Health Centers: Competition for Grants and Efforts to Measure Performance Have Increased
Released: 2005-08-12T00:00:00

Letter

Background

The Consolidated Health Centers program is administered by HRSA’s Bureau of Primary Health Care (BPHC). In addition to program grants from HRSA, which constitute about one-quarter of the centers’ budgets, the health centers receive funding from a variety of other sources, including Medicaid and state and local grants and contracts. (See fig. 1.) In 2003, health centers reported total revenues of about $5.96 billion.

Health centers are required by law to serve a federally designated medically underserved area or a federally designated medically underserved population. In 2003, 69 percent of health center patients had a family income at or below the federal poverty level, and 39 percent were uninsured. In addition, 64 percent of patients were members of racial or ethnic minority populations, and 30 percent spoke a primary language other than English.

Health Center Organization and Services

Health centers are private, nonprofit community-based organizations or, less commonly, public organizations such as public health department clinics. The centers are typically managed by an executive director, a financial officer, and a clinical director. In addition, health centers are required by law to have a governing board, the majority of whose members must be patients of the health center.

Health centers are required to provide a comprehensive set of primary health care services, which include treatment and consultative services, diagnostic laboratory and radiology services, emergency medical services, preventive dental services, immunizations, and prenatal and postpartum care. Centers are also required to provide referrals for specialty care and substance abuse and mental health services, and although centers may use program funds to provide such services themselves or to reimburse other providers, they are not required to do so. In addition, a distinguishing feature of health centers is that they are required to provide enabling services that facilitate access to care, such as case management, translation, and transportation. The health care services are provided by clinical staff—including physicians, nurses, dentists, and mental health and substance abuse professionals—or through contracts or cooperative arrangements with other providers. Health center services are offered at one or more delivery sites and are required to be available to all people in the center’s service area. Services must be provided regardless of patients’ ability to pay. Uninsured users are charged for services based on a sliding fee schedule that takes into account their income level, and health centers seek reimbursement from public or private insurers for patients with health insurance.

HRSA’s Award Process for Grants Funded through the Consolidated Health Centers Program

HRSA uses a competitive process to award grants to health centers. Grant applications undergo an initial review for eligibility in which HRSA screens applications based on specific criteria—the applicant must be a public or private nonprofit entity, the applicant must be applying for an appropriate grant (e.g., certain grants funded by the program are available only to existing grantees), and the application must include the correct documents and meet page limitations and format requirements. Independent reviewers who have expertise in the health center program are selected by HRSA to review and score all eligible applications. The reviewers score an application by assessing each component of the applicant’s proposal, including descriptions of the need for health care services in the applicant’s proposed service area, how the applicant would integrate services with other efforts in the community, and the applicant’s capacity and readiness to initiate the proposed services. The Administrator of HRSA makes final award decisions and is required to take into account whether a center is located in a sparsely populated rural area, the urban/rural distribution of grants, and the distribution of funds across types of health centers (community, homeless, migrant, and public housing). In addition, the Administrator of HRSA also considers geographic distribution in making award decisions. The scope of a health center’s grant is delineated in its application and consists of its services, sites, providers, target population, and service area. (See app. II for additional information on HRSA’s process for awarding health center grants.)

BPHC administers several competitive grants under the Consolidated Health Centers program, including new access point, expanded medical capacity, service expansion, and service area competition grants. (See table 1.) HRSA approves funding for a specific project period—which can be up to 5 years for existing grantees and up to 3 years for new organizations— and provides funds for the first year. For subsequent years, health centers must obtain funding annually through a noncompeting continuation grant application process in which the grantee must demonstrate that it has made satisfactory progress in providing services. A grantee’s continued receipt of grant funds also depends on the availability of funding.

HRSA’s Monitoring of the Consolidated Health Centers Program

To monitor health centers’ performance and compliance with federal statutes, regulations, and policies, HRSA relies on periodic on-site monitoring reviews, as well as ongoing monitoring. Through early 2004, HRSA used BPHC’s Primary Care Effectiveness Review (PCER) to provide periodic on-site monitoring of health center operations. The PCER was scheduled to occur every 3 to 5 years as a mandatory part of the competitive grant renewal process when a health center’s project period was about to expire. During on-site PCER visits, a team of reviewers identified strengths and weaknesses in health center administration, governance, clinical and fiscal operations, and management information systems. According to HRSA officials, review team members were generally not HRSA staff, but contractors. The last PCER review was conducted in March 2004.

HRSA created a new process for the periodic on-site review of all agency grantees, including health centers, and reviewers from HRSA’s Office of Performance Review (OPR) began to use this new process in May 2004. OPR reviews grantees in the middle of their project period—in the second year for new grantees and in the third or fourth year for existing grantees. According to HRSA officials, a goal of the OPR performance review process is to reduce the burden on grantees by consolidating the on-site monitoring of all HRSA grants to a health center into one comprehensive review. For example, if a health center receives a Ryan White Title III HIV Early Intervention grant, the OPR performance review covers both the Ryan White grant and the Consolidated Health Centers program grant(s). Each health center review team has three or four reviewers; HRSA’s goal is for the reviewers to be OPR staff, who are located in HRSA’s regional offices, with contractors being used to supplement OPR staff only when necessary. For each health center review, the review team prepares a performance report describing its findings. As necessary, the report identifies the health center’s technical assistance needs and actions the center needs to take to ensure its compliance with program requirements.

