GAO-05-645, Health Centers: Competition for Grants and Efforts to Measure Performance Have Increased

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Report to the Honorable Judd Gregg, U.S. Senate:

July 2005:

Health Centers:

Competition for Grants and Efforts to Measure Performance Have
Increased:

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-645]:

GAO Highlights:

Highlights of GAO-05-645, a report to the Honorable Judd Gregg, U.S.
Senate:

Why GAO Did This Study:

Health centers in the federal Consolidated Health Centers program
provide comprehensive primary health care services at one or more
delivery sites, without regard to patients’ ability to pay. In fiscal
year 2002, the Health Resources and Services Administration (HRSA)
began implementing the 5-year President’s Health Centers Initiative.
The initiative’s goal is for the program to provide 1,200 grants in the
neediest communities—630 grants for new delivery sites and 570 grants
for expanded services at existing sites—by fiscal year 2006. GAO was
asked to provide information on (1) funding of health centers and
HRSA’s process for assessing the need for services, (2) geographic
distribution of health centers, and (3) HRSA’s monitoring of health
center performance.

What GAO Found:

Competition for Consolidated Health Centers program funding increased
over the first 3 years of the President’s Health Centers Initiative,
and HRSA’s process for assessing communities’ need for additional
primary care sites is evolving. Program funding, which primarily
supported continuing health center services, increased from fiscal year
2002 to fiscal year 2004. However, funding for new access point grants,
which fund one or more new delivery sites, decreased by 53 percent
during this period. At the same time, the number of applicants for
these grants increased by 28 percent. As a result, the proportion of
applicants receiving new access point grants declined from 52 percent
in fiscal year 2002 to 20 percent in fiscal year 2004. In fiscal years
2002 through 2004, HRSA funded 334 new access point grants and 285
grants for expanded services at existing sites. While HRSA includes an
assessment of communities’ need for services in its process for
awarding new access point grants, agency officials indicated that they
were not confident that the process has sufficiently targeted
communities with the greatest need. Therefore, the agency is
considering changes to the way it assesses community need and the
relative weight it gives need in the award process.

The number of health centers receiving new access point grants varied
widely by state—from 1 to 57—during fiscal years 2002 through 2004, but
HRSA lacks reliable data on the number and location of health centers’
delivery sites. Although HRSA uses data on the number of delivery sites
to track the progress of the Consolidated Health Centers program, it is
not confident that grantees are accurately identifying delivery sites
funded by the program. Furthermore, in its reporting, HRSA counted each
new access point grant funded in fiscal years 2002 through 2004 as a
single delivery site, although some represent more than one site. HRSA
needs to collect and report accurate and complete delivery site data to
give the agency and the Congress data they need to make decisions about
the program.

What GAO Recommends:

GAO recommends that 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. HRSA said that it has efforts under way to
increase the accuracy of delivery site data, but HRSA did not indicate
whether it plans to revise its method of counting and reporting
delivery sites to include all delivery sites funded since the
President’s Health Centers Initiative began.

www.gao.gov/cgi-bin/getrpt?GAO-05-645.

To view the full product, including the scope and methodology, click on
the link above. For more information, contact Marjorie Kanof, (202) 512-
7119.

[End of section]

Contents:

Letter:

Results in Brief:

Background:

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

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

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

Health Centers Often Face Challenges Securing Specialty Care for
Patients:

Conclusions:

Recommendation for Executive Action:

Agency Comments:

Appendix I: Scope and Methodology:

Appendix II: HRSA's Process for Awarding Grants through the
Consolidated Health Centers Program:

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

Appendix IV: Distribution of Consolidated Health Centers Program
Grantees, 2001 and 2003:

Appendix V: Comments from the Health Resources and Services
Administration:

Appendix VI: GAO Contact and Staff Acknowledgments:

Tables:

Table 1: Description of Competitive Grants Funded through the
Consolidated Health Centers Program:

Table 2: Review Criteria for New Access Point, Expanded Medical
Capacity, Service Expansion, and Service Area Competition Grants,
Fiscal Year 2004:

Figures:

Figure 1: Health Centers' Sources of Revenue, 2003:

Figure 2: Allocation of Consolidated Health Centers Program Funding, by
Type of Grant, Fiscal Years 2002 through 2004:

Figure 3: Disposition of Applications, by Type, Fiscal Years 2002
through 2004:

Figure 4: Health Center Grantees Funded through the Consolidated Health
Centers Program, 2003:

Abbreviations:

BPHC: Bureau of Primary Health Care:

HHS: Department of Health and Human Services:

HRSA: Health Resources and Services Administration:

JCAHO: Joint Commission on Accreditation of Healthcare Organizations:

OPR: Office of Performance Review:

PCER: Primary Care Effectiveness Review:

UDS: Uniform Data System:

Letter July 13, 2005:

The Honorable Judd Gregg:
United States Senate:

Dear Senator Gregg:

