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| <title> - THE NEED FOR BETTER FOCUS IN THE RURAL HEALTH CLINIC PROGRAM</title> | |
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| [House Hearing, 105 Congress] | |
| [From the U.S. Government Publishing Office] | |
| THE NEED FOR BETTER FOCUS IN THE RURAL HEALTH CLINIC PROGRAM | |
| ======================================================================= | |
| HEARING | |
| before the | |
| SUBCOMMITTEE ON HUMAN RESOURCES | |
| of the | |
| COMMITTEE ON GOVERNMENT | |
| REFORM AND OVERSIGHT | |
| HOUSE OF REPRESENTATIVES | |
| ONE HUNDRED FIFTH CONGRESS | |
| FIRST SESSION | |
| __________ | |
| FEBRUARY 13, 1997 | |
| __________ | |
| Serial No. 105-5 | |
| __________ | |
| Printed for the use of the Committee on Government Reform and Oversight | |
| U.S. GOVERNMENT PRINTING OFFICE | |
| 39-659 WASHINGTON : 2002 | |
| _____________________________________________________________________________ | |
| For Sale by the Superintendent of Documents, U.S. Government Printing Office | |
| Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800 | |
| Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001 | |
| COMMITTEE ON GOVERNMENT REFORM AND OVERSIGHT | |
| DAN BURTON, Indiana, Chairman | |
| BENJAMIN A. GILMAN, New York HENRY A. WAXMAN, California | |
| J. DENNIS HASTERT, Illinois TOM LANTOS, California | |
| CONSTANCE A. MORELLA, Maryland ROBERT E. WISE, Jr., West Virginia | |
| CHRISTOPHER SHAYS, Connecticut MAJOR R. OWENS, New York | |
| STEVEN H. SCHIFF, New Mexico EDOLPHUS TOWNS, New York | |
| CHRISTOPHER COX, California PAUL E. KANJORSKI, Pennsylvania | |
| ILEANA ROS-LEHTINEN, Florida GARY A. CONDIT, California | |
| JOHN M. McHUGH, New York CAROLYN B. MALONEY, New York | |
| STEPHEN HORN, California THOMAS M. BARRETT, Wisconsin | |
| JOHN L. MICA, Florida ELEANOR HOLMES NORTON, Washington, | |
| THOMAS M. DAVIS, Virginia DC | |
| DAVID M. McINTOSH, Indiana CHAKA FATTAH, Pennsylvania | |
| MARK E. SOUDER, Indiana TIM HOLDEN, Pennsylvania | |
| JOE SCARBOROUGH, Florida ELIJAH E. CUMMINGS, Maryland | |
| JOHN SHADEGG, Arizona DENNIS KUCINICH, Ohio | |
| STEVEN C. LaTOURETTE, Ohio ROD R. BLAGOJEVICH, Illinois | |
| MARSHALL ``MARK'' SANFORD, South DANNY K. DAVIS, Illinois | |
| Carolina JOHN F. TIERNEY, Massachusetts | |
| JOHN E. SUNUNU, New Hampshire JIM TURNER, Texas | |
| PETE SESSIONS, Texas THOMAS H. ALLEN, Maine | |
| MIKE PAPPAS, New Jersey ------ | |
| VINCE SNOWBARGER, Kansas BERNARD SANDERS, Vermont | |
| BOB BARR, Georgia (Independent) | |
| ------ ------ | |
| Kevin Binger, Staff Director | |
| Daniel R. Moll, Deputy Staff Director | |
| Judith McCoy, Chief Clerk | |
| Phil Schiliro, Minority Staff Director | |
| ------ | |
| Subcommittee on Human Resources | |
| CHRISTOPHER SHAYS, Connecticut, Chairman | |
| VINCE SNOWBARGER, Kansas EDOLPHUS TOWNS, New York | |
| BENJAMIN A. GILMAN, New York DENNIS KUCINICH, Ohio | |
| DAVID M. McINTOSH, Indiana THOMAS H. ALLEN, Maine | |
| MARK E. SOUDER, Indiana TOM LANTOS, California | |
| MIKE PAPPAS, New Jersey BERNARD SANDERS, Vermont (Ind.) | |
| STEVEN SCHIFF, New Mexico THOMAS M. BARRETT, Wisconsin | |
| Ex Officio | |
| DAN BURTON, Indiana, HENRY A. WAXMAN, California | |
| Lawrence J. Halloran, Staff Director and Counsel | |
| Doris F. Jacobs, Associate Counsel | |
| Robert Newman, Professional Staff Member | |
| Marcia Sayer, Professional Staff Member | |
| R. Jared Carpenter, Clerk | |
| Ron Stroman, Minority Professional Staff | |
| C O N T E N T S | |
| ---------- | |
| Page | |
| Hearing held on February 13, 1997................................ 1 | |
| Statement of: | |
| Buto, Kathleen, Associate Administrator for Policy, Health | |
| Care Financing Administration, Department of Health and | |
| Human Services; Marilyn H. Gaston, M.D., Director, Bureau | |
| of Primary Health Care, Health Resources and Services | |
| Administration, Department of Health and Human Services, | |
| accompanied by Dena Puskin, Acting Director, Office of | |
| Rural Health Policy, Health Resources and Services | |
| Administration............................................. 45 | |
| Finerfrock, Bill, executive director, National Association of | |
| Rural Health Clinics; Tom Harward, physician assistant and | |
| executive director, Belington Clinic, Belington, WV; and | |
| Robert J. Tessen, M.S., co-founder and first president, | |
| Texas Association of Rural Health Clinics, National Rural | |
| Health Association......................................... 89 | |
| Steinhardt, Bernice, Director, Health Service Quality and | |
| Public Health, General Accounting Office, accompanied by | |
| Frank Pasquier, Assistant Director, Health Issues, Seattle | |
| office; Lacinda Baumgartner, evaluator, Health Issues, | |
| Seattle office; and George Grob, Deputy Inspector General | |
| for Evaluation and Inspections, General Accounting Office.. 4 | |
| Letters, statements, etc., submitted for the record by: | |
| Buto, Kathleen, Associate Administrator for Policy, Health | |
| Care Financing Administration, Department of Health and | |
| Human Services, prepared statement of...................... 50 | |
| Finerfrock, Bill, executive director, National Association of | |
| Rural Health Clinics, prepared statement of................ 93 | |
| Gaston, Marilyn H., M.D., Director, Bureau of Primary Health | |
| Care, Health Resources and Services Administration, | |
| Department of Health and Human Services, prepared statement | |
| of......................................................... 60 | |
| Grob, George Deputy Inspector General for Evaluation and | |
| Inspections, General Accounting Office, prepared statement | |
| of......................................................... 20 | |
| Harward, Tom, physician assistant and executive director, | |
| Belington Clinic, Belington, WV, prepared statement of..... 112 | |
| Steinhardt, Bernice, Director, Health Service Quality and | |
| Public Health, General Accounting Office, prepared | |
| statement of............................................... 8 | |
| Tessen, Robert J., M.S., co-founder and first president, | |
| Texas Association of Rural Health Clinics, National Rural | |
| Health Association, prepared statement of.................. 118 | |
| THE NEED FOR BETTER FOCUS IN THE RURAL HEALTH CLINIC PROGRAM | |
| ---------- | |
| THURSDAY, FEBRUARY 13, 1997 | |
| U.S. House of Representatives, | |
| Subcommittee on Human Resources, | |
| Committee on Government Reform and Oversight, | |
| Washington, DC. | |
| The subcommittee met, pursuant to notice, at 1:15 p.m., in | |
| room 2203, Rayburn House Office Building, Hon. Christopher | |
| Shays (chairman of the subcommittee) presiding. | |
| Present: Representatives Shays, Snowbarger, Souder, Pappas, | |
| Towns, and Kucinich. | |
| Staff present: Lawrence J. Halloran, staff director and | |
| counsel; Doris F. Jacobs, associate counsel; Robert Newman, and | |
| Marcia Sayer, professional staff members; R. Jared Carpenter, | |
| clerk; Ron Stroman, minority professional staff; and Jean Gosa, | |
| minority staff assistant. | |
| Mr. Shays. I will call this hearing to order. | |
| The Rural Health Clinic Program is adrift. Drawn off course | |
| by financial cross-currents and a weak hand at the helm, the | |
| program lost sight of its core mission: improved access to | |
| primary health care by Medicare and Medicaid beneficiaries in | |
| rural areas. Today, the subcommittee asks how the Rural Health | |
| Clinic Program lost its focus and grew dramatically away from | |
| truly underserved areas into less rural and suburban locations. | |
| The rapid growth in the number of rural health clinics | |
| since 1990 caught the attention of both the General Accounting | |
| Office, GAO, and the Health and Human Services Department, HHS, | |
| Inspector General, the IG. Through separate investigations, the | |
| two reached strikingly similar conclusions: rural health | |
| clinics are growing for the wrong reasons, in the wrong places, | |
| and at substantial cost to Medicare and Medicaid programs. | |
| Their testimony today will describe a program distorted by a | |
| focus on money rather than medicine. | |
| In launching the program in 1977, Congress permitted cost- | |
| based reimbursement of primary care doctors as well as mid- | |
| level practitioners, physician assistants, nurse practitioners, | |
| and nurse midwives, to induce the expansion of health care | |
| delivery into rural areas. The higher reimbursement rates made | |
| rural Medicare practices financially viable. | |
| In later years, as Medicare and Medicaid moved away from | |
| cost-based reimbursement to lower, fixed fee schedules in other | |
| areas, rural health clinics became one of the last | |
| opportunities for doctors and hospitals to get the higher | |
| payments. | |
| It appears this financial incentive, more than any other | |
| factor, drove the growth of rural health clinics after 1990 and | |
| tilted that growth away from independent clinics toward those | |
| owned and operated as part of a hospital or nursing home. In | |
| 1990, less than 10 percent of the 600 rural health clinics | |
| nationwide were provider or facility based. Today, they | |
| represent almost half the Nation's 3,000 rural health care | |
| clinics, and their growth continues. | |
| The GAO also found many rural health clinics were formed | |
| through the purchase or conversion of existing medical | |
| practices, rather than through the extension of care to those | |
| without adequate access. In many instances, the rural health | |
| clinics designation became little more than an accounting | |
| gimmick. The result was not better rural health care, just a | |
| healthier bottom line for some suburban doctors and hospitals. | |
| Different program management and broad eligibility criteria | |
| also facilitated, perhaps even accelerated, this costly form of | |
| growth. | |
| The Health Care Financing Administration, HCFA, decided it | |
| would be easier to reimburse facility-based rural health | |
| clinics the same way Medicare pays for other outpatient | |
| departments. That decision proved very costly. Unlike payments | |
| to independent rural health clinics, reimbursement to provider- | |
| based clinics are not capped, not reviewed for reasonableness, | |
| and may include institutional overhead costs shifted from a | |
| facility's other operations. We asked the agency to address | |
| this policy and their plans to control Rural Health Clinic | |
| Program costs in testimony today. | |
| At the same time, the Health Resources and Services | |
| Administration, charged with the designation of medically | |
| underserved areas and health professional shortage areas, where | |
| rural health clinics may locate, failed to update those key | |
| indicators to reflect current areas of need. Certification of | |
| one, or two, or any number of clinics in an area has little or | |
| no impact on its designation status. The availability of mid- | |
| level practitioners, the very heart of the Rural Health Clinic | |
| Program, has never been factored into the designation formula. | |
| As a result, we have no way of knowing where the Rural | |
| Health Clinic Program is succeeding or where it needs to go | |
| next to meet real needs. Testimony from the agency today will | |
| address how rural health care access can be measured more | |
| accurately and more often. | |
| Finally, we will hear from rural health clinic association | |
| representatives and testimony from an independent clinic | |
| operator on how to extend the reach of Medicare and Medicaid | |
| into isolated rural areas more efficiently and effectively. | |
| For me, this type of hearing epitomizes good, constructive | |
| oversight. A 20-year-old program, targeted to meet rural health | |
| care needs, is found to be missing its mark. Through the | |
| process of thorough investigation, open public discussion, and | |
| the cooperation of the executive and legislative branches, we | |
| can recalibrate the program's trajectory and put it back on | |
| course. | |
| It may take additional hearings to clarify the | |
| administrative and legislative actions needed to focus the | |
| Rural Health Clinic Program on the rural elderly, the poor, and | |
| the children who truly need better access to Medicare and | |
| Medicaid. We are committed to the task, and I am grateful to | |
| all our witnesses today for their help in this effort. | |
| I welcome all of you. | |
| At this time, I would turn to the gentleman from Cleveland, | |
| if he has a statement he would like to make, and then I will | |
| turn to my colleague, the vice chairman. | |
| Mr. Kucinich. I just want to say, Mr. Chairman and members | |
| of the committee, what a pleasure it is to be on this | |
| subcommittee with the Chair. I look forward to a productive | |
| relationship, and I certainly appreciate the chance to be here. | |
| Thank you. | |
| Mr. Shays. I thank the gentleman. | |
| Mr. Snowbarger. I will forego any opening remarks. | |
| Mr. Shays. Well, we are eager to begin. We have a great | |
| committee, some wonderful new Members. This subcommittee, in | |
| the last session, had 52 hearings, and I felt that we not only | |
| had hearings, but we acted on what we learned. So we're going | |
| to learn a lot today, and we look forward to what we learn. | |
| Hopefully, we can all, collectively, make a contribution. | |
| Before actually calling on you, Mr. Towns is the ranking | |
| member of this committee and, frankly, an equal partner in this | |
| process. So, at this time, if he can catch his breath, we are | |
| going to call on you, if you'd like to make a statement. | |
| Mr. Towns. Thank you very much, Mr. Chairman. | |
| Access to adequate primary health care is a critical need | |
| in rural America. While I represent an urban district in | |
| Brooklyn, NY, I was born in a rural community in North | |
| Carolina, so I know personally the importance of this issue. I | |
| also know that the lack of primary health care in rural | |
| communities is also faced every day in inner city areas like | |
| Brooklyn. In both cases, there is a dangerous shortage of | |
| trained primary health care professionals, and we should never | |
| lose sight of that. That is why I support the goals of the | |
| Rural Health Clinic Program. | |
| This program was designed to attract and retain primary | |
| care providers and assistants to rural communities around the | |
| country. Unfortunately, as GAO has discovered, there appears to | |
| be widespread waste and abuse within this program. Even more | |
| disturbing to me is the fact that Medicare and Medicaid | |
| payments to rural health clinics are increasingly benefiting | |
| well-staffed, financially well off clinics in suburban areas | |
| that already have extensive health care delivery systems in | |
| place. That is a real concern. | |
| As the GAO points out, there are numerous rural underserved | |
| communities which desperately need the rural health clinics, | |
| but there are virtually no efforts being made to locate rural | |
| health clinics in these areas. Instead, more populated suburban | |
| areas are taking advantage of the large financial incentives in | |
| the program. This abuse must be stopped, and it must be stopped | |
| now. | |
| I am pleased to note, Mr. Chairman, that the Department of | |
| Health and Human Services appears to be moving in the right | |
| direction to correct some of these abuses. For example, it is | |
| my understanding that HHS will soon hold facility-based rural | |
| health clinics to the same payment limits and cost reporting | |
| requirements as independent rural health clinics. This would be | |
| a good first step, but more needs to be done, and that's what | |
| we have to talk about even further. | |
| As the GAO report makes clear, this problem will only be | |
| fixed if both the Congress and the administration work together | |
| to solve these problems. As a member of both this subcommittee | |
| and the Health and Environment Subcommittee of the Commerce | |
| Committee, I look forward to working with you, Mr. Chairman, | |
| and the administration to correct the problems that we know | |
| exist. | |
| I would like to yield back. Thank you for holding this | |
| hearing. I look forward to working with you in bringing about | |
| some solutions. Thank you very, very much. I yield back. | |
| Mr. Shays. I thank the gentleman. | |
| Before I swear in our panel, I would ask unanimous consent | |
| that all members of the subcommittee be permitted to place any | |
| opening statement in the record and that the record remain open | |
| for 3 days for that purpose. Without objection, so ordered. | |
| I also ask unanimous consent that our witnesses be | |
| permitted to include their written statements in the record. | |
| Without objection, so ordered. | |
| We have today Bernice Steinhardt, Director, Health Service | |
| Quality and Public Health, General Accounting Office; | |
| accompanied by Frank Pasquier, Assistant Director, Health | |
| Issues, Seattle Office; and Lacinda Baumgartner, Evaluator, | |
| Health Issues, Seattle Office; then George Grob, who is the | |
| Deputy, Office of Inspector General, Department of Health and | |
| Human Services. It is wonderful to have all of you here. | |
| At this time, if you would rise, we will swear you in. We | |
| swear in all our witnesses, including Members of Congress. | |
| [Witnesses sworn.] | |
| Mr. Shays. For the record, all four of our witnesses have | |
| responded in the affirmative. | |
| We basically have two statements, but all can participate | |
| in responding to questions. | |
| So we will start with you, Ms. Steinhardt. | |
| STATEMENTS OF BERNICE STEINHARDT, DIRECTOR, HEALTH SERVICE | |
| QUALITY AND PUBLIC HEALTH, GENERAL ACCOUNTING OFFICE, | |
| ACCOMPANIED BY FRANK PASQUIER, ASSISTANT DIRECTOR, HEALTH | |
| ISSUES, SEATTLE OFFICE; LACINDA BAUMGARTNER, EVALUATOR, HEALTH | |
| ISSUES, SEATTLE OFFICE; AND GEORGE GROB, DEPUTY INSPECTOR | |
| GENERAL FOR EVALUATION AND INSPECTIONS, GENERAL ACCOUNTING | |
| OFFICE | |
| Ms. Steinhardt. Thanks very much for having us at this | |
| hearing today to talk about our report on rural health clinics. | |
| As you pointed out, Mr. Chairman, this is a program that | |
| has grown very rapidly. We brought a couple of charts along | |
| with us, and, as you can see from the bar chart, the program | |
| started out relatively modestly, from about 100 or so clinics | |
| in its early days, to about 500 clinics a decade later. But in | |
| the early 1990's, for reasons that I know the Inspector | |
| General's Office will talk about in testimony, the number of | |
| clinics began to grow dramatically, and today, as the chairman | |
| pointed out, there are about 3,000 rural health clinics across | |
| the country. | |
| I wanted to add, though, that the growth in rural health | |
| clinic costs has also been dramatic, with Medicare and Medicaid | |
| expenditures growing at two to three times the rate of the | |
| Medicare and Medicaid programs overall. Currently, annual | |
| expenditures for rural health clinics total about $760 million, | |
| but by the year 2000, they could exceed $1 billion a year. | |
| When we started our study of the program for the | |
| subcommittee, we asked two broad questions. We asked first | |
| whether the program is serving a population that would | |
| otherwise have difficulty obtaining primary care. In other | |
| words, is this program improving access to care? And second, | |
| are there adequate controls in place to ensure that Medicare | |
| and Medicaid payments to the clinics are reasonable and | |
| necessary? The answer to both questions, simply put, is ``no.'' | |
| Let me take a few minutes to elaborate. Returning to the | |
| first question of improving access, I think it's fair to say | |
| that some rural health clinics do, in fact, benefit their rural | |
| communities. These clinics are generally in sparsely populated | |
| areas with fewer than 5,000 people, that couldn't support a | |
| primary care practice otherwise, and which, by their presence, | |
| have made it possible to reduce by many miles the distance they | |
| have to travel for care. | |
| But while these types of rural health clinics can be found, | |
| as the pie chart shows there on the left, many of the areas in | |
| which clinics are being certified, and that's 19 percent of the | |
| pie there, are in well populated areas, sometimes with | |
| extensive primary health care systems. This has increasingly | |
| become the case among the clinics that have been certified in | |
| the last couple of years. | |
| What is more, in many of the locations that we looked at in | |
| depth, primary care was already available to the Medicare and | |
| Medicaid populations. We looked at care patterns for a sample | |
| of over 42,000 Medicare and Medicaid beneficiaries, and we | |
| found that before they became rural health clinic patients, | |
| about three out of four of these people had been seeing a | |
| primary care provider in the same city in which they lived or | |
| in which the clinic was located. | |
| Overall, in fact, we found that the availability of care | |
| didn't change very much for about 90 percent of these 42,000 | |
| people after their rural health clinics were certified. As you | |
| pointed out, Mr. Chairman, this really isn't surprising, given | |
| that 68 percent of the clinics were simply conversions of | |
| existing physician practices, practices that, in many cases, | |
| had been in existence for 12 to 18 years before they became | |
| rural health clinics. | |
| Apart from the Medicare and Medicaid populations, the | |
| certification of rural health clinics seems to have little or | |
| no effect on the availability of care for any other underserved | |
| segments of the population. Even though many of these clinics | |
| qualify for the program because the overall population is | |
| designated as underserved, less than half of a group of clinics | |
| we surveyed said that they used the program to expand their | |
| staff or to increase the number of patients that they actually | |
| see. In fact, some of them told us they were seeing fewer | |
| patients after they became rural health clinics. | |
| Turning to the question of cost controls, we found that the | |
| Rural Health Clinic Program does not have adequate controls in | |
| place to ensure reasonable costs. These clinics, you will | |
| recall, are generally reimbursed by Medicare and Medicaid for | |
| the costs that they claim in providing services, rather than | |
| according to the lower set fees for these services that would | |
| otherwise apply. | |
| So, under this system, we estimate that, in 1993, rural | |
| health clinics were paid at least 43 percent more by Medicare | |
| and at least 86 percent more by Medicaid than they would have | |
| been paid under a fee schedule system. In 1996, we estimate | |
| this amounted to an additional $100 million for Medicare and | |
| close to an additional $200 million in Medicaid reimbursement. | |
| This differential we found is particularly great among those | |
| rural health clinics that are operated by a hospital or other | |
| facility. | |
| As you can see--once again, I will turn your attention to | |
| the bar chart--about half of all rural health clinics are made | |
| up of facility operated clinics, which are the white portion of | |
| the bar. And their portion, as you can also see from the chart, | |
| has increased dramatically over the last few years. You can | |
| only see a white bar there beginning in 1990. | |
| Unlike the independently operated clinics, the facility | |
| operated clinics are not subject to any limits on payments for | |
| visits. In one case we came across, a clinic received over $200 | |
| for a visit, or about four times the maximum $55 or $56 paid | |
| for a visit to an independent clinic. While independent clinics | |
| have a maximum reimbursement per visit, neither they nor the | |
| facility based clinics have any apparent limits on the amount | |
| or types of costs that they can claim. | |
| In a sample of independent clinics, we found that a quarter | |
| were paying physician salaries of up to 50 percent or more than | |
| the national mean of $127,000. These are rural health clinics, | |
| mind you. In looking at facility based clinics we found | |
| hospitals sometimes claiming overhead costs that were more than | |