HRSA also conducts ongoing monitoring of health centers through its project officers, who serve as grantees’ main point of contact with the agency. Project officers use various tools to monitor compliance with program requirements and to assess the overall condition of health centers. For example, project officers review annual noncompeting continuation grant applications, conduct midyear assessments, and regularly examine available data, including financial audits and UDS data. They are also expected to have regular contact with health centers by telephone and through e-mail and to connect grantees to resources for assistance when necessary, such as referring a health center to a HRSA-funded contractor for technical assistance to improve health center operations. In July 2003, HRSA transferred project officer responsibilities from its 10 regional offices and centralized this function within BPHC to improve the consistency of program oversight.

In addition, about one-third of the health centers funded under the Consolidated Health Centers program are accredited by the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and receive additional periodic on-site monitoring. These reviews include an assessment of a health center’s compliance with program laws and regulations, clinical procedures, and organizational processes, such as performance improvement activities and human resource management. HRSA began promoting accreditation for health centers in 1996, and under its current agreement with JCAHO, HRSA pays the fees for health center surveys, reducing the financial burden of accreditation for health centers. HRSA also provides financial support to the National Association of Community Health Centers to encourage accreditation and educate health centers about its benefits.

HRSA uses UDS data to monitor aspects of health center and overall program performance. Each year, health centers are required to report administrative data on their operations through UDS. These data include a list of each center’s service delivery sites and information about the center’s patients (e.g., race/ethnicity, insurance status); revenues; expenses; and service, staffing, and utilization patterns. HRSA uses UDS data to prepare its annual National Rollup Report, which summarizes the Consolidated Health Centers program; to prepare Comparison Reports, which allow the centers to compare their performance on certain measures (e.g., productivity, cost per encounter) against that of other centers; and to generate analyses that HRSA uses when evaluating the program.

In March 2000, we reported on HRSA’s monitoring of the Consolidated Health Centers program. We analyzed UDS data from 1996 through 1998 and noted deficiencies in data completeness and quality. Specifically, some grantees failed to report certain data elements or reported them very late, resulting in missing data. Furthermore, we found that the data editing and cleaning processes that were in place at the time did not always correct data errors that they were designed to detect. We recommended that HRSA improve the quality of UDS data and enforce the requirement that every grantee report complete and accurate data. In response to the recommendation, HRSA reported that a new requirement was in place for grantees to submit their UDS reports electronically, which improved the timeliness and accuracy of data by eliminating the need for a second level of data entry. In addition, the agency implemented formal training for centers on how to report UDS data.

Competition for Health Center Funding Has Increased, and HRSA Is Evaluating Its Process for Assessing Need

Competition for new access point, expanded medical capacity, and service expansion grants increased during the first 3 years of the President’s Health Centers Initiative. For example, while HRSA funding of new access point grants decreased by about half from fiscal year 2002 to fiscal year 2004, the number of applicants rose by 28 percent. HRSA is concerned that its current process for awarding new access point grants may not be consistent with the goal of funding health centers in the neediest communities. Therefore, the agency is considering both revising the measures it uses to assess need and increasing the relative weight of need in the award process.

Funding for Grants to Increase Health Center Services Has Become More Competitive Since the President’s Health Centers Initiative Began

Competition for new access point grants increased over the first 3 years of the President’s Health Centers Initiative. Although the majority of grant funds are awarded for continuation grants, for which funding increased, funding for other types of grants declined. (See fig. 2.) For example, funding for new access point grants decreased from about $80 million in fiscal year 2002 to about $38 million in fiscal year 2004, a 53 percent decline.

At the same time, the number of eligible new access point applications increased by 28 percent. Combined with the decrease in new access point funding, this resulted in a decrease in the proportion of applicants that HRSA funded—from 52 percent of fiscal year 2002 applicants to 20 percent of fiscal year 2004 applicants. Some of these applicants received funding in the same year they applied, and others received funding the following year. (See fig. 3.) The percentage of new access point applicants HRSA funded in the same year they applied decreased from 43 percent in fiscal year 2002 to 3 percent in fiscal year 2004. In addition, HRSA approved 17 percent of the applications it received in fiscal year 2004 for funding in fiscal year 2005.

Competition for expanded medical capacity and service expansion grants also increased during the President’s Health Centers Initiative. Funding for expanded medical capacity grants decreased from about $56 million in fiscal year 2002 to about $19 million in fiscal year 2004, and funding for service expansion grants decreased from about $27 million in fiscal year 2002 to about $9 million in fiscal year 2004. With the decrease in funding amounts, the percentage of funded applicants also decreased. HRSA funded 66 percent of fiscal year 2002 expanded medical capacity applicants and 57 percent of fiscal year 2002 service expansion applicants; in fiscal year 2004, it funded 34 percent and 21 percent of the applicants, respectively.