The nationwide network of health centers in the federal Consolidated
Health Centers program is an important component of the health care
safety net for vulnerable populations, including Medicaid
beneficiaries,[Footnote 1] people who are uninsured, and others who may
have difficulty obtaining access to health care. The centers provide
comprehensive primary health care services--including preventive,
diagnostic, treatment, and emergency services and referrals to
specialty care[Footnote 2]--without regard to patients' ability to pay.
They also provide enabling services, such as transportation and
translation, that help patients gain access to care. In 2003, through
this program, the Department of Health and Human Services' (HHS) Health
Resources and Services Administration (HRSA) was funding nearly 900
health centers with one or more delivery sites. The health centers
provided comprehensive primary care services to over 12 million people-
-including over 4 million Medicaid patients and nearly 5 million
uninsured patients. To increase access to health care for vulnerable
populations, HRSA began implementing the 5-year President's Health
Centers Initiative in fiscal year 2002. The initiative's goals are for
the Consolidated Health Centers program to provide 1,200 grants in the
neediest communities--630 grants to health centers for new primary care
delivery sites and 570 grants to health centers for expanded services
at existing sites[Footnote 3]--and increase the number of people served
annually to about 16 million by the end of fiscal year 2006.[Footnote
4]

Federal community and migrant health centers were established in the
mid-1960s, and other types of health centers--such as homeless and
public housing centers--were established subsequently. The Health
Centers Consolidation Act of 1996 created the Consolidated Health
Centers program by combining these various types of health center
programs under Section 330 of the Public Health Service Act.[Footnote
5] In fiscal year 2004, funding for the Consolidated Health Centers
program was about $1.6 billion, of which about $1.4 billion was
allocated to grants for health centers. The Health Care Safety Net
Amendments of 2002 reauthorized the Consolidated Health Centers program
through fiscal year 2006.[Footnote 6]

In light of the goals of the President's Health Centers Initiative and
in preparation for consideration of the reauthorization of the
Consolidated Health Centers program, you asked us to provide
information on the program, including health centers' efforts to link
patients with specialty care. In this report, we discuss (1) funding of
health centers and HRSA's process for assessing the need for services;
(2) the geographic distribution of health centers; (3) HRSA's
monitoring of health center performance; and (4) health centers'
efforts to provide specialty care for their patients.

To conduct our work, we analyzed national data that HRSA collects from
health centers that receive grants through the Consolidated Health
Centers program. We also reviewed information on health center funding,
grant applications, and grant awards during fiscal years 2002 through
2004. We assessed the reliability of these data 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. We interviewed HRSA officials and
representatives of state and national health center membership
organizations and conducted structured interviews with officials of 12
health centers in urban and rural areas of California, Illinois,
Pennsylvania, and Texas. We selected these states because they vary in
geographic location and were among the states with the highest number
of health centers. We conducted our work from August 2004 through June
2005 in accordance with generally accepted government auditing
standards. (For additional information on our methodology, see app. I.)

Results in Brief:

Competition for Consolidated Health Centers program funding increased
over the first 3 years of the President's Health Centers Initiative,
and HRSA's process for assessing communities' need for additional
health center delivery sites is evolving. Program funding, which
primarily supported continuing health center services, increased from
fiscal year 2002 to fiscal year 2004. However, funding for new access
point grants, which fund one or more new delivery sites operated by
either new or existing grantees, decreased by 53 percent during this
period. At the same time, the number of applicants for these grants
increased by 28 percent. As a result, the proportion of applicants
receiving new access point grants declined from 52 percent in fiscal
year 2002 to 20 percent in fiscal year 2004. While HRSA includes an
assessment of communities' need for services in its process for
awarding new access point grants, agency officials indicated that they
are not confident that the process has sufficiently targeted
communities with the greatest need. Therefore, the agency is
considering changes to the way it assesses community need and the
relative weight it gives need in the award process.

The number of health centers receiving new access point grants varied
widely by state during fiscal years 2002 through 2004, but HRSA lacks
reliable information on the number and location of the delivery sites
where health centers provided care. During this period, about half of
the 334 new access point grants HRSA awarded were in 10 states, and the
number of grantees in each state ranged from 1 to 57. 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 delivery sites where the centers provide
care. In its budget documents and performance reports, HRSA has used
the number of delivery sites it funds to provide information on its
progress toward achieving its health center program goal of increasing
the number of health center access points. Although HRSA mostly uses
delivery site data from its Uniform Data System (UDS), the program's
administrative data set, to measure this progress, the agency is not
confident that grantees accurately report to UDS the sites supported by
program dollars. In addition, HRSA has underestimated the number of
delivery sites it funded in fiscal years 2002 through 2004 by counting
each new access point grant as a single delivery site regardless of how
many sites the grant supports. It is 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. HRSA officials and the Congress need this information
to make decisions about managing and funding the health centers
program.