| 100 percent of the direct costs of operating the clinic. | |
| Finally, under current law, rural health clinics receive | |
| this extra Medicare or Medicaid reimbursement indefinitely, | |
| even if the area in which they are located is no longer rural | |
| or underserved, and even if the clinics don't depend on it for | |
| financial viability. | |
| So what does the program need to do to address these | |
| findings. Our report made several recommendations. First, we | |
| recommended that HCFA revise its Medicare payment policy to | |
| hold all rural health clinics to payment limits and to | |
| reimburse them for only the reasonable costs incurred in | |
| providing care. HHS has actually agreed with our | |
| recommendations and has said that it would begin to take | |
| actions to implement them. | |
| We also believe that the Congress needs to develop a more | |
| precise definition for the types of areas that are eligible for | |
| these higher Medicare and Medicaid payments, so that the | |
| program is more clearly targeted to increasing access to care. | |
| This wouldn't necessarily require redoing the existing | |
| criteria, only adding another screen that would be targeted to | |
| communities where access is a problem. | |
| We therefore recommended that the Congress restrict this | |
| higher Medicare and Medicaid reimbursement to rural health | |
| clinics in areas that have no other Medicare or Medicaid | |
| providers, or to clinics that can demonstrate that the existing | |
| providers, the existing capacity, if you will, is not great | |
| enough to accept new Medicare or Medicaid patients, and that | |
| that funding will be used to expand access to them. | |
| We also recommended that the Congress require periodic | |
| recertification to make sure that the financial assistance | |
| given to clinics is still appropriate. | |
| This concludes my remarks, and we would certainly be happy | |
| to answer any questions. | |
| [The prepared statement of Ms. Steinhardt follows:] | |
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| Mr. Shays. Thank you. | |
| We will hear from Mr. Grob and then we will start our | |
| question- ing. I like this era of charts. They one-upped you; | |
| they've got color. | |
| Mr. Grob. Mr. Chairman, it's 1997, and it's the 20th | |
| anniversary of this program. Like a birthday that ends in zero, | |
| it's probably a good time to take stock and see where we've | |
| been and where we're going. | |
| When we began this evaluation, we found that the General | |
| Accounting Office was also beginning work on this subject, so | |
| we began to collaborate with them early on in the project to | |
| divide the work up. We took somewhat different approaches to | |
| the study. Our approach was based very much on onsite reviews. | |
| We sent inspectors out into the countryside to locate the rural | |
| health clinics that were there, to see what they were like, to | |
| talk to the people who were there, and things of this nature. | |
| We did some other larger analysis of national data. | |
| What is good about the fact that we took these two | |
| different approaches is two things. One is, I think if you put | |
| the two reports together, you get a pretty full picture of | |
| what's happening. The second is a remark you made in | |
| introducing this, which is, the results were identical. For all | |
| practical purposes, the findings and the recommendations were | |
| the same. So it seems that no matter what direction you look at | |
| this thing from, you get the same answers, which gives you even | |
| more confidence about the results. | |
| Briefly, we found that the rural health clinics are | |
| important to people who live in rural areas and who need access | |
| to primary care. But the program is vulnerable to waste because | |
| of the placement of the centers and because of weak cost | |
| controls or unsatisfactory reimbursement systems. | |
| Rather than repeat all of the details of those findings, | |
| which you have just heard from the representative from GAO, let | |
| me concentrate instead on talking about the growth and the | |
| nature of the growth. I've got a growth chart here that is | |
| similar to GAO's, and, frankly, I did it so that the line would | |
| appear to be a bit steeper, because I wanted very much to | |
| illustrate the rapid rate of growth of this program. | |
| From 1990 to the end of 1996, the number of centers has | |
| increased tenfold. In the last year alone, the increase in the | |
| number of centers was 30 percent. When we calculated it, there | |
| were more than 250 applications still pending at the end of | |
| that year. In some of the States that we went to and asked them | |
| questions, they expected growth rates of 50 percent in 1 year, | |
| not a small number of States. | |
| As far as the dollars are concerned, as was mentioned, we | |
| are now at about three quarters of a billion dollars. The | |
| growth began to accelerate in recent years. It wasn't so heavy | |
| in the beginning years. The remark that by the year 2000 we | |
| would be at $1 billion actually may come true sooner than that. | |
| In the last year alone, the growth rate was 48 percent in the | |
| dollars. So if we have the same growth rate next year, we will | |
| be at $1 billion just next year. | |
| Now, why is this growth occurring? And a good question that | |
| might be asked, is anything different today than was the case | |
| 20 years ago when the program was first started? Well, some | |
| things are still the same. One thing pushing the growth is the | |
| need. About a quarter of the population of the country still | |
| lives in rural areas, and they are going to continue to need | |
| access to primary care. Hopefully, that will become the driving | |
| force for any growth in this program. | |
| Another big part of it, though, is the incentive funding. | |
| And to make it simple, I have just included a chart here that | |
| shows what the funding levels are in just a few States, and | |
| these are typical of what you will see. Basically speaking, the | |
| reimbursement rates for the rural health clinics are about | |
| twice what they would be for clinics that don't receive this | |
| incentive. And if they are provider based, because that cap is | |
| not on them, they can even be considerably more than that, | |
| perhaps two or three times that amount. So that chart there | |
| just illustrates that fact. | |
| Now, where health care is missing, where people have | |
| trouble with the financial base, that might be just what the | |
| doctor ordered, financially. But in places where there are lots | |
| of services--for example, in one area we visited, we found 10 | |
| pages in the Yellow Pages, 10 Yellow Pages full of health care | |
| providers in a location where a health clinic was located. | |
| Mr. Shays. Just to clarify that, you mean like the big ad? | |
| Mr. Grob. Well, I was just saying, we sent our inspectors | |
| out to actually see these things. | |
| Mr. Shays. I just want to understand 10 pages. | |
| Mr. Grob. Ten pages in the Yellow Pages. | |
| Mr. Shays. Was it lines? | |
| Mr. Grob. Well, it was the usual mixture of ads and lines, | |
| typical Yellow Pages full of health care providers, as an | |
| example, just to give you a sense of how rural it was or how | |
| needy it was. | |
| So the incentive funding no doubt is a big cause for the | |
| growth. Now, in fairness to the Health Care Financing | |
| Administration, the last time this Congress took a look at this | |
| program, there was a concern that there wasn't enough growth in | |
| the program, and HCFA was instructed to notify various | |
| providers of the availability of this program, and they did so. | |
| That might have had a hand in spurring the growth of some of | |
| the provider-based rural health clinics. | |
| We found a reason that we didn't expect, and that was | |
| managed care. What's happening here is that there are | |
| unspecified fears of the coming of managed care in rural areas, | |
| and the large providers are basically trying to get a foothold | |
| in the area before other managed care organizers come into the | |
| area. They are trying to establish a foothold, a very common | |
| thing that we heard over and over again. | |
| A lot of those provider-based rural health centers are very | |
| small, one practitioner. They may even be claiming to lose | |
| money, but what they are saying is, they want to be there so | |
| that they have a stake in it before someone else comes in and | |
| organizes the area. | |
| Another thing is the business organization. Initially, a | |
| lot of these clinics were just small operations, one or two | |
| doctors, and things like this. Now, with the providers becoming | |
| heavily involved in it, we have the basis of a large | |
| organization behind them, some chains are cropping up here and | |
| there, as well. So that accounts for it. | |
| Finally, as far as the dollars are concerned, there is the | |
| problem of tenure that was alluded to earlier. Once you have | |
| the incentive funding, you have it; it never goes away. There | |
| is no recertification of these programs periodically. | |
| The reason that I mention these areas of growth is that all | |
| of them are still there. In fact, the forces behind some of | |
| them are growing, and the forces for some are such that they | |
| will spur the growth even faster. For example, where we had the | |
| centers opening up, initially their costs were not high because | |
| they were new businesses. Now they are maturing, so their cost | |
| is going to be even greater. They are going to be doing more | |
| and more business as time goes on. | |
| The tenure never goes away, so it keeps accumulating. We | |
| keep getting more and more growth that way. And certainly the | |
| concerns for managed care will be increasing and not decreasing | |
| in the near future. | |
| For all these reasons, we feel that what is important to | |
| consider now is the rate of growth that is occurring and also | |
| the notion that someone iterated earlier, that if we do want to | |
| do something about this program, we need to do it now, because | |
| there are large dollar amounts looming right behind that curve. | |
| Even without the reasons, I think any analyst would put a ruler | |
| in that curve and guess where that curve is going to end up | |
| next year. | |
| Our recommendations are similar to GAO's, and I won't | |
| repeat them. We think a control can be placed on the location | |
| and the cost. There are numerous ways to do this that are | |
| spelled out in both of our reports and in our written | |
| testimony. | |
| Thank you very much. | |
| [The prepared statement of Mr. Grob follows:] | |
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| Mr. Shays. Mr. Towns, you have the floor. | |
| Mr. Towns. Thank you very much, Mr. Chairman. | |
| Mr. Shays. Let me just say, Mr. Grob and Ms. Steinhardt, | |
| both reports were very well-written, well-organized, and I | |
| think fairly clear, not oversensationalized. I thought they | |
| were both excellent reports. In some sense, I almost feel we | |
| don't have to issue a report; we just submit yours to the | |
| Congress. | |
| We hope, very shortly, to respond to what you all have | |
| written. Before I do give the floor to Mr. Towns, I want to be | |
| clear on one thing. When we're asking HCFA to make a change in | |
| the process--I guess what I really want to know is, I feel a | |
| number of people have gained the system and are making a | |
| gigantic windfall. Do we have the ability quickly, through | |
| regulation, to change, or is it going to be a long, laborious | |
| process? | |
| Mr. Grob. I could give an opinion on that. I think that | |
| some of the change that needs to be made can indeed be made | |
| through the regulatory process, but the regulatory process is | |
| never quick. The rules for public rulemaking generally take a | |
| year or more because of the requirement for the opportunity for | |
| the public to comment, and dealing with those comments, and | |
| things of this nature. | |
| Mr. Shays. And there is no shortcut, Ms. Steinhardt? | |
| Ms. Steinhardt. Well, there is no shortcut to the | |
| rulemaking process. But I think the point here is, if we have | |
| the will to take action here, there are things we can do to | |
| make sure that this program is back on track. It had a purpose. | |
| It has lost focus and lost track of that purpose. I think both | |
| the Congress and HCFA need to take action. | |
| Mr. Shays. By the time it comes to my questioning, because | |
| I will go to Mr. Snowbarger after Mr. Towns, I would love you | |
| to just articulate what changes are really rulemaking changes | |
| and what can be done more quickly. That will be something I | |
| will ask. | |
| Ms. Steinhardt. Sure. | |
| Mr. Shays. Mr. Towns. | |
| Mr. Towns. Thank you very much, Mr. Chairman. | |
| Let me begin with you, Ms. Steinhardt. You mentioned | |
| recertification more than once. In order to do that, how much | |
| money are we talking about? Have you thought about it in | |
| dollars and cents? | |
| Ms. Steinhardt. What it takes to actually recertify? | |
| Mr. Towns. Yes, the costs. Yes, the costs involved, that | |
| process. | |
| Ms. Steinhardt. We didn't calculate the cost, but this is | |
| not something that needs to involve onsite field visits or | |
| anything. This is something that HCFA can do, or HRSA could do, | |
| with a data base, just knowing who these clinics are and where | |
| they are located. This is a data base search. | |
| Mr. Towns. Right. And I guess it would not take too much to | |
| put that equipment in place. | |
| Ms. Steinhardt. They ought to know where all these clinics | |
| are. | |
| Mr. Towns. As you know, Congress established the Rural | |
| Health Clinic Program because many rural communities were | |
| having difficulties attracting and retaining primary care | |
| providers. In your review, did you come across sparsely | |
| populated rural areas that lacked primary care providers? | |
| Ms. Steinhardt. Yes. We found that there were some areas | |
| that met the general criteria that would qualify them for rural | |
| health clinics that were still without a rural health clinic. | |
| Maybe Mr. Pasquier wants to add some details to that. | |
| Mr. Towns. Sure. | |
| Mr. Pasquier. Yes. I think the real contrast that we say | |
| was, when we took our sample of beneficiaries, the ones where | |
| access has improved, we noticed in the smaller communities | |
| where there were these clinics that the program really did make | |
| a big difference. In the larger communities, there really | |
| wasn't much of a change in access. The patients were going to | |
| the same providers or providers in that same community. | |
| So I think the benefits of the program are much more | |
| pronounced and easier to see when they are restricted to the | |
| smaller community. That's what we found. | |
| Mr. Towns. In your judgment, why aren't those communities | |
| using the Rural Health Clinic Program? Do you have any reason | |
| as to why they were not using it? | |
| Ms. Steinhardt. They may not be aware of it, that they | |
| qualify for it. I know, just anecdotally, some of the rural | |
| health clinics that we spoke with became aware that they were | |
| eligible for certification because financial consultants | |
| contacted them and told them that they had an opportunity to | |
| increase their reimbursements if they applied for designation | |
| as a rural health clinic. So not every community is aware of | |
| the benefit available to them. | |
| Mr. Towns. Do you have any suggestions as to how HHS might | |
| be able to target these communities to be able to get this | |
| information? | |
| Ms. Steinhardt. Well, I think the recommendations we make | |
| would certainly help the program be focused on those places | |
| where there are no Medicare or Medicaid providers or where the | |
| providers can't accommodate any more Medicare or Medicaid | |
| patients. That's where we think this program was intended-- | |
| those are the communities we think were the intended | |
| beneficiaries of this program, and we think that's how the | |
| criteria ought to be targeted. | |
| Mr. Towns. Let me ask a question I think the chairman sort | |
| of alluded to, but I want to turn it around, maybe, to a | |
| degree. Once a rural health clinic is designated, that | |
| designation cannot be removed, even if the area has developed | |
| into a well financed and viable health care delivery system, if | |
| it has it in place. Once that designation is there, it is | |
| there. How would you recommend fixing it? | |
| Ms. Steinhardt. We would revisit that. It's not that it | |
| can't be dedesignated. In fact, there were some clinics that, | |
| during the 1980's, I guess, the sort of earlier years of the | |
| program, that were dedesignated. | |
| Mr. Towns. How did that come about, do you know? | |
| Ms. Steinhardt. I think they asked for it, or the | |
| definitions changed. | |
| Mr. Shays. Excuse me. Could you be clear as to whom | |
| ``they'' are? Did the rural health clinic ask, or did HCFA ask | |
| for it? Where is it coming from? | |
| Mr. Towns. The ``who,'' yes. | |
| Mr. Shays. If you don't know, I would just as soon not | |
| speculate. I want us to be very clear on this. | |
| Ms. Baumgartner. They are dedesignated--if there is a | |
| change of ownership, they have to reapply for certification, or | |
| if they lose their status as a Medicare provider, they would be | |
| dedesignated. There was some movement to dedesignate some of | |
| the shortage areas, I think, in the 1980's. | |
| Ms. Steinhardt. Right. My point is simply that it is | |
| possible to dedesignate; it's just that, by and large, no one | |
| has ever gone back to take another look at the clinics to see | |
| whether they still met the original criteria that qualified | |
| them. And that's our recommendation--that such a review take | |
| place to see whether they still meet the original criteria, and | |
| we would add our additional screening criteria. | |
| Mr. Grob. That would require a statutory change, that | |
| review. | |
| Ms. Steinhardt. Right. The recertification requirement | |
| would require Congress to act. | |
| Mr. Towns. You know, I agree with you that there should be | |
| a review, but I think the point I want to make is, how often | |
| should this review take place? | |
| Ms. Steinhardt. Good question. We didn't specify the | |
| frequency of the review. One thought that came to our minds was | |
| every 3 years, which is the frequency with which the health | |
| professional shortage areas are reviewed to see whether they | |
| still qualify as health professional shortage areas, but we | |
| have no set feelings about it. | |
| Mr. Towns. Any other comments? | |
| [No response.] | |
| Mr. Towns. Your report suggests restricting the cost-based | |
| reimbursement benefit of the program. What impact will this | |
| have on the financial viability of rural health clinics in | |
| truly underserved areas? | |
| Ms. Steinhardt. Good question. From our review, we found | |
| that most of the clinics don't depend on their rural health | |
| clinic status or cost reimbursement status for financial | |
| viability. It's just not the case. And these clinics, unlike, | |
| say, federally qualified health centers, are not required to | |
| serve underserved populations. They don't have to see uninsured | |
| populations, for example, as a condition of their being a rural | |
| health clinic. | |
| So this is not as though they need their rural health | |
| clinic status in order to make sure that they are able to care | |
| for the uninsured, because they don't have to see them if they | |
| can't afford to. | |
| Mr. Towns. I know you made some recommendations. Is there | |
| anything else, now that you've had an opportunity to look | |
| further, that you would like to recommend that we might be able | |
| to do on this side? | |
| Ms. Steinhardt. Well, as far as the Rural Health Clinic | |
| Program, I think the recommendations we've made in this report | |
| would take care of the two big areas that we are concerned | |
| with, which is improving access for the intended beneficiaries | |
| of this program, and establishing better cost controls. | |
| There are things, I think--and this is something we intend | |
| to do some more work on--we think that there are issues related | |
| to the whole area of how we deal with increasing access to | |
| communities that are regarded as underserved. There are a whole | |
| variety of programs that are intended to help these | |
| communities. They are not well coordinated; they are not really | |
| well related to one another. We think there are opportunities | |
| to improve, overall, how we, as the Federal Government, support | |
| access to these communities by doing a better job with those | |
| programs. | |
| We have done some work in this area in the past. We have | |
| recommendations on the whole medically underserved health | |
| professional shortage area system. We have looked at the J-1 | |
| visa waiver program that allows foreign physicians to serve in | |
| underserved areas. We have looked at the National Health | |
| Service Corps. There are common themes that run across all | |
| these programs, and I think there is certainly room for | |
| improvement in how we put all these programs together to deal | |
| with improving access. | |
| Mr. Towns. Thank you very much. I yield back, Mr. Chairman. | |
| Mr. Shays. Thank you. | |
| Mr. Snowbarger. | |
| Mr. Snowbarger. Thank you, Mr. Chairman. | |
| I apologize for the simplicity of these questions. You all | |
| are out there sitting there as experts, and the chairman is | |
| probably an expert on this, and the audience is probably expert | |
| on this. I want to go back just to some very basic things. | |
| Mr. Grob, if you can help with your chart, your South | |
| Carolina line. If you can just explain to me the differences | |
| there in the reimbursement, it would be helpful. | |
| Mr. Grob. OK. First of all, let me tell you that there is | |
| no central data bank of Federal data for what happens in every | |
| State. Whenever we look at the Medicaid program, we really have | |
| to hustle after the data and get it State by State, and we | |
| don't always get uniformly comparable data when we do so. | |
| But just to give you an example, there is a rate that each | |
| State sets for reimbursement of primary care. Health care | |
| providers, they have the option to set whatever rate they want. | |
| So for each of those three States, I have shown what rate those | |
| States have set on their own. | |
| For a freestanding rural health clinic, they are allowed to | |
| receive reimbursement based on the costs that they incur, but | |
| it is subjected to a limit, and the limit is imposed by HCFA, | |
| by the Health Care Financing Administration, which basically | |
| certifies the centers. That's what you see there for the | |
| independent rural health centers. You notice they are all about | |
| the same. The rate now is about $56.65, something like that, | |
| but, again, it's a cost limit, so there might be a few that are | |
| below that. | |
| Mr. Shays. If I could just interrupt you, I would just | |
| point out to the gentleman that the questions can be simple, | |
| but the answers are never. | |
| Mr. Snowbarger. I suspected that. | |
| Mr. Shays. I thought I understand this, and I'm getting a | |
| little confused. I want you to speak a little more slowly and | |
| define the difference between Medicaid and Medicare. I just | |
| think it would be helpful. And I just want to say to you that | |
| we learn more from the simple questions, so that's the way we | |
| proceed. | |
| Mr. Snowbarger. Prepare to learn. | |
| Mr. Shays. Yes. So I'm going to ask you, if you don't mind, | |
| to answer the vice chairman's question by just starting over | |
| again, giving a different framework. You've got independents, | |
| you've got the provider-based, you've got the independent | |
| doctors, and you've got Medicare and Medicaid. If you could | |
| kind of sort all this out, because this is going to be the base | |
| from which we ask other questions. | |
| Mr. Grob. OK. Let me start out, first of all, there are | |