Although HRSA funded fewer grants to increase health center services during the second and third years of the President’s Health Centers Initiative, HRSA officials believe program funding for fiscal year 2005 and the President’s proposed budget for fiscal year 2006 will allow them to exceed the initiative’s goal. From fiscal year 2002 through fiscal year 2004, HRSA funded 334 new access point grants and 285 expanded medical capacity grants, representing about half of the initiative’s 5-year goal of providing 630 new access point grants and 570 expanded medical capacity grants.

HRSA’s Process for Assessing Need for New Access Point Grants Has Changed

The process HRSA uses to assess the need for services in a new access point applicant’s proposed service area has changed since the beginning of the President’s Health Centers Initiative. In fiscal year 2002, new access point applicants were ranked according to both the score they received on a need-for-assistance worksheet and the score assigned by independent reviewers after they evaluated the technical merit of the application. In fiscal years 2003, 2004, and 2005, however, HRSA did not use the worksheet scores to rank applicants. Instead, it used the worksheet scores to screen applicants; only applicants that scored 70 or higher on the worksheet had their application forwarded to independent reviewers for an evaluation of its technical merit. In addition to changing the role of the need-for- assistance worksheet score, HRSA also increased the relative weight of the need criterion in the application score. In fiscal year 2002, the maximum need criterion score constituted 5 percent of the maximum total application score; in fiscal years 2003, 2004, and 2005, the maximum need criterion score constituted 10 percent of the maximum total score.

HRSA has raised concerns that its current process for assessing the need for services in a new access point applicant’s proposed service area may not be consistent with the goal of the President’s Health Centers Initiative to fund health centers in the neediest communities. HRSA reported that the process had resulted in little distinction among applicants’ need-for- assistance worksheet scores and that almost all applicants received a score of 70 or higher. During the first 3 years of the President’s Health Centers Initiative, only 24 of 1,346 applications scored lower than 70 points. In addition, HRSA reported that the relative weight assigned to an applicant’s description of the need for health care in its proposed service area (10 percent) might be too low. In light of these concerns, HRSA commissioned a study to evaluate whether the measures in the need-for- assistance worksheet reflected the relative need of different applicants and whether the review criteria were weighted appropriately to ensure that grants were awarded to the neediest communities. The report, which was issued in November 2003, recommended several changes, including revising measures in the need-for-assistance worksheet and increasing the maximum need score from 10 percent to 20 percent of the maximum total score.

In response to these recommendations and feedback from program applicants, HRSA is considering revising the method it uses to assess the need for services in new access point applicants’ service areas. On February 4, 2005, HRSA issued a Federal Register notice seeking comments on a proposal to change the measures used in the need-for- assistance worksheet and to substitute the need-for-assistance worksheet for the current need criterion in the grant application. HRSA also sought comments on what weight the agency should give need in the application score. Comments on the Federal Register notice were due on March 7, 2005, and HRSA expected to complete its analysis by June 2005. HRSA reported it would delay the May 23, 2005, due date for new access point applications until its analysis was complete.

To further strengthen its ability to award new access point grants in the neediest communities, HRSA has indicated that it may focus its efforts on high-poverty counties without a health center delivery site. In its fiscal year 2006 budget justification, HRSA noted that, without special attention to high-poverty counties, the current award process may result in some of these counties not having a health center site. For example, it may be difficult for an applicant in a high-poverty county to demonstrate its financial viability. In the budget justification, HRSA requested funds specifically for awarding new access point grants to centers serving high- poverty counties and planning grants to community-based organizations to support the establishment of centers in such counties.

Number of New Access Point Grantees Varies Widely by State, but HRSA Lacks Reliable Information on Delivery Sites

The number of health centers receiving new access point grants varied widely by state during the first 3 years of the President’s Health Centers Initiative. During that period, HRSA awarded 334 new access point grants, with at least one grantee in each state. About half of the grantees were in 10 states—Alaska, California, Illinois, Massachusetts, New Mexico, New York, Oregon, South Carolina, Texas, and Virginia. The number of grantees in each state ranged from 57 in California to 1 each in Delaware, the District of Columbia, Kansas, and Wyoming. (See app. III for additional information on the number of new access point grants by state and territory. See app. IV for the numbers of all health center grantees, by state and territory, operating in 2001—before the initiative began—and in 2003— the most recent year for which data were available at the time we conducted our review. Figure 4 shows the location of health centers that HRSA was funding in 2003.)

In 2003, the distribution of all health center grantees was 48 percent urban and 52 percent rural. HRSA is required by law to make awards so that 40 to 60 percent of patients expected to be served reside in rural areas. HRSA officials told us that the agency meets this requirement by ensuring that the proportion of awards to rural health centers is from 40 to 60 percent. Based on the numbers of patients reported by health centers to the UDS, the proportion of patients served by urban health centers in 2003 was 54 percent and the proportion served by rural centers was 46 percent.