HRSA has increased the role of performance measurement in its
monitoring of health centers and has improved its collection of data
that could help measure overall program performance. In 2004, the
agency began to use a new process for on-site monitoring of individual
health centers that focuses on each center's performance on measures
tailored to the specific needs of its community and patient population.
The new review also provides specific feedback to each health center on
ways to improve its performance. However, the new review generally does
not provide standardized performance information that HRSA can use to
evaluate the health center program as a whole. The agency is using
other tools to collect data that could help measure overall program
performance. For example, HRSA is collecting patient-level health
outcome data through its Sentinel Centers Network--a network of health
centers designed to be geographically and sociodemographically
representative--and through its Health Disparities Collaboratives,
which collect standardized data on patients with chronic diseases such
as diabetes and asthma. Continued attention to such efforts could
improve the agency's ability to evaluate its success in improving the
health of people in underserved communities. In addition to developing
these data collection tools, HRSA has taken steps to improve the
accuracy and completeness of UDS, which it uses to monitor aspects of
the health centers' operations and performance. For example, to improve
the accuracy of UDS data on health centers' delivery sites, for 2004,
HRSA revised the instructions to health center grantees for identifying
their delivery sites. In providing this new guidance, HRSA has taken a
step toward improving the quality of its information on the number and
location of the delivery sites it funds. However, the agency will need
to carefully assess the effectiveness of the guidance and, if
necessary, take additional steps to ensure that delivery site
information is accurate.

Although Consolidated Health Centers program funding has enabled health
centers to expand the availability of primary care services, health
centers often face difficulty ensuring that patients receive the
specialty care they need. About one-third of health centers provide
some specialty care on site, but health centers more often provide
referrals to specialty care outside the center. Officials from most of
the health centers in our review told us that there was a shortage of
certain types of specialists available to receive referrals and some
specialists were not willing to provide free care for uninsured
patients.

We are recommending that the Administrator of HRSA ensure that the
agency collects reliable information from grantees on the number and
location of delivery sites funded through the program and accurately
reports this information to the Congress.

In commenting on a draft of this report, 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 has efforts under way to increase the accuracy of these data.
HRSA did not indicate whether it plans to revise its method of counting
delivery sites for its future reports on the progress of the health
centers program to include all delivery sites funded since the
President's Health Centers Initiative began. We believe that it is
important for HRSA and the Congress to have complete and accurate
information on all delivery sites funded by program dollars.

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.

Figure 1: Health Centers' Sources of Revenue, 2003:

[See PDF for image]

Note: Percentages do not total to 100 percent due to rounding. Health
centers reported total revenues of about $5.96 billion in 2003.

[A] Other grants administered by BPHC account for 1 percent of health
center revenue and include grants for capital improvement and
management information systems.

[B] Includes private third-party insurance (6 percent) and other public
insurance (3 percent).

[C] Includes funding from other federal grants (3 percent), indigent
care programs (4 percent), and nonpatient-related funding not reported
elsewhere (3 percent).

[D] State and local grants and contracts account for 9 percent and
private grants and contracts, including foundations, account for 3
percent. Percentages do not total to 13 percent due to rounding.

[End of figure]

Health centers are required by law to serve a federally designated
medically underserved area or a federally designated medically
underserved population.[Footnote 7] 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.[Footnote 8]

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.[Footnote 9],[Footnote
10]

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.[Footnote 11] Services must be
provided regardless of patients' ability to pay.[Footnote 12] 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.[Footnote 13] 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).[Footnote 14] 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.

Table 1: Description of Competitive Grants Funded through the
Consolidated Health Centers Program:

Type of grant: New access point;
Purpose: To fund additional delivery sites that offer comprehensive
primary and preventive health care services;
Eligibility: Existing grantees and organizations that currently do not
receive program funding;
Maximum annual funding for each awarded grant in fiscal year 2004:
$650,000.

Type of grant: Expanded medical capacity;
Purpose: To increase the number of people served in a health center's
existing service area by expanding the capacity of existing sites, such
as by increasing the number of medical providers, expanding hours of
operation, expanding existing services, or adding new types of services
through contractual relationships;
Eligibility: Existing grantees;
Maximum annual funding for each awarded grant in fiscal year 2004:
$600,000.

Type of grant: Service expansion;
Purpose: To create and expand access to mental health, substance abuse,
and oral health care services;
Eligibility: Existing grantees;
Maximum annual funding for each awarded grant in fiscal year 2004:
$250,000 (oral health--new access); $160,000 (mental health/substance
abuse--new access); $150,000 (oral health and mental health/substance
abuse--expanded access).

Type of grant: Service area competition;
Purpose: To open competition for existing service areas when a health
center's project period is about to expire;
Eligibility: Existing grantees and organizations that currently do not
receive program funding;
Maximum annual funding for each awarded grant in fiscal year 2004: The
maximum level of support is not expected to exceed the previous annual
level of program funding for this area or population.

Source: GAO analysis of HRSA documents.

[End of table]

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,[Footnote
15] 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.[Footnote 16] 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,[Footnote 17] 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.[Footnote 18] 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.

Figure 2: Allocation of Consolidated Health Centers Program Funding, by
Type of Grant, Fiscal Years 2002 through 2004:

[See PDF for image]

[A] Continuation grants are noncompeting continuation grants and
service area competition grants.

[B] Base adjustments are supplemental funding that HRSA awards to
existing grantees to help offset rising costs.

[End of figure]

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.[Footnote 19] (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.

Figure 3: Disposition of Applications, by Type, Fiscal Years 2002
through 2004:

[See PDF for image]

Note: Eligible applications meet the following criteria: the applicant
is a public or private nonprofit entity, the applicant is applying for
an appropriate grant (e.g., expanded medical capacity and service
expansion grants are available only to existing grantees), and the
application includes the correct documents and meets page limitations
and format requirements.

