Regulatory Guide: HPSA/MUP Methodology

Regulatory Guide Icon The Health Resources and Services Administration (HRSA) recently proposed a new combined methodology for determining designation as a Health Professional Shortage Area and/or Medically Underserved Population. This change in methodology could have a radical impact on the ability of rural and frontier communities to recruit additional providers to their community. The NRHA provides this regulatory guide to explain the proposed methodology, to share our initial intent on comments NRHA offers to HRSA regulators, and to give details on how rural advocates can submit their own comments on the proposed rule.

Additional Background/Resources:

Update - May 27, 2008 - NRHA's draft comments now available online: The NRHA draft comment letter is now online for review and feeddback. In order for member comments to be included by NRHA staff in the comment letter, feedback must be received by Thursday, May 29th at noon ET. The comment letter can also be used as a base for your own response due by 5 PM ET the same day.

Update - April 16, 2008 - Deadline for Comments Extended: Thanks to the assistance of rural Congressional leadership, this association, our partners, and our members, the comment period has been extended for 30 days through May 29, 2008. This extra time will allow us and out partners to go back and make sure that we understand the full effects of this regulation before the comment period ceases. More information is available below.

Background:

On February 29, 2008, the Health Resources and Services Administration published a proposed methodology for determining Medically Underserved Populations (MUP) and Health Professional Shortage Areas (HPSAs) in the Federal Register. This proposed methodology would combine the two shortage definitions under one formula to reduce paperwork for communities who currently apply twice for similar designations. For providers relying on MUPs, this will for the first time require that the designation be updated periodically. Currently, once a community receives an MUP designation, they are permanently eligible for the benefits despite any changes that may have occurred.

Whenever the federal government makes a regulatory change, they offer the general public an open comment period to express their views on the regulation. The agency responsible for the regulation must then respond to each of these comments. For this proposed rule comments must be received by May 29th, 2008 to be considered by HRSA before they proceed in finalizing this methodology. Rural advocates need to pay significant attention to these changes, as both the MUP and HPSA designations are used by a number of rural programs that seek to address the lack of access to primary care. Key programs include the Rural Health Clinic (RHC) designation, the Community Health Centers (CHC) designation and grant program, the National Health Service Corps (NHSC), the J1 Visa Waiver program, and the Medicare Incentive Payment (MIP) for physicians. A full list is attached from a Government Accountability Office (GAO) report.

This is the second time that HRSA has proposed a new methodology to combine these two shortage definitions. In 1999, HRSA withdrew a previously proposed rule after hundreds of comments suggested the methodology would have a significantly negative impact on safety net providers. This new proposed rule attempts to respond to these comments by simplifying the shortage designation process and assuring safety net providers that most areas will retain their status.

Overview of the Formula:

HRSA's stated intention with this proposed rule is to combine the two definitions into a single formula. In addition they hope to make the process simpler and have scientific basis for analysis of whether a community is underserved or not. While the basic concept is simple, there are a number of complex, nuanced adjustments that rural advocates need to analyze before deciding whether or not HRSA has achieved their goal with this new methodology.

The basic idea of the rule is that if a community or rational service area (RSA) has a ratio of more than 3,000 people to one provider, it is considered underserved. This underserved ratio is double the "normal" ratio of population to providers that a fully served community would have (1,500:1). The basic ratio would look like this:

However, HRSA proposes to not just simply count the number of people and compare to the number of providers. Instead, they created an adjustment named in the proposed rule (as shown in the above equation), the "Barrier Free Population." In essence, instead of a simple count of the population, this is a count that has population and gender adjustments. Children and the elderly tend to require more visits to a primary care office than middle age Americans. Likewise, women of childbearing years need more care than their male counterparts of a similar age. So the "Barrier Free Population" adjusts for these needs and the demographics of a community. For many rural communities, which tend to have a higher elderly population than their urban counterparts, this should be a net win in the equation.