While HRSA can provide information on the geographic distribution of health center grantees, it does not have reliable information on the number and geographic distribution of the delivery sites where the centers provide care. In its budget justification documents and Government Performance and Results Act reports, HRSA has used the number of delivery sites it funds to provide information on its progress toward achieving its goals for the Consolidated Health Centers program. For example, in its fiscal year 2005 performance plan, HRSA has a performance goal of increasing access points in the health centers program, and it used 2001 UDS data on the number of health center delivery sites as a baseline to measure progress toward this goal. HRSA, however, is not confident that UDS data accurately reflect the number of sites supported by program dollars. HRSA officials told us that the agency does not verify the accuracy of the delivery site information grantees provide to UDS. They also said that UDS delivery site data through 2003 may include sites not funded by the health centers program and sites that HRSA did not approve in the scope of a health center’s grant. Moreover, HRSA has been reporting inconsistent data on the number of health center delivery sites in the program. For example, in its fiscal year 2005 performance plan, HRSA reported funding 3,588 delivery sites in fiscal year 2003, consisting of 3,317 delivery sites operating in fiscal year 2001 and 271 new access point grants funded in fiscal years 2002 and 2003; however, some of the new access point grants represent more than one delivery site. As a result, HRSA underestimated the number of new program delivery sites operating in fiscal years 2002 and 2003.

HRSA Has Increased the Role of Performance Measurement in Monitoring and Improved Its Collection of Health Center Data

HRSA’s new tool for periodic on-site review of health centers—the OPR performance review—focuses on monitoring individual health centers’ performance on selected measures, including health outcome measures. The OPR performance review generally does not provide HRSA with standardized performance information for evaluating the Consolidated Health Centers program as a whole. However, the agency is using other data collection tools, such as its Sentinel Centers Network, that could help it measure overall program performance. HRSA also uses UDS to monitor aspects of health centers’ performance, and the agency has taken steps to improve the accuracy and completeness of that data set.

HRSA’s New Process for Monitoring Health Centers and Other Data Collection Tools Include Patient Health Outcome Measures

HRSA’s new health center reviews, conducted by OPR staff, focus on evaluating selected measures of performance and identifying ways to improve health centers’ operations and performance. OPR works with each health center to select three to five measures that reflect the specific needs of the center’s community and patient population, and then to ascertain the health center’s current performance on each measure. For the health centers we contacted that had undergone the OPR performance review, most of the measures were health outcome measures. These measures included the average number of days that asthmatic patients are symptom free, percentage of patients age 60 or older receiving influenza and pneumonia immunizations, and percentage of low-birth-weight infants born to health center patients. Health centers may set performance goals related to these measures. For example, one health center adopted the goal set by Healthy People 2010 of reducing the percentage of low-birth-weight infants born to its patients to less than 5 percent. HRSA officials told us that the agency intends to follow up annually on grantees’ performance on these measures. When possible, HRSA plans to track progress using data the grantee already reports. For example, HRSA would be able to use UDS data to track progress on the number of health center patients receiving care. HRSA officials told us that because the OPR performance reviews began recently, the agency is still determining how it will track performance on other measures, including many related to patient health outcomes.

After assessing the health center’s performance on each measure, the review team analyzes the factors that contribute to and hinder the center’s performance on these measures, including the processes and systems the health center uses in its operations. During an on-site visit, the review team meets with health center staff to discuss these factors and determine which are the most important to address. The review team also identifies potential actions that could help the center improve its performance and identifies possible partners in making improvements. For example, to improve one health center’s performance on its low-birth-weight measure, the review team suggested the center undertake provider and patient education, training for health center staff, continued partnerships with other service providers and community groups, and an analysis of patient medical charts to identify the risk factors of patients who gave birth to low- birth-weight infants.

HRSA requires that grantees develop an action plan to improve performance in response to the review team’s findings. The action plan describes the specific steps the grantee plans to take to improve performance on each measure and provides estimated completion dates. For example, the health center discussed above proposed hiring an outside physician to conduct chart reviews and showing a video on cultural competence to all staff as two specific actions to improve performance on its low-birth-weight measure.

While the OPR review primarily focuses on health centers’ performance on specific measures, the reviews also verify key aspects of health centers’ compliance with Consolidated Health Centers program requirements. The review teams examine information HRSA maintains on each health center, including grant applications and financial audits. According to HRSA officials, OPR reviewers also follow up on concerns identified by project officers, who are the agency’s primary means for ongoing monitoring of health center operations and compliance. If the review team identifies any instances of noncompliance with program requirements—such as those related to the types of services the center must provide and the composition of its governing board—HRSA requires grantees to address them in the action plan.

HRSA officials told us they hoped that in addition to providing information on individual health centers, the OPR performance reviews would result in information that could improve other centers’ services and operations. HRSA officials said that as reviewers gained more experience in evaluating health centers, they would be better able to identify best practices that contribute to outstanding patient health outcomes and share these practices among health centers. HRSA officials told us that OPR planned to use this information to develop a list of successful practices employed by health centers, such as a patient tracking system or prescription drug subsidy program. They said they expected to generate this list three times a year and to make it available as a resource for project officers and OPR review teams to share with other health centers.

The health center officials we interviewed whose centers had undergone the OPR performance review said that, in general, it provided helpful suggestions for improving services and operations. Officials from some health centers told us that they planned to incorporate the performance goals and their progress in achieving them into their future grant applications. Health center staff also described the reviews as accurate and thorough and said they appreciated the in-depth method of looking at performance in targeted areas. Officials from a few health centers also noted that their reviewers had expertise on the health centers program because the reviewers had previously been project officers for the program; one health center official said that this expertise was critical to the review process. In many cases, HRSA field office staff conduct performance reviews of health centers in states or communities with which they are already familiar. HRSA officials told us this experience has allowed the OPR reviewers to understand performance in the context of the local, state, and regional environment, such as the effect state Medicaid funding and policy changes might have on the number of people receiving health center services.

