CLINICS IN RURAL AMERICA
An Issue Paper Prepared
by the National Rural Health Association-February 1997
Public Law 95-210. In 1977,
the U.S. Congress passed legislation that established criteria
for the establishment of federally certified Rural Health Clinics.
The law was designed to support and encourage access to health
care by rural residents.
It was noted that due to economic conditions, the rural population
was becoming poorer and more elderly, and that providers were
becoming older and not being replaced by younger physicians as
the older physicians retired.
It also was noted that provision of health care to the rural
poor and elderly was more costly than to those populations in
urban areas. Rural health care also is more costly because a limited,
constricted patient mix restricts the percentage of revenue from
private third-party payers.
The number of these Rural Health Clinics has proliferated in
the past 10 years due to decreasing reimbursements from the standard
fee-for-service system. Because Rural Health Clinics receive cost-based
reimbursement, providers are turning to Rural Health Clinics program
to be able to continue providing service to the rural poor and
As health care providers--both independent and provider-based
facilities-strive to maintain service to this vulnerable population,
the Rural Health Clinics have become an integral part of this
health care system.
As Rural Health Clinics have proliferated, so has scrutiny
of the amount of money being spent for the clinics by the federal
and state governments on the program. It is important to remember
that the Rural Health Clinic status has helped maintain health
care in areas that otherwise have not historically been able to
recruit or maintain providers.
When examining the cost of a Rural Health Clinic, it must be
balanced against the cost of having no access or limited access
for the patients the Rural Health Clinic serves. Preventive health
care and early intervention in acute illnesses would suffer and
the ultimate healthcare cost would increase if there was not such
access to that provided by the Rural Health Clinics. Cost also
should be evaluated on another less quantifiable continuum-the
quality of life issue that either encourages or discourages providers
from locating in rural areas. Rural providers are typically within
the reach of local citizens 24 hours a day, seven days a week,
making quality of life in a rural community more difficult to
attain, much less maintain.
Health care provision to rural populations through Rural Health
Clinic certification 1) allows access in areas that otherwise
would not have sustainable health care; 2) encourages mid-level
providers to be an integral part of the health care delivery system;
3) gives rural citizens the opportunity to learn and accept the
skills of mid-level providers; and 4) allows the potential for
other services to be brought to the rural area that otherwise
would not be available in a private practitioner's office, such
as dietitian, social and physical therapy services.
Rural Health Clinics receive cost-based reimbursement from
Medicaid and Medicare for services already provided to patients
and are regulated by and audited by a survey process. This concept
of cost-based reimbursement has facilitated the recruitment of
providers into rural areas.
The National Rural Health Association (NRHA) fully supports
the Rural Health Clinics program as one major component of a rural
health care delivery system. As the rural health care concept
is re-examined at the national level by federal agencies, the
NRHA will be actively supporting the Rural Health Clinics program
and will be active in any discussion of revisions.
With the above stated support, it is noted that the Rural Health
Clinics program is designed like many other health care delivery
programs at the federal and state levels. A program is legislated,
qualification requirements are established, certification processes
are put in place and ongoing monitoring mechanisms are developed.
There is a system of checks and balances for the program to ensure
both initial and ongoing compliance with established goals and
In the case of the Rural Health Clinics program, this system
does not appear to have worked as effectively as it was designed,
mainly because certain segments of the system have not been regularly
instituted, applied or addressed.
ACCESS TO CARE
- Access to care has become a defining argument for and against
the establishment of Rural Health Clinics. A working objective
definition remains elusive and perhaps arbitrary at some state
levels. Access to health care should be defined in workable terms
considering both the needs of specific communities as well the
short- and long-term primary and emergency health care services
needs of those communities.
- Rural Health Clinics should be required to serve the populations
for which the designation of need for the area was granted and
thus provided the eligibility criteria for certification of the
For example, Rural Health Clinics should serve all Medicare beneficiaries
and Medicaid recipients seeking services at the clinic. Rural
Health Clinics originally obtaining certification under a population-based,
underserved or shortage area designation should serve members
of the population for which the area was certified as needing
health care providers. For instance, if a Rural Health Clinic's
certification is based on a HPSA-based area with a population
below 200 percent of poverty level, that Rural Health Clinic
should have to offer services to that population on a sliding-fee
basis or a similar mechanism.