[End of figure]

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;[Footnote 20] 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.[Footnote 21] 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[Footnote 22] 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.[Footnote 23]

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.[Footnote 24] 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.[Footnote 25]

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.[Footnote 26] 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.[Footnote 27] During that period, HRSA awarded 334
new access point grants,[Footnote 28] with at least one grantee in each
state.[Footnote 29] 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.)

Figure 4: Health Center Grantees Funded through the Consolidated Health
Centers Program, 2003:

[See PDF for image]

Note: The map depicts 863 health center grantees in the 50 states and
the District of Columbia that submitted data to the 2003 UDS; 27
grantees in the territories also submitted data to the 2003 UDS. HRSA
was funding an additional 9 grantees in 2003, but 7 of these grantees
were not required to report to the 2003 UDS because they either did not
operate for more than 90 days in 2003 or merged with another grantee.
The other 2 grantees were required to report, but did not submit data.
The map indicates a single location for each health center grantee.
However, grantees provided services at one or more delivery sites.

[End of figure]

In 2003, the distribution of all health center grantees was 48 percent
urban and 52 percent rural.[Footnote 30] HRSA is required by law to
make awards so that 40 to 60 percent of patients expected to be served
reside in rural areas.[Footnote 31] 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.[Footnote 32] 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.[Footnote 33],[Footnote 34] For the health
centers we contacted that had undergone the OPR performance
review,[Footnote 35] 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.[Footnote 36]
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.[Footnote 37] 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.[Footnote 38]
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.[Footnote 39] The
network is intended to supplement HRSA's other data sources, such as
the Community Health Center User and Visit Survey,[Footnote 40]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.[Footnote 41] 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.[Footnote 42] 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.[Footnote 43] 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,[Footnote 44] 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.[Footnote 45]

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.[Footnote 46] 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.[Footnote 47] 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.[Footnote 48] 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.[Footnote 49] 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.[Footnote 50] 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,[Footnote 51] 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,[Footnote 52] 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.

As arranged with your office, unless you publicly announce the contents
of this report earlier, we plan no further distribution of it until 30
days after its issue date. At that time, we will send copies of this
report to the Secretary of Health and Human Services, the Administrator
of the Centers for Medicare & Medicaid Services, and other interested
parties. We will also make copies available to others upon request. In
addition, the report will be available at no charge on the GAO Web site
at [Hyperlink, http://www.gao.gov].

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.

Sincerely yours,

Signed by:

Marjorie Kanof:
Managing Director, Health Care:

[End of section]

Appendix I: 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.[Footnote 53] 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[Footnote 54] 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.

[End of section]

Appendix II: 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.[Footnote 55] 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.[Footnote 56]
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.

Table 2: Review Criteria for New Access Point, Expanded Medical
Capacity, Service Expansion, and Service Area Competition Grants,
Fiscal Year 2004:

Grant: New Access Point;
Criteria: Service delivery strategy and model;
Maximum points: 20.

Criteria: Health care services;
Maximum points: 15.

Criteria: Organizational capabilities and expertise;
Maximum points: 15.

Criteria: Budget;
Maximum points: 10.

Criteria: Description of the service area/community and target
population;
Maximum points: 10.

Criteria: Governance;
Maximum points: 10.

Criteria: Readiness[A];
Maximum points: 10.

Criteria: Strategic planning;
Maximum points: 10.

Grant: Expanded Medical Capacity;
Criteria: Need;
Maximum points: 25.

Criteria: Response[B];
Maximum points: 25.

Criteria: Evaluative measures[C];
Maximum points: 15.

Criteria: Resources/capabilities;
Maximum points: 15.

Criteria: Support requested[D];
Maximum points: 15.

Criteria: Impact;
Maximum points: 5.

Grant: Service Expansion; (mental health/substance abuse and oral
health services);

Criteria: Response[B];
Maximum points: 60.

Criteria: Evaluative measures[C];
Maximum points: 10.

Criteria: Need;
Maximum points: 10.

Criteria: Resources/capabilities;
Maximum points: 10.

Criteria: Impact;
Maximum points: 5.

Criteria: Support requested[D];
Maximum points: 5.

Grant: Service Area Competition;
Criteria: Organizational capabilities and expertise;
Maximum points: 25.

Criteria: Service delivery strategy and model;
Maximum points: 20.

Criteria: Health care services;
Maximum points: 15.

Criteria: Budget;
Maximum points: 10.

Criteria: Description of the service area/community and target
population;
Maximum points: 10.

Criteria: Governance;
Maximum points: 10.

Criteria: Strategic planning;
Maximum points: 10.

Source: HRSA's fiscal year 2004 application guidance for new access
point, expanded medical capacity, service expansion, and service area
competition grants.

[A] The readiness criterion refers to an applicant's readiness to begin
providing services.

[B] The response criterion refers to an applicant's description of its
service delivery and business plans.

[C] The evaluative measures criterion refers to how the applicant plans
to measure the success of its program.

[D] The support requested criterion refers to an applicant's proposed
budget.