While the OPR review evaluates the performance of individual health centers, it generally does not provide standardized performance information for the Consolidated Health Centers program as a whole, and HRSA is using other tools to collect information that could help measure overall program performance. In 2002, HRSA began collecting data on health centers’ services and patient populations through its Sentinel Centers Network—a network of health centers designed to be geographically and sociodemographically representative. As of February 2005, 67 health centers, with more than 1 million patients, were participating in the network. Participating health centers report patient-, encounter-, and practitioner-level data. The network is intended to supplement HRSA’s other data sources, such as the Community Health Center User and Visit Survey,which is conducted only every 5 to 7 years, and the UDS, which generally provides grantee-level data.

HRSA also collects information that could help it measure overall program performance through its Health Disparities Collaboratives, which the agency views as a tool for improving the quality of care. Participating health centers use a model for patient care that includes evidence-based practice guidelines. The model also includes a database in which the health centers collect standardized patient-level health outcome data that are used to track progress and are shared with all health centers in the collaborative. HRSA plans to expand the collaborative model from a focus on specific diseases to a focus on primary care in general. Through 2004, 497 health centers had implemented the collaborative model for at least one disease. An additional 150 centers began the collaborative process in February 2005. In the future, HRSA officials would like to extend the model to all health centers in the Consolidated Health Centers program.

HRSA has a contract with Johns Hopkins University for evaluating data from the Sentinel Centers Network and other health center data, such as UDS data. According to HRSA officials, the purpose of this contract is to provide timely, short-term statistical analyses and longer-term evaluation studies using databases that contain information on health centers. One planned study will examine preventive services provided by health centers, and several will focus on the role of health centers in reducing racial/ethnic and socioeconomic disparities in health outcomes for health center users.

HRSA Has Taken Actions to Improve the Completeness and Accuracy of Its Uniform Data System

Since our previous report on the health centers program in March 2000, HRSA has taken steps to improve the UDS data collection and reporting process by trying to ensure that all Consolidated Health Centers program grantees report to the system and that the information they report is complete and accurate. HRSA’s efforts resulted in near-universal reporting—99.8 percent—by grantees for 2003. HRSA contacts grantees that do not submit UDS data for the preceding calendar year by February 15. HRSA officials told us that after they made several efforts to try to obtain UDS data, only 2 of the 892 grantees required to report in 2003 did not submit data.

To minimize errors in the data set, HRSA implements data quality assurance procedures in the UDS data collection process. Specifically, HRSA has programmed 474 edit checks into the software that grantees use to report UDS data. These edit checks detect mathematical and logical errors and are triggered while grantees are entering or verifying data. Mathematical edit checks ensure that rows and columns sum to the total submitted by the grantee, and logical edit checks ensure consistency within and across tables. For example, one logical edit check ensures that the total number of patients reported by age and sex equals the total number of patients reported by race/ethnicity. The grantee is prompted to address inaccuracies or inconsistencies identified by the edit checks before submitting the data to HRSA.

When HRSA receives grantees’ UDS submissions, its contractor conducts additional edit checks. The contractor confirms that grantees’ submissions are substantially complete, which includes ensuring that tables are not blank, and forwards satisfactory submissions to an editor. The editors review the mathematical and logical checks triggered by the software and the checks for completeness conducted by the contractor. The editors also conduct 304 additional edit checks, which include comparisons to data submitted in the previous year and comparisons to industry norms. When they find an aberrant data element, editors contact grantees to determine if there is an error in the data or if there is a reasonable explanation. If there is an error, the editor and grantee agree on a process and timeline for the grantee to submit corrected data, and the grantee’s UDS data are revised. HRSA officials told us that editors were experienced with UDS, the Consolidated Health Centers program, and data editing. The editors have also attended training to ensure consistency across editors and to learn about new edit checks. In addition, editors are assigned to grantees in a single state or region to facilitate their understanding of unique regional issues that could affect UDS data, such as managed care participation.

We found the UDS data for the selected data elements we evaluated to be generally accurate. For the mathematical and logical edit checks of 25 data elements we conducted, we found very few errors, and each error was due to missing data. In addition, we found no discrepancies in our replication of five analyses in HRSA’s 2003 National Rollup Report.

To improve the accuracy of UDS data on the number and location of health center delivery sites, for 2004, HRSA revised the instructions to grantees for identifying their delivery sites. The new instructions specified that grantees should report delivery sites that provide services on a regularly scheduled basis and that are operated within the approved scope of the health center’s grant. HRSA also provided more detailed instructions to help grantees determine which delivery sites they should include in their UDS submission and which sites they should exclude. As of June 2005, HRSA had not validated the accuracy of the 2004 UDS data on delivery sites.