The proposed rule also changes who counts as a "provider." The proposed methodology will now count midlevels (nurse practitioners, physician assistants, college of nurse midwives) at .5 full time equivalent (FTE), while continuing to count physicians at 1.0 FTE. Under the current rule, midlevels are not counted. For both midlevels and physicians, the time counted should only be the time they are practicing primary care in the community. Any time they spend on acute care, inpatient hospital care, administration and other non-primary care tasks should not be counted in this ratio.

HRSA has also proposed an additional adjustment to the ration, a "High Need Indicator (HNI)" score that would be added to the ratio. The HNI score is made up of nine separate health status indicators:

Percentage of population unemployed
Percentage of population that is elderly
Percentage of population that is non-white
Percentage of population that is Hispanic
Percentage of population that is under 200% of the poverty line
Low Birth Weight
Infant Mortality
Density of the population - with the lower density increasing the overall score
Actual versus expected death rate

These nine scores would be compared to the percentile that the RSA ranks against the rest of the country. The higher the population within an RSA is on one of these indicators (or the higher it is in the percentiles), the more points would be added to the ratio. Each of these indicators were chosen to serve as proxies for health outcomes, and because HRSA has this data for all communities in the country. When the HNI score is added to the formula, the final formula to determine whether a community is a HPSA or not looks like this:

All of this data is available nationally. However, it is clear, especially in counting the time that providers spend doing primary care, that state and local officials will need to provide accurate, up to date information. HRSA will notify the state, locality, and impacted facilities if they are going to lose HPSA designation. At that time (and any time before), more accurate data can be substituted. Likewise, states will be allowed to designate RSAs that are more appropriate to the state's situation than simply using county boundaries. States are encouraged in this proposed rule to create a statewide RSA plan following guidelines laid out in the proposed rule.

The Formulas Complexity - Tiers and Population HPSAs/MUPs:

What we described in the section above is how to determine a Tier One Geographic HPSA and MUA. As part of the new proposed rule, HRSA is introducing a new concept - tiers of HPSAs and MUPs.

A concern with HPSAs has always been that if a community is able to attract new providers with these designations that they could then fall below the ratio threshold, and lose their designation. This has been termed the "yo-yo effect" as a community, especially a small rural or frontier community, loses a provider and reaches the threshold only to lose the status when a new provider comes. To get over this, HRSA is introducing a Tier Two HPSA. This Tier Two HPSA uses the same formula as the Tier One HPSA, except that the number of providers will not include providers under the J1 Visa Waiver program, National Health Service Corps, State Loan Repayment programs, and those practicing at Community Health Centers. In essence, the Tier Two designation "backs out" federally sponsored providers. Tier Two HPSAs will continue to receive the benefits they were eligible for when they did meet the provider ratio, but in most cases, they will not be able to receive new benefits that Tier One HPSAs would be eligible for.

The second element of the formula that adds to the complexity of this new rule is the Population HPSA or MUP designations. This designation is for communities or RSAs that may have enough providers in the community, but still have certain populations that are not being served. Often these populations have additional barriers such as poverty, lack of insurance, lack of providers willing to accept Medicaid, or a linguistic or ethnic difference. To figure out whether a community qualifies for a Population-based HPSA or MUP, you use the above formula, including HNI score adjustment, but only count the population in question as your "Barrier Free Population. For instance, a Population-based HPSA for a Medicaid population would look something like this:

Notice, the number of providers, barrier free population, and HNI score are all adjusted just for the Medicaid population. This will allow a rural or frontier community to see a large HNI increase in the low income metric (as by definition a Medicaid population would be low income), and most likely a large decrease in the number of providers willing to serve this community. Other HNIs, like unemployed, non-white or Hispanic populations, would often also be impacted if that data is available.

Finally, if an RSA is still not able to qualify for either of the previous HPSA or MUP designations, there will remain the option for a Governor-designated Geographic HPSA and a facility-site designation. The proposed rule gives some guidance on these final options.

Impact on Rural and Frontier:

In the proposed rule, HRSA indicates that almost all current HPSAs will retain their status - 98% in non-metro areas, 99% in frontier America. However, the data is nearly nine years old at this point, and it is unclear whether this would still be the case. In fact, a recent study by The George Washington University School of Public Health and Health Services found that nearly one in six rural and frontier HPSAs may be in jeopardy.

