Department of Health and Human Servces 

OFFICE OF 

INSPECTOR GENERAL 

OFFICE FOR CIVIL RIGHTS' OVERSIGHT 

OF THE HILL-BURTON PROGRAM 

AUGUST 199 
OFFCE OF INSPECfOR GENRA 

The mission of the Offce of Inspector General (OIG), as mandated by Public Law 95-452, as amended, is to protect the integrity of the Department of Health and Human Servces' (HHS) programs as well as the health and welfare of beneficiaries served by those programs. This statutory mission is carred out through a nationwide network of audits, investigations, and inspections conducted by three OIG operating components: the Office of Audit Servces, the Offce of Investigations, and the Offce of Evaluation and Inspections. The OIG also informs 

the Secretary of HHS of program and management problems and recommends courses to 

correct them. 

OFFCE OF AUDIT SERVICE 

The OIG's Offce of Audit Servces (OAS) provides all auditing servces for HHS, either by conducting audits with its own audit resources or by overseeing audit work done by others. 

Audits examine the performance of HHS programs and/or its grantees and contractors in 

carryng out their respective responsibilties and are intended to provide independent 

assessments of HHS programs and operations in order to reduce waste, abuse, and mismanagement and to promote ecnomy and effciency throughout the Department. 

OFFCE OF INTIGATIONS 

The OIG's Office of Investigations (01) conducts criminal, civil, and administrative 

investigations of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of 

unjust enrichment by providers. The investigative effort of 01 lead to criminal convictions 

administrative sanctions, or civil money penalties. The 01 also oversees State Medicaid fraud 

control units which investigate and prosecute fraud and patient abuse in the Medicaid program. 

OFFICE OF EVALUATION AN INSPECfONS 

The OIG's Office of Evaluation and Inspections (OEI) conducts short-term management and program evaluations (called inpections) that focus on issues of concern to the Department 

the Congress, and the public. The findings and recommendations contained in these inspection 

report generate rapid, accurate, and up-to-date information on the efficiency, vulnerabilty, 

and effectivenes of departmental programs. This report was prepared in the Chicago Regional Offce under the direction of Wiliam C. Moran, Regional Inspector General and Natalie Con, Deputy Regional Inspector General. Project staff: 

REGION HEUAR1ES 

John M. Traczyk (Project Leader) Ruth Folchman


Thomas F. Komaniecki


Margaret Shell


To obtain a copy of this report, call the Chicago Regional Offce at (312) 353-4124. 
Department of Health and Human Servces 

OFFICE OF 

INSPECTOR GENERAL 

OFFICE FOR CIVIL RIGHTS' OVERSIGHT 

OF THE HILL-BURTON PROGRAM 

AUGUST 199 OEI-05-001 
EXECUTIVE SUMMAR 

PUROSE 

This inspection examines the effectiveness of the processes used by the Office for Civil Rights (OCR) to monitor compliance with the community servce obligation of health care 

facilties assisted by the Hil-Burton program. 

BACKGROUN 

In 1946, Congress passed the Hospital Survey and Construction Act, commonly known as the Hil-Burton Act. Since 1946, more than $4 bilion in Hil-Burton funds have aided 

nearly 6 900 hospitals and other health care facilities in 4 000 communities across the 

United States. 

Recipients of Hil-Burton grants agree to make available, in perpetuity, the servces offered by the constructed facility to all persons residing in their servce area. This 

agreement is commonly known as the Hil-Burton community servce obligation and prohibits a facilty from discriminating practices. Such practices include discrimination 

against patients when providing non-emergency servces and denial of emergency servces to persons unable to pay. The cooperation of facilties that have received Hil-Burton grants is important to achieving the Secretary s strategic goal to improve access to health care for all Americans. 

The OCR has responsibilty for ensuring compliance with several different civil rights and nondiscrimination statutes. In the 2-year period 1989 and 1990, OCR closed, under all of its authorities, 330 post-grant reviews involving discrimination against persons based on their medical condition, handicap, race, abilty to payor other factors. Thirt-six percent

were specifically for Hil-Burton compliance. When OCR conducts a post-grant review

they can assess facility compliance with all of the statutory provisions binding on the 

facility for which they have jurisdiction. Although, for reporting purposes, post-grant reviews are categorized under only one authority. 

During this same period, OCR received and processed 3 562 discrimination complaints.