| both Medicare and Medicaid program. The Medicare program is | |
| administered by HCFA. The Medicaid programs, of course, are | |
| administered by each State. Each of those programs sets their | |
| own rates. There are rates that HCFA sets for the Medicare | |
| program, and each State sets its own rate for the Medicaid | |
| programs. | |
| If a center, physicians' office, or any group would like to | |
| become a rural health clinic under the Medicare and Medicaid | |
| Rural Health Clinic Program, they apply to the Health Care | |
| Financing Administration for a certification to that effect. If | |
| they pass certain criteria, which includes providing certain | |
| primary care services, having the assistance of mid-level | |
| providers, and things of this nature, and if they live in an | |
| underserved rural area, then the Health Care Financing | |
| Administration will certify them as being one of these centers. | |
| Now, if they are certified, they get more money, under both | |
| the Medicare program and the Medicaid program. The money that | |
| they get is based on the cost that they incur. So instead of | |
| getting money for a certain fee, they are basically allowed to | |
| charge what it costs them to do business. | |
| However, that cost reimbursement is limited by a cap which | |
| the Health Care Financing Administration has set. That cap is | |
| updated every year, and it applies to the freestanding clinics. | |
| Whether they be under the Medicare program or the Medicaid | |
| program, they are subject to that cap. Right now it's about $56 | |
| or $57. OK? | |
| Other clinics, of course, get paid by a fee, are on a basis | |
| other than that. However, if they are not freestanding, if they | |
| are basically owned by a hospital, then the Health Care | |
| Financing Administration has construed that they are part of | |
| the hospital, and they are reimbursed the way that, say, the | |
| outpatient department of a hospital or another ancillary unit | |
| of a hospital would be reimbursed. | |
| That reimbursement system under Medicare does not have a | |
| cap placed on it. It is based on reasonable costs. The result | |
| of that is that if you are a clinic that is owned by a | |
| hospital, the cap doesn't apply to you. | |
| So this chart that I have prepared here illustrates how | |
| this would work under the Medicaid program. It shows the fact | |
| that those rates would vary from State to State, because the | |
| underlying Medicaid rates would vary from State to State. A | |
| similar thing would happen, however, under the Medicare | |
| program. | |
| Basically speaking, in these rural areas, the independent | |
| clinical labs are receiving about twice as much money as a | |
| clinic would receive under the Medicaid program. For those that | |
| are owned by providers, it could be a lot more. | |
| Mr. Snowbarger. Could I follow through with a few | |
| definitional things here? | |
| Mr. Shays. Yes. | |
| Mr. Snowbarger. I understand that Medicare and Medicaid are | |
| different programs, and you have indicated that both of those | |
| programs have some kind of rural health clinic designation. | |
| Mr. Grob. Yes. | |
| Mr. Snowbarger. Are they definitionally the same? | |
| Mr. Grob. They are. | |
| Mr. Snowbarger. Wow, we finally coordinated something. | |
| Mr. Grob. Yes, we did. However, I will tell you--and you | |
| didn't ask me this, but I think it's worth laying on the table. | |
| Mr. Snowbarger. Well, I'll ask it. | |
| Mr. Grob. OK. Another issue is, different people would | |
| represent the interest of the States. You each represent the | |
| interest of the States that you come from, to some extent. So | |
| would the people running the Medicaid program or the Governors. | |
| It is the Health Care Financing Administration that | |
| certifies these clinics. So if they certify them, then the | |
| Medicaid program must pay the higher rates. Not all the people | |
| who run the Medicaid programs are happy about the fact that | |
| they have to pay higher rates because the Health Care Financing | |
| Administration certifies the clinics. | |
| So there is a single certification, which is unusual, and | |
| it applies, for this program, to both Medicare and Medicaid. | |
| The State officials don't have any control, or very little | |
| control, over that certification process. Some wish they did | |
| have more control. To change that, by the way, I believe that | |
| would be a statutory matter. | |
| Mr. Snowbarger. Again, coming out of HCFA, Medicare makes | |
| the designation? | |
| Mr. Grob. In essence, yes. The Health Care Financing | |
| Administration speaks on behalf of both. | |
| Ms. Steinhardt. One thing that I think might be important | |
| to keep in mind, just in sort of a historical context about | |
| this program, when the Rural Health Clinic Program was | |
| established, Congress' concern was that there were parts of the | |
| country, rural areas in the country, which depended for primary | |
| care on people other than physicians--nurse practitioners, | |
| physician assistants--and they were not being reimbursed under | |
| Medicare. | |
| So the initial thrust of this program was to provide | |
| reimbursement to nonphysician providers of primary care, to | |
| make sure that those areas of the country were not penalized, | |
| you might say, for depending on nonphysicians for their care. | |
| Everybody was under a cost reimbursement system then. So it | |
| wasn't cost reimbursement that was the sort of benefit, by | |
| itself, to these rural health clinics; it was coverage of | |
| nonphysician providers that was the benefit then. | |
| As we moved to a prospective payment system, where we moved | |
| to a fee schedule, and under this sort of managed care--the | |
| whole restructuring of the health care system, in which | |
| suddenly there were concerns about managed care and | |
| establishing market share, and so on. The whole flavor of the | |
| program really changed dramatically, so that it's now operating | |
| really in a very different environment and with different kinds | |
| of concerns than it did back in 1977 when it was established. | |
| And that's important to remember. | |
| Mr. Snowbarger. One other question, and I want to just make | |
| sure that the reference over here to provider base is the same | |
| as reference to facility base here? | |
| Mr. Grob. Yes, it is. Yes, thank you. | |
| Mr. Snowbarger. A phenomenon I've seen occur in our area is | |
| for, say, a metropolitan hospital--it comes from a large area-- | |
| would not qualify, I presume, as a rural health provider. As is | |
| common with a lot of hospitals, both buying and creating family | |
| practice clinics, and some of those clinics end up in areas | |
| that now qualify for the higher reimbursement. | |
| Is that the kind of thing we're talking about? | |
| Mr. Grob. Yes. | |
| Mr. Snowbarger. What is the rationale used by these | |
| agencies that this perhaps even transplanted clinic from an | |
| urban area to a rural area, frankly, operated under a separate | |
| structure even, now qualifies? | |
| Mr. Grob. I think I can address that, if you wish, sir. It | |
| gets to say that I still live in a rural area and have been | |
| following these developments very carefully in the area that I | |
| live. | |
| What you see happening there is that there is quite a | |
| concern among various organizers of health care. They may be | |
| the large hospitals, they may be HMOs that are associated with | |
| hospitals or freestanding, they may be groups of physicians who | |
| want to band together to have their own health maintenance | |
| organizations, or whatever, but they are all quite concerned | |
| about organizing the medical care in the areas where it is | |
| unorganized right now. Those areas may be rural areas. | |
| So exactly what you are saying is happening. Hospitals and | |
| others are, as I said earlier, trying to gain a foothold so | |
| they have a stake in everything that happens and that they are | |
| basically in the game. We were surprised about this. When our | |
| inspectors went out and talked to the people as to what was | |
| happening, they started coming back with these reasons, which | |
| are somewhat nebulous, but very commonly given. | |
| I know I, myself, have seen it firsthand where I live. It | |
| is a consideration, and it's exactly what you are describing. | |
| That's starting to fuel this instead of the original purpose of | |
| the program. | |
| Mr. Snowbarger. Again, Mr. Chairman, what is the rationale | |
| for the higher reimbursement for the provider-based and | |
| facility-based, in the circumstances that I was saying. | |
| Mr. Grob. OK. What happened here was that, when the Health | |
| Care Financing Administration had to establish what the limits | |
| on cost-based reimbursement were, it had a harder time, | |
| administratively, dealing with how we pay hospitals. Since they | |
| were controlled by the hospitals, they had to be paid for as | |
| part of the system for paying hospitals, which is a different | |
| system entirely. | |
| Mr. Snowbarger. Thank you, Mr. Chairman. | |
| Mr. Shays. You're welcome. I would love to just get a much | |
| clearer sense of what is rural. Define for me ``rural.'' | |
| Ms. Steinhardt. Under 50,000. The definition now is non- | |
| urbanized areas, and for the purposes of this program it's non- | |
| urbanized areas of less than 50,000 population. | |
| Mr. Shays. In a 15-mile square? | |
| Ms. Steinhardt. No, that's it. That is the definition with | |
| no other qualifications around it. It could be only a few miles | |
| away from a larger area. | |
| Mr. Shays. That's just too absurd to contemplate. If you | |
| had a 10-mile-square area, and you said there were less than | |
| 50,000, and right next to it you had even a larger area, you | |
| are saying that would be defined as rural? | |
| Ms. Steinhardt. Yes. | |
| Mr. Shays. OK. That doesn't take a rocket scientist to know | |
| that's the first thing we change. Except, politically. | |
| Ms. Steinhardt. Yes. Go ahead. | |
| Mr. Shays. No, I'm happy to have both of you participate in | |
| this dialog. Do you have something to add to it? | |
| Mr. Pasquier. No, the definition in this program uses the | |
| Bureau of the Census definition, which is ``non-urbanized,'' | |
| and it depends on the city. If the city has an under-50,000 | |
| population, then it is considered rural. | |
| Now, looking at solutions to the program, we think, if you | |
| establish additional criteria rather than try to redefine what | |
| is rural, if you establish additional criteria that is trying | |
| to target funds to those beneficiaries that are experiencing | |
| problems with access, you can avoid having to redefine | |
| ``rural'' in the statute, which is a problem. | |
| Mr. Shays. I hear what you are saying. There must be | |
| another reason why I can't do it. Are you saying that a | |
| Ridgefield, CT, that maybe has a population of 10,000 people, | |
| or 12,000, or 15,000 people, could be designated as rural under | |
| our system? There must be other factors. | |
| Mr. Grob. These would be areas that are outside the large | |
| metropolitan statistical areas. | |
| Mr. Shays. It's not logical to me, so there is something | |
| I'm not getting. | |
| Ms. Steinhardt. There are lots of problems with trying to | |
| define ``rural,'' just as there are lots of problems with | |
| trying to define ``medically underserved'' and ``shortage | |
| areas.'' | |
| Mr. Shays. Let me just say that what this committee, I am | |
| almost certain, is going to do: we're going to recommend that | |
| we do a better job serving people in rural areas. And what I'm | |
| getting a sense of is, I'm not sure that your reports are going | |
| to really help us get to that, if I'm not able to see a little | |
| more definition to this issue. | |
| Ms. Steinhardt. I think, though, the way we tried to get at | |
| it was to focus on the problem of access. If the people in the | |
| community are not well served, if they have no Medicare or | |
| Medicaid providers, or the ones they have can't see any more | |
| patients, that, to us, gets at the problem of access most | |
| directly. | |
| So, while I think it may be very important to take on the | |
| issues of defining ``rural,'' and defining ``medically | |
| underserved,'' these are very thorny problems. | |
| Mr. Shays. Is that a thorny problem politically, or | |
| statistically is it a problem? | |
| Ms. Steinhardt. Maybe both. | |
| Mr. Shays. The other two who are going to follow afterwards | |
| maybe can answer some of these questions. Where I get concerned | |
| is when you basically tell me that the new people who have | |
| gained access, basically about 90 percent of them didn't need | |
| it, and that tells me that we're building this gigantically | |
| expensive system that is going to have a constituency. When you | |
| get into the billions of dollars, you are going to have a hard | |
| time changing it. So I feel there is a tremendous sense of | |
| urgency to get at that problem. | |
| So you, basically, in your chart over there against the | |
| wall, when you say 27 percent are in areas that are 25,000 to | |
| 50,000, that is even a misstatement, in some ways, because they | |
| could be right next door to a community with a lot more. | |
| I mean, I have a friend who lives in Montana, who thinks | |
| nothing of going shopping 5 hours away, or going, literally, to | |
| a movie that is 3 hours away. But to my suburban mind, if it's | |
| 10 miles away, that's a distance. There's a mind-set here that | |
| we just have a big disconnect. | |
| Ms. Steinhardt. Well, every 3 years, HCFA does a survey of | |
| Medicare beneficiaries. When they ask Medicare beneficiaries | |
| how they feel about their access to care, 97 percent of | |
| Medicare beneficiaries feel they have adequate access to care. | |
| It's an important reminder. | |
| Mr. Shays. OK. Let me just say, from my standpoint, I'm | |
| going to investigate this with the panels that will follow. You | |
| have kind of thrown the ball into play and have provided a | |
| tremendously useful effort for us. | |
| Mr. Souder, do you have some questions you would like to | |
| ask? | |
| Mr. Souder. Just a couple of clarifications. I apologize; I | |
| missed the original testimony. I tried to look through some | |
| last night and some here while we were talking through. I'm a | |
| bit confused on a couple of terms in Mr. Grob's testimony. | |
| You have a statement that rural health clinics converted to | |
| rural health clinic status--in other words, they were already | |
| rural health clinics--when you say independent rural health | |
| clinics, do you mean those are the ones that haven't converted | |
| to status yet. | |
| Mr. Grob. No. You may be running a clinic in a rural area, | |
| but you may not be receiving the benefit of any special funding | |
| from either the Medicare or the Medicaid program. | |
| Mr. Souder. So you would be the blue on your chart? | |
| Mr. Grob. Yes, the regular rate. So, if you wanted to | |
| receive that funding, then you would have to apply for | |
| certification to get into the Medicare and Medicaid Rural | |
| Health Clinic Program. Then, if certified, you could receive | |
| the higher rates of pay. | |
| Mr. Souder. So, then, if you are independent, you move to | |
| the red; and if you work with a facility, you are in the green. | |
| Mr. Grob. Yes, that's right. | |
| Mr. Souder. And your chart over there is, the gray is, in | |
| effect, the red; and the white is the green? | |
| Mr. Grob. That's correct. | |
| Ms. Steinhardt. Yes. | |
| Mr. Souder. The increase in the amount of independents, you | |
| are arguing, was due to the financial incentives; both of those | |
| groups, the white and the gray? | |
| Mr. Grob. That's correct. | |
| Mr. Souder. There is some implication in the testimony that | |
| some of these places might have closed if they weren't able to | |
| convert. How do we sort that out? | |
| Mr. Grob. I really don't think anybody knows that, to be | |
| honest with you. I certainly don't think we would have any way | |
| of telling. I can tell you that our inspectors, in reviewing | |
| the facilities, didn't see very many that they felt were really | |
| in jeopardy. In fact, the opposite may be the case. Because of | |
| the special rates that these facilities receive, they may | |
| actually be making it more difficult for nonsubsidized | |
| enterprises to come into existence, because they have an | |
| advantage in these heavily populated areas. | |
| It is possible, though, I think in the rural areas, that | |
| are truly rural and truly underserved, I do think the financial | |
| thing could make a difference. And I don't think that any of us | |
| are advocating that we eliminate that financial benefit for | |
| those in the rural areas where you need the money for financial | |
| stability or because you might want to attract providers in the | |
| area that aren't there now. I think it does turn more on what | |
| is truly rural, what it truly underserved. | |
| Ms. Steinhardt. In our survey--if I might just add--in our | |
| survey we found that, while some may depend on this | |
| designation, many don't depend on it for financial viability. | |
| Even if they were not to have that designation, they would | |
| remain financially viable. | |
| Mr. Souder. The other question I have is that--anybody here | |
| can answer the questions; I was picking on Mr. Grob--obviously, | |
| the group of the facility-based has exploded, proportionally, | |
| yet there has been a steady growth of the other as well. | |
| My understanding is, you were having independents also | |
| convert to facility-based, so it means there has been a fairly | |
| substantial percentage converting from nothing into the | |
| independent. Then there also is probably some resistance--I | |
| certainly hear this in Indiana--the resentment of doctors and | |
| independent clinics having to go with facilities. There is | |
| somewhat of a rivalry. | |
| So on what grounds--is this being facility-driven, trying | |
| to come in, is that part of your argument, as opposed to--are | |
| the independents that associate with a facility actually | |
| struggling financially? | |
| Mr. Grob. No, I think you stated it exactly right. Again, | |
| now, this is not hard; this is what people were telling us. | |
| What I think we are seeing is that, on the provider side, on | |
| the facility-based, it's the facility that is bankrolling the | |
| center, to get it established, to kind of extend themselves | |
| out. Whereas, for the independent practitioner, they are the | |
| ones who want to convert over because the funding is more | |
| favorable. | |
| I don't think that the facilities are necessarily | |
| establishing these centers because they expect to make a lot of | |
| money in them, initially. I think they are simply trying to | |
| position themselves. In fact, a lot of them told us that they | |
| weren't making money. Of the facility-based centers that we | |
| saw, a lot of them were very small: one doctor, a few visits. | |
| The independent ones were the large ones, because they were | |
| behaving much more as the program was intended to behave. | |
| Again, we can't prove this, and I'm sure that | |
| representatives of the industry might deny that it's the case, | |
| and perhaps on good basis. I am simply trying to tell you what | |
| our inspectors saw and what people told them when they were | |
| there. | |
| Mr. Souder. How much of this may be caused by the fact that | |
| the hospitals in towns 5,000 to 10,000 are in relatively deep | |
| trouble? | |
| For example, in my district, which is centered by Fort | |
| Wayne and has nine rural counties around it, what has happened | |
| is with the access of the interstates and the commuting, and so | |
| on, the Fort Wayne hospitals are in heavy competition to get | |
| the feeder system that, on almost anything major, they are | |
| drawing in the patients from the rural areas, leaving | |
| substantial empty beds in the rural hospitals, then starting to | |
| set up this outreach to feed in and through system. | |
| Are they using this heavily to do that? Is that partly what | |
| is going on? | |
| Mr. Grob. I believe that, in a general manner, they are | |
| using the ability to sponsor these centers as a way to reach | |
| out and fill those areas with things less than hospitals. | |
| Mr. Souder. Thank you for helping clarify. | |
| Mr. Towns [presiding]. Thank you very much. | |
| Any other questions from any Members? | |
| [No response.] | |
| Mr. Towns. Let me thank the members of the panel for | |
| enlightening testimony. Also, you have pointed out that we | |
| still have a lot of work to do in order to make certain that we | |
| are not wasting resources. I think that is a real concern. I | |
| think that when we get involved in the checking and the | |
| rechecking, we don't want to spend all of our money checking | |
| and rechecking either. We also want to be able to have some | |
| resources to spend in terms of getting rid of the problems in | |
| terms of the patients. | |
| So thank you very, very much. | |
| The second panel: Kathy Buto; Dr. Gaston; Dr. Puskin. | |
| We swear in all of our witnesses. If you would just please | |
| stand. | |
| [Witnesses sworn.] | |
| Mr. Towns. Let the record reflect that all of them answered | |
| in the affirmative. | |
| Why don't we start with you, Ms. Buto. | |
| STATEMENTS OF KATHLEEN BUTO, ASSOCIATE ADMINISTRATOR FOR | |
| POLICY, HEALTH CARE FINANCING ADMINISTRATION, DEPARTMENT OF | |
| HEALTH AND HUMAN SERVICES; MARILYN H. GASTON, M.D., DIRECTOR, | |
| BUREAU OF PRIMARY HEALTH CARE, HEALTH RESOURCES AND SERVICES | |
| ADMINISTRATION, DEPARTMENT OF HEALTH AND HUMAN SERVICES, | |
| ACCOMPANIED BY DENA PUSKIN, ACTING DIRECTOR, OFFICE OF RURAL | |
| HEALTH POLICY, HEALTH RESOURCES AND SERVICES ADMINISTRATION | |
| Ms. Buto. Mr. Chairman, members of the subcommittee, I am | |
| very pleased to be here. I am Kathleen Buto, the associate | |
| administrator for policy at the Health Care Financing | |
| Administration, HCFA. | |
| I am pleased to have the opportunity to address rural | |
| health clinics and to respond to the concerns raised by the | |
| Inspector General's report and the GAO about the program not | |
| improving access to primary care services in underserved areas. | |
| The GAO and IG reports indicate that while the number of | |
| rural health clinics has grown rapidly in recent years, their | |
| proliferation has not necessarily been in areas where Medicare | |
| and Medicaid beneficiaries face access problems. Rather, many | |
| clinics are being certified in areas where other clinics, RHCs, | |
| already exist or where beneficiaries have other sources of | |
| medical care. The process does not adequately identify | |
| underserved areas, and Medicare's current cost base payment | |
| methodology encourages providers to seek RHC status. | |
| HCFA generally agrees with the findings of the reports and | |
| is working with the Public Health Service to correct these | |
| problems. Before discussing how we are addressing these issues, | |
| I would like briefly to touch on some background of the Rural | |
| Health Clinic Program. | |
| The Rural Health Clinics Act was enacted in 1977 by | |
| Congress and implemented by us in 1978, to increase access to | |
| primary health care services for Medicare and Medicaid | |
| beneficiaries living in rural areas. To be classified as an RHC | |
| by HCFA, clinics must be located in a rural area and a shortage | |
| area. I would emphasize that, because there was a lot of focus | |
| on the rural designation in the last panel. The shortage area | |
| designation is equally if not more important in this program, | |
| as designated by the Public Health Service or by a Governor, | |
| and approved by the Public Health Service. | |
| In addition, an entity applying for RHC designation under | |
| Medicare must meet specific conditions of participation set out | |
| in the Medicare statute, including staffing requirements, lab | |
| requirements, and other criteria appropriate to a setting for | |
| primary health care. | |
| Under the Medicare statute, HCFA must continue to designate | |
| existing clinics as RHCs, even if the area in which they are | |
| located is no longer considered a shortage or rural area. This | |