Health Centers Often Face Challenges Securing Specialty Care for Patients

In addition to providing comprehensive primary and preventive health care services, most health centers receiving Consolidated Health Centers program grants provide specialty care on site or have formal arrangements for referring patients to outside specialists for care. According to the 2003 UDS data, 32 percent of health centers provided some specialty care on site. Specialists providing services on site include health center employees and volunteers. In addition, 83 percent of health centers reported that they had formal referral arrangements for some specialty care, which included agreements with community providers, such as local hospitals and networks of specialty care providers. Almost all of these health centers reported that they did not pay for some of the services for which they referred patients. In addition to formal referrals, health centers also informally refer patients to specialty care. Health center officials told us that many of their referrals for specialty care were arranged informally through discussions between health center staff and the specialty care provider, and specialists donated their time to provide services to the health center’s patients.

Health center officials told us that obtaining specialty care for center patients, especially patients who are uninsured, could be difficult. Officials from most of the health centers in our review said that there was a shortage of certain specialists available to receive referrals from their health center. For example, one official told us that there were only two specialists providing gynecologic oncology services in the county, and both physicians were overbooked with paying patients. Health center officials told us that some specialists—such as orthopedists, neurologists, oncologists, cardiologists, ophthalmologists, and dermatologists—were difficult to find.

This problem is exacerbated because, according to officials from most of the health centers in our review, some specialists are not willing to provide free care for uninsured patients. As a result, there are often long waiting lists for health center patients to see a specialty care provider who is willing to provide donated services. For example, one health center official told us that a patient might have to wait 9 months for an appointment with a dermatologist. One health center official characterized the center’s efforts to secure specialty care for patients as “begging.” Although these issues present a problem for health centers in both urban and rural areas, people living in rural communities could face additional challenges affecting their access to care, such as a need to travel a long distance to obtain care.

Conclusions

HRSA’s Consolidated Health Centers program has played a pivotal role in providing access to health care for people who are uninsured or who face other barriers to receiving needed care. When HRSA makes decisions about awarding program funds to support additional health center delivery sites, it is faced with the challenge of identifying applicants that will serve communities with a demonstrated need for services and that will operate centers that can effectively meet those needs and remain financially viable. HRSA has indicated that it is not confident that its award process for new access point grants—which is intended to meet this challenge—has sufficiently targeted communities with the greatest need. HRSA’s recent effort to evaluate the assessment and relative weight of need in the award process could result in greater confidence that the agency is appropriately considering community need in distributing federal resources to increase access to health care.

In light of the growing federal investment in health centers during the President’s Health Centers Initiative, it is important for HRSA to ensure that health centers are operating effectively and improving patient health outcomes. HRSA’s adoption of a performance monitoring process that includes emphasis on patient health outcomes and its efforts to collect health outcome data constitute an important step in improving the agency’s capacity to assess health centers and the health centers program. Continued attention to such efforts could improve HRSA’s ability to evaluate its success in improving the health of people in underserved communities.

It is also important for HRSA to ensure that it is collecting and reporting accurate and complete information about the number and location of delivery sites where health centers are providing care. In providing new UDS guidance to grantees, HRSA has taken a step toward improving the quality of its information on delivery sites. The agency will need to carefully assess the effectiveness of its new guidance and, if necessary, take additional steps to ensure that delivery site information is accurate. HRSA officials and the Congress need accurate and complete information on delivery sites to assess whether the health centers program is achieving its goal of expanding access to health care for underserved populations and to make decisions about managing and funding the program.

Recommendation for Executive Action

We recommend that, to provide federal policymakers and program managers with accurate and complete information on the Consolidated Health Centers program’s activities and progress toward its performance goals, the Administrator of HRSA ensure that the agency collects reliable information from grantees on the number and location of delivery sites funded by the program and accurately reports this information to the Congress.

Agency Comments

We provided a draft of this report to HRSA for comment. HRSA acknowledged that more accurate and timely delivery site data would allow for improved management of the Consolidated Health Centers program and said that the agency already has efforts under way to increase the accuracy of delivery site data. (HRSA’s comments are reprinted in app. V.) HRSA stated that the accuracy of delivery site data does not affect its ability to assess and report the progress of the President’s Health Centers Initiative because it believes this progress is more appropriately assessed by the number of new access point and expanded medical capacity grants HRSA has awarded. While HRSA may choose to assess the progress of the President’s Health Centers Initiative on this basis, it is not appropriate to equate the number of new access point grants awarded to health centers with the number of delivery sites where these centers provide care. HRSA did not indicate whether it plans to revise its method of counting delivery sites for its future reports to the Congress to include all delivery sites funded since the President’s Health Centers Initiative began. We continue to believe it is important that HRSA collect and report accurate data on the number and location of all delivery sites funded by the program so that agency officials and the Congress will have the information they need to monitor the program’s progress in increasing access to health care and to make decisions about managing and funding the program. HRSA also provided technical comments, and we revised our report to reflect the comments where appropriate.

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If you or your staff have any questions about this report, please contact me at (202) 512-7119. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. An additional contact and the names of other staff members who made contributions to this report are listed in appendix VI.