Less than 4 percent of the complaints received by OCR specifically involve allegations of Hil-Burton noncompliance. 

MEODOLOY 

We intervewed OCR headquarters ' staff and OCR staff in the eight regional offices that 

account for most of the Hil-Burton workload. Data on the number of facilties 

investigated and the number of compliance reviews conducted was obtained from OCR 

headquarters. 
FIINGS 

Over the past 4 years, OCR has developed a comprehensive procedures manual for 

conduct of investigations and routine compliance reviews. These national guidelines

coupled with the checks and balances of supervsory review, have improved OCR investigative processes. Nevertheless, our inspection found that: 

Investigative procedures could be strengthened by using some unannounced visits. 

No formal or uniform follow-up procedures exist to ensure facilties take 

corrective action when they are found to be out of compliance. 

The OCR authority to enforce compliance with Hil-Burton regulations is limited. 

An opportunity exists for improving the investigative process by sharing staff 

expertise. 

RECOMMATIONS 

Medical facilties built with Hill-Burton funds are prohibited from discriminating through the community servce obligation. The efforts of OCR to enforce Hil-Burton and other 

legislation intended to prevent discrimination helps ensure health care access to a 

significant segment of the American public. 

To strengthen Hil-Burton enforcement efforts, OCR should: 

consider unannounced visits whenever possible to validate systems that facilties 

use in complying with the community servce obligation under the Hil-Burton 

program 

develop a follow-up system to monitor compliance agreements that ensures 

facilties take adequate and prompt action to bring their community servce 

programs into compliance 

seek legislative authority that allows for administrative action against facilties that 

fail to comply with their Hil-Burton community servce obligation or fail to take 

timely corrective action when their program is found to be out of compliance, and 

determine whether technical assistance guides and methodologies developed in 

individual regions can be shared nationally. 
An exit conference was held with OCR to discuss this inspection s findings and recommendations. At that meeting, OCR agreed in principle with the recommendations. 

Subsequently, OCR provided wrtten, technical comments which we considered in 

preparing this final report. 

The Assistant Secretary for Planning and Evaluation (ASPE) recommended that we delete 

recommendations callng for unannounced inspection visits unless they could be done cost 

effectively. We continue to believe that unannounced visits can be an effective 

enforcement tool. We do agree, and indeed had meant to emphasize, that their use 

should be selective. The ASPE was also not supportive of additional enforcement 

authority for OCR believing that Medicare funds could be suspended if Hil-Burton 

requirements were violated. We stil believe that the various enforcement tools that we 

have recommended would be useful to OCR and provide the flexibilty OCR needs to 

ensure compliance with Hil-Burton requirements. The complete text of OCR and ASPE comments can be found in Appendices A and respectively. 
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .... .. ......... . . . . . . . . . . . .. . .. . 

TABLE OF CONTENTS


PAGE 

.......................................... i


INODUCfON . 

FIINGS . . . . . . . . . . . . . . . . . . . 5


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


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


Enforcement Authority . . . . . . . 7


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


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


APPENICE


A: OCR Comments . . . . .. AB: ASPE Comments
 . . . . . . . . " B-
INTRODUCTION€

PUROSE 

This inspection examines the effectiveness of the processes used by the Office for Civil 

Rights (OCR) to monitor compliance with the community servce obligation of health 

care facilties assisted by the Hil-Burton program. 

BACKGROUN 

Lelatie Backgwu 

In 1946, Congress passed the Hospital Survey and Construction Act, commonly known as the Hil-Burton Act. Since 1946, more than $4 billon in Hil-Burton funds have 

aided nearly 6 900 hospitals and other health care facilties in 4 000 communities 

across the United States. 

The Hil-Burton Act authorized Federal grants to assist States and communities in 

constructing needed hospital and public health centers. Hil-Burton recipients are required to: 

provide a reasonable amount of uncompensated care to persons unable to 

pay, and 

make available, in perpetuity, the servces offered by the constructed facilty 

to all persons residing in the territorial area of the applicant. 

This second requirement is commonly referred to as the "community servce 

obligation. If a facilty continues operations without a change of status, OCR will 

continue to enforce the community servce obligation even though the facilty has completed its uncompensated care obligation. The OCR considers a change of status to occur when the initial Hill-Burton recipient transfers ownership or control to 

another entity. If control transfers to an ineligible entity (Le., a for profit corporation) the obligation to provide community servce terminates except under limited 

circumstances. 