| is a statutory provision. Certification by Medicare as an RHC | |
| leads to corresponding RHC status under Medicaid, if the clinic | |
| elects to serve Medicaid beneficiaries. | |
| The scope of services furnished by these clinics is | |
| comparable to services provided in a physician's office. These | |
| services may be provided by physicians and mid-level | |
| practitioners, including physician assistants, nurse | |
| practitioners, and certified nurse midwives. Services provided | |
| by RHCs also include outpatient mental health services | |
| furnished by clinical psychologists and clinical social | |
| workers. | |
| Medicare regulations for this program distinguish between | |
| two types of rural health clinics: independent and provider- | |
| based. Independent clinics are freestanding practices that are | |
| not part of the hospital, skilled nursing facility, or home | |
| health agency. Provider-based clinics are integral and | |
| subordinate parts of hospitals, skilled nursing facilities, or | |
| home health agencies, under common licensure, governance, and | |
| professional supervision. | |
| The rural health clinic benefit has allowed many | |
| communities in rural America to establish and maintain rural | |
| health clinics. Communities located primarily in the western | |
| United States rely heavily on Medicare and Medicaid support to | |
| provide primary and emergency care to beneficiaries living in | |
| remote and mountainous areas. | |
| While some rural clinics serve primarily Medicaid | |
| beneficiaries, most rural health clinics are an essential | |
| source of care for the entire community, including patients | |
| with Medicare, Medicaid, private insurance, as well as the | |
| uninsured, even though they are not required to cover the | |
| uninsured. Rural health clinics often provide care free of | |
| charge to patients who are unable to pay. | |
| When the act was passed in 1977, projections of | |
| participation were optimistic. By October 1990, only 581 | |
| clinics around the country participated in the Rural Health | |
| Clinic Program. Recognizing the importance of rural health | |
| clinics in improving access to vital health services, Congress | |
| enacted several amendments to the original law to encourage | |
| participation of providers. | |
| For example, in OBRA 1987, there was a mandated increase in | |
| the payment caps applied to this program and annual updates to | |
| the caps based on the Medicare economic index. Prior to that, | |
| we didn't have any indexing or increases in the cap. OBRA 1989 | |
| provided Governors the option of designating health care | |
| shortage areas within the States, thereby increasing the number | |
| of areas where RHCs could potentially locate. | |
| This law also required that HCFA disseminate rural health | |
| clinic application materials--I think as alluded to by the | |
| previous panel--to all Medicare providers, including hospitals, | |
| skilled nursing facilities, and home health agencies, as a way | |
| of promoting participation in the program. The legislation also | |
| required us to expedite the approval time for rural health | |
| clinic certification. | |
| In part due to these changes instituted by Congress, the | |
| number of rural health clinics has grown significantly, as | |
| pointed out. Much of the growth in rural health clinics has | |
| occurred in States where there are large rural areas that for | |
| many years had few or no clinics. The GAO and IG are concerned, | |
| however, that while increases in the number of rural health | |
| clinics may approve access in certain geographic areas, these | |
| clinics are also locating in areas where Medicare and Medicaid | |
| beneficiaries have adequate access to other primary care. | |
| Let me now address some of the initiatives HCFA and the | |
| Department are pursuing to address the concerns raised in the | |
| two reports. First, a HCFA work group charged with monitoring | |
| the growth in rural health clinics; second, the Public Health | |
| Service's plans to reevaluate the shortage area designation | |
| process, which I will pretty much defer to the other panelists | |
| here; a proposed regulation that would consider a new payment | |
| methodology for rural health clinics; a study underway to | |
| evaluate access to clinic services; and legislative proposals | |
| that would give States flexibility in establishing new Medicaid | |
| rural health clinic rates that are in the President's 1998 | |
| budget. | |
| We are concerned about the inappropriate proliferation of | |
| rural health clinics in recent years. The agency first received | |
| reports from State Medicaid agencies about the number of rural | |
| health clinics growing rapidly in 1994, and we moved to convene | |
| a working group in October 1994 to analyze and propose | |
| solutions related to this proliferation and other issues | |
| impacting the Rural Health Clinic Program. | |
| Although we certainly agree with the GAO and IG reports, I | |
| would point out that we began to work on payment limits and | |
| payment reforms 2 or 3 years ago, and think that, basically, we | |
| are ready to go forward with rules. | |
| Representatives from the Health Resources and Services | |
| Administration have also participated with us as partners, and | |
| our work group meets periodically with representatives from the | |
| rural health care clinic community to solicit input and gauge | |
| industry reaction to some of our proposals. | |
| One of the first issues addressed by the group, also | |
| identified by GAO as an area of concern, is the method by which | |
| the Department designates clinics. HCFA is concerned about the | |
| current method to establish areas and the fact that it only | |
| measures the number of primary care physicians to the | |
| population base. | |
| In fairness to HRSA, HRSA is also concerned and is looking | |
| at the issue of whether mid-level practitioners, who typically | |
| provide the majority of services in rural health clinics, | |
| should be included in that calculation. So they are beginning | |
| to look at that, as well. | |
| HCFA is concerned that all shortage area designations are | |
| not periodically updated, and, as such, a rural health clinic | |
| may be established in an area that was designated years ago but | |
| would no longer meet the criteria for shortage area. We are | |
| also sensitive to the fact, however, that the shortage area | |
| designations are used for a wide variety of governmental | |
| purposes. So any changes that need to be made to it need to | |
| take those broader purposes into account. | |
| Given that scenario, we in HCFA believe we need to take a | |
| look at additional tests of need beyond the two that are set | |
| out in the statute already, the rural provision and also the | |
| medically underserved. So we are looking at a variety of other | |
| factors that could be put into place to add criteria in | |
| selecting rural health clinics, in addition to the two that | |
| exist. | |
| We would consider the fact that rural health clinics | |
| currently, a number of them, are already located in areas, but | |
| that we ought to maybe take a look at nonphysician personnel, | |
| such as physician assistants and nurse practitioners, in | |
| considering future designations. We believe that additional | |
| tests and better measures of need will limit RHC growth to | |
| areas that are truly underserved, and we are working with a | |
| work group to develop specific proposals in this area. | |
| The GAO and IG reports identified the currently statutorily | |
| mandated cost-based payment system as another factor | |
| contributing to the rapid growth of these clinics, particularly | |
| of the provider-based variety. We believe that a significant | |
| reason for this growth is the differential between independent | |
| and provider-based. We are preparing regulations to eliminate | |
| the difference in payment levels and apply a payment cap to the | |
| provider-based rural health clinics, or at least to seek | |
| comment on the application of a payment cap through | |
| regulations. | |
| We are looking to get additional information about the | |
| relationship between RHCs and the access to care through an | |
| evaluation that our Office of Research and Demonstrations is | |
| sponsoring. Some of the questions that came up in the last | |
| panel about access to care issues in relation to costs that are | |
| rising are among the things that we will be looking at there. | |
| Let me mention a budget proposal in the 1998 budget that | |
| deals with the Medicaid provision, that would phaseout cost- | |
| based reimbursement. Right now, as you heard, Medicaid is | |
| required to pay the Medicare rates. This would phaseout that | |
| cost-based reimbursement. In place of that, our proposal would | |
| provide some supplemental payments during a transition period, | |
| both for rural health clinics and FQHCs, as States move away | |
| from that to a more competitive basis. | |
| Just in conclusion, as you know, we agree with many of the | |
| conclusions of the IG and GAO reports. We recognize that | |
| changes need to be made. We are working on some regulations to | |
| make those changes and to look at other criteria that ought to | |
| be applied. | |
| I will end my statement there. | |
| [The prepared statement of Ms. Buto follows:] | |
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| Mr. Towns. Thank you very much. | |
| Dr. Gaston. | |
| Dr. Gaston. Thank you very much, Mr. Chairman, members of | |
| the committee. I am Dr. Marilyn Gaston, director of the Bureau | |
| of Primary Health Care within the Health Resources and Services | |
| Administration. I am pleased to be accompanied by Ms. Dena | |
| Puskin, acting director of HRSA's Office of Rural Health | |
| Policy. | |
| We implement safety net programs which provide primary | |
| health care services to underserved populations. In the Bureau, | |
| these include the National Health Service Corps and the | |
| federally qualified health centers, FQHCs, including community | |
| health centers, migrant health centers, health care for the | |
| homeless programs, and health care for public housing | |
| residents, and the FQHC look-alikes. In connection with these | |
| programs, we also manage the underserved area designation | |
| processes. | |
| Safety net programs are a critical part of the health care | |
| delivery system in the Nation today. As you know, that system | |
| is being challenged rapidly and dramatically, with profound | |
| effects upon these programs and, most of all, upon the people | |
| that they are trying to serve. | |
| In the last 5 years, the numbers of uninsured persons | |
| increased nationally by 15 percent, but the number of uninsured | |
| increased by 34 percent within our safety net programs, clearly | |
| double. These programs are also affected by decreasing | |
| revenues, as managed care is implemented, and by loss of | |
| capacity caused by closures of other safety net providers. Yet | |
| these programs are more essential than ever to assure access to | |
| health services for uninsured and other underserved | |
| populations. | |
| RHC's and FQHCs are both intended to enhance access in | |
| underserved areas. However, FQHCs serve as safety net | |
| providers, as they must provide care to all patients in their | |
| target populations who seek their services regardless of their | |
| ability to pay. This is an essential feature of safety net | |
| providers. As GAO points out, some RHCs are serving as safety | |
| net providers and providing care to the underserved populations | |
| on which their certification is based, including not only | |
| Medicaid and Medicare patients but also the uninsured and | |
| underinsured. | |
| HRSA agrees with the GAO finding that many RHCs are located | |
| in areas of highest need. This is occurring, in part, because | |
| their location is a designated underserved area alone is not | |
| sufficient to ensure that Federal resources are targeted to | |
| areas of highest need. | |
| In HRSA Bureau of Primary Health Care, we use the | |
| designations as only one aspect of determining need for Federal | |
| resources and funding of FQHCs. For example, the National | |
| Health Service Corps uses a HPSA designation as a first screen | |
| in determining where a provider should be placed. Other scoring | |
| mechanisms are then used to determine priorities among HPSAs | |
| and among primary care delivery sites in HPSAs, before | |
| available providers are allocated to those HPSAs of greatest | |
| need. | |
| Similarly, the MUAMUP designation is the first screen in | |
| determining potential need for a health center grant. Then a | |
| grant application for a health center is also required to | |
| confirm that unmet need in the designated community and how | |
| they intend to increase access. Throughout all of these | |
| determinations, we routinely gain invaluable input from States | |
| regarding the need and required intervention. | |
| Like health center grantees and National Health Service | |
| Corps placements, applicants for FQHC look-alike status must | |
| also provide information on additional aspects of need. So we | |
| use designations as a first screen and other measures of need | |
| as additional considerations. Most of all, we continuously | |
| monitor our programs for need, access, quality, and community | |
| impact. | |
| To assure adherence to the mission, we require annual grant | |
| or recertification applications from grantees and FQHC look- | |
| alikes, respectively. In addition, for grantees we conduct | |
| monitoring activities beyond the annual applications, which | |
| include regularly scheduled onsite reviews. | |
| Finally, we agree with the GAO that MUAs be updated | |
| regularly. HRSA has developed a new approach to improve the | |
| existing designation process for HPSAs and MUAs. The new | |
| approach will consolidate the two existing procedures, thereby | |
| eliminating two overlapping lists of designations and | |
| additional data burdens for States and communities. | |
| As a result, in the future, both MUAs, MUPs, and HPSAs will | |
| be updated simultaneously, on a regular schedule, the one we | |
| are using for HPSAs at this point. We would ask States to | |
| review their designations annually and require States to submit | |
| new data for those designations every 3 years. With the new | |
| designation process, we also plan to begin counting nurse | |
| practitioners, physician assistants, and certified nurse | |
| midwives. | |
| We also agree with the GAO that the current RHC eligibility | |
| criterion of location in an underserved area does not go far | |
| enough to ensure that the program is directed and maintained in | |
| needed communities with critical shortages of primary care | |
| providers. As has been stated, additional assessments of need | |
| are required. | |
| Before an entity is certified as an FQHC or RHC, it is | |
| important that it documents the lack of sufficient health care | |
| resources in the service area and how it intends to increase | |
| access to health care for a substantial number of underserved | |
| persons. We in HRSA support HCFA's efforts to explore | |
| additional tests of need for RHCs, and have been working with | |
| them in their efforts. | |
| I would also like to note that just last week the | |
| Secretary's Advisory Committee on Rural Health adopted a | |
| position which supports certification of new RHC sites based on | |
| additional program-specific needs assessment. Clearly, HRSA | |
| considers State involvement in the certification process as | |
| critical. We have also been collaborating with HCFA in | |
| determining how to increase State involvement. HRSA also agrees | |
| with the GAO recommendation to require periodic recertification | |
| of RHCs to ensure that clinics continue to meet eligibility and | |
| need requirements. | |
| In conclusion, we believe all of these changes will greatly | |
| improve decisions around the location of RHCs and will help | |
| ensure that they are strategically placed. A recertification | |
| process will ensure whether they should be maintained in | |
| underserved communities. | |
| Provider types that are reimbursed by higher Medicaid and | |
| Medicare rates than others, because of their safety net nature, | |
| which includes FQHCs and RHCs, should be held accountable for | |
| receiving the special subsidy. It is imperative that FQHC or | |
| RHC provide increased access to health care for a substantial | |
| number of underserved persons. | |
| Given the changing health care environment and budgetary | |
| pressures at both the Federal and State levels, it is critical | |
| that Federal grant programs and financing mechanisms for health | |
| care services maximize their contribution to the safety net and | |
| increase access for the many underserved citizens in our | |
| country. | |
| Thank you very much for the opportunity to testify. We will | |
| be glad to answer any questions. | |
| [The prepared statement of Dr. Gaston follows:] | |
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| Mr. Towns. Thank you very much, Dr. Gaston. I understand | |
| that Dr. Puskin will not be testifying, so we will move | |
| forward. | |
| Let me just move to you, Mr. Snowbarger, and let you open | |
| up. | |
| Mr. Snowbarger. Thank you, Mr. Chairman. | |
| I have just a couple of questions. I guess I didn't realize | |
| until your testimony, Dr. Gaston, that we've got two different | |
| kinds of certifications: one is medically underserved; the | |
| other one is, what, health professional shortage? | |
| Dr. Gaston. Shortage area. | |
| Mr. Snowbarger. OK. I looked on the map for my State, and | |
| where I see these RHCs going in, there may be some areas where | |
| they are medically underserved or there would be a shortage; I | |
| see other areas of the State where there definitely is, but | |
| there aren't any RHCs out there. So if we are trying to target | |
| this relief--or maybe incentive, I ought to say--if we are | |
| trying to target this incentive to places where there really is | |
| a medically underserved or health shortage area, how do we | |
| change the definitions to get them focused in the right way? | |
| Dr. Gaston. As I mentioned, one of the things that is | |
| important to remember is that the HPSA--let me talk about them | |
| in a little more detail. The HPSA, the health professional | |
| shortage area, is to really look at those areas that need | |
| providers. The medically underserved areas are looking at | |
| services. Now, you can't separate providers from services, but | |
| that is the main intent. | |
| The HPSAs are published annually, and they are updated | |
| every 3 years. OK. The first screen for the HPSA relates to-- | |
| it's focused on providers--it relates to the physician to | |
| population ratio in that area, in a rational service area. | |
| Mr. Snowbarger. So ``provider'' refers specifically to a | |
| physician? | |
| Dr. Gaston. It does. Right. We are going to begin counting | |
| other providers, the mid-levels; we have not done that in the | |
| past. So it's talking about mainly the physician to population | |
| ratio, starting at a 1 to 3,500 ratio. After that, though, | |
| before we put any core providers in an area, we look at the | |
| poverty of that area, we look at the infant mortality rate, we | |
| look at the access barriers as it relates to distance, we look | |
| at low birth weight. | |
| So there are many other criteria that go into the | |
| determination, and then we take those HPSAs and score them and | |
| prioritize them. Then we also score the sites in those | |
| prioritized HPSAs. So it's a three-stage process. I think that | |
| is the point that we want to make. | |
| And we do this in conjunction with the States. So if we | |
| want to target certain areas, first of all, those communities | |
| have to ask for those designations. We don't designate them | |
| from the Federal Government. This is a ground-up process. So | |
| the communities and the States decide what areas they want to | |
| be designated, and then they send them to us for that. I think | |
| that's an important distinction, too. | |
| So the targeting of those areas first starts with the local | |
| concern, and then to get resources, to have Federal | |
| interventions put into those areas, we really have to look at a | |
| major series of steps that determine need further than just the | |
| HPSA or the MUA. | |
| Mr. Snowbarger. The statute that talks about HPSAs | |
| indicates that they are to be reviewed annually and, if | |
| necessary, revised. Have we been revising those? | |
| Dr. Gaston. Yes, they are reviewed. | |
| Mr. Snowbarger. Well, what are we revising? What do you | |
| interpret that statute to mean? The reason I ask is, | |
| apparently, it looks to me like we need to be revising the | |
| designation or the definition of where there is a shortage. | |
| Dr. Gaston. What gets revised are the resources in areas. | |
| OK. And this is happening very rapidly now, as you might | |
| expect. But what changes could be the level of poverty, it | |
| could be, certainly, the physician to population ratio. So all | |
| those criteria are subject to changes based on the environment. | |
| Mr. Snowbarger. But they are measured against some kind of | |
| standard? Let me try to do it a different way. I see a problem | |
| happening here. When I measure these bar graphs with, again, | |
| the map of my State, where these RHCs are located. I see a | |
| mismatch. And with the pie chart over here, I see a mismatch. | |
| Has there been any attempt to try to change that mismatch, | |
| to try to get RHCs into areas that are medically underserved | |
| and the health professional shortage? | |
| Dr. Gaston. Let me mention something very important. We in | |
| HRSA do not administer the RHCs. We don't know when they get | |
| certified. We don't know where some of them are. This is | |
| administered by HCFA. | |
| Mr. Snowbarger. OK. I'm asking the wrong person. | |
| Ms. Buto, same question. | |
| Ms. Buto. Any attempt to try to target the areas that are-- | |
| that's the issue of further additional criteria for targeting. | |
| We have set up this group of folks to look at those criteria. | |
| Some of the issues would be, can you come up with a way to | |
| target frontier areas, for instance, areas which are really | |
| underserved, that really aren't able to get professionals in | |
| there? That's one of the things we're looking at. | |
| Another thing we're looking at is, there might be different | |
| purchasing strategies that you need to take. For instance, in | |
| the budget this year, we are asking for authority so that | |
| Medicare can go in. | |
| Where we have a need and we're not able to use a major | |
| statutory framework to get at the need, maybe we ought to go in | |
| and say, we need to purchase special services in a really | |
| underserved area; let's see what kind of bidding we can set up | |
| to get interested parties into this area. That might be a more | |
| effective way to get at those really hard to get at areas, by | |
| figuring out what you need in that area to get people into it. | |
| So I think we've got to use more than one strategy to get | |
| at this issue. | |
| Mr. Snowbarger. Mr. Chairman, just two more short | |
| questions. The question may not be short, but the answer is | |
| expected to be. Let's put it that way. | |
| Have we decertified any of these areas since 1977? | |
| Ms. Buto. The law does not allow us to--there is an actual | |
| provision that grandfathers in existing rural health clinics. | |
| So one of the issues that I think the GAO and IG both raised | |
| is, if we really want to put teeth in decertification, if you | |
| will, there probably has to be a change in the law. That's one | |
| of the things we've looked at, as well. | |
| One issue that has to be dealt with in any provision in | |
| that grandfather clause would be, you know, you want to be sure | |
| you are not just decertifying in an area and then it becomes | |
| medically underserved again and you recertify. You want to be | |
| sure that you have criteria that get at the problem rather than | |
| create a churning in the system that actually disadvantages the | |
| people being served. | |
