009.” 

Web. 9 Nov. 2009. <http://www.hrsa.gov/healthit/factsheet. 

htm>.
 

135 “Transforming the Health Care Deliverty System: 

Proposals to Improve Patient Care and Reduce Health Care 

Costs.” April 29, 2009. Rural Policy Research Institute. Web. 

< http://www.rupri.org/Forms/HealthPanel_FinanceMay09_
	

Final.pdf>.
 

136 “Physician-Hospital Collaboration Demonstration.” 

Centers for Medicare and Medicaid Services. Web. <http:// 

www.cms.hhs.gov/DemoProjectsEvalRpts/downloads/ 

PHCD_646_Solicitation.pdf>. 

137 “Medicare Hospital Gainsharing Demonstration.” Centers 

for Medicare and Medicaid Services. Web. <http://www.cms. 

hhs.gov/DemoProjectsEvalRpts/downloads/DRA5007_Fact_ 

Sheet.pdf>. 

138. United States. General Accounting Office. Specialty 

Hospitals: Geographic Location, Services Provided, and 

Financial Performance. GAO-04-167. 22 October, 2003. Print. 

139 Berenson, Robert A. “Hospital-Physicians Relations: 

Cooperation, Competition, Or Separation?” Health Affairs 26.1 

(2007): W31-43. 5 Dec. 2006. Web. 

140 Bodenheimer, Thomas. “Coordinating Care — A 

Perilous Journey through the Health Care System.” The New 

England Journal of Medicine 358.10 (2008): 1064-071. Print. 

141 Xu, Liyan, Fred Ullrich, and Keith Mueller. “Loss 

of Community Pharmacies Since 2006: State Experiences.” 

RUPRI Center for Rural Health Policy Analysis. Apr. 2009. 

Web. <http://www.unmc.edu/ruprihealth/Pubs/b2009-3%20 

Loss%20of%20Comm%20Pharms.pdf>. 

142 “U.S. Code: Health Centers.” Cornell Legal Information 

Institute. Web. 3 March 2010. <http://www4.law.cornell.edu/ 

uscode/42/254b.html>. 

143. “Federally Qualified Health Centers Information Guide.” 

Rural Assistance Center. March 2010. Web. <http://www. 

raconline.org/info_guides/clinics/ fqhc.php>. 

144 Nason, Carroll. “Healthy Communities Access Program 

‘Lessons Learned’: National, State and Community 

Perspectives.” Web. <http://www.healthystepsalabama.com/ 

pdf/HCAPforhospitalcouncils.pdf>. 

145 United States. Department of Health and Human Services, 

Health Resources and Services Administration. “Report to 

Congress on Healthy Communities Access Program.” 

146 Ibid. 

147 “Program Assessment: Healthy Community Access 

Program.” U.S. Office of Management and Budget. 

Web. <http://www.whitehouse.gov/omb/expectmore/ 

summary/10003515.2005.html>. 

148 United States. Department of Health and Human Services, 

Health Resources and Services Administration. “Report to 

Congress on Healthy Communities Access Program.” 

40
 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CoP Conditions of Participation 

CfC Conditions for Coverage 

CFS Critical Shortage Facility 

CRH Custer Regional Hospital 

DGME Direct GME 

eICU Electronic Intensive Care Unit 

ED Emergency Department 

EHR Electronic Health Record 

EMR Emergency Medical Records 

EMS Emergency Medical Services 

EMTALA Emergency and Medical Treatment 

and Active Labor Act 

Flex Medicare Rural Hospital Flexibility 

FQHC Federally Qualified Health Center 

FTE Full-Time Equivalents 

FY Fiscal Year 

GAO General Accountability Office 

GIP General Inpatient Services 

GME Graduate Medical Education 

HCAP Healthy Communities Access 

Program 

HCBS Home and Community-based 

Services 

HIE Health Information Exchanges 

HIT Health Information Technology 

HHS U.S. Department of Health and 

Human Services 

HMO Health Maintenance Organization 

AAMC American Association of Medical 

Colleges 

COGME Council on Graduate Medical 

Education 

ACGME Accreditation Council for Graduate 

Medical Education 

ACO Accountable Care Organization 

ADL Activities of Daily Living 

ADRC Aging and Disability Resource 

Center 

AHEC Area Health Education Center 

AoA Administration on Aging, HHS 

ARRA American Recovery and 

Reinvestment Act 

APN Advanced Practice Nurses 

ARC Appalachian Regional Commission 

BCRS Bureau of Clinician Recruitment and 

Service, HRSA, HHS 

BIA Bureau of Indian Affairs, U.S. 