Today, the Hil-Burton community servce obligation could playa vital role in ensuring access to the American health care system. The emergence of AIDS, the resurgence of other infectious diseases such as measles and tuberculosis coupled with efforts by 

government and private sector to control spiraling health care costs changed the health care environment in the United States. Limits on the amount paid for patient 

care, increased numbers of uninsured, misunderstandings of AIDS and inadequate 

resources to deal with the infectious disease epidemics has created the temptation for 

some facilties to transfer persons to publicly supported facilties or to refuse to 
...

provide emergency and other medical care.€

The Hi-Burton community servce obligation prohibits a facilty from:€

discriminating against patients when providing non-emergency servces;€

denying emergency servces to persons unable to pay; 

deciding not to participate in governmental (Federal, State, and local) third-part payer programs, if eligible to do SO 

discriminating against beneficiaries of governmental third-part payment


programs;€

making exclusionary admissions policies, including the exclusion of patients 

who do not have a physician with staff privileges at the facilty; and 

requiring a cash deposit at time of servce.€

The cooperation of facilties that have received Hil-Burton grants is important to€

achievig the Secretary s strategic goal to improve access to health care for all€

Americans.€

In December 1980, the HHS Secretary delegated to OCR the responsibility for ensuring facilty compliance with all aspects of the community servce obligation. In addition to their Hil-Burton responsibilties, OCR is also responsible for monitoring 

and ensuring compliance with Title VI of the Civil Rights Act of 1964, Section 504 of 

the Rehabilitation Act, the Age Discrimination Act and other laws designed to prevent discrimination. The OCR also coordinates its Hil-Burton activities with the patient 

dumping investigations conducted by the Health Care Financing Administration 

(HCF A) Offce of Inspector General.€

This study focuses on the processes used by OCR to monitor compliance with Hil-


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


are similar to the processes used to monitor all of the statutory provisions binding on€ facilties falling under OCR jurisdiction.€

Descrtin of Pres 

When OCR conducts a post-grant review, they can assess facilty compliance with all 

of the statutory provisions binding on the facilty but tyically select the strongest 

Federal statutes require that physicians affiated with Hill-Burton assisted facilites must also 

partcipate in governmental third-part payer programs. However 42 C.F.R. 124. 603(d)(2) states that to be in compliance with this requirement " a facility does not have to require all of its staff physicians to 

accept medicaid " 
statutes for which they have jurisdiction. For reporting purposes, post-grant reviews

are categoried under only one statutory authority. Post-grant reviews are generated internally within OCR and can be targeted based on triennial survey results, media interest, frequency of complaints, and other factors. Complaint investigations result from specifc allegations made by an individual or group of individuals. If a facilty has been a Hil-Burton recipient, its compliance with the community service obligation can be examined whenever OCR has reason to conduct a civil rights or discrimination 

review. 

The OCR mails all Hil-Burton assisted hospitals, nursing homes and other Hil-Burton 

assisted facilities providing health or social servces a standard reporting form. The 

information obtained from this form is used to determine facilties that potentially are 

in noncompliance with Hil-Burton regulations. Facilties that are potentially in noncompliance can be targeted for further review. In addition, individual regional 

offces can, and often do, target facilties for compliance reviews based on the number 

of complaints and other factors. 

The OCR uses a number of different techniques to validate facilty compliance with 

the Hil-Burton community servce obligation. During onsite reviews, OCR 

investigators attempt to visually observe the operations of specific areas of the facilty. 

They also examine facility notices, documents and usually will select a random sample 

of emergency room or other hospital records for review. In addition to these on site 

activities, investigators attempt to verify actual practice through third parties such a 

advocacy groups. Statements from facilty staff, patients and other parties, coupled with documents, provide the primary evidence used by OCR to determine compliance. 

In the 2 year period 1989 and 1990, OCR closed, under all of its authorities, 330 post- grant reviews involving discrimination against persons based on their medical 

condition, handicap, race, ability to payor other factors. Thirty-six percent of the reviews were conducted specifcally to ensure for Hil-Burton compliance. In addition 

to the post-grant reviews, OCR received and processed 3 562 discrimination 

complaints. 