| Mr. Snowbarger. It looks like we've given an awful lot of | |
| incentive for some areas that may have been medically | |
| underserved in the past to be fully served, maybe excessively | |
| served at this point in time. | |
| Dr. Gaston. May I make one point? | |
| Mr. Snowbarger. Sure. | |
| Dr. Gaston. Just to clarify the decertification versus | |
| dedesignation. | |
| Mr. Snowbarger. OK. | |
| Dr. Gaston. The designation process relates to what we do | |
| in HRSA, MUAs, OK. There has not been a decertification, as far | |
| as I know, or very few, in terms of the RHCs, the clinics | |
| themselves. There's a constant process where we are | |
| dedesignating areas all the time. They lose their HPSAs, and | |
| then new HPSAs are designed. So that process is very fluid. | |
| Ms. Buto. The problem--just to get back to the connection | |
| to the grandfather issue--is that even after that has occurred, | |
| if there is one designated in that area right now, the law says | |
| they continue. | |
| And the reason, I think, originally, for that was, there | |
| was a lot of concern, especially as the program was getting | |
| started, that by the time you invested the capital and actually | |
| set up a clinic, that if the designation was lost, you would | |
| have really deterred people from getting into the program. That | |
| was, obviously, a long time ago. | |
| Mr. Snowbarger. Since the answers don't appear to be short, | |
| the next question will be a rhetorical one. There's a statement | |
| in the report that concerns me greatly. Let me just read it | |
| quickly. | |
| ``HCFA officials said that they did not establish cost | |
| limits for facility-based RHCs as they did for independent | |
| RHCs, because few facility-based RHCs were certified when the | |
| program began.'' Here's what bothers me: ``And it was easier to | |
| reimburse these RHCs the same way as Medicare paid the | |
| facility's other outpatient departments, on the basis of lower | |
| costs or charges for services.'' | |
| That may be easy, but the time has come to put a little | |
| hard work into it and figure out why we're paying at different | |
| rates for the same service. | |
| Ms. Buto. Yes. And I think I mentioned that we're going to | |
| that. I should just say that, at the beginning, there were only | |
| 10 hospitals. There was a real danger in double paying, because | |
| in a hospital accounting system, you would pay them for some of | |
| the overhead here, and then you would also pay in the clinic | |
| over here. | |
| So the feeling at the time was, one accountant looking at | |
| all the books was better than paying them out of different | |
| pockets. Now, we feel that, you know, that's obviously out of | |
| control and we need to put limits on. | |
| Mr. Snowbarger. Thank you, Mr. Chairman. | |
| Mr. Towns. Thank you. | |
| We have a vote on, so what I would like to do is to finish | |
| with this panel and then bring the next panel up. | |
| Let me begin by saying that GAO recommended four changes to | |
| the Rural Health Clinic Program. Which of those recommendations | |
| do you agree with, and which ones do you disagree with? Or if | |
| you want to add some more, fine. | |
| Ms. Buto. We basically agree with all of them. Two of them, | |
| I think, were legislative changes, and two were administrative | |
| changes. One of those, as I say, we're already planning to | |
| propose a cap on the provider-based. And the other was to apply | |
| some screens in terms of reasonable costs, if I recall. I may | |
| be getting IG and GAO mixed up. We are also doing the | |
| development of screens. So we're doing both of those | |
| administratively, and the legislative proposals we also agree | |
| needed to be addressed. | |
| Dr. Gaston. We also agree that there need to be further | |
| determinants of need. There needs to be a recertification | |
| process and some monitoring. | |
| Mr. Towns. In your testimony, Dr. Gaston, you used the term | |
| ``periodic'' recertification. What do you really mean by that, | |
| every 3 years, every 5 years, every 6 months? What do you | |
| really mean? | |
| Dr. Gaston. OK. Again, we don't certify or recertify the | |
| RHCs. We are involved in that process as it relates to the FQHC | |
| look-alikes, which we also do conjointly with HCFA and really | |
| could serve as a model of how we could do the RHC program. But | |
| we designate areas of underservice. They are looked at annually | |
| by the States. We do this in conjunction with the States. Then | |
| their designation is either given to them, or they are | |
| dedesignated on a 3-year basis. | |
| Mr. Towns. Right. That's the test for need. | |
| Dr. Gaston. Yes. | |
| Mr. Towns. OK. Can HHS meet the statutory 1-year | |
| requirement for updating the health professional shortage area | |
| list? If not, how long would it take you to do it? | |
| Dr. Gaston. Well, we are assessing them annually. The | |
| States do that. We rely on the States to do that. And we do it | |
| every 3 years; we do a complete one. It's very labor intensive, | |
| in terms of finding the data. So to do it annually, when we are | |
| not convinced that the criteria need to be looked at that | |
| often, we have not considered moving to a complete assessment | |
| annually. We do that every 3 years, and that seems to work | |
| fine. | |
| Mr. Towns. Let me ask a question, Ms. Buto. How much time | |
| and money is needed to conduct the type of periodic | |
| recertification recommended by GAO? How much money would be | |
| involved in doing that; do you have any idea? | |
| Ms. Buto. I don't. We have a general survey budget in | |
| Medicare. Unlike someone else's statement in the earlier panel, | |
| Medicare certifies hospitals and nursing homes, home health | |
| agencies, and many other providers, for Medicaid. So this is | |
| not the only instance in which we have the same standards. So | |
| we have to budget that. When the budget for the agency comes | |
| up, we usually line item how much we can allocate to each of | |
| the different categories. | |
| I can't tell you specifically, if we were to go to | |
| recertification, how much it would cost. We would need to | |
| reshuffle some of our money, because that hasn't been growing. | |
| We have had to reallocate and target that funding. | |
| Mr. Towns. Thank you very much, Mr. Chairman. | |
| Mr. Shays [presiding]. I thank the gentleman. | |
| Unfortunately, because I wasn't here during the previous | |
| questions and some of the statements, what I may do is cover a | |
| little bit of old ground, but I want to just establish a sense | |
| of what the obstacles are in this situation. Basically, the GAO | |
| is saying that 90 percent of the people who are being served | |
| would have been served anyway. So first I need to be clear with | |
| both of you whom you have your disputes with: the GAO or the | |
| Inspector General. | |
| Ms. Buto. I think we said earlier we really don't have | |
| disputes with the GAO and Inspector General around the | |
| recommendations. There are a number of areas where I would | |
| dispute or at least raise the question that I don't think that | |
| they had the time or the focus of their review was in the same | |
| direction. | |
| The 90 percent is a good example. Ninety percent may have | |
| been served. I don't think we know many of those would actually | |
| have received the same range of services. They may have had a | |
| provider; it may have been an emergency room. Again, it depends | |
| how the question was asked and how extensive the services were | |
| that were available. It may be some smaller percentage, but the | |
| fact is, we all know that there are many of these rural health | |
| clinics that are in areas where there are plenty of other | |
| providers. | |
| The issue of overpaying them is really, again, related very | |
| much to the managed care penetration, both in Medicaid and | |
| Medicare. Particularly where physicians are seeing themselves | |
| moving into managed care in Medicaid, the rural health clinic | |
| option has become more and more attractive, even more | |
| attractive because the fee schedules themselves are going away | |
| in Medicaid and being replaced by negotiated managed care | |
| arrangements. | |
| In Medicare, it's more complicated. We actually have an | |
| abuse in the program where some physicians have actually picked | |
| and chosen between sometimes billing us as a physician and | |
| sometimes billing us as a rural health clinic. Our regulations | |
| are intending to address that issue, as well, because there are | |
| fees in the Medicare physician fee schedule that are higher | |
| than what you could get as an RHC. | |
| We find that some billings are occurring for those fees. | |
| And then when the clinic rate is higher, billing is occurring | |
| there. This is not a widespread problem, but it is enough of an | |
| issue that we're going to draw some very clear lines about what | |
| an RHC is, and if it's an RHC service, you cannot bill the fee | |
| schedule. | |
| So those are the kinds of things we're finding that I'm not | |
| sure GAO or IG went into, because that wasn't the line of | |
| inquiry. So the nature of service, if you will, and the reasons | |
| people are doing RHC billing may vary, and there actually may | |
| be worse abuses in some other areas related to lack of clarity | |
| here. | |
| Generally, we agree with the recommendations. | |
| Mr. Shays. Well, I think your key point is that, if it was | |
| even 70 percent of the problem, it would be bad. Now you are | |
| going to decide at what level people are being served. I have a | |
| sense that you might have a disagreement as to what level. So, | |
| in essence, you basically buy into the fact that this system is | |
| broken. | |
| Ms. Buto. That's right, that we need to fix--we either need | |
| to narrow those criteria to really get at the areas of need and | |
| change the payment limits to really discourage that | |
| proliferation on the provider-based side. | |
| Mr. Shays. Usually, if there is 10 percent type of abuse in | |
| the other way, you would say we're starting to see a problem. | |
| So 10 percent may be working the way we want, and 90 percent | |
| not working the way we want raises some questions, obviously, | |
| that really make us wonder: are we approaching this in a quick | |
| enough manner? And I'm not getting a sense that that's | |
| happening. | |
| Dr. Gaston, where do you agree or disagree with the general | |
| thrust of the Inspector General's or GAO's report? | |
| Dr. Gaston. We agree that the determination around need and | |
| where they are placed really needs to be refined and looked at. | |
| The way we do it in the Bureau is the way we would recommend | |
| doing it, that the designations, as they are published, are | |
| only screens, first-level screens, and then, after that, you go | |
| through a whole list of other need determinants, along with | |
| access, other health services, the community impact. | |
| So these entities really have to show that they are | |
| performing the mission, they are increasing access, and having | |
| an impact. That's the first thing. They certainly need to be | |
| recertified so that, over time, you do have to make decisions | |
| as to whether that is continuing. So the monitoring and the | |
| recertification is another key aspect. | |
| We certainly agree that this has to be done in conjunction | |
| with the States. We cannot do that in isolation. So all these | |
| decisions, the States have to have input in terms of data, | |
| input in terms of their priorities, input into interventions | |
| they think should happen, et cetera. | |
| Mr. Shays. One of the things that we determined in looking | |
| at other areas where we wanted to change rules, the rules are | |
| basically stacked against the people who have to pay the bills, | |
| because it takes us so long, in our regulations and rules, to | |
| change them. | |
| So if the system favors the seller--and I consider the | |
| government the buyer; in other words, we are paying for it--if | |
| it favors the person who is providing the service, they are | |
| going to readily want to take advantage of it. If it doesn't | |
| favor them, they simply aren't players. So we only lose. In | |
| other words, we're just going to continue to pay out. | |
| I need to get a sense of how we can move more quickly. I | |
| need some specific recommendations of what you suggest that we | |
| do, so that this committee staff can write a report soon, and I | |
| can go to the leadership on both sides of the aisle and say, we | |
| need to take action. So tell me some very real, specific things | |
| we can do right away. | |
| Ms. Buto. We're about to issue the rule on putting the | |
| payment limit on the provider-based side. Clearly, as you say, | |
| regulations take a while. | |
| Mr. Shays. How long will it take? Just run me through that. | |
| Ms. Buto. The regulations take--a good estimate is a year | |
| from the time that they go out in proposed to the time they are | |
| actually finalized and implemented, because we give our | |
| intermediaries a chance to put them into place. If there were | |
| legislation, for instance--and I think it's fair to say we | |
| would support legislation of this sort--that were to make the | |
| same change, we would still have to give our contractors time | |
| to make the change, but it would be quicker. | |
| Rulemaking is important for another reason. I just have to | |
| say this. We often create unintended consequences, and we're | |
| concerned about that, and that's why we seek public comment. So | |
| there's a balance. But in terms of quickness, you know, | |
| legislation is quicker than regulations. | |
| Mr. Shays. Do you both agree? I'm sorry. Dr. Gaston. | |
| Dr. Gaston. Yes. | |
| Mr. Shays. What could be done relatively quickly? | |
| Dr. Gaston. Well, from our side, we already have revised | |
| regulations as it relates to the designation process that I | |
| described in my testimony, that would improve what we are doing | |
| in terms of MUA and HPSA designations. Hopefully, that will | |
| proceed. Again, we have to go through the same process that | |
| HCFA is having to do, in terms of rulemaking, et cetera. But | |
| certainly that will be on board very soon. | |
| Mr. Shays. The GAO report came out in November 1996. Why do | |
| we not yet have suggested rule changes? | |
| Ms. Buto. The rule changes--and I mentioned a little of | |
| this before you came in--involve more than just the payment | |
| limit. They are going to address some commingling of funds | |
| between physicians who are billing us sometimes on the fee | |
| schedule, sometimes as RHCs. They are going to incorporate a | |
| number of other changes the law has made over time. | |
| So it is a process that--by the way we do rulemaking, we | |
| try to involve interested parties, beneficiaries, then we clear | |
| them with our lawyers and issue them. That usually does take a | |
| few months. The IG's office has also been involved in looking | |
| at our rules in the Department. It just takes that long, quite | |
| frankly, to do. | |
| Mr. Shays. Let me back up a second. Why did it take the | |
| GAO's report to get us to take some action? Why didn't we do | |
| this 5 years ago? | |
| Ms. Buto. And I disagree with that, because we started the | |
| rulemaking effort way before the GAO issued its report. We | |
| began working on the commingling issue a couple of years ago, | |
| just gathering the data on what was happening, because you | |
| can't assume it's happening everywhere until you look at what | |
| records are being billed, as well as the cap issue. We have | |
| been working sort of in tandem with the Inspector General and | |
| others on this, and gathering the information. | |
| Part of it is, their information has helped us refine some | |
| of the policies in the regulation, but we did not start after | |
| they completed their report. | |
| Mr. Shays. Either way, it's not a good commentary, frankly, | |
| on HCFA. If you started sooner, you should have been done | |
| sooner. And if you started later, you should have started | |
| sooner. So from my simple mind, you basically want people to go | |
| into rural areas, doctors; you want to provide health care in | |
| rural areas. | |
| So my simple mind says, there are reasons why people don't | |
| do it. The reason they don't do it is, there is not a large | |
| population; therefore, they don't get enough traffic. And maybe | |
| they don't even want the lifestyle of a rural area. So there | |
| has to be some inducement. So it seems logical that we should, | |
| in fact, pay more to serve a rural area. | |
| My simple mind says, though, that if someone can go 10 or | |
| 15 or 20 miles away and get that same service, that maybe then | |
| you don't need to have a higher reimbursement rate. And it | |
| seems to me that that's a no-brainer. Tell me where I'm wrong. | |
| Ms. Buto. You're not. | |
| Dr. Gaston. We agree with you. | |
| Ms. Buto. We agree with you. What we are doing is--because | |
| certification is still in our court, when new ones come in, we | |
| really are focusing on the areas where there aren't any, where | |
| we really, genuinely don't have providers, and we're giving | |
| those the highest priority. But right now, the way the law is | |
| structured, there is no ability, once you're certified, even if | |
| the designation changes, for you to be out of the program, | |
| nondesignated. | |
| So we feel that, No. 1, we've got to move on that issue of | |
| adding more criteria. | |
| Mr. Shays. You're talking about being designated as a rural | |
| health clinic. | |
| Ms. Buto. That's correct. | |
| Mr. Shays. Let me ask you this: Why can't you have two | |
| levels of rural health clinics, those that are clearly isolated | |
| from other health care facilities, and those that aren't? | |
| Ms. Buto. You can. I mentioned also earlier that we're | |
| looking at the issue of frontier areas where there really is a | |
| dire need, where we can really focus this effort. And that's | |
| one of the things that we are likely to be having a proposal to | |
| address. | |
| Mr. Shays. I guess the thing that concerns me is that there | |
| is a political problem. The political problem is that once you | |
| have allowed people to invest in these facilities and develop a | |
| political constituency, we're not going to change it. Yet if | |
| the number was 20 percent who really couldn't have gotten | |
| health care without this, but if we're looking at anything to | |
| more than 75 percent, it tells me that the system had to have | |
| been sick for a long time. | |
| I don't mean to throw stones at HCFA or anyone else, | |
| because I know that politicians, of which I am one, sometimes | |
| come in and say, why didn't you do this or protect this person. | |
| I understand, but it strikes me that there is a tremendous | |
| imbalance at HCFA, where you are so sensitive to the criticism, | |
| to what doctors might say, and to what the politicians might | |
| say about you cutting off services or making it more difficult | |
| that we now end up with an abuse like this. | |
| For me, recertification should be something that shouldn't | |
| take a long time. That's just a no-brainer that we would | |
| require recertification. Why do we have to compile all these | |
| different rules? I don't like to be in a large group sometimes, | |
| because you're only as quick as the slowest person in the | |
| group. I got that same image when you were talking about where | |
| you've got all these different rules you want to change. | |
| So things that we know we can do now, we're waiting until | |
| we get some other things that we might want to do, and you want | |
| to package them all in one. Tell me why we have to package them | |
| all in one. | |
| Ms. Buto. They are done. They are very close to being | |
| issued, so I think, at this point, we ought to just proceed | |
| with those. They are related. The issue of a cap on provider- | |
| based entities and the commingling of funds, they are all | |
| related, because there are different ways to push the balloon, | |
| if you will. | |
| Mr. Shays. And recertification? | |
| Ms. Buto. Recertification is in the statute. We cannot do | |
| it under the law. That's the problem. | |
| Mr. Shays. OK. Have you asked anyone in Congress to | |
| recertify? Prior to this effort, have you made an effort, or | |
| anyone? | |
| Ms. Buto. We have not asked for legislative authority to | |
| repeal that or to change that, but it is one of the three or | |
| four things we are working on. | |
| Mr. Shays. How long will it take you to do that? | |
| Ms. Buto. I think the next couple of months developing the | |
| proposal. | |
| Mr. Shays. No, that takes us too long. We're not going to | |
| wait a couple of months. I mean, why would we have to wait a | |
| couple of months to have you write a letter to ask us to | |
| recertify? | |
| Ms. Buto. Oh, to ask for the authority? | |
| Mr. Shays. Yes. In other words, why can't you all tell us? | |
| Put some of the burden on us. Why can't you tell us these are | |
| the things you want us to do, and we will work on them? I'll | |
| give you an example. In this very committee, we had the issue | |
| of people ripping off Medicare and Medicaid. It was not a | |
| Federal offense to commit fraud, except by wire or mail, and | |
| health care fraud was not a Federal offense. | |
| We had a hearing like this, and it became evident to us, | |
| and the administration was asking us to change it. We went to | |
| our leadership, and we put it in the health care reform bill. | |
| But, I don't see why we would wait a day. | |
| Ms. Buto. We'll take it back and get back to you quicker. | |
| Mr. Shays. OK. I would like to say that by the end of this | |
| month, if you could make some preliminary suggestions of things | |
| that you would like us to do statutorily. We need to get it in | |
| to start that process, and then, if you want to finalize it, or | |
| even if you want it to be oral in the next 2 weeks and then | |
| tell us in a month, but in the next 30 days. It seems to me | |
| that you have studied this long enough and you can ask us to do | |
| certain things. | |
| Ms. Gaston, is there anything, statutorily, that you would | |
| like us to do? | |
| Dr. Gaston. No. I would like to make a point, though, that | |
| you made, that was very important. We want people to go into | |
| underserved areas. What kind of incentives can we give them? As | |
| we look at cost-based reimbursement, that certainly has been an | |
| important one. We fully support those programs that are meeting | |
| the mission of seeing everybody, increasing access, everybody, | |
| regardless of ability to pay, do need cost-based reimbursement. | |
| Also, the ones that are increasing access through enabling | |
| services, that are dealing with language barriers, et cetera, | |
| those kinds of incentives and those kinds of payments will keep | |
| them alive. So I want to make that as a point as that is being | |
| considered. | |
| Mr. Shays. You are suggesting, then, you have a two-tiered | |
| billing. | |
| Dr. Gaston. Yes. | |
| Mr. Shays. Some rural health care clinics won't get that | |
| kind of reimbursement; some will. | |
| Dr. Gaston. It has to be the ones that are meeting the | |
| mission of serving the underserved, increasing access, | |
| improving health outcomes, those are the ones that then get it. | |
| Mr. Shays. Is there anything that you all wish we had asked | |
| or statements or comments you want to make? | |
| Doctor, do you have any comment? | |
| Ms. Puskin. The only clarification is, it's very important | |
| to understand what was said earlier about the very critical | |
| role of Medicare and Medicaid in assuring that services are | |
| available in rural areas. These are communities that often the | |
| providers have 60, 70 percent of their patient load is Medicare | |
| and Medicaid. | |
| So the role of Medicare and Medicaid in stabilizing access | |
| to health services in those areas is very critical. Therefore, | |
| this program and its role in stabilizing the availability of | |
| services needs to be considered very, very carefully. So as we | |
| look at certification and recertification, we certainly feel | |
| that we need standards that are better than the current ones | |