In addition, while a community is eligible for many of the HRSA sponsored programs, such as Community Health Centers and National Health Service Corps, with any type of HPSA, this is not the case for other agencies that use the HPSA methodology. Rural Health Clinic status cannot be achieved with a facility-site designation. Physicians that receive the Medicare Incentive Payment (MIP, 10% of Medicare payments for qualifying locations) have to be located in a Geographic HPSA. In the analysis in the final rule, HRSA's data does not distinguish between different HPSAs when they claim that only 2% of non-metro communities will be impacted. For them a HPSA is a HPSA. Unfortunately, this is not the case in all situations.

The NRHA has joined with other safety net groups to call for an extension to the comment period. Our letter to HRSA explained that sixty days is not enough time, after a nearly ten year process to write this regulation, to do the analysis needed to know how the rule will impact rural America. Our request was not initially accepted. Thanks to the added pressure of Congressional rural champions and other interested parties, the comment period has now been extended until May 29, 2008.

This now allows rural advocates to analyze the impact on their own community. We strongly encourage all members to download the HPSA calculator (Excel file) and determine the effects in your own community. The Association needs to hear from communities like your own. We will need help from our members to truly understand how this methodology will impact rural providers and communities.

Timeline:

Assuming the proposed rule goes forward, HRSA plans to begin implementation January 1, 2009. There would be a three year process to update all HPSAs. HRSA would begin with the oldest HPSA or MUP areas first. Once all HPSAs had been updated, HRSA would have an ongoing, rolling updating process. Rural Health Clinics and Community Health Centers would have at least six years from the beginning of this process before they have to qualify for benefits under the new HPSA formula.

Concerns:

Complex regulatory changes always create a number of concerns. This rule is no different. While we are still reviewing the regulation, we are concerned about the following points:

While HRSA explained how they will treat Tier Two HPSAs (no additional resources), it is not clear how the Centers for Medicare and Medicaid Services (CMS) will treat this new level. There is no mention of tier levels in the statute, which means CMS would not necessarily have to recognize such a designation. This could have devastating impacts on rural America - will RHCs keep their status with a Tier Two HPSA? Will a Tier Two Geographic HPSA qualify a physician for the MIP payment? These are open questions that need to be understood before an adequate comment can be made.

As explained previously, HRSA proposed the Tier levels to avoid the "yo-yo effect," where federally sponsored providers would be "backed out" so that a community does not lose their providers after getting them due to a HPSA designation. In the proposal, this includes backing out providers at Community Health Centers, but Rural Health Clinics are not included in this backing out process. The NRHA will strongly urge HRSA to include Rural Health Clinics in the Tier Two back out for equity reasons, even if the proposed rule is correct in its assertion that the Tier Two process will impact very few RSAs.

Early analysis shows that in at least one state counting midlevels as 0.5 FTE will lead to a decrease in the number of Geographic HPSAs. In the proposed rule, HRSA did not spend much time analyzing the shifting of HPSAs since their programs do not care which HPSA an area has. This is not the case for other department programs, especially CMS level programs, such as MIP payments. In addition, HRSA did not analyze the impact of this rule on the MIP program, assuming providers would not see a decrease of 5% of their revenue due to any change. This is a misunderstanding of small, rural providers, who may have more than half their revenue come from Medicare patients. A change in their HPSA and the accompanying loss of MIP would be very significant.

As stated above, HRSA proposes to notify the state, locality, and providers whenever a HPSA is lost. It is very important that this notification takes place even when changing HPSA type. For programs run by CMS and other agencies, all HPSAs are not created equally. Notification should happen any time an RSA changes from one HPSA type to another.

In the proposed rule, HRSA proposes eliminating HPSAs for Podiatry, Vision Care, Pharmacy and Veterinary Care since they are not being used at this time for any program. The NRHA strongly believes that the Vision Care and Pharmacy HPSAs should be retained, as we have been advocating for the NHSC to add these types of providers.