If a facilty is found to be out of compliance, OCR undertakes negotiations with the 

facilty to brig its program back into compliance. When OCR and the facilty agree 

to a corrective plan of action, a wrtten agreement between OCR and the facility is executed. When the facilty has completed all of the corrective actions it notifies OCR 

and OCR offcially closes the monitoring of the case. When an agreement cannot be reached or the corrective actions are not implemented, the case can be referred to the 

Department of Justice (DOJ) for action. 
MEODOLOY€

The OCR has jurisdiction over civil rights and nondiscrimination codified in several 

statutes. Ths inspection is limited to OCR responsibilty for the oversight and€

monitoring of the Hil-Burton community servce obligation. This inspection did not look at how OCR handles each of the other authorities over which it has investigative jurisdiction. 

We intervewed OCR headquarters' staff and OCR staff in the eight regional offces 

that account for most of the Hil-Burton workload. The eight regional offces visited 

during this study were Boston, New York, Philadelphia, Atlanta, Chicago, Dallas 

Kansas City, and San Francisco.€

During our visit to the regional offces we gathered information on the flow of data 

and the handling of complaints and routine compliance reviews. We analyzed the 

processes used by OCR to ensure compliance with Hil-Burton provisions. 

Data on the number of facilties investigated by regional OCR offces was obtained.€

Similar data on the number of compliance reviews conducted by the regional offices 

was also obtained from OCR headquarters and from regional offces. The complaint and compliance review data collected from OCR systems were for the years 1989 and 

1990. 
FINDINGS€

The OCR has developed a comprehensive procedures manual for conduct of 

investigations and post-grant reviews. These national guidelines, coupled with the 

checks and balances of supervsory review, have greatly improved OCR compliance 

and investigative processes. 

Selection of facilties for post-grant reviews is made from each of the statutory areas over which OCR has investigative responsibilty. While reviews are opened under 

specific authorities, OCR may find durig the course of their investigation violations in 

areas other than the program under which the investigation was initiated. When this 

occurs, the case will be documented to reflect noncompliance with the appropriate 

statute. A case opened as a potential Hil-Burton violation may be closed indicating 

violations of Title VI of the Civil Rights Act of 1964; likewise, a case opened under 

Title VI could be closed with findings of noncompliance with the Hil-Burton 

community servce obligation. 

In 1989 and 1990, OCR completed 119 post-grant reviews specifically to ensure facilty 

compliance under Hil-Burton. During this same period, less than 4 percent of the 

562 complaints received and processed by OCR specifically involve allegations 

Hil-Burton noncompliance. Hil-Burton violations may have been examined during 

the course of other investigations. 

Each region has autonomy in the selection of facilities it will review. While criteria 

exists to identify facilities with high probabilty of being in violation of various civil 

rights and nondiscrimination statutes, each region can request deleting or adding 

facilities to reflect the critical issues affecting their region. For example, two regions have chosen to use complaint files and media articles to target facilties accused of 

using admissions policies that discriminate against AIDS patients. Another region is 

focusing on facilities that refuse to provide care to Medicaid patients while another is 

focusing on facilties that refuse to provide emergency care to uninsured patients. 

Findig #1: The OC inestigatie procures could be strengtened by the use of 

some unannounce viits. 

The investigative community and other oversight agencies have long recognized the 

deterrent effect of unannounced, random sight visits and audits. The mere possibilty 

of being selected at random for verification of information previously provided to the 

government has a positive effect on compliance. The possibilty of unannounced visits 

coupled with appropriate enforcement authority would provide an incentive for HilBurton facilties to monitor their operations to ensure compliance with civil rights 

statutes at all times and not just during announced regulatory visits. 
Once facilties have been selected for review, OCR tyically conducts an announced€

onsite visit to investigate the community servce programs operated by Hil-Burton€

grantees. The same procedure applies to complaints filed against facilties alleging 

communty servce noncompliance. As previously mentioned, OCR investigations frequently determine whether a facilty might be in violation of other civil rights 

nondiscrimination statutes. 

According to OCR staff, most investigations and compliance reviews are conducted on 

site with visits to facilties scheduled in advance. This is done to ensure that 

administrative and other facilty staff are present to answer any questions OCR staff 

may have regarding the way a facility implements its community servce obligation 

under the Hil-Burton program. Advance scheduling of on site visits enables facilties 

to collect documentation about their community servce program and to have it 

available for OCR examination.€

While we did not independently investigate this, OCR staff felt that announced visits 

can provide facilities with enough lead time to ensure that OCR investigators will find 

nothing wrong with their community servce obligation program. Announced visits 

may alter the way a facilty handles its community servce obligation for that brief 

period when OCR is onsite. 