[End of table]

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.[Footnote 57] 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.[Footnote 58] 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.[Footnote 59] 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.

[End of section]

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

State/territory: Alabama;
Fiscal year 2002: 1;
Fiscal year 2003: 0;
Fiscal year 2004: 2;
Total: 3.

State/territory: Alaska;
Fiscal year 2002: 15;
Fiscal year 2003: 5;
Fiscal year 2004: 0;
Total: 20.

State/territory: American Samoa;
Fiscal year 2002: 1;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 1.

State/territory: Arizona;
Fiscal year 2002: 2;
Fiscal year 2003: 4;
Fiscal year 2004: 1;
Total: 7.

State/territory: Arkansas;
Fiscal year 2002: 3;
Fiscal year 2003: 1;
Fiscal year 2004: 0;
Total: 4.

State/territory: California;
Fiscal year 2002: 29;
Fiscal year 2003: 19;
Fiscal year 2004: 9;
Total: 57.

State/territory: Colorado;
Fiscal year 2002: 4;
Fiscal year 2003: 1;
Fiscal year 2004: 0;
Total: 5.

State/territory: Connecticut;
Fiscal year 2002: 2;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 2.

State/territory: Delaware;
Fiscal year 2002: 1;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 1.

State/territory: District of Columbia;
Fiscal year 2002: 1;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 1.

State/territory: Federated States of Micronesia;
Fiscal year 2002: 0;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 0.

State/territory: Florida;
Fiscal year 2002: 4;
Fiscal year 2003: 2;
Fiscal year 2004: 1;
Total: 7.

State/territory: Georgia;
Fiscal year 2002: 4;
Fiscal year 2003: 1;
Fiscal year 2004: 2;
Total: 7.

State/territory: Guam;
Fiscal year 2002: 0;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 0.

State/territory: Hawaii;
Fiscal year 2002: 1;
Fiscal year 2003: 0;
Fiscal year 2004: 2;
Total: 3.

State/territory: Idaho;
Fiscal year 2002: 2;
Fiscal year 2003: 0;
Fiscal year 2004: 1;
Total: 3.

State/territory: Illinois;
Fiscal year 2002: 8;
Fiscal year 2003: 3;
Fiscal year 2004: 5;
Total: 16.

State/territory: Indiana;
Fiscal year 2002: 1;
Fiscal year 2003: 2;
Fiscal year 2004: 3;
Total: 6.

State/territory: Iowa;
Fiscal year 2002: 2;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 2.

State/territory: Kansas;
Fiscal year 2002: 0;
Fiscal year 2003: 1;
Fiscal year 2004: 0;
Total: 1.

State/territory: Kentucky;
Fiscal year 2002: 2;
Fiscal year 2003: 1;
Fiscal year 2004: 0;
Total: 3.

State/territory: Louisiana;
Fiscal year 2002: 1;
Fiscal year 2003: 1;
Fiscal year 2004: 3;
Total: 5.

State/territory: Maine;
Fiscal year 2002: 0;
Fiscal year 2003: 0;
Fiscal year 2004: 3;
Total: 3.

State/territory: Marshall Islands;
Fiscal year 2002: 0;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 0.

State/territory: Maryland;
Fiscal year 2002: 3;
Fiscal year 2003: 2;
Fiscal year 2004: 1;
Total: 6.

State/territory: Massachusetts;
Fiscal year 2002: 5;
Fiscal year 2003: 1;
Fiscal year 2004: 2;
Total: 8.

State/territory: Michigan;
Fiscal year 2002: 3;
Fiscal year 2003: 2;
Fiscal year 2004: 1;
Total: 6.

State/territory: Minnesota;
Fiscal year 2002: 1;
Fiscal year 2003: 1;
Fiscal year 2004: 0;
Total: 2.

State/territory: Mississippi;
Fiscal year 2002: 1;
Fiscal year 2003: 1;
Fiscal year 2004: 0;
Total: 2.

State/territory: Missouri;
Fiscal year 2002: 4;
Fiscal year 2003: 0;
Fiscal year 2004: 2;
Total: 6.

State/territory: Montana;
Fiscal year 2002: 2;
Fiscal year 2003: 3;
Fiscal year 2004: 0;
Total: 5.

State/territory: Nebraska;
Fiscal year 2002: 0;
Fiscal year 2003: 2;
Fiscal year 2004: 0;
Total: 2.

State/territory: Nevada;
Fiscal year 2002: 1;
Fiscal year 2003: 1;
Fiscal year 2004: 0;
Total: 2.

State/territory: New Hampshire;
Fiscal year 2002: 2;
Fiscal year 2003: 0;
Fiscal year 2004: 1;
Total: 3.

State/territory: New Jersey;
Fiscal year 2002: 3;
Fiscal year 2003: 2;
Fiscal year 2004: 0;
Total: 5.

State/territory: New Mexico;
Fiscal year 2002: 4;
Fiscal year 2003: 3;
Fiscal year 2004: 1;
Total: 8.

State/territory: New York;
Fiscal year 2002: 9;
Fiscal year 2003: 6;
Fiscal year 2004: 2;
Total: 17.