Open Questions:

In addition to concerns that the NRHA has with the proposed rule, there are still a number of open questions that we will be analyzing in the weeks to come. If you have thoughts about any of these issues, we would love to hear them:

It is not clear in the proposed rule what order a community or facility will have to go to receive a HPSA. For instance, if a community does not receive a Tier One Geographic HPSA (most likely the most advantageous designation), can they chose between a Tier One Population Based HPSA (still allowing additional resources) or a Tier Two Geographic HPSA (allowing them to keep their MIP for local physicians)? The NRHA is interested in whether or not communities would like this flexibility or whether it may be too difficult to pick winners and losers locally.

One problem with having a formula that has a count in the divisor is that if there are no providers in a community, you can not do simple division to get a ratio. HRSA mentioned this dilemma in trying to figure out what to do in a community or RSA that does not have any providers. They outlined three different approaches they considered - a) automatically designating the community a HPSA with an adjusted ratio of 3,000:1 and then adding the HNI score; b) automatically designating the community a HPSA without a score; and c) giving these communities a small count - .1 FTE and evaluating the score. For their impact analysis they chose c. The NRHA is interested in hearing which option would be best for rural and frontier communities, since we will be impacted by this more than urban communities.

The proposed methodology details that seasonal employees and migrants could be included in the "Barrier Free Population" based on their length of stay. For instance, if 20,000 seasonal workers are in a RSA for 3 months each year (1/4th of the year), they would count for 5,000 (20,000 * 1/4 = 5,000) . However, the rule does not detail whether they would also be adjusted based on age and gender like the general population is. In preliminary discussions with state offices, it does not appear that the data needed to make the adjustment are available. The NRHA is interested in understanding whether the option of including this adjustment, assuming data could be gathered, or using the overall population's adjuster would help rural or frontier communities. Also, while the proposed rule explicitly said that tourists would not qualify, the NRHA is interested in hearing whether an argument can be made that this is needed for communities to provide primary care to their own population and tourists, and whether this would have a large impact.

Information on Commenting:

Whenever the federal government makes a regulatory change, they offer the general public an open comment period to express their views on the regulation. The agency responsible for the regulation must then respond to each of these comments. This allows rural advocates to express their views on the proposed regulation and make sure that the federal government understands how the rule will impact rural America. In any final rule, the agency responsible will answer concerns that were presented in the open comment period.

This proposed rule has an open comment period through May 29th, 2008. If you would like to comment, you have the option submitting your comments in the following ways:

Electronically - Go to http://www.regulations.gov and click on "Submit electronic comments on HRSA regulations with an open comment period." They prefer the document in MS Word format but will accept WordPerfect or MS Excel.
Through the mail - Send one original and two copies to: Health Resources and Service Administration, Department of Health and Human Services, Attention: Ms. Andy Jordan, 8C-26 Parklawn Building, 5600 Fishers Lane, Rockville, MD 20857.
There is also an option to send overnight mail or by courier. See the regulation for more information on these delivery methods.

Further Information/Questions:

If you have comments, concerns or seek additional information about the proposed changes to the HPSA/MUP designation methodology, please contact Tim Fry at Fry@NRHArural.org or 202-639-0550.

The NRHA is much indebted to Heather Bonser-Bishop, who helped us better understand the methodology and its impact. If your state or community needs assistance in understanding how this proposed methodology will impact your community or you need to update your current HPSA or MUP, contact Ms. Bonser-Bishop at heather@bonserbishop.com or (707) 834-0428.

Or you can speak directly to Ms. Andy Jordan, Chief, Shortage Designation Branch, Bureau of Health Professions at 301-594-0197.

Version/Updates:

This document will evolve over the course of the regulatory process. This version is updated with current information as of April 17, 2008. Continue to check back. As the NRHA continues to evaluate the impact, creates its comments and views the response of HRSA, we will make updates.

National Rural Health Association

Upcoming Events

July 17-18

July 18-20

July 30-31

September 25-28

December 5-6

Rural Health Fact