Findig #2: No formal or unorm follow-up procdures exit to ensure facities tae 

correcte acton when they are found to be out of compliance. 

Facilities whose community servce programs are found to be out of compliance are 

sent a letter of findings specifyg the corrective actions to be taken. During 1989 and 

1990, 46 percent (55 of 119) of the post-grant reviews required facilities to take some remedial action to bring their community servce program into compliance. More often than not, corrective actions were discussed with these facilties before a formal 

letter of findings was issued by OCR. In many cases, OCR and facilties have 

negotiated settlement agreements designed to bring the facility's community servce 

program back into compliance before an offcial notice of findings is sent to the€

facility. If a compromise cannot be reached or a facilty refuses to take corrective€

action, OCR regional offces must refer the case to OCR headquarters for a decision€

on whether to pursue legal action through DOJ. 

We found wide variance in how individual OCR staff monitor facilties that have 

agreed to take corrective action on findings of noncompliance. The data system maintained by OCR headquarters does enable the regional office to input a follow-up 

action date. However, regional offce staff told us that untimely updating of data 

bases by the region, coupled with a lack of uniform definitions and standardized 

procedures, deterred them from using the system developed by OCR headquarters. 

Consequently, each region, and often individuals within the region, have developed their own personal systems that they use to remind themselves to follow up on a 

facility' s efforts to bring their community servce program into compliance. 
It was our overall impression, from discussions with OCR staff, that while 

investigations were conducted conscientiously, follow-up actions were viewed as 

nonproductive, if not undesirable, work. In almost all cases, a letter or other 

documentation from the Hill-Burton facility was accepted as suffcient evidence that 

the facilty had undertaken corrective action. Very few corrective actions are verified 

through third parties or by onsite visits. 

Findig #3: The OC authority to enforce compliance with Hi-Buron regulations is lited. 

Unlike Civi Monetary Penalties and sanction authorities available to other 

Department programs, such as Medicare and Medicaid, the OCR has no such 

administrative remedies to ensure that recalcitrant facilties bring their community servce programs into compliance. The Medicare program also has the authority to 

suspend government funds pending the resolution of investigations. 

The lack of enforcement authority leaves OCR with two alternatives, either reach settlement with the noncompliant facilty or refer the case for further action. Since 

OCR has little clout to force compliance, settlements between regional offices and 

facilties may not be suffcient to ensure that a facilty does not discriminate against 

patients unable to pay for medical care. Further action against a facilty requires that

the regional offce case be sent to OCR headquarters for consideration and referral to 

DOJ. The absence of suffcient internal enforcement options creates delays in resolving problems and hinders OCR's abilty to force compliance. 

Findig #4: An opportty exits for improvig the investigatie process by sharg sta exprt. 

During our regional office visits, we found individual staff members and regions that 

have developed techniques that augment the national procedures. Several have 

developed their own technical assistance gudes and other investigative tools. They have also developed techniques to faciltate compliance reviews and complaint 

investigations. In the Philadelphia regional offce, we found a system to coordinate 

complaints received by HCF A and OCR. In the San Francisco regional office we 

found a regional training manual. These guides and methodologies are not shared

with other regional offce staff and, in most cases, are confined to the region that 

developed them.

RECOMMENDATIONS


Medical facilties built with Hill-Burton funds are prohibited from discriminating 

through the community servce obligation. If it were not for this and other legislation preventing discrimination and the efforts of OCR to enforce legislation a significant 

segment of the American public would find it even more diffcult to obtain medical 

care. 

To strengthen Hil-Burton enforcement efforts OCR should: 

1) Consider unannounced visits whenever possible to validate systems that facilties 

use in complying with the community servce obligation under the Hil-Burton 

program. 

Advance notice reduces the amount of time reviewers spend in the field 

and ensures that appropriate documentation will be available for reviewers. 

However, arrving a day early, or conducting an unannounced onsite visit at 

one facilty while doing an announced visit at another, would not only 

provide a truer picture of facility operations but also have a deterrent 

effect on other facilties. 