- Rural Health Clinics should contribute to the overall health
of their resident communities by providing primary health care
services to indigent and uninsured citizens to the extent financially
feasible for that clinic, taking into consideration that no reimbursement
typically is received for such services.
- Rural Health Clinics are reimbursed for services provided,
typically without the benefit of other financial resources such
as grants. Therefore, Rural Health Clinics should be reimbursed
at reasonable and adequate levels for the primary health care
- The limiting circumstances involved in the establishment
and retention of access to care in frontier and other significantly
rural areas should be taken into special consideration in any
possible revision of the eligibility and reimbursement provisions
for Rural Health Clinics.
- Provider-based facilities constitute a significant number
of Rural Health Clinics. The size and physical location of the
provider entity should be a consideration in any possible revision
of the reimbursement provisions for Rural Health Clinics, e.g.,
Rural Health Clinics of hospitals in rural, medically underserved
or health professional shortage areas with 75 acute-care hospital
beds or fewer should be accorded reimbursement levels commensurate
to the critical role played in the delivery of primary health
care services in the shortage areas.
- Rural Health Clinics also face the onward march of managed
care programs across the country. Such clinics should be recognized
as historical providers of Medicare and Medicaid services as
well as essential community providers and should be afforded
inclusion in any such managed care system.
- The recent rapid growth in the number of Rural Health Clinics
has been noted. Yet, it is too soon to say whether this growth
rate is positive or negative. Further study appears warranted
and should be directed as specific, measurable aspects of direct
access to care-for example, numbers of clients served in the
program, increases in number of patients served due to different
reimbursement, increases in the cost of care that affects all
programs, and increases in the volume of services should be assessed.
- Rural Health Clinics should actively serve the specific populations
on which the qualifying geographic area was designated as a shortage
area. This aspect of access is seen as an integral part of the
intent of the original federal legislation and a responsibility
that Rural Health Clinics have an obligation to meet.
ELIGIBILITY FOR CERTIFICATION
- Rural Health Clinics program eligibility requires only the
designation of a medically underserved area (MUA) or a health
professional shortage area (HPSA). Originally, designation also
included medically underserved populations. No definite measure
of ongoing need was established beyond these minimum requirements.
Such a management function should be developed, or the initial
eligibility requirements should be revised. Regular assessments
of MUA and HPSA designations for a given area already provided
for under existing rules could help to define ongoing need and
to address the issue of proliferation. This assessment needs
to include protection for existing essential community providers.
This does not appear to be a function of Rural Health Clinics
themselves, but of the system that applies the criteria for establishment.
- Increasing and retaining access to care are both critical
considerations for most rural communities as they face the need
for provider services today and in years to come. Definition
of a community's needs also should include consideration of the
retention and recruitment of primary care providers.
- There should be a determination of the unmet need in an area
and the resources necessary to meet that need before certification
of new Rural Health Clinics. The federal government should establish
standards to measure this need, and the state should apply them
in making recommendations for certification of Rural Health Clinics.
Such standards should include, but would not necessarily be limited
to, the number of health care providers available to the population
or area and also should include community input.
- Critical criteria for evaluating need at both the community
and state levels should include consideration of actual and potential
patient utilization assessed by patient type and patient need,
taking into consideration such factors as age, demographics,
income and poverty levels, prevalent diagnostic patterns, and
community economic needs and planning.
- Needs assessments for new rural health clinics should consider
the effects on the existing primary care infrastructure in rural
communities and should not cause fragmentation of that infrastructure.
- Geographic distance, provider type, patient transportation
requirements and limitations, and other proven access considerations
must be included in evaluating access to health care.
- Mid-level providers are required by the enabling federal
law to be key Rural Health Clinics components in the delivery
of primary health care services by Rural Health Clinics and,
therefore, should be included in some objective manner in the
assessment of need for Rural Health Clinics at the federal, state
and community levels.
SURVEY PROCESS AND AUDITS
Regular and annual surveys of Rural Health Clinics are included
in the original requirements of the original legislation, providing
a method of checks and balances when applied objectively and consistently.