State/territory: North Carolina;
Fiscal year 2002: 2;
Fiscal year 2003: 4;
Fiscal year 2004: 1;
Total: 7.

State/territory: North Dakota;
Fiscal year 2002: 1;
Fiscal year 2003: 3;
Fiscal year 2004: 0;
Total: 4.

State/territory: Ohio;
Fiscal year 2002: 2;
Fiscal year 2003: 0;
Fiscal year 2004: 2;
Total: 4.

State/territory: Oklahoma;
Fiscal year 2002: 3;
Fiscal year 2003: 1;
Fiscal year 2004: 1;
Total: 5.

State/territory: Oregon;
Fiscal year 2002: 5;
Fiscal year 2003: 6;
Fiscal year 2004: 3;
Total: 14.

State/territory: Palau;
Fiscal year 2002: 0;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 0.

State/territory: Pennsylvania;
Fiscal year 2002: 2;
Fiscal year 2003: 0;
Fiscal year 2004: 3;
Total: 5.

State/territory: Puerto Rico;
Fiscal year 2002: 2;
Fiscal year 2003: 1;
Fiscal year 2004: 0;
Total: 3.

State/territory: Rhode Island;
Fiscal year 2002: 0;
Fiscal year 2003: 2;
Fiscal year 2004: 2;
Total: 4.

State/territory: South Carolina;
Fiscal year 2002: 7;
Fiscal year 2003: 2;
Fiscal year 2004: 0;
Total: 9.

State/territory: South Dakota;
Fiscal year 2002: 3;
Fiscal year 2003: 1;
Fiscal year 2004: 0;
Total: 4.

State/territory: Tennessee;
Fiscal year 2002: 2;
Fiscal year 2003: 3;
Fiscal year 2004: 0;
Total: 5.

State/territory: Texas;
Fiscal year 2002: 5;
Fiscal year 2003: 2;
Fiscal year 2004: 5;
Total: 12.

State/territory: Utah;
Fiscal year 2002: 1;
Fiscal year 2003: 2;
Fiscal year 2004: 0;
Total: 3.

State/territory: Vermont;
Fiscal year 2002: 2;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 2.

State/territory: Virgin Islands;
Fiscal year 2002: 1;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 1.

State/territory: Virginia;
Fiscal year 2002: 4;
Fiscal year 2003: 3;
Fiscal year 2004: 2;
Total: 9.

State/territory: Washington;
Fiscal year 2002: 2;
Fiscal year 2003: 1;
Fiscal year 2004: 2;
Total: 5.

State/territory: West Virginia;
Fiscal year 2002: 3;
Fiscal year 2003: 3;
Fiscal year 2004: 0;
Total: 6.

State/territory: Wisconsin;
Fiscal year 2002: 2;
Fiscal year 2003: 0;
Fiscal year 2004: 0;
Total: 2.

State/territory: Wyoming;
Fiscal year 2002: 0;
Fiscal year 2003: 1;
Fiscal year 2004: 0;
Total: 1.

State/territory: Total;
Fiscal year 2002: 171;
Fiscal year 2003: 100;
Fiscal year 2004: 63;
Total: 334.

[End of table]

[End of section]

Appendix IV: Distribution of Consolidated Health Centers Program
Grantees, 2001 and 2003:

State/territory: Alabama;
2001: 15;
2003: 15.

State/territory: Alaska;
2001: 6;
2003: 21.

State/territory: American Samoa;
2001: 0;
2003: 1.

State/territory: Arizona;
2001: 13;
2003: 14.

State/territory: Arkansas;
2001: 9;
2003: 10.

State/territory: California;
2001: 57;
2003: 83.

State/territory: Colorado;
2001: 14;
2003: 15.

State/territory: Connecticut;
2001: 9;
2003: 10.

State/territory: Delaware;
2001: 3;
2003: 3.

State/territory: District of Columbia;
2001: 1;
2003: 2.

State/territory: Federated States of Micronesia;
2001: 1;
2003: 1.

State/territory: Florida;
2001: 30;
2003: 32.

State/territory: Georgia;
2001: 20;
2003: 22.

State/territory: Guam;
2001: 1;
2003: 1.

State/territory: Hawaii;
2001: 8;
2003: 10.

State/territory: Idaho;
2001: 6;
2003: 7.

State/territory: Illinois;
2001: 25;
2003: 31.

State/territory: Indiana;
2001: 8;
2003: 11.

State/territory: Iowa;
2001: 7;
2003: 8.

State/territory: Kansas;
2001: 7;
2003: 8.

State/territory: Kentucky;
2001: 11;
2003: 12.

State/territory: Louisiana;
2001: 15;
2003: 16.

State/territory: Maine;
2001: 12;
2003: 12.

State/territory: Marshall Islands;
2001: 1;
2003: 1.

State/territory: Maryland;
2001: 11;
2003: 13.

State/territory: Massachusetts;
2001: 28;
2003: 33.

State/territory: Michigan;
2001: 24;
2003: 26.

State/territory: Minnesota;
2001: 10;
2003: 12.

State/territory: Mississippi;
2001: 21;
2003: 21.

State/territory: Missouri;
2001: 14;
2003: 17.