2) Develop a follow-up system to monitor compliance agreements that ensures 

facilties take adequate and prompt action to bring their community servce 

programs into compliance. 

While the current system used by OCR has the capabilty of generating 

notices that follow-up action is needed, it is not currently used to do so 

because the monitoring section of the case information system may not be 

updated in a timely manner by all regional offices. The OCR should 

develop a uniform regional system, or update the current system more 

frequently, to ensure follow-up actions are taken. 

3) Seek legislative authority that allows for administrative action against facilties that 

fail to comply with their Hil-Burton community servce obligation or fail to take 

timely corrective action when their program is found to be out of compliance. 

The abilty to assess civil monetary penalties, impose sanctions and restrict 

a facilty's receipt of Federal grants and other payments would have a 

deterrent effect on facilties and strengthen OCR' s abilty to bring 

recalcitrant facilties and repeat offenders into compliance. 
4) Determine whether technical assistance guides and methodologies developed in 

individual regions can be shared nationally. 

Other investigative agencies share investigative tools and methodologies 

developed by peers. The OCR should explore methods that would enable 

them to share the expertise developed in one regional office with other 

regional office staff. 

AGENCY CO~NT 

We received comments on our draft report from OCR and the Assistant Secretary for 

Planning and Evaluation (ASPE). 

Prior to our finalizing this report we met with OCR to discuss our findings and 

recommendations. At that meeting, OCR agreed in principle with our report findings 

and recommendations. 

The ASPE recommended that we delete our recommendation that OCR conduct 

unannounced inspection visits. They feel that unannounced visits are too costly to warrant their use. The ASPE also feels that our recommendation that OCR seek 

legislative authority that would allow them to take administrative action against 

facilities is premature since other options may already be available. The ASPE 

specifically mentions cutting off Medicare funds as an alternative. The full text of 

ASPE' s comments can be found in Appendix B. 

Our final report has been modified to incorporate the technical comments offered by 

both agencies. The full text of OCR's comments can be found in Appendix A. 

OIG REPONSE TO COMM ON TH DRA REPORT 

We have discussed with OCR how unannounced visits might be conducted using 

existing resources. We did not propose extensive use of unannounced visits by OCR. 

Our suggestion is that OCR staff conduct unannounced compliance visits to nearby 

facilities at the completion of regularly scheduled inspection visits. Such visits would 

not be an indepth analysis such as that conducted at scheduled inspections. The

unannounced visits would be limited to time available. Compliance would be observed 

and if time permtted or severity of infractions warranted a more indepth investigation

would be undertaken. 

Unannounced visits playa key role in ensuring that facilties are vigilant in complying 

with their community servce obligation. The IRS requires that tax returns be fied 

and that records be maintained to substantiate returns. No such provision exists that

would require hospitals to document and maintain records on every person that may 

have sought, but not received, medical care from them. How then does one ensure 
that persons in need of medical care have not been denied care or that a facilty acted 

in such a way as to discourage a person from pursuing care at their facilty? To deter 

would be violators the IRS uses random audits in addition to auditing records of 

taxayers whose returns fail certain edit screens. 

Regarding cutting off Medicare/Medicaid funds, we continue to believe that additional 

enforcement authority would be usefu to OCR. We believe that such authority would 

provide the flexibilty OCR needs to ensure compliance with Hil-Burton requirements. 
APPENDIX A 

OFFCE FOR CI RIGHT CO~NT ON TH DRA REPORT 
.... . 

. . . . . .

" 'OC"€

DEPARTMENT Of HEALTH a. HUMAN SERVICES Of of the Seretar 

Office for Civil Rights 

Washington, D.C. 20201€

DATE 24 JUL 1992 

FROM€ Edward Mercado

Director /J Office f 1 Rf 

SUBJECT:€ OIG Draft Report: Office for Civil Rights Oversight of the Hill-Burton Program , OEI-05-90-0026l 

Emilie Baebel

Chief

Public Heal th and Human Services Branch€ Office of the Inspector General€

This is in reply to your July 8, 1992 request for OCR comments regarding the above-referenced report. 

