It appears that well over two-thirds of the areas that would no longer be designated will be in rural and frontier areas, indicating a possible bias in the proposed methodology. The large majority of de-designated areas have residents that will continue to have unmet needs. Implicit in the proposed regulations is the desire to reduce Medicare spending. However, it is generally recognized that more health-care dollars are spent in the urban areas of the United States than in the rural areas. For example, in North Dakota, almost 78 percent of Medicare dollars spent for hospital services were attributed to seven hospitals in four cities.
Percentages are comparable in other rural Western states.
Accordingly, the relative Medicare savings from the new criteria would be small. If the proposed approach is implemented, it could lead to a large federal disinvestment in Western states, a reduction of funding that would require increased state and local efforts to maintain the current level of activity. HRSA and the state's partnership arrangement that assures alignment of federal and state support for community health services would be disrupted by the proposed methodology in that state investments in community health systems would be treated separately from federal resources. This will likely lead to some areas losing designation where there are programs receiving state resources, making them ineligible for ongoing federal support. The proposed methodology will require states to conduct expanded data collection for purposes of assuring accurate designation of underserved areas and populations.