Scope and Methodology

To do our work, we obtained Consolidated Health Centers program documents, pertinent studies, and data from the Department of Health and Human Services’ (HHS) Health Resources and Services Administration (HRSA). We also conducted structured interviews of officials from 12 health centers in California, Illinois, Pennsylvania, and Texas. We selected these states because of their geographic diversity and because they were among the states with the highest number of health centers. Within each of the four states, we selected 3 health centers, including at least 1 urban and 1 rural center in each state. To ensure that we could obtain information about securing specialty care for uninsured patients, we selected only centers where at least 26 percent of the patients were uninsured in calendar year 2003; 75 percent of all health centers had a proportion of uninsured patients of at least 26 percent. For each state we selected, we also interviewed officials from the state’s primary care association. We also reviewed the relevant literature and program statutes and regulations and interviewed officials from the National Association of Community Health Centers and the National Association of Free Clinics.

To acquire information on health center funding, we examined Consolidated Health Centers program funding data by grant award type— new access point, expanded medical capacity, service expansion, service area competition, and noncompeting continuation—for fiscal years 2002, 2003, and 2004. In addition, we reviewed information on grant applications HRSA received during those 3 years. To describe the geographic distribution of health centers, we analyzed Uniform Data System (UDS) data on health center location by zip code and state and other data HRSA provided on centers’ urban/rural status. We assessed the reliability of the data on health center funding and geographic distribution of health centers by interviewing agency officials knowledgeable about the data and the systems that produced them, and we determined that the data were sufficiently reliable for the purposes of this report.

To determine HRSA’s process for assessing the need for services, we reviewed agency grant announcements, grant applications, and application guidance documents for the various grant types. We also reviewed the need-for-assistance worksheet and the need criteria in the new access point grant application guidance. We interviewed agency officials about the criteria used to assess the application sections on need for services and about HRSA’s ongoing consideration of revising the way need is assessed for new access point grants. In addition, we interviewed health center officials and officials from national and state associations that work with health centers about their experiences with the grant process.

To examine HRSA’s monitoring of health center performance, we reviewed agency reports and protocols related to the new monitoring process conducted by the Office of Performance Review (OPR). We interviewed agency officials about the development of the new process and the roles played by different agency branches in monitoring health centers. To obtain information about health centers’ experiences with the new OPR performance review process, we conducted interviews with officials from health centers that had completed the process. One of the 12 original health centers we interviewed had completed the OPR performance review process, and we also interviewed officials at an additional 6 health centers that were among the first to complete the process. In addition, we reviewed documents provided by the health centers, including performance reports and action plans. We also reviewed reports and documents related to HRSA’s ongoing monitoring, including sample tools used by project officers to monitor their grantees and schedules of site visits conducted by the project officers. In addition, we reviewed documents related to HRSA’s collection of health center performance data, including agency guidelines for the Health Disparities Collaboratives and the application for health center participation in the Sentinel Centers Network.

To assess HRSA’s improvements to UDS, we evaluated the completeness and quality of 2003 data—the most recent data available at the time we conducted our review. To evaluate overall completeness, we obtained the master list of 2003 grantees from HRSA and matched the grantees on this list with those in the 2003 UDS data file. To evaluate the completeness and quality of specific data elements in the 2003 UDS data file, we developed and evaluated edit checks of those data elements. We selected variables that were identified as problematic in our March 2000 report and others that were used in our current analysis. We also independently conducted selected analyses and compared our findings to corresponding tables in the 2003 National Rollup Report. For example, using 2003 UDS data, we duplicated the table on services offered and delivery method in the National Rollup Report and verified that it matched the data HRSA reported. We did not perform edit checks on the delivery site data grantees reported to UDS. We interviewed agency officials about how HRSA collected UDS data on health center delivery sites and determined that the data were not sufficiently reliable for purposes of our report.

We conducted our work from August 2004 through June 2005 in accordance with generally accepted government auditing standards.

HRSA’s Process for Awarding Grants through the Consolidated Health Centers Program

HRSA’s process for awarding grants through the Consolidated Health Centers program involves several steps. HRSA provides initial grant information for new access point, expanded medical capacity, service expansion, and service area competition grants through the HRSA Preview, a notice available on HRSA’s Web site. The preview includes information on eligibility requirements; the estimated number of awards to be made; the estimated amount of each award; and the dates that application guidance will be available, applications will be due, and awards will be made. HRSA later issues grant application guidance, which includes the forms applicants need to submit (such as forms describing the composition of the applicant’s governing board, summarizing the funding request, and describing the type of services to be provided) and a detailed description of the application review criteria and process.

The application guidance for new access point grants also encourages applicants to submit a letter of interest prior to submitting a grant application. In the letter of interest, the applicant describes its community’s need for services and proposes services that the health center would offer to address those needs. HRSA officials told us that in fiscal year 2004, nearly one-half of applicants for new access point grants submitted a letter of interest. HRSA provides feedback to organizations on whether the proposal is consistent with the objectives of the health center program and whether HRSA thinks the organization is ready to establish a new delivery site.

HRSA also provides applicants with technical assistance resources during the development of grant applications. For example, through cooperative agreements with HRSA, state primary care associations and the National Association of Community Health Centers offer regional training sessions on various topics, including strategic planning, proposal writing, community assessment, and data collection. Potential applicants may also contact their state primary care association for individual technical assistance and application review.