In both the Executive Sumary and at page one , the report refers to the Hospital Survey and Construction Act, passed in 1946 , and describes it as requiring provision of community services to all persons residing or employed in a facility'

Act s service area. This , commonly known as Hill-Burton, is codified in Title VI of the Public Health Service Act. Ti tIe VI does not require provision of communi ty services to those employed in the service area. The communi ty services requirement for those employed in the service 

area applies only to recipients of assistance under Title XVI of 

the Public Health Service Act , enacted in 1974. 

The third paragraph of page one closes: " If control transfers to an sic) noneligible entity... OCR will not require the new owner to 

honor the community service obligation. " This sentence may imply that OCR has discretion to excuse a new owner from honoring an obligation. Transfer to an ineligible entity terminates the obligation , except under limited circumstances. 

The first sentence of the third paragraph on page two , which begins: " Since January 1980 , pursuant to an MOA... , OCR has been responsible for monitoring, is misleading. This sentence should begin: " In December 1980, Secretary Patricia Harris delegated to OCR the responsibility of insuring compliance with all aspects of. 

On page two , the draft report lists a number of statutes which OCR moni tors and enforces. This list includes "the Consolidated Omnibus Reconciliation Act of 1986 (patient dumping). OCR is not€ responsible for monitoring and ensuring compliance with the Act€

although OCR coordinates its Hill-Burton activities with the COBRA

acti vi ties of HCFA and OIG. 

A -
Page 2 - OCR Comments 

Footnote one on page two states that (p)hysicians affiliated with Hill-Burton assisted facili ties must also participate in governmental third-party payer programs. This incorrectly suggests that all physicians are required to participate in these 

programs. See 42 C. F. R. S 124. 603 (d) (2) (" To be in compliance a facili ty does not have to require all of its staff physicians to 

accept medicaid" 

On page six , the phrase " to a compromise designed" in paragraph one, Finding #2 , should be omitted. OCR does not compromise with

enforcement of the law. We do negotiate settlement agreements. 

In the next paragraph , still on page six , sentence three begins: However , regional office staff told us that untimely updating. The phrase, " in the region " should be inserted after " untimely updating. " 

Related to this, in paragraph two of the second Recommendation 

page eight, the phrase it is not currently used to do so because the. . . " should continue with " moni toring section of the case

information system may not be updated in a timely maner by all regional offices, instead of " system is not updated timely. 

Finally, the last sentence of Finding #3, page seven , in discussing

cases referred to DOJ for enforcement, states: " Historically, DOJ has accepted few cases, leaving OCR with few options to force

compliance. " This sentence inaccurately suggests that DOJ has

routinely declined to enforce cases referred by OCR. 

Please continue to apply our previous comments on the draft report 

where appropriate. 

You may contact Marcella Haynes at 619-0671 if you have any

questions or comments. 

Thank you for the opportunity to review the draft report. 

A -€
APPENDIX 

ASISAN SECRTARY FOR PLAG AN EVALUATION COMM ON TH DRA REORT 
....

"'Ir. 

DEPARTMENT OF HEALTH a. HUMAN SEJVICES€ 0t of th s... , 

9 19 WIIIg. D.C- 201 

TO:€ Richard P. Kusserow 

Inspector General 

FROM:€ Assistant Secretary for

Planning and Evaluation 

SUBJECT: OIG Draft Report on OCR Hill-Burton Oversight 

This report deals with OCR' s enforcement of the Hill-Burton


requirement that hospitals serve commnity residents. I


pleased that OIG has found such a considerable improvement in OCR
 investigative reviews. I agree with most findings. However, I recommend some changes, as follows: 

The draft report recommends unannounced inspection visits.

A scheduled visit assures that hospital staff and records
 are readily available without delay. It is hard to believe


that there is significant extra deterrent value if the visit 

is unscheduled. One analogy is tax compliance, where IRS


audits are carefully scheduled in advance and rarely or


never unannounced. Furthermore, unannounced inspections consume addi tional resources and decrease the total numer 

of inspections possible. If a substantial cost-


effectiveness rationale specific to frequent Hill Burton


violations cannot be developed, this finding and


recommendation should be dropped.


The report finds that enforcement sanctions are limited, and
 recommends legislation to add civil money penalties. While 

I agree that the "H- bomb" of prosecution by the Justice


Department is a weak sanction, it is my understanding that


Medicare funds can be cut off if the institution does not€ comply. OCR and HCFA should develop procedures to enable 

effective use of this more practical sanction, and explore


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


explored. 

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


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

cc: Ed Mercado