Department of Interior 

CDC Centers for Disease Control and 

Prevention, HHS 

DRC Delta Regional Commission 

BHPr Bureau of Health Professions, 

HRSA, HHS 

CAH Critical Access Hospital 

CAP Community Access Program 

CHC Community Health Center 

CMS Centers for Medicare and Medicaid 

Services, HHS 

The 2010 NACRHHS Report 

41 

Acronyms 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The 2010 NACRHHS Report 

HPSA	 Health Professional Shortage Area 

HRSA	 Health Resources and Services 

Administration, HHS 

HUD	 U.S. Department of Housing and 

Urban Development 

ICU	 Intensive Care Unit 

IME	 Indirect GME 

IMG	 International Medical Graduate 

MA	 Medicare Advantage 

MDS	 Minimum Data Set 

MedPAC	 Medicare Payment Advisory 

Commission 

MFP	 Money Follows the Person 

MMA	 Medicare Prescription Drug, 

Improvement, and Modernization Act 

of 2003 

MPPS	 Missouri Physician Placement 

Service 

MU	 University of Missouri’s School of 

Medicine 

NACRHHS	 National Advisory Committee on 

Rural Health and Human Services 

NCHN	 National Cooperative of Health 

Networks 

NF	 Nursing Facility 

NFCSP	 National Family Caregiver Support 

Program 

NHSC	 National Health Service Corps 

NSP	 Nursing Scholarship Program 

OAA	 Older Americans Act 

OASIS	 Outcome and Assessment 

Information Set 

ORHP Office of Rural Health Policy, 

 HRSA, HHS 

PA Physician Assistant 

PACE Program of All-Inclusive Care for the 

 Elderly 

PCMH Patient-Centered Medical Home 

PFS Physician Fee Schedule 

PHS Public Health Service 

PRIME Programs in Medical Education, 

 University of California 

RCRH Rapid City Regional Hospital 

REACH Racial and Ethnic Approaches to 

 Community Health 

RHC Rural Health Clinics 

RTT Rural Training Track 

RVU Relative Value Units 

SENIOR State-Based Examples of Network 

 Innovation, Opportunity, and 

 Replication 

SGR Sustainable Growth Rate 

SNP Special Needs Plans 

USDA U.S. Department of Agriculture 

VA U.S. Department of Veterans Affairs 

VHA Veterans Health Administration 

WWAMI Washington, Wyoming, Alaska, 

 Montana, and Idaho 

42
 
The 2010 NACRHHS Report 

Appendix: 

Key Federal Programs for Integration 

ORHP GRANTS TO COMMUNITIES
 

Program Budget 

(FY ‘09) Description 

Rural Health Network 

Development Planning 

HRSA 

$1.6 million 

One year of funding to rural organizations that seek to 

develop a formal integrated network with the purpose 

of improving the coordination of health services in rural 

communities. 

Rural Health Network 

Development 

HRSA 

$8.7 million 

Funding to support rural providers for up to three years 

that work together in formal networks and alliances 

to integrate administrative, clinical, financial, and 

technological functions. 

Rural Health Care Services 

Outreach 

HRSA $19.1 million* 

Funding to encourage the development of new and 

innovative health care delivery systems in rural 

communities that lack essential health care services. 

Requires the grantee to form a consortium with at 

least two additional and separately owned partners. 

Authorized by Section 330A of the Public Health Service 

(PHS) Act. 

*This was distrbuted across many grant programs and services, including the Network Development Planning and Network Development grants. 

ORHP GRANTS TO STATES 

Program Budget 

(FY ‘09) Description 

Medicare Rural Hospital 

Flexibility (Flex) 

HRSA $22.3 million 

Funding to support integration in rural communities. 

CAHs must all have upstream referral relationships. 

Additionally, Flex has a strong focus on integration of 

EMS with CAHs because CAHs often triage patients and 

refer them upstream or provide post-acute care in their 

swing beds. 

Critical Access Hospital 

- Health Information 

Technology 

HRSA 

$ 25 million 

(one time, 

2007) 

Funding to 16 State pilot networks to create health 

information exchanges (HIEs). Each network had to 

include at least one CAH and any ambulatory and 

specialty providers with which it regularly worked. 

43
 
 

The 2010 NACRHHS Report 

Appendix: 

Key Federal Programs for Integration 

HRSA GRANTS FOR COLLABORATION
 

Program Budget 

(FY ‘09) Description 

Community Access 

Program (CAP) and Healthy 

Communities Access 

Program (HCAP) 

HRSA 

$0 

(2000-2005) 

193 grants have supported 158 communities (34 of 

which were rural) in 42 States by facilitating provider 

integration and access to primary care for individuals 

who were uninsured or underinsured. Grants were 

awarded to providers with a low-income utilization rate 

of 25 percent or more and providers that traditionally 

serve the medically underserved. (Operated from 

2000-2005.) 

Health Center Controlled 

Networks 

HRSA $36.8 million 

Funding to improve operational effectiveness and 

clinical quality in CHCs through the provision of 

management, financial, technological and clinical 

support services. Many used the grants for HIT 

implementation. 

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