State/territory: Montana;
2001: 7;
2003: 11.

State/territory: Nebraska;
2001: 3;
2003: 5.

State/territory: Nevada;
2001: 2;
2003: 2.

State/territory: New Hampshire;
2001: 5;
2003: 7.

State/territory: New Jersey;
2001: 13;
2003: 16.

State/territory: New Mexico;
2001: 12;
2003: 14.

State/territory: New York;
2001: 44;
2003: 51.

State/territory: North Carolina;
2001: 21;
2003: 25.

State/territory: North Dakota;
2001: 1;
2003: 5.

State/territory: Ohio;
2001: 19;
2003: 21.

State/territory: Oklahoma;
2001: 4;
2003: 6.

State/territory: Oregon;
2001: 11;
2003: 16.

State/territory: Palau;
2001: 1;
2003: 1.

State/territory: Pennsylvania;
2001: 27;
2003: 29.

State/territory: Puerto Rico;
2001: 20;
2003: 20.

State/territory: Rhode Island;
2001: 5;
2003: 6.

State/territory: South Carolina;
2001: 19;
2003: 21.

State/territory: South Dakota;
2001: 6;
2003: 7.

State/territory: Tennessee;
2001: 19;
2003: 23.

State/territory: Texas;
2001: 31;
2003: 35.

State/territory: Utah;
2001: 9;
2003: 11.

State/territory: Vermont;
2001: 2;
2003: 3.

State/territory: Virgin Islands;
2001: 2;
2003: 2.

State/territory: Virginia;
2001: 18;
2003: 18.

State/territory: Washington;
2001: 21;
2003: 22.

State/territory: West Virginia;
2001: 22;
2003: 27.

State/territory: Wisconsin;
2001: 13;
2003: 14.

State/territory: Wyoming;
2001: 4;
2003: 4.

State/territory: Total;
2001: 748;
2003: 890.

Source: HRSA's UDS, Calendar Year 2001 Data: National Rollup Report,
Rollup Summary and Calendar Year 2003 Data: National Rollup Report,
Rollup Summary.

Note: Table includes the 748 and 890 grantees that submitted data to
the 2001 and 2003 UDS, respectively. The 2001 data provide the number
of grantees operating before the President's Health Centers Initiative
began and the 2003 data were the most recent data available at the time
we conducted our review.

[End of table]

[End of section]

Appendix V: Comments from the Health Resources and Services
Administration:

DEPARTMENT OF HEALTH & HUMAN SERVICES:
Health Resources and Services Administration:
Rockville, Maryland 20857:

Jun 24, 2005:

TO: Marjorie Kanof:
Managing Director, Health Care:
Government Accountability Office:

FROM: Administrator:

SUBJECT: Government Accountability Office Draft Report: "Health
Centers: Competition for Grants and Efforts to Measure Performance Have
Increased" (Code # 290400):

Thank you for the opportunity to provide comments on the above subject
draft report. Attached please find our response.

Questions may be referred to Ms. Gail Lipton in HRSA's Office of
Federal Assistance Management at (301) 443-6509.

Signed by:

Betty James Duke:

Attachment:

Health Resources and Services Administration's Comments on the
Government Accountability Office Draft Report: "Health Centers:
Competition for Grants and Efforts to Measure Performance Have
Increased"

General Comments:

Health Resources and Services Administration (HRSA) appreciates the
dialogue that occurred during the exit conference regarding the
comments raised about tracking the number of delivery sites. HRSA
acknowledges that more accurate and timely site data would allow for
improved management of the Health Center Program. Recognizing the need
for improved site data collection and verification, HRSA has already
initiated activities to increase the accuracy of site-specific data
through the management of databases to track changes in scope and
verify sites. Furthermore, the expansion goals of the President's
Health Center Initiative focus on impacting 1,200 communities and
increasing access to primary health care for over 6 million additional
patients. Each of the 1,200 communities impacted is represented by a
new or expanded project that addresses the specific needs exhibited in
each community, and those needs may be addressed by one or more sites
at the discretion of the applicant organization. As a result, the goal
of impacting 1,200 communities is more appropriately assessed by the
number of new or expanded access point grants supported rather than the
actual number of sites. Therefore, the accuracy of the number of
service delivery sites supported by expansion activities does not
impact the ability of the Health Center Program to assess and report
the progress of the President's Health Center Initiative relative to
its stated goals.

[End of section]

Appendix VI: GAO Contact and Staff Acknowledgments:

GAO Contact:

Helene F. Toiv, (202) 512-7162:

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.

(290400):

FOOTNOTES

[1] Medicaid is a joint federal-state program that finances health
insurance for certain low-income adults and children.

[2] Specialty care is health care services provided by medical
professionals with advanced training focused on a specific field, such
as cardiology, dermatology, and orthopedics.

[3] New primary care delivery sites are sites that were not previously
part of health centers funded by the Consolidated Health Centers
program. These sites may be newly established facilities or facilities
that already existed at the time their health center first received
program funds. Sites providing expanded services are previously
existing program sites whose health center is receiving additional
funds to increase the site's service capacity.

