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 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 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. 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 new access point, expanded medical capacity, and service expansion grants increased during the first 3 years of the President’s Health Centers Initiative.