Rural Health Clinics: Rising Program Expenditures Not Focused on Improving Care in Isolated Areas
HEHS-97-24
Published: Nov 22, 1996. Publicly Released: Dec 02, 1996.
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Highlights
Pursuant to a congressional request, GAO reviewed the Rural Health Clinic (RHC) Program, focusing on: (1) whether the RHC program is serving a Medicare and Medicaid population that would otherwise have difficulty obtaining primary care; and (2) whether there are controls in place to ensure that costs claimed for reimbursement are reasonable and to target the cost-reimbursement benefit of the program to clinics needing it for financial viability.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| To refocus the RHC program to meet its original purpose, Congress should amend the law to restrict the cost-based reimbursement benefit of the program to: (1) RHCs in areas with no other Medicare or Medicaid providers; or (2) RHCs that can demonstrate that existing providers will not accept new Medicare or Medicaid patients and that the funding will be used to expand access to them. |
Closed – Implemented
|
The Balanced Budget Act of 1997 (Public Law 105-33), enacted in August 1997, gives the Secretary authority to establish additional need-based program criteria for RHC. This step by the Congress meets the intent of the recommendation by allowing the agency the discretion to determine those situations where RHCs can best be used to alleviate medical underservice. |
| To refocus the RHC program to meet its original purpose, Congress should amend the law to require periodic recertification to ensure that clinics continue to meet eligibility requirements for cost reimbursement. |
Closed – Implemented
|
The Balanced Budget Act of 1997 (Public Law 105-33), enacted in August 1997, eliminated grandfather provisions for RHC that no longer meet eligibility criteria. |
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Health and Human Services | For those RHCs that continue to be reimbursed on a cost-reimbursement basis, the Secretary of Health and Human Services should direct the Administrator, HCFA, to revise Medicare payment policy, which Medicaid generally follows, to hold facility-based RHCs to the same payment limits and cost-reporting requirements as independent RHCs. |
Closed – Implemented
The Balanced Budget Act of 1997 (Public Law 105-33), enacted in August 1997, limits payment to facility based RHC as GAO recommended.
|
| Department of Health and Human Services | For those RHCs that continue to be reimbursed on a cost-reimbursement basis, the Secretary of Health and Human Services should direct the Administrator, HCFA, to apply reasonable cost principles to such categories as salaries and overhead claimed for reimbursement by RHCs. |
Closed – Implemented
In November 1996 HCFA informed GAO that it was directing Medicare contractors to apply reasonable cost rules as GAO had recommended.
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Topics
Community health servicesEconomically depressed areasEligibility criteriaHealth care cost controlHealth care programsHealth centersHealth resources utilizationMedicaidMedical services ratesMedicareRural health