| that we have. | |
| As we look at it, it's very critical, as we look at | |
| underserved, the potential for communities to become | |
| underserved in the future is very critical to look at, | |
| particularly, I think, as we look at the history in the past. | |
| When we didn't have supportive services, special provisions for | |
| hospitals, for example, under Medicare, we saw that hospitals | |
| went under very quickly when we removed those underpinnings. | |
| Mr. Shays. You are triggering a question that I do want to | |
| put on the record. In some of our urban areas we have | |
| community-based health care clinics that basically get | |
| reimbursement from Medicare and Medicaid, but also, frankly, | |
| provide health care services and aren't properly reimbursed. | |
| Will the rural health clinics come to me and say, you are | |
| seeing one part of the story; the other part of the story is | |
| that the extra money we get from the Federal Government has | |
| enabled us to serve other people who are the working poor? Will | |
| that be one of the claims that will be made? | |
| What I'm trying to understand is, it seems so illogical | |
| that we could have allowed it to get to this point, there must | |
| be something I'm just not getting. For me, it should have been | |
| dealt with years ago, and I should have known about it years | |
| ago, and we should have dealt with it years ago, if it has | |
| gotten so bad. What am I missing here? | |
| Ms. Buto. I think what you are missing, what we all were | |
| missing for a while, is that a big part of this problem is in | |
| Medicaid, and it took us a while to understand the dimensions | |
| of what was going on in Medicaid. That is more than half of the | |
| growth issue. The other big part of this issue is provider- | |
| based clinics growing out of control, and that very much is | |
| related to the cap. | |
| Were those two things really addressed--and, as I say, we | |
| have a legislative proposal on the Medicaid side and the cap on | |
| the Medicare side--then I think Dena is right. What we have to | |
| look at, and the tough thing about writing back to you in a | |
| month, is trying to develop the right criteria so that you're | |
| not putting everybody at risk where you really need those | |
| critical clinics. That's the part we're really going to have to | |
| address. | |
| Mr. Shays. Let me ask you this. Really what I would like is | |
| there to be some oral communication between this committee and | |
| your staff in the next 2 weeks, telling us where you think we | |
| could logically move and where the trouble points are, and that | |
| timeframe could obviously be adjusted then. It's just that I do | |
| think that we have to bring some kind of timeframe, some kind | |
| of deadline. | |
| Given that I know the regulation process and the statutory | |
| process, I'm only here for, basically, 18 more months. That's | |
| the way I'm thinking. So I don't think I have that kind of | |
| timeframe to just go on indefinitely. | |
| May I just clarify? Because HCFA focuses more on Medicare | |
| than Medicaid, obviously, you're saying that the Medicaid part | |
| you lost. | |
| Ms. Buto. The data we get from the States varies | |
| tremendously by State. So we have heard episodically about it, | |
| but until we had some of this very state-specific study that | |
| both GAO and IG have done, we haven't had that kind of detail | |
| in some of the State experience. | |
| Mr. Shays. Doctor, do you have anything you want to add? | |
| Ms. Puskin. One of the things is, you asked a question, if | |
| these clinics use the money to serve the uninsured, and I think | |
| that's a very important role. These clinics were designed, | |
| however, to ensure that there was access for the Medicare and | |
| Medicaid population. We did do a survey in 1994, when we had | |
| about 1,300 clinics, and we did find that about 16 percent of | |
| them had more than 25 percent of their volume in the uninsured. | |
| We don't know exactly where that stands now. It is | |
| important to State, the mission for these clinics is to | |
| ensure--and we need to make sure that they do this--serve the | |
| Medicare and Medicaid population and ensure access for them. It | |
| is a much more complicated question when we get to the | |
| uninsured, because that is not necessarily part of their | |
| mission by statute. | |
| Mr. Shays. It's not part of their mission, but they may | |
| have taken it on. | |
| Ms. Puskin. In our survey, a significant percentage had a | |
| very high percentage of uninsured that they provided care to. | |
| Mr. Shays. That is a good lead to the next panel. Let me | |
| just ask each of you, though, tell me the most difficult | |
| political obstacle. Clearly we have to define exactly what we | |
| want, but on merit, we need to make major changes and as | |
| quickly as possible. Define for me the political challenge that | |
| HCFA might have, HHS, in general, might have on this side. What | |
| are the political challenges? | |
| Ms. Buto. It's a very general one, and that is that we | |
| continue to see real problems in rural areas in terms of | |
| access, both in physician access and practitioner access. You | |
| will see we are proposing some greater access to nonphysician | |
| practitioner services. So there is this bigger problem. The | |
| problem in dealing with this one is not overdoing it in a way | |
| that we have done harm. | |
| Mr. Shays. Let me put it in my words. Since it has the name | |
| ``rural health clinic,'' just the name alone, if we make any | |
| changes in rural areas, people will say, what are doing | |
| changing a system that is helping us? Even if they are only | |
| getting 10 percent of the benefit, they are fearful that some | |
| change could be harmful. Whereas, we've got to sell them on the | |
| fact that we really want to do a lot more in rural areas to | |
| meet their needs. But that would be one. | |
| Ms. Buto. I see that as the biggest one. | |
| Mr. Shays. Any others? | |
| Dr. Gaston. I would agree. | |
| Mr. Shays. Is another obstacle that we have people | |
| entrenched in the system that are making a windfall; they have | |
| a collective mass that means that they will be able to prevent | |
| change? | |
| Ms. Buto. I may be naive on this, but I think there's | |
| enough concern from good rural health clinics and the | |
| legitimate providers that everyone wants to clean up that part | |
| of the problem where there are entrenched and undeserving, if | |
| you will, entities involved in the program. | |
| Ms. Puskin. Can I just say, one thing that you need to | |
| recognize is, some people see rural health clinics and the | |
| toehold that some of the urban may have in it as actually a | |
| good thing, because what they are seeing is the need, using it | |
| as a tool to organize care in rural areas, and that what you're | |
| doing is creating the linkages that help to prepare those rural | |
| areas to become part of networks of care that are more | |
| effective. | |
| Now, in fact, there is a lot of abuse, but I think, as you | |
| are looking at the system, rural health clinics have a | |
| reputation for both good and bad, for the good that they do in | |
| helping to maintain services out there. So the political | |
| problem you face is a concern of throwing the baby out with the | |
| bathwater. | |
| Mr. Shays. One last question: The two-tier approach, will | |
| that encounter a lot of opposition? | |
| Dr. Gaston. Yes, it will. | |
| Mr. Shays. But that enables us to get around the whole | |
| issue of what is truly designated as a rural area. I mean, | |
| that's the way we can deal with that problem; correct? | |
| Dr. Gaston. No. No, that's not going to deal with that | |
| problem. | |
| Mr. Shays. Let me put it this way: An area that I might not | |
| consider rural, the census will call it rural--we're not going | |
| to change that. You are recommending that we not change that. | |
| Dr. Gaston. No, the first thing we have to do is really | |
| define where they are, in terms of underserved areas. | |
| Mr. Shays. Right. | |
| Dr. Gaston. That has to be fixed right away, and I think | |
| that can be fixed right away. | |
| Mr. Shays. OK. Thank you very much. | |
| We will call our last panel. Bill Finerfrock, executive | |
| director, National Association of Rural Health Clinics; Tom | |
| Harward, physician assistant and executive director, in West | |
| Virginia; and Robert J. Tessen, co-founder and first president | |
| of the Texas Association of Rural Health Clinics. | |
| If you would all remain standing. | |
| [Witnesses sworn.] | |
| Mr. Shays. Let me just say that you are free to read your | |
| statements, but sometimes, as the third panel, you can almost | |
| be more effective just responding to what you have heard. So I | |
| would encourage you to do that, but do whatever you are | |
| comfortable with. I want to address what you're hearing before | |
| we even start our questions. | |
| We will just go down the line. | |
| STATEMENTS OF BILL FINERFROCK, EXECUTIVE DIRECTOR, NATIONAL | |
| ASSOCIATION OF RURAL HEALTH CLINICS; TOM HARWARD, PHYSICIAN | |
| ASSISTANT AND EXECUTIVE DIRECTOR, BELINGTON CLINIC, BELINGTON, | |
| WV; AND ROBERT J. TESSEN, M.S., CO-FOUNDER AND FIRST PRESIDENT, | |
| TEXAS ASSOCIATION OF RURAL HEALTH CLINICS, NATIONAL RURAL | |
| HEALTH ASSOCIATION | |
| Mr. Finerfrock. Thank you, Mr. Chairman. | |
| I think I would prefer to perhaps respond rather than | |
| recite what is in the testimony, because I think there are some | |
| important things that have been brought out here today and some | |
| things that perhaps need some clarification and explanation. | |
| First, as was mentioned, this is the 20th anniversary of | |
| the Rural Health Clinic Program, 1997, and I think it's | |
| important that Congress take a look at the program at this | |
| time. What we're finding is that, while the Rural Health Clinic | |
| Program has not changed substantially over the last 20 years, | |
| the world in which rural health clinics operate has changed. | |
| So while we didn't see tremendous growth in the early | |
| years, changes in Medicare, Medicaid, and other areas, managed | |
| care, as has been mentioned, has created perhaps an opportunity | |
| for folks to take a look at the Rural Health Clinic Program | |
| that didn't exist in the past. | |
| I think it's important. We had the pie chart over there, | |
| and you focused somewhat on ``rural'' as part of what is the | |
| problem. The statute all along has defined ``rural'' as a non- | |
| urbanized area. So for the GAO report to say at the outset that | |
| the premise of the program was to put practitioners in | |
| underserved, low-density, low-populated areas is really an | |
| inaccurate reflection of the record. | |
| In fact, at the time the Rural Health Clinic Program was | |
| created, there was very little discussion about the size of the | |
| community in which the clinic was located. In fact, the Carter | |
| administration had proposed that there be no restriction on the | |
| size of the community, that really what the focus was on was an | |
| underserved area, that what we were trying to do was provide | |
| access to underserved populations. | |
| Congressman, in Brooklyn, you've got underserved | |
| populations even though you've got a million people who live in | |
| Brooklyn. So population is not your determiner of whether or | |
| not a community is underserved. So no one ever sat down and | |
| said, ``Well, are you a population of 8,000 that is adjacent to | |
| another population,'' to a great degree; they said, ``Are you | |
| underserved?'' And therein lies the problem. | |
| We have a situation that has evolved over the last almost | |
| 18 years where our definitions and what we define as | |
| ``underserved'' have really become outdated and inefficient. If | |
| you look, as has been mentioned, rural health clinics are | |
| supposed to be in underserved areas, defined as underserved | |
| areas or health professional shortage areas. | |
| The MUA lists haven't been updated since 1981, which means | |
| that they were probably using data from the late 1970's to make | |
| those designations, if you look at the way we do data | |
| collection. So we're sitting here in 1997 certifying clinics in | |
| areas that were defined as underserved based on information | |
| from 1979. That doesn't make any sense. We have to update those | |
| medically underserved area lists, as has been mentioned by | |
| others. | |
| In that regard, we would support an initiative to change | |
| the statute to put the words ``currently certified'' into the | |
| statute, with ``currently'' being defined as the area having | |
| been reviewed within the last 3 years. In other words, | |
| tomorrow, if that were to be in law, if someone were to seek | |
| certification as a rural health clinic and use the MUA list, we | |
| went to the MUA list and said, ``Sorry, this designation was | |
| done in 1981. You can't have it until you come back to use with | |
| more accurate, up-to-date information.'' | |
| We think that is absolutely critical, and we think the law | |
| needs to be changed to incorporate that into the statute, to | |
| give us that ability to have some degree of reliance that the | |
| information is at least timely and current. | |
| We also believe that there is a problem with the cap that | |
| does not exist on provider-based, as you have heard, relative | |
| to the independent clinics. I would just say--and you started | |
| to get to this toward the end of your conversation with the | |
| previous panel--we've known about this problem for a long time. | |
| The Health Care Financing Administration embarked--over 2 | |
| years ago, they announced in the Federal Register that they | |
| were going to develop regulations to address this particular | |
| problem. The rural health clinics community has been waiting | |
| for over 2 years for HCFA to publish regulations so that we | |
| could move ahead to begin to close what we see as a very | |
| serious gap in this process. | |
| So we would encourage, as a community, the rural health | |
| clinics that I speak on behalf of, that we move ahead | |
| expeditiously in this area. That having been said, though, I | |
| think it's important, you had another chart up there, and I'm | |
| sorry it's no longer there, but it looked at the three | |
| different types of reimbursement. There was blue bar, a green | |
| bar, and a red bar. | |
| The blue bar looked at what clinics get through traditional | |
| Medicaid. The green bar was what clinics get that are hospital- | |
| based. And the red bar was independent clinics. That's really | |
| not an accurate comparison or a fair comparison to make. In | |
| many respects, you are comparing apples to oranges. | |
| Let me give you an example. Under the Medicaid program, as | |
| they mentioned, you had what was an office visit that might be | |
| charged at $25, and that was compared to a rural health clinic | |
| visit where the practice might get $56 or a provider-based | |
| clinic where they were going to get some higher amount. What | |
| that's not accurately reflecting is that the independent rural | |
| health clinic and the provider-based clinic are based on | |
| aggregate costs; it's an all-inclusive rate. | |
| So if a Medicaid beneficiary under traditional Medicaid | |
| comes into a physician's office and has an ear infection, which | |
| is a fairly simply diagnosis to undertake and fairly simple | |
| prescription, it's a short visit, Medicaid pays that practice | |
| $25. That same patient goes into a rural health clinic, they | |
| are going to get $56. Seems like a pretty good deal. | |
| But 2 days later, that same patient, that same mother | |
| brings that child back, and she has fallen off her bike, she's | |
| got a wound that perhaps needs suturing, needs debridement, | |
| needs bandaging, may have a suspected broken bone. That clinic | |
| has to do an x-ray, has to suture the wound, has to bandage it, | |
| has to cast and set the fracture. | |
| The clinic is only going to get $56 for that visit, even | |
| though, under traditional Medicaid, they might get $120, | |
| because an office visit is not just an office visit. Under fee- | |
| for-service, you have to add in all of the ancillary, | |
| additional costs that a practice can bill for. Rural health | |
| clinics don't do that. They look at the entire cost of | |
| operating that clinic on an annual basis and then aggregate | |
| that and bring it out to an average. | |
| So some patients, as would be shown there, you're going to | |
| win on. But what that fails to show is that there are a lot of | |
| patients on which you're going to lose money on that particular | |
| encounter. So we need to really understand what cost-based | |
| reimbursement is. | |
| Mr. Shays. Is that independent and provider both? | |
| Mr. Finerfrock. In provider-based clinics, it's a little | |
| bit different. In my testimony, I give you another example of | |
| where that somehow can be very misleading the way that is | |
| characterized. | |
| A provider-based clinic is paid based on what is referred | |
| to as the lesser of cost or charges, and it's a step-down | |
| process in their accounting that is done through the hospital. | |
| So there is never a per-encounter rate that is done for a | |
| hospital-based rural health clinic. | |
| The figure that you saw there is that GAO went in after the | |
| fact and looked at the aggregate that that hospital was | |
| reimbursed for its clinic, then looked at the number of | |
| patients they saw, and did a calculation. But that clinic was | |
| never reimbursed on a per-encounter basis. | |
| Why that can be very misleading, in my testimony I give you | |
| an example. You have three clinics that all cost the same | |
| amount to operate, $250,000, let's say. They are identical in | |
| every way: overhead, services, the health professionals that | |
| they employ, the salaries that they pay each of those health | |
| professionals. The only difference is one is located in a | |
| community with 1,000 people; one with 3,000 people; and one | |
| with 5,000 people. | |
| If, on average, every patient visits that clinic two times | |
| a year, you're going to have 10,000 visits, 6,000 visits, and | |
| 2,000 visits. What GAO has done is taken the $250,000, in the | |
| one case divided it by 10,000; in another case divided it by | |
| 6,000; in the other case divided it by 2,000, and come out and | |
| said, ``Well, geez, in the community of 1,000, we're | |
| reimbursing these people $125 per encounter, and in the other | |
| community we're reimbursing them $25 per encounter.'' | |
| The point is that in the low-density population, by virtue | |
| of the way they are doing their calculation, it's going to come | |
| out with a very high per-encounter rate. Now, we can argue | |
| whether or not that is fair or unfair, and so forth, but the | |
| point being that there is a volume factor here that comes into | |
| play. When you are talking about low-density areas, as they | |
| are, by definition you are going to have a high per-encounter | |
| cost, because you have a low patient volume. | |
| Mr. Shays. But they are not really talking about low | |
| density. In some areas, they aren't low-density at all. | |
| Mr. Finerfrock. They may not be. In some areas, they are | |
| not. I'm just saying that looking at a provider-based clinic | |
| and doing the calculations the way they do it can present a | |
| very misleading picture of what may or may not be occurring. | |
| I will let it go on, and then we can answer questions. | |
| [The prepared statement of Mr. Finerfrock follows:] | |
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| Mr. Shays. Mr. Harward. | |
| Mr. Harward. Thank you for the opportunity to be here. In | |
| this setting, I'm about as nervous as some of these people | |
| would be feeding my horses. So I'm going to stick with my | |
| statement, but I think that it addresses what's going on here. | |
| Mr. Shays. Let me just say something to you. We all get | |
| nervous sometimes before this committee, for different reasons. | |
| So we're happy to have you read your statement. | |
| Mr. Harward. Thank you. | |
| Mr. Shays. And don't rush when you read it. | |
| Mr. Harward. OK. Thank you very much. | |
| Thank you for the opportunity to comment on the Rural | |
| Health Clinic Program. My name is Tom Harward. I'm a physician | |
| assistant, and I practice in a small community clinic in | |
| Belington, WV. I've been the only resident health care provider | |
| in our town of 1,800 for the past 19 years. | |
| There are other health care services in towns 14 to 16 | |
| miles away. Although not every single person in Belington uses | |
| the clinic, I believe that most take a certain amount of | |
| security in having the clinic there. I'm equally sure that the | |
| RHC Program has been valuable to many other rural areas in West | |
| Virginia. | |
| In 1985, I talked a friend of mine into relocating to a | |
| small town called Riverton. Riverton has about 500 residents, | |
| and its' clinic had closed. The town is on a fair-sized creek | |
| in the mountains, about 50 miles east of where I practice. | |
| About 2 weeks after he arrived, he found himself, along | |
| with his wife, mother-in-law, and 4-year-old, sitting in a barn | |
| loft. He was watching his home and about half of that town | |
| float down the creek. I had a little trouble looking him in the | |
| eye for a while after that flood, but he rebuilt his home, and | |
| he rebuilt his clinic. He is still practicing there today. | |
| My friend is a PA. I think he represents the hearts and | |
| guts about what non-physician providers are supposed to be | |
| about, and that is cost-effective care, particularly to | |
| underserved populations. That's what the Rural Health Clinic | |
| Program is supposed to be about, a lean, cost-effective program | |
| providing care to rural and underserved populations. | |
| Perhaps the respective agencies and professions need to be | |
| reminded of this focus on occasion. Perhaps we need our | |
| collective professional feet held to the fire a bit. So be it. | |
| But like the lady said earlier, don't throw the baby out with | |
| the bathwater. | |
| The GAO report does not make good reading for those who are | |
| advocates of the Rural Health Clinic Program, particularly when | |
| it States that it was adrift, without focus. I cannot speak for | |
| the areas mentioned in the report. I found it well written, but | |
| I know it doesn't reflect anything about my clinic, and I know | |
| it does not generally reflect what has transpired in West | |
| Virginia. | |
| Our clinics are in rural areas. They do serve rural | |
| populations. They are also in areas where the weather can be | |
| treacherous, the terrain rough, and there is often no public | |
| transportation. The GAO report cited a failure to increase the | |
| number of patients served. When I joined our clinic in 1978, we | |
| saw less than 3,000 patients a year. This year we will see | |
| nearly 14,000. | |
| The report cited a failure to increase the number of health | |
| care providers. When I began, there was a physician a half day | |
| a week and myself. Today, we've got another full-time PA and a | |
| half-time OBGYN nurse practitioner. Two family docs give us two | |
| half-days a week each; a pediatrician, the same; and a surgeon | |
| also comes in. In the western end of the county, a new | |
| provider-based RHC has brought in another family physician and | |
| a PA. | |
| Mention was made in this report of the failure to provide | |
| care to the underserved and a lack of a sliding fee schedule | |
| for this group. We do offer a sliding fee schedule. We provide | |
| care for every single person who walks through the door and | |
| asks for it. We have programs for indigent children, adults, | |
| and seniors. | |
| The report was critical of the cost-based system whereby | |
| high overhead and administrative costs resulted in counter | |
| rates which, in some cases, were cited as $200. The two | |
| provider-based clinics in the western end of our county have | |
| rates of $52 and $56, respectively. I represent the | |
| administrative overhead of our clinic, and I see 4,000 to 6,000 | |