HRSA approves funding for a specific project period—up to 5 years for existing grantees and up to 3 years for new grantees. HRSA provides funds for the first year of the project; for subsequent years, health centers must obtain funding annually through a noncompeting continuation grant application process in which the grantee must demonstrate that it has made satisfactory progress in providing services. A grantee’s continued receipt of funds also depends on the availability of funding.

Applications submitted to HRSA go through several stages of review. HRSA initially screens applications for eligibility based on specific criteria—the applicant must be a public or private nonprofit entity, the applicant must be applying for an appropriate grant (e.g., expanded medical capacity and service expansion grants are available only to existing grantees), and the application must include the correct documents and comply with page limitations and format requirements.

Eligible applications go through a review process in which independent reviewers evaluate and score applications. The reviewers are selected by HRSA and have expertise in a specific field relevant to the health center program. HRSA provides reviewers with the same application guidance that it provides to applicants, and reviewers are to use their professional judgment in scoring applications.

During the first stage of the review process, HRSA forwards eligible applications to three independent reviewers, who have 3 to 4 weeks to individually evaluate the applications. Applications for new access point grants include a need-for-assistance worksheet, which is evaluated by the reviewers. HRSA uses the need-for-assistance worksheet to measure barriers to obtaining care and to measure health disparity factors in the applicant’s proposed service area. Applicants can score up to 100 points on the worksheet, and only those applicants that receive a score of 70 or higher on the worksheet go on to have the technical merits of their application evaluated. The reviewers evaluate the merits of all qualified applications; they base their review on a standard set of criteria (see table 2) and give each application a preliminary score of up to 100 points. For example, reviewers of new access point grant applications evaluate the need for services through the criterion that describes the applicant’s service area/community and target population and assign a score from 0 to 10, which constitutes a maximum of 10 percent of the applicant’s maximum final score. Similarly, reviewers evaluate the applicant’s service delivery strategy and model and assign a score from 0 to 20, which constitutes a maximum of 20 percent of the maximum final score.

During the second stage of the review process, reviewers present the strengths and weaknesses of the application to a panel of 10 to 15 reviewers. After discussing the application, each panel member scores it. For each application, HRSA averages the scores assigned by each reviewer in the panel. The volume of applications may result in HRSA’s using multiple review panels during a funding cycle. When this occurs, HRSA uses a statistical method to adjust for variation in scores among different review panels. The adjusted score becomes the final application score, and the final scores are used to develop a rank order list of applicants.

HRSA bases its award decisions on the rank order of scores and other factors. Two types of factors—the funding preference and awarding factors—can affect which applicants HRSA chooses for funding from the rank order list. The funding preference is given to applicants proposing to serve a sparsely populated rural area. To be considered for the preference, the applicant must demonstrate that the entire area proposed to be served by the delivery site has seven or fewer people per square mile. In addition to scoring an application, the review panel evaluates the requested funding amount and determines if an applicant should be considered for the funding preference. The funding preference does not affect the score, but may place an applicant in a more competitive position in relation to other applicants. For example, if the panel has determined that the applicant qualifies for the funding preference, it may receive a grant award over higher scoring applicants that did not qualify for the preference. In fiscal year 2004, of the five applicants that received a service expansion grant to provide new oral health services, three were determined to qualify for the funding preference. These three applicants—with scores of 83, 86, and 90— were each awarded a grant over six applicants with application scores above 90.

As with the funding preference factor, the law requires HRSA to consider awarding factors in selecting applicants to fund from the rank order list. HRSA must consider the urban/rural distribution of awards, the distribution of funds across types of health centers (community, homeless, migrant, and public housing), and a health center’s compliance with program requirements. In fiscal year 2004, HRSA gave priority to funding homeless and migrant health centers and, from the new access point applications the agency received that year, it funded only health centers requesting homeless or migrant health center funding. HRSA officials said the agency did this because the applications it had already approved in fiscal year 2003 for funding in fiscal year 2004, pending funding availability, did not include applications for homeless or migrant health center funding. In addition to the preference and awarding factors specified in the law, HRSA also considers the geographic distribution of awards in making funding decisions.

HRSA sends a Notice of Grant Award to successful applicants. The notice includes a set of standard terms and conditions with which the grantee must comply to receive grant funds, such as allowable uses of federal funds and reporting requirements. In addition, the notice may include grantee- specific conditions of award. For example, common conditions placed on new access point awards relate to the health center’s being operational within 120 days, having the appropriate governing board composition, and hiring key staff. About 80 percent of new access point awards receive at least one condition, according to HRSA officials. HRSA notifies unsuccessful applicants of the outcome of the review process and provides applicants with their score and a summary of their application’s strengths and weaknesses.

Distribution of Consolidated Health Centers Program New Access Point Grants, Fiscal Years 2002 through 2004

3 (Continued From Previous Page)

Distribution of Consolidated Health Centers Program Grantees, 2001 and 2003

16 (Continued From Previous Page)

Comments from the Health Resources and Services Administration

GAO Contact and Staff Acknowledgments

GAO Contact

Acknowledgments

In addition to the person named above, key contributors to this report were Donna Almario, Janina Austin, Anne McDermott, Julie Thomas, Roseanne Price, and Daniel Ries.