Yet, such surveys have not been conducted in any consistent manner
in the Rural Health Clinics program.
Rural Health Clinics of both types (independent and provider
based) submit required cost-reporting documents, yet audits of
any real meaning either are not conducted at all, or are not conducted
in a timely or consistent manner.
- Timely and consistent surveys and audits would greatly contribute
to the ensured compliance of Rural Health Clinics, address many
of the concerns facing these providers today, and contribute
to the success of those Rural Health Clinics striving to fulfill
the letter and intent of the originating legislation.
- Another facet of regulatory oversight to be addressed should
be the enforcement of the mid-level provider waiver process.
Because the Rural Health Clinics program was established specifically
to include mid-level providers, waivers of this requirement should
be legitimate, short term, and enforced.
INDEPENDENT VS. PROVIDER-BASED RURAL
Much attention has been focused on provider-based Rural Health
Clinics, yet no specific manual of regulations and rules has been
developed or implemented pertaining to the functioning of this
type of clinic, unlike the rules that have been developed for
independent Rural Health Clinics.
- The existence of concrete rules and regulations would be
a significant start to ensuring compliance of provider-based
Rural Health Clinics. Prime examples would be that of a specific
definition of allowable costs for these clinics and the application
of productivity standards for their providers. Active consideration
also should be given to the development and implementation of
a comprehensive billing manual for provider-based Rural Health
- Provider-based Rural Health Clinics are challenged by the
strict regulations of the Joint Commission for the Accreditation
of Healthcare Organizations (JCAHO) and the Omnibus Budget Reconciliation
Act (OBRA) regarding denial of patient care due to poverty and
regulated/appropriate transfers from the clinic to acute-care
facilities. These additional constraints cause a large monthly
fiscal deficit due to uncompensated care costs. Capping the reimbursement
level to that of non-provider-based clinics would prove to be
financially devastating to small rural hospitals, causing closures
and patients being abandoned without access to care.
Data collection, or the lack thereof, is a serious problem
in evaluation of the Rural Health Clinics program and its participating
facilities, particularly as such evaluation would relate to access
to care. The cost report is the single means through which data
is collected beyond individual patient bills submitted to Medicare
and Medicaid. Additionally, the cost-report collection of productivity
standards, for Medicare utilization, holds true only for independent
Rural Health Clinics.
- Efforts by the federal and state governments and Rural Health
Clinic providers should be focused on the development of a single,
comprehensive and objective national data collection system that
will meet the needs of the regulators, payers, community health
planners and Rural Health Clinics.
It also should be noted that Rural Health Clinics are fertile
ground for the training of primary health care providers and increasing
the health care awareness of their resident communities.
- The use of Rural Health Clinics for provider training should
be encouraged and expanded, offering another avenue to increase
Rural Health Clinics provide access to health care services,
which may be seen as a multifaceted factor that includes definitions
not only of specific utilization by specific types of patients,
but also of recruitment and retention of primary care providers
and ongoing contributions to the long-term economic and health
factors of their local communities.
The aspects of the program that work should be strengthened
and the problem areas should be refined and improved. Efforts
to change the program entirely would appear to be premature.
Equal emphasis also should be given to the consistent accomplishment
of required federal government actions relative to the eligibility
and regulatory aspects of the program. Such factors are outside
the realm of responsibility of or action by Rural Health Clinics,
although responsibility for the integrity of the program is seemingly
being placed solely at the feet of the participating Rural Health
Clinics and those that operate them.
The risk of too much intervention with Rural Health Clinics
could result in the loss of momentum that the Rural Health Clinics
program has achieved in helping to address access to primary and
emergency health care services in rural communities.
Another long-term risk is that if today's momentum is lost,
the issue of access to care in rural communities may have to be
dealt with once again years from now. Rural communities and their
citizens, as well as federal and state governments, cannot afford
this. The NRHA strongly supports the concept of Rural Health Clinics
as a major component in improving access to health care services
in rural communities and believes that the program deserves careful,
rational and objective fine tuning.
The NRHA will join in any discussions and efforts to improve
this program and will advocate for changes consistent with the
proposals in this paper.