| patients a year. Our rate is $38, and I believe it is good | |
| value. | |
| For this $38, we are able to provide our community with a | |
| clinic that is open 5\1/2\ days a week, a call system where | |
| help is available 24 hours a day, 7 days a week, a | |
| comprehensive family practice situation where we can provide | |
| both inpatient and outpatient care, including obstetrics. We | |
| have a house call service that reaches hundreds of the elderly | |
| and disabled a year. And we have health programs such as | |
| cervical cancer screening and the pediatric health service. | |
| We also have two innovative projects--and I want to make | |
| this clear--that are not financed by the Rural Health Clinic | |
| Program, but because of the stability we have by it, we've been | |
| able to move forward on these. We have one of the finest | |
| school-based clinics in the State. We provide screening | |
| services there, acute care to kids who can't get services | |
| elsewhere, and health education programs. | |
| We also have built, from donations in the community, | |
| because of the support that our clinic has, a preventive health | |
| center that is opened from 7 a.m. until 8 p.m. We offer | |
| nutrition counseling here, exercise instruction, aerobics, | |
| water aerobics, hydrotherapy services, stretching exercises for | |
| seniors, et cetera. We feel like that people need to take | |
| responsibility for their own care, and this is our attempt. | |
| I would like to close with these final thoughts. I grew up | |
| here in the Washington area. I left Connecticut Avenue and | |
| Chesapeake Street here about 20 years ago. And I know that we | |
| are not completely unique, or my area is not completely unique | |
| in its weather and terrain, but people do come to care late and | |
| they are sicker. | |
| We deal with an extraordinary number of people that have | |
| diabetes, obesity, chronic obstructive pulmonary disease, and | |
| other illnesses. We provide care to families who really do | |
| exist on $6 and $8 an hour, in areas where the unemployment | |
| rate is likely to run 12 to 22 percent. | |
| I just ask you to remember, as you take a look at this | |
| program, that it has been important to us. We have adhered to | |
| its original concept. Obviously, it needs fixing. Reasonable | |
| caps would be a good start, and also redesignation. | |
| I want to throw one issue out here in the comments made | |
| today. We talk about decertification. I've been there 19 years. | |
| I'm 56 years old. If you decertify my clinic, I can't practice. | |
| I put my whole life in this place, because I would not be | |
| eligible to be reimbursed under Medicare. So if you fix this, | |
| it needs to be fixed right. | |
| Another issue, in terms of decertification, at our rate, | |
| $38, I challenge you to go to a doctor in Washington for $38, | |
| in most cases. It has given us a floor, and it has allowed us | |
| to develop these other programs. | |
| I have watched dozens--and I mean dozens--of physicians and | |
| other providers come into this area. There are cultural | |
| reasons; there are social reasons; there are economic reasons. | |
| They fear the school system. You know, if you want your kid to | |
| be a physician or a lawyer, you might not want him in our high | |
| school. And they are there a year or two, and their kids start | |
| to grow up, and they pull out--not everybody--but they pull | |
| out. | |
| I've been there when we got $7.50 from Medicaid for a | |
| patient encounter, and I've also been there when Medicaid took | |
| 6 months to pay us. So I want to make those points. If you fix | |
| this thing, it's got to be fixed right, and I think it should | |
| be done in an expedient manner. | |
| [The prepared statement of Mr. Harward follows:] | |
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| Mr. Shays. Tell me again how many years you've had your | |
| clinic or you've been involved in the clinic. | |
| Mr. Harward. Nineteen. | |
| Mr. Shays. I don't think you need to fear, for a variety of | |
| reasons, that we will be acting too quickly. You don't need to | |
| go to sleep at night fearful that the next morning HCFA or | |
| Congress will have taken decisive action. But I'm going to be a | |
| little more sympathetic and sensitive to the areas you | |
| describe. So I look forward to having a dialog with you. | |
| Mr. Tessen. | |
| Mr. Tessen. Mr. Chairman, members of the committee, I do | |
| want to follow my script to some degree. | |
| Mr. Shays. Where are your cowboy boots? | |
| Mr. Tessen. Well, I wanted to act urban today. I figure | |
| this is Washington, you can't act Texan up here. | |
| Mr. Shays. I don't know one Texan up here who wears normal | |
| shoes, as a Member of Congress. | |
| Mr. Tessen. I would challenge you to see what's in their | |
| closet, then. | |
| Mr. Shays. OK. | |
| Mr. Tessen. I figure a good pair of Niconas these days cost | |
| $600, so we can't afford too many. | |
| Mr. Shays. OK. | |
| Mr. Tessen. I appreciate the opportunity to share some | |
| information with you. I just want to follow the script and | |
| bring out some points particularly reflective of some of the | |
| comments that had been made earlier. | |
| I am representing the National Rural Health Association, | |
| which is a national member organization comprised not just of | |
| rural health clinics but physicians, Federal qualified health | |
| clinics, community-operated practices, research and education, | |
| everyone. I am the founder and the chair of the division which | |
| we call constituency groups within the NRHA, to represent rural | |
| health clinics. | |
| I would suggest that there are some other reasons that the | |
| number of RHCs has exploded in the last 6 or 7 years, other | |
| than those that have been brought out so far during testimony | |
| today. No. 1--and I will use Texas as an example--the reason | |
| there were no functioning RHCs in Texas up through 1989--there | |
| were 12 originally, and they all went under after the 1977 | |
| legislation. | |
| So by 1989 there were none, because in Texas the State | |
| regulations did not allow independent practice by a physician | |
| assistant. So we could not have a rural health clinic without | |
| over the shoulder supervision of a physician assistant until | |
| 1989. After 1989, the numbers took off like crazy, but it was | |
| because of the change in State regulations that allowed PAs to | |
| practice. | |
| I would also suggest another reason for some of the | |
| numbers, something we have experienced in some of the western | |
| States, a lot of the physicians in rural areas are aging. I | |
| guess we're all aging, at least some of us, faster than others, | |
| it seems. But in rural areas, a lot of the physicians are or | |
| are at retirement age. One of the things that the Rural Health | |
| Clinic Program has allowed communities to do is, instead of | |
| that practice closing and the community losing its access to | |
| care, allow a rural health clinic to come in. That's going to | |
| show up as a conversion, No. 1. | |
| Mr. Shays. Fair enough. | |
| Mr. Tessen. But what it's going to do, it's going to allow | |
| a mid-level practitioner, nonphysician provider to be brought | |
| into that community to continue that practice. Whereas, without | |
| the Rural Health Clinic Program, there may not have been the | |
| ability to convert that practice and convert that primary care. | |
| I think that's another aspect of rural conversions we have to | |
| look at, in terms of rural health clinics. | |
| I would emphasize that one of the biggest problems with | |
| this program is the lack of data. OIG did a report. GAO did a | |
| report. Bill's association did a report a couple years ago. | |
| There have been a couple studies. But I would challenge anybody | |
| to be able to tell you what is going with rural health clinics | |
| in the United States, across the board, with objective data. | |
| There isn't any. There simply is no data. Instead of being | |
| proactive, we end up reacting to a study or something that was | |
| done that wants to change something. | |
| I guess what I would recommend is that there really be an | |
| effort made to find out what is really going on. I think | |
| clinics like Tom's don't get the recognition they need. They | |
| don't show up in the data. | |
| I would also point out that I think there are some other | |
| discrepancies or faults with the design of the GAO study. One | |
| of the things that I would suggest is that there is an | |
| assumption made, it seems, in their report, that all those RHCs | |
| they found are full-time clinics. That's not necessarily true. | |
| We had one county in Texas that received notorious play in | |
| the media because there were 10 RHCs in the county. I went down | |
| there. Four of those are owned by the same physician assistant | |
| who has opened each of those clinics 1 day a week. | |
| Mr. Shays. Interesting. | |
| Mr. Tessen. That's not brought out in the GAO report. | |
| It also assumes, I think, in the GAO report, that all | |
| clinics serve all patients, and that's not true. There are some | |
| rural health clinics that serve just pediatric patients. In | |
| that case, that clinic does not provide access to Medicare | |
| patients. That was not brought out in the GAO report. | |
| I also think using population assumes that all patients in | |
| all locales are the same, and that's not true. I think that | |
| every area has a different patient mix. Number of Medicare and | |
| Medicaid patients, unemployed, indigent care, levels of | |
| poverty, those are different. You may have some areas 15 miles | |
| away--which, by the way, I think 15 miles in Texas is a little | |
| bit different than 15 miles in Connecticut. If I've got to | |
| drive 15 miles in Texas, I'm in another town half a county | |
| away. And I think we, in the western States, look at it a | |
| little bit differently. | |
| Mr. Shays. But that would imply you would look at 15 miles | |
| as being pretty close, not a big deal. | |
| Mr. Tessen. Except that, in terms of access to care, the | |
| orientation of the folks in that town 15 miles away is going to | |
| be to that community rather than to a town 15, 20, or 30 miles | |
| away. | |
| Mr. Shays. But isn't the issue whether someone can get a | |
| health care? | |
| Mr. Tessen. It is, yes. | |
| Mr. Shays. That's really the issue. And I'm seeing the | |
| abuse. Let me let you finish your statement. I'm really happy | |
| you all are here, because I think we will learn a lot. | |
| Mr. Tessen. I would also assume that 15 miles assumes the | |
| presence of transportation. I would contend that, for a lot of | |
| the elderly, particularly in a lot of rural areas, | |
| transportation is not available, as a matter of just a way of | |
| life. | |
| I would also suggest the current system is broken in | |
| another way. I think left unspoken here today has been the idea | |
| that the current system is working as it is supposed to have | |
| been working in a number of ways. And I'm going to tell you | |
| it's not. I have clinics in Texas that have not been surveyed, | |
| even though the regulations require an annual survey, have not | |
| been surveyed in 6 or 7 years. There has been no one coming in | |
| to check on those clinics to see if they are in compliance with | |
| the existing law, much less any abuses that may be going on. | |
| I would also suggest that the feedback system is poor. We | |
| have clinics in the western part and some of the fiscal | |
| intermediaries out west that are not giving feedback to the | |
| individual RHCs on their cost reports, their allowable costs, | |
| if their data is in line with what it should be, for 18 months | |
| after the data has been submitted. | |
| I would suggest, if we were running a private business and | |
| had to wait on our accountant's report for 18 months before we | |
| could determine if we were in line or not, or if we tried to | |
| convince that when we appear before the IRS tax board, it | |
| wouldn't fly, but that's what rural health clinics face as a | |
| matter of routine. | |
| I think the National Rural Health Association is in full | |
| agreement that the program needs to be fine-tuned. We agree | |
| that access to care should be the primary determinant for | |
| placement and certification of a rural health clinic. But what | |
| we would also contend is that the objective definitions be | |
| that, objective and consistent across the board. I mean, when | |
| we talk about developing policies, we can't even agree on the | |
| definition of ``rural.'' I think we're going to have to have | |
| objective data. | |
| I just want to make a couple other quick points. | |
| Mr. Shays. OK. And then we would like to get to | |
| questioning. Just make one or two more points, and then we will | |
| get to the questioning. | |
| Mr. Tessen. I would say that there has been a thing in the | |
| GAO report that said that conversions in even the rural health | |
| clinics in the suburban areas did so without adding staff. I | |
| would contend that's not possible, because, by requirement, by | |
| definition, a rural health clinic has to have at least a mid- | |
| level practitioner 50 percent of the time. So by simply going | |
| to a rural health clinic certification, they have to add a mid- | |
| level practitioner at least 50 percent of the time. They can't | |
| avoid that and still be in compliance with the law. So I would | |
| contest that. | |
| [The prepared statement of Mr. Tessen follows:] | |
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| Mr. Shays. Let me just have a sense of where your | |
| perspective is, in terms of background. There are approximately | |
| 3,000 rural health clinics today. | |
| Mr. Tessen. Yes; 3,273. | |
| Mr. Shays. How many belong to the National Association of | |
| Rural Health Clinics? | |
| Mr. Finerfrock. Well, we have about 450 that pay dues, but | |
| they represent, in many instances, because you have multiple | |
| clinics, we have about 900 clinics. | |
| Mr. Shays. You are part of the National Rural Health | |
| Association. | |
| Mr. Tessen. Right. | |
| Mr. Shays. How many members do you have? | |
| Mr. Tessen. Just over 200 now. | |
| Mr. Shays. Now, do these two different--your association, | |
| do you have the same basic type clinics part of it, or do you | |
| kind of go after a certain group? | |
| Mr. Finerfrock. Our membership is both independent and | |
| provider-based. I don't want to speak for Sam. | |
| Mr. Shays. Is it geographically based? | |
| Mr. Finerfrock. I think the way I would describe the | |
| difference in our organizations is--and I mean this | |
| positively--NRHA is a department store, and we are a boutique. | |
| NRHA has a variety of rural entities that are members, all | |
| under the broad, so there are rural hospitals, independent | |
| providers. | |
| Mr. Shays. So you have other organizations besides. | |
| Mr. Tessen. Using that analogy, we would be like Saks. | |
| Mr. Finerfrock. And we're the boutique on the corner. We | |
| just work on rural health clinics. | |
| Mr. Shays. So, Mr. Harward, did you join a ``Saks,'' or | |
| which one are you in? | |
| Mr. Harward. Rural Health Care Association. | |
| Mr. Shays. Now, Mr. Tessen, do you have clinic of your own? | |
| You have your own clinic besides being part of an association? | |
| Mr. Tessen. I manage a clinic at this point. | |
| Mr. Shays. You manage a clinic. | |
| Mr. Tessen. But that's not my full-time job. I also work at | |
| a medical school in Texas, in Galveston. | |
| Mr. Shays. And you're basically in charge of this | |
| association. | |
| Mr. Finerfrock. I'm kind of a policy wonk. | |
| Mr. Shays. OK. Listen, we're policy wonks. We can't be | |
| totally against you guys. | |
| Mr. Harward, you're in the trenches. | |
| Mr. Harward. Yes, sir. | |
| Mr. Shays. OK. Describe to me your community. | |
| Mr. Harward. My community has one stop light, one bridge, a | |
| Quick Stop, a couple small grocery stores. As I said, the | |
| population is about 1,800. It's primarily marginal farming, | |
| timber industry, a declining coal industry. The town itself is | |
| about 1,800. The county is 16,000, probably 350, 450 square | |
| miles. | |
| Mr. Shays. So the closest community of more than 50,000 | |
| would be how far away? | |
| Mr. Harward. 150 miles. | |
| Mr. Shays. See, in my own mind, that's the kind of | |
| community that I would visualize we're trying to focus in on. | |
| Now, I do understand your point, Mr. Finerfrock. Your point is | |
| that you could even make an argument that a rural health clinic | |
| could be in the Bronx, in terms of need. | |
| Mr. Finerfrock. Yes. You have heard reference here to the | |
| FQHC program, federally qualified health centers program. Some | |
| of the previous witnesses made reference to that program. That, | |
| in essence, is very similar in its financing to the RHC | |
| program. Those facilities get cost-based reimbursement under a | |
| cap, and their costs look at the same things that the RHC costs | |
| do. So there is, in essence, an urban component or model of | |
| this. | |
| Mr. Shays. Yes, there is a model, but my sense is that when | |
| Congress started this--and we will look at the record--in | |
| ``rural,'' certainly the implication was that we were talking | |
| more like areas that Mr. Harward is part of. | |
| Mr. Tessen. Under the initial legislation, there was also | |
| the certifiability in medically underserved populations, MUPs. | |
| HCFA has gotten rid of that. | |
| Mr. Shays. HCFA has gotten rid of? | |
| Mr. Tessen. The RHC eligibility under the MUP certification | |
| process. But when that was in effect, we have ``rural health | |
| clinics'' in downtown Dallas because of the population being | |
| poor, impoverished, no work, and no medical services | |
| whatsoever. | |
| Mr. Shays. I'm not saying we don't have to deal with that | |
| problem, but my sense was, this program was not designed for | |
| that. | |
| Mr. Tessen. Right. | |
| Mr. Shays. That's all I'm saying. I can make a strong | |
| argument that you need to be in Bridgeport, CT, in one sense. | |
| But what I don't like is, where people were, in fact, serving | |
| the community, they decided to be under a new system that gave | |
| them a greater reimbursement. I do think you're making the | |
| point of older physicians selling. | |
| Mr. Tessen. Retiring. | |
| Mr. Shays. Retiring, and then a clinic coming in. You have | |
| answered one question. All three of you answered one question. | |
| To me, it appeared to be a no-brainer, and you're saying, you | |
| just need to get into this a little deeper to understand. | |
| Mr. Harward, I'm just going to say to you that I will use | |
| you as the test. If we're doing anything or if HCFA is doing | |
| anything that would negatively impact your circumstance, then I | |
| think we're headed in the wrong direction. So I will use you as | |
| the benchmark, in a way, and others like you, because I do want | |
| you to go to sleep at night. | |
| Mr. Harward. I want to go. | |
| Mr. Finerfrock. I'm really glad to hear that, because, I | |
| mean, for me, personally, Tom is kind of the benchmark. This is | |
| where this grandfather clause, I think--if we could spend a | |
| little bit of time perhaps on that. | |
| Mr. Shays. I don't want to spend too much time. I don't | |
| want to grandfather people who shouldn't be grandfathered. | |
| Mr. Finerfrock. That's right. I don't think we do. But my | |
| point is that there are reasons why that grandfather clause was | |
| put in there, and Tom mentioned one of them at the end of his | |
| presentation, which is that you have PAs and NPs who are | |
| staffing these clinics. If you take away the certification from | |
| them, there is no mechanism for Medicare, in many instances, to | |
| pay for their services. | |
| Mr. Shays. I want to let Mr. Towns ask questions. The one | |
| thing that I'm going to qualify my own response, I could see | |
| where you were truly in what I would call a rural area, serving | |
| people that aren't going to get care elsewhere. And I can see | |
| how that community can change. And then I can see how you've | |
| devoted 20 years of your life. I would be very sensitive to not | |
| saying, ``Oh, my gosh, no longer should you be there,'' if you | |
| have shown that kind of commitment to the community. | |
| So I think there should be some way to give credit to, and | |
| allow for, that individual to continue to practice. The | |
| question would be, not that you would decertify, but would you | |
| put them on a different reimbursement rate that would be | |
| competitive with the area and be fair? | |
| Mr. Finerfrock. I would agree. There has got to be some | |
| kind of a glide path or some mechanism for transition. I just | |
| saw it earlier. I mean, HCFA mentioned they are working on | |
| legislative proposals. I saw it just as we were coming in here. | |
| Their proposal is, you would immediately be kicked out of the | |
| RHC program. If your area was decertified as an underserved | |
| area, you would be immediately shut down as a rural health | |
| clinic, which means he's out of business. My view is, that's | |
| too simplistic. | |
| Mr. Shays. Would you be put out of business? I'm sorry. I | |
| want to get to Mr. Towns. | |
| Mr. Harward. If we cannot be reimbursed. | |
| Mr. Shays. No, no. It seems to me that you would meet the | |
| test of reimbursement. | |
| Mr. Harward. I can't be reimbursed unless I'm in a rural | |
| health clinic. | |
| Mr. Shays. Right. I don't see how your health clinic would | |
| be one that would be targeted for decertification, is what I'm | |
| saying. | |
| Mr. Harward. Not likely, except we have two other rural | |
| health clinics in the other end of the community, provider- | |
| based clinics. You factor us in as providers--currently we're | |
| not factored in, in figuring a medically underserved area-- | |
| that's going to change the ratio a little bit. It might be a | |
| little plus or minus. | |
| I'm not afraid for our clinic to compete, what I'm saying, | |
| on the ``private'' market, but I want an even playing field. | |
| Mr. Shays. But you're an independent, correct, or are you | |
| provider-based? | |
| Mr. Harward. We're an independent. | |
| Mr. Shays. So you're not even getting reimbursed at the | |
| rate that some of your competition is. | |
| Mr. Harward. We don't need it. | |
| Mr. Shays. No, let me back up a second. You're not even | |
| getting reimbursed at the rate that some of your competition is | |
| getting reimbursed. | |
| Mr. Harward. No, we're not. | |
| Mr. Shays. OK. So I'm just saying it's interesting that | |
| you're not upset that others are making more money than you are | |
| in this system, that you may tend to compete. | |
| Mr. Harward. I might be a little more upset than I show. | |
| Mr. Shays. OK. At least your human. I wanted to know. | |
| Mr. Towns. | |
| Mr. Towns. Thank you very much, Mr. Chairman. | |
| Let me thank all of you for your testimony. I know you have | |
| heard the comments that were made earlier by GAO and also the | |
| Deputy Inspector General. I guess I could start with you, Mr. | |
| Harward. I would like to ask each member to tell us how you | |
| would correct the problems that GAO and the Deputy Inspector | |
| General described earlier. | |
| Mr. Harward. The cap is absolutely essential. I mean, the | |
| cap is going to take care of a hugh amount of the problem. I | |
| think that's important. The designation issue is tremendously | |
| important, to be updated regularly. And it's tremendously | |
| important to include, on some formula, nonphysician health care | |
| providers in this designation. Those are two most important | |
| things. Those two things alone, I believe, would give you the | |
| kind of cost control that you need and stop the proliferation. | |
| Mr. Shays. May I just ask? | |
| Mr. Towns. Sure. | |
| Mr. Shays. Do you mean new designation, or do you mean | |
| decertification? | |
| Mr. Harward. The first thing you need to do, I guess, is | |
| level it off, OK. And then, in terms of the decertification, I | |
| think it has to be on the table. Yes, I agree. | |
| Mr. Towns. I want to move to also ask Mr. Finerfrock, and | |
| you, too, Mr. Tessen. Before I do that, if a clinic is closed | |
| in the State of West Virginia, just assume that it happens, the | |
| worst, what happens to the medical records? | |
| Mr. Harward. There is no central repository that I'm aware | |
| of. | |
| Mr. Towns. You are educating us here, too, you know. I want | |
| you to know that. | |
| Mr. Harward. Yes. They would be locked up somewhere. We | |
| would advertise in the paper, you know, when that's going to | |
| happen. Once my clinic was provider-based, many, many years | |
| ago, and it was one of the very few, one of two or three. And | |
| the hospital that I worked for in the early 1980's, before this | |
| happened, went bankrupt and closed down. A lot of those records | |
| are just sitting in a basement somewhere, and people can't get | |
| to them. | |
| So, I mean, you know, they advertised for a while. We've | |
| been an independent, private clinic now, or community clinic, | |
| since that bankruptcy, for I guess 12 years. | |
| Mr. Towns. In other words, they just left the records. | |
| Mr. Harward. Yes, sir. Yes, sir. Now, people, when you | |
| advertise, would ask that they be transferred to another health | |
| care provider, you know, in an adjacent area or the same town. | |
| We just don't happen to have any in our town. It would be one | |
| of those providers in a nearby town. | |
| Mr. Towns. Mr. Finerfrock. | |
| Mr. Finerfrock. I would agree with Tom that a cap is really | |
| important on the provider-based side. One of the other issues | |
| that has not been addressed, concurrent with that, is a | |
| productivity standard. On the independent clinics, in addition | |
| to the cap, clinics are required to maintain a productivity | |
| standard in order to get their reimbursement rate. | |
| That standard is 4,200 visits per year on a full-time | |
| equivalency for a physician; 2,000 visits per year for a PA or | |
| a nurse practitioner. If they don't achieve that level, then | |
| there's a downward adjustment in their payments to reflect that | |
| they were not operating at what was considered to be maximum | |
| productivity. | |
| In addition to there not being a cap on the provider-based | |
| clinics, there is not a productivity standard, the issue I was | |
| addressing earlier. So simply imposing a cap on provider-based | |
| is not sufficient. There also needs to be a productivity | |
| standard, in order to make sure that they are operating | |
| efficiently, as well. | |
| In terms of the shortage area issue, I would agree those | |
| need to be updated and updated immediately. Short of that, we | |
| need to institute into the law, ``currently certified,'' which | |
| would be the area has been reviewed in the last 3 years, in | |
| order to prevent people from doing a designation based on | |
| information that is outdated. It also needs to include the | |
| availability of PAs and NPs at some appropriate FTE | |
| substitution rate for physicians. | |
| There should be a tie-in notice. Once a clinic is | |
| certified, the Health Care Financing Administration should | |
| notify the Office of Shortage Designation that that clinic has | |
| been certified. Otherwise, what you run the risk of is that, | |
| during that 3-year intervening period, you know, people come in | |
| and set up multiple rural health clinics when it perhaps was no | |
| longer warranted. | |
| So we need to have a mechanism for alerting the Office of | |
| Shortage Designation that there may have been a change in the | |
| provider availability in that community, so that designation | |
| may no longer be appropriate. | |
| We need to create a glide path in order to transition folks | |
| off of rural health clinics, if, for some reason, the area is | |
| no longer rural or no longer underserved. What I would | |
| recommend there is that we look at a situation where they would | |
| actually be excess capacity. In other words, you heard earlier | |
| that it requires 1 physician to 3,500 population in order for a | |
| designation to occur. So if the community exceeds that, if | |
| there were 1 physician for 3,000, it would lose its | |
| designation. | |
| What I would suggest is that dedesignation wouldn't kick in | |
| until you had an infrastructure perhaps that was 1 to 1,500 or | |
| 1 to 1,000. In other words, so that you were sure that there | |
| was adequate capacity within the community such that losing | |
| that designation would not result in them being back as an | |
| underserved area, what I refer to as the yo-yo effect. I think | |
| Kathy Buto talked about that, where you create an incentive to | |
| get someone to an area, then by virtue of being successful at | |
| recruiting to the area, the area is no longer underserved, and | |
| so we pull away that incentive. | |
| I think those would be my recommendations. | |
| Mr. Towns. Just before I leave you, Mr. Finerfrock, how | |
| many provider-based clinics do you represent? | |
| Mr. Finerfrock. You know, I'm not sure. I mean, I don't | |
| make that distinction in our membership. We have provider-based | |
| on our board, and we have provider-based on our policy | |
| committee. But I can find that out for you. | |
| Mr. Towns. Mr. Tessen. | |
| Mr. Tessen. I think there are a couple of things. I think | |
| the cap on provider-based is in the right direction, but I | |
| would make a case that there should be some sort of exception | |
| or level or some differentiation for those rural hospitals that | |
| have rural health clinics that are really rural hospitals, out | |
| in the middle of no place, that are just struggling to survive | |
| with patient loads of one or two patients per day. I mean, | |
| we've got to do something to protect the people in the frontier | |
| areas and the really rural areas from just pulling out | |
| infrastructure across the board. | |
| Mr. Shays. May I? | |
| Mr. Towns. Yes. | |
| Mr. Shays. In a sense that raises the two-tiered approach. | |
| Are all three of you comfortable with that approach? | |
| Mr. Harward. I would like to respond. You asked do I resent | |
| that $20 difference between the people in the other end of the | |
| county. One is a rural hospital that's now one of these each | |
| piece hospitals. Their bed capacity went from 90 to 12, and | |
| they are associated with a distant hospital. They are sort of | |
| the junior partner in this program. That clinic is real | |
| important to the survival of that hospital, and they do | |
| maintain emergency room there, and it's part of their financial | |
| base. I think we have to avoid doing things to these small | |
| hospitals that could hurt that. | |
| On the same subject, on the question of decertification, | |
| it's real important. One of the things that you could do in | |
| decertification is just knock the rate to 75 percent of the | |
| maximum, if you reach a point. Because these people that are | |
| abusing it are way, way above. If you've got the cap and even | |
| you limited my community-based clinic to 75 percent of the | |
| maximum rate because we hit that magic number where we were no | |
| longer served, we could continue to do what we do best, which | |
| is community health. | |
| Mr. Tessen. I think another thing that really concerns me | |
| is, we're talking about all kinds of changes in the system | |
| without addressing the fact that we aren't following the | |
| current system. I mean by that the lack of surveys, the lack of | |
| audits, the lack of timely feedback and cost reports, the | |
| waivers for the mid-level practitioners are not being enforced. | |
| If we change the system and don't address that part of it, | |
| we're going to have the same problem. I mean, people are going | |
| to go into it, and there's no real way to find out if people | |
| are in compliance or not. | |
| I guess my point is, why have a system if we're not going | |
| to follow the basics of it, even it's required by regulation | |
| and law at this point. | |
| The other thing that I would say is that the NRHA, the | |
| National Rural Health Association, has put together a white | |
| paper on a whole list of proposals for rural health clinic | |
| refinement. I guess that has been submitted as part of the | |
| testimony. It is intriguing, in NRHA, the process of devising | |
| policies, because I have to sit and argue with the rural | |
| hospital folks, and I have to sit and argue with the FQHC | |
| people, and I have to argue with the research and education | |
| people when we develop policies. | |
| So the policies that are in this NRHA paper are really a | |
| real strong reflection of kind of the microcosm that is going | |
| on in the whole argument about rural health clinics on a | |
| national basis. So these are fairly good, I think. | |
| Mr. Towns. Thank you very much. | |
| Thank you, Mr. Chairman. | |
| Mr. Finerfrock. Mr. Chairman. | |
| Mr. Shays. Yes. | |
| Mr. Finerfrock. You asked about the two-tiered approach. On | |
| that, we've had some discussions with the Health Care Financing | |
| Administration on that concept of having a different cap and | |
| different standards for clinics that are located in what are | |
| defined as frontier areas. I think that's a reasonable thing to | |
| take a look at. | |
| The only difference I would make, perhaps, on this point, | |
| with Sam, is that I don't think that we should make that | |
| exclusive to hospital-owned clinics. To me, the payment should | |
| be based on the services that you are delivering and the care | |
| that you are delivering. The ownership of the clinic shouldn't | |
| make that distinction. | |
| So if we're going to create this level playing field--I | |
| just got a call the other day, a physician in the Upper | |
| Peninsula of Michigan is 40 miles from the nearest town of any | |
| size, he's by himself, could really use to be a rural health | |
| clinic, but can't be for a variety of reasons. If you were to | |
| do the two-tiered approach, I suspect that he would be able to | |
| do that and make it attractive. He's on the verge of leaving | |
| that community, and I think that kind of an approach would | |
| really help. | |
| Mr. Shays. I just wonder, in that case, if knowing that we | |
| might change the rules to benefit him would keep him there. | |
| Mr. Finerfrock. We might. | |
| Mr. Shays. The process is still going to take so long. | |
| Mr. Finerfrock. It will, but it may keep him there. | |
| I think another point needs to be made. There was a | |
| reference to managed care, I think, by one of the earlier | |
| witnesses, that perhaps the growth was a result of managed care | |
| and the concern about that. I think we also have to consider | |
| the Health Care Reform plan that the Clinton administration | |
| proposed back in the first Clinton administration. | |
| The reason I say that is, in that plan there was a proposal | |
| to create facilities that are called, ``essential community | |
| providers,'' and that those ``essential community providers'' | |
| would have special status when it came to negotiating with | |
| managed care or any plan that the Clinton proposal was going to | |
| put into that community. And rural health clinics were | |
| automatically defines as an essential community provider. | |
| I think, for the same reason that you were suggesting that | |
| the prospect that we might be able to do something for that | |
| physician, might encourage him to stay in, I think the prospect | |
| that the government was going to create this ``essential | |
| community provider'' category and give you special status for | |
| purposes of negotiating with managed care also was an incentive | |
| to become a rural health clinic, even though they didn't intend | |
| to expand their services to Medicare and Medicaid. They were | |
| looking down the road, trying to provide some kind of a special | |
| status for themselves when the world, as they new it, was going | |
| to change. | |
| Mr. Shays. Very interesting. | |
| We have been joined by Mike Pappas, from New Jersey, a new | |
| Member, and a wonderful new Member. I don't know if you would | |
| like to just enter into this dialog or just say hello. | |
| Mr. Pappas. Yes, if I could, Mr. Chairman. | |
| Mr. Shays. Sure. | |
| Mr. Pappas. Thank you. I'm sorry for getting here late. | |
| You may have covered this, but if you would bear with me, I | |
| understand there is a program called Partnership for Rural | |
| Opportunities. I'm wondering if you folks, in various | |
| capacities, are familiar with it and, if so, if there has been | |
| any work with them? | |
| Mr. Shays. This may be a viable program none of you have | |
| heard about, but we are continually learning of government | |
| programs that we voted for, right? | |
| Mr. Pappas. As I understand it, it's a division within the | |
| Department of Health and Human Services. | |
| Mr. Tessen. Never heard of it. | |
| Mr. Finerfrock. I'm not familiar with it. | |
| Mr. Shays. Is there anyone in our audience who might know? | |
| Ms. Rapp. I know. | |
| Mr. Shays. If you don't mind just coming up. We won't even | |
| swear you in. I'm just curious. | |
| Ms. Rapp. I won't go to the front. | |
| Mr. Shays. No, no. We need you to be in the mike here. Just | |
| identify who you are. | |
| Ms. Rapp. I'm Jennifer Rapp. I'm the government affairs | |
| director for the National Rural Health Association here in | |
| Washington. We work closely with the National Rural Development | |
| Partnership, which is affiliated with the PRO. The PRO was | |
| formed within the Department of Health and Human Services by a | |
| number of divisions within HHS. The Federal Office of Rural | |
| Health Policy belongs, so do several of the other divisions | |
| within HHS. They formed this group to kind of cut across | |
| division barriers, but to look at rural issues department-wide. | |
| So I know what the group is, and we have had communication | |
| with them. They are a relatively new group. I think they just | |
| started holding meetings within HHS about 6 months ago. | |
| Mr. Shays. Do you want to pursue that a minute? | |
| Mr. Pappas. Yes. I just would be curious, these folks who | |
| are very involved, on the witness stand--what effort is going | |
| to be made to--if folks such as these should be made aware of | |
| this. I'm assuming this new conglomeration has been established | |
| to try to, say, improve the situation. Their input may be | |
| helpful. Do you know? | |
| Ms. Rapp. So far they have involved outside groups through | |
| the larger, National Rural Development Partnership, which there | |
| is a Washington component called the National Rural Development | |
| Council, which I sit on. They, in the past year, have invited | |
| outside organizations such as other associations to sit on the | |
| council, indirectly interacting with this department group | |
| called the PRO. | |
| So I don't attend PRO meetings, because it's only intra- | |
| HHS. But I do participate, and I'm sure other outside | |
| organizations could participate through serving on the National | |
| Rural Development Council. | |
| Mr. Shays. And the purpose of the organization is what? | |
| Ms. Rapp. I think to really have a rural filter. I know the | |
| woman who heads it up, in the Office of the Secretary, actually | |
| spoke at our meeting on Monday about the group, and she likes | |
| to call it a rural filter for all issues that pass through the | |
| Department of Health and Human Services. | |
| I would also like to mention that I think Jake Culp, from | |
| the Federal Office of Rural Health Policy, is here, and he | |
| participates. | |
| Mr. Shays. Would you like to just comment on this? | |
| Mr. Culp. I could just say one more thing. | |
| Mr. Shays. Let me just say this to you. You're going to | |
| come up here, but just would you say your name again so our | |
| recorder has it. Do you have a card? | |
| Ms. Rapp. Yes, I do. It's Jennifer Rapp, R-a-p-p. | |
| Mr. Shays. And you represent? | |
| Ms. Rapp. I'm the government affairs director for the | |
| National Rural Health Association. | |
| Mr. Shays. And you, sir, are? | |
| Mr. Culp. I'm Jake Culp. I'm with the Office of Rural | |
| Health Policy. I work with Dr. Puskin, who was here testifying | |
| earlier. | |
| Mr. Shays. Now, did you want to make a response? | |
| Mr. Culp. Yes. I would just like to elaborate. Jennifer got | |
| at that. This is a group that was formed, I think it's about 9 | |
| or 10 months ago, and it's serving two purposes in our | |
| Department, in my view. | |
| The first purpose is to get all of the various components | |
| of the Department together on a regular basis, who have | |
| something to do with rural health care, and that's a lot of us. | |
| That's the Health Care Financing Administration, that's our | |
| office--we're in another part of the Department, the Health | |
| Resources and Services Administration--the Administration on | |
| Aging, another part of the Department that also has some rural | |
| interest. So it's an opportunity for us to come together, and | |
| the leadership for that is provided out of the Office of the | |
| Secretary. | |
| One of the goals of the group that's a little different is, | |
| we've been working hard over the years, our office and the | |
| Department, as well, to get a close tie-in between economic | |
| development issues in rural issues and health. The Department | |
| of Agriculture, for example, has agents out there in small | |
| rural communities all over the country, and we're trying to | |
| work with them to make health a part of their agenda as they | |
| work on local economic development issues in small communities. | |
| So this group also has that role, to work closely with the | |
| Department of Agriculture and other parts of the executive | |
| branch on rural health care kinds of issues. | |
| It's a very important activity. | |
| Mr. Pappas. Thank you. One of the things, I think, that | |
| could be done to maybe even improve what I think is a very | |
| worthwhile effort is to provide some sort of a mechanism where | |
| people out in the community could then be given a forum to | |
| maybe express what their views are as to what the various | |
| Federal programs do or don't do. | |
| Ms. Rapp. May I make one comment about that? State rural | |
| development councils do sit on the larger body. So within each | |
| State there is a State rural development council, and that's | |
| kind of the ground-up approach. | |
| Mr. Pappas. OK. Thank you, Mr. Chairman. | |
| Mr. Shays. You're welcome. I will say, I've broken my rule, | |
| not swearing in two witnesses here, but circumstances dictated | |
| that. Thank you both very much. | |
| I want to ask if there is anything you wish we had asked | |
| you, that you wanted to make a point on before we close up | |
| here. You have given a nice definition to the hearing, and I | |
| thank you all for being here. Is there any closing statement | |
| you want to say? | |
| Mr. Tessen. I would just invite members of the committee or | |
| their staffs to come out and visit some real rural health | |
| clinics, like Tom's or some others. Some are closer. | |
| Mr. Pappas. Easy for you to say. | |
| Mr. Shays. Be careful. He's from Texas. | |
| Mr. Tessen. I think that rural health clinics, in reality, | |
| are really interesting animals, and I think that seeing them in | |
| operation is an experience to behold. | |
| Mr. Shays. As you were testifying, particularly Mr. | |
| Harward, I was thinking that it would be important for us to | |
| find a way to visit a few. I have, obviously, seen community- | |
| based health care clinics who do some of the same stuff. | |
| Any other comments? | |
| Mr. Finerfrock. If I could. In the testimony that Dr. | |
| Gaston presented, she made reference to the fact that the | |
| Department was going to now incorporate PAs, NPs, and CNNs into | |
| the designation process. If you could get clarification, in the | |
| written testimony, there was a caveat that was not addressed in | |
| her oral presentation, which was, once we feel that there is | |
| sufficient data. | |
| I don't think that that should be taken lightly. I think | |
| there is data. They have suggested that there is not sufficient | |
| data. We've done some checking around. Tom was on the medical | |
| board in West Virginia and can provide accurate information | |
| there. | |
| I would be remiss to Congressman Towns if I didn't | |
| acknowledge your efforts on the part of correcting the problem | |
| for Medicare reimbursement for PAs and nurse practitioners | |
| outside of the rural health clinic. You have been a real leader | |
| on that issue. I know last year, as part of the budget act, | |
| that provision was adopted by Congress, through no small effort | |
| of yours, and I know the PA and NP communities are very | |
| appreciative of everything that you have done in that regard. | |
| Mr. Shays. He's a good guy. | |
| Mr. Finerfrock. The last thing I just wanted to say is that | |
| Tom's calm demeanor, he has earned that honestly. Tom is the | |
| father of 15 kids. | |
| Mr. Towns. No wonder he's so calm. | |
| Mr. Finerfrock. Anybody who can survive that experience-- | |
| ranging in age from 9 to 33--anybody who can survive that | |
| experience, I think coming before Congress is probably a piece | |
| of cake. | |
| Mr. Harward. Actually, when they left home, we would be | |
| dedesignated. [Laughter.] | |
| Mr. Towns. Mr. Chairman, if I could just ask one quick | |
| question. | |
| Mr. Shays. Sure. | |
| Mr. Towns. I'm concerned that there seems to be no | |
| continuity in terms of records, when facilities close and | |
| facilities consolide. What happens to records in your area? | |
| Because I think it's something we're going to have to look at, | |
| at some point in time, as to what happens to records when | |
| facilities happen to close. | |
| Mr. Tessen. As I understand it, legally, medical records | |
| are the property of the owner of the clinic. I guess there's | |
| legal precedent for that someplace. If whoever owns that | |
| clinic, whatever clinic it is, rural health clinic or anything | |
| else, if that clinic closes or anything else, those medical | |
| records remain the property of that owner. | |
| Mr. Harward. They should go to the patient. I mean, you can | |
| mandate that they go to the patient if the facility closes. If | |
| they have not assigned them to another provider, it's pretty | |
| simple. You know, if they choose to abuse them or throw them | |
| away, that's their problem. It's simple enough. | |
| Mr. Towns. What I'm thinking about, see, most clinics or | |
| most hospitals do not close down with everyone elated over the | |
| fact that it's closing. It generally closes, and people are | |
| upset, the union is involved, and everybody is mad. I can sort | |
| of picture them throwing the records out the window. I think | |
| that somewhere along the line we have to have a uniform way of | |
| doing this as we move along. I don't know exactly what we need | |
| to do, but I think it's something we need to investigate. | |
| Mr. Finerfrock. I know you have a background in hospital | |
| administration and medical records. I've heard you raise this | |
| issue at other hearings, and I think you're right. This is not | |
| the first time. I mean, a couple years ago I heard you raise | |
| this issue. | |
| The whole area of medical records is getting a lot of | |
| attention now, in terms of privacy, and security, et cetera, | |
| and computerization of medical records. I think you talk to the | |
| health professionals and see. It's not something we've looked | |
| at, but I think it's a serious issue. My understanding is that | |
| each State handles it differently. It's an area that is | |
| governed, at the current time, by State law. | |
| Mr. Shays. Let me ask, before we close up, is there anyone | |
| from the GAO's office here? Anyone from the Inspector General's | |
| Office here? | |
| I'm not going to ask you to come up. Thank you for staying. | |
| Is there anyone from HCFA or the Health Resources and | |
| Services Administration? | |
| I just want to thank you for staying. I appreciate your | |
| doing that, because the third panel deserves to be heard by the | |
| people that ultimately impact your lives. So thank you for | |
| staying. | |
| Thank you all. We will call this hearing to a close. | |
| [Whereupon, at 4:20 p.m., the subcommittee adjourned.] | |
| - | |
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