[4] HRSA reported that in fiscal year 2001, before the President's
Health Centers Initiative began, the number of primary care delivery
sites whose health centers were receiving Consolidated Health Centers
program funding was 3,317, and the number of people served was 10.3
million.

[5] Pub. L. No. 104-299, 110 Stat. 3626 (1996) (codified at 42 U.S.C. §
254b). The Consolidated Health Centers program also funds school-based
health centers.

[6] Pub. L. No. 107-251, § 101, 116 Stat. 1621, 1622-27 (2002).

[7] 42 U.S.C. § 254b(a). Criteria for designating a medically
underserved area or population include the ratio of primary medical
care physicians per 1,000 population, infant mortality rate, percentage
of the population with incomes below the federal poverty level, and
percentage of the population age 65 or older. In 2004, the federal
poverty level for a family of four was an annual income of $18,850 in
the 48 contiguous states and the District of Columbia.

[8] Information on health center patients is based on UDS data. The
percentages related to income level and race/ethnicity exclude patients
whose status HRSA reported as unknown. The income level of 20 percent
of patients was reported as unknown, and the race/ethnicity of 6
percent of patients was reported as unknown.

[9] 42 U.S.C. § 254b(k)(3)(H). According to the health centers statute,
HRSA must waive the governing board composition requirement for a
center that proposes to serve homeless, migrant, or public housing
populations exclusively and for those that are located in sparsely
populated rural areas if the center can show "good cause" for the
waiver. HRSA's application guidance indicates that a waiver will be
granted only if applicants show they cannot meet the composition
requirement and that arrangements are in place to ensure appropriate
patient input and involvement. HRSA program guidance indicates that a
legal guardian of a patient who is a dependent child or adult, or a
legal sponsor of an immigrant, may also be considered a patient for
purposes of board representation.

[10] HRSA and some health center officials we interviewed believe
patient representation on the governing board is key to identifying the
health care needs of the community. Several representatives from health
centers that do not receive Consolidated Health Centers program funding
told us that the governing board requirement for majority patient
representation deters some potential applicants for program funding
because of concerns that the requirement could limit the financial and
managerial expertise of the board.

[11] 42 U.S.C. § 254b(a)(1). The requirement to serve all people in the
center's service area does not apply to centers that are specifically
funded to serve homeless people, migratory and seasonal agricultural
workers, or residents of public housing. 42 U.S.C. § 254b(a)(2).

[12] 42 U.S.C. § 254b(k)(3)(G)(iii).

[13] HRSA officials told us that, in general, fewer than 10 percent of
applications are deemed ineligible.

[14] 42 U.S.C. § 254b(p), (k)(4), (r)(2)(B).

[15] 42 U.S.C. §§ 300ff-51 through 300ff-78.

[16] JCAHO is a not-for-profit organization that evaluates and
accredits more than 15,000 health care organizations and programs in
the United States using its own standards for the quality and safety of
care provided by health care providers, including hospitals, ambulatory
care providers, nursing homes, and home care organizations.

[17] The surveys include an initial survey, subsequent triennial
surveys, and, as necessary, laboratory accreditation and behavioral
health surveys.

[18] GAO, Community Health Centers: Adapting to Changing Health Care
Environment Key to Continued Success, GAO/HEHS-00-39 (Washington, D.C.:
Mar. 10, 2000). This report focused only on community and migrant
health centers.

[19] HRSA officials told us that awards to be funded in the following
year are contingent on the availability of funds at that time.

[20] Nine percent of the fiscal year 2002 expanded medical capacity
applicants received their funding in fiscal year 2003.

[21] Estimated federal funding for the Consolidated Health Centers
program was about $1.69 billion in fiscal year 2005. The President's
proposed budget for fiscal year 2006 allocated about $1.99 billion to
the program.

[22] 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. Barriers to care include the
distance or time to the nearest primary care provider and percentage of
the population age 5 years or older who speak a language other than
English. Health disparity factors include the rates of specific
diseases and health outcomes, such as cancer, infant mortality, low-
birth-weight infants, and teen pregnancy. Applicants can score up to
100 points on the worksheet.

[23] Cecil G. Sheps Center for Health Services Research, University of
North Carolina at Chapel Hill and Health Systems Research, Inc.,
Evaluation of Need for Assistance Criteria and Weighting of Overall
Criteria in the Requirements of Funding New Start and Expansion Grant
Applications for Health Centers, report prepared at the request of
HRSA, November 2003.

[24] Development of Revised Need for Assistance Criteria for Assessing
Community Need for Comprehensive Primary and Preventive Health Care
Services under the President's Health Centers Initiative, 70 Fed. Reg.
6016-6023 (Feb. 4, 2005).

[25] May 23, 2005, was the due date for the second round of fiscal year
2005 new access point applications. December 1, 2004, was the due date
for the first round of applications.

[26] HRSA officials said the agency has not yet determined what
constitutes a high-poverty county.

[27] Unless otherwise noted, in this report, "states" refers to the 50
states and the District of Columbia.

[28] About half of the grants went to health centers that were new to
the program, and about half went to health centers already in the
program that were adding to their delivery sites.

[29] HRSA also funded grants in American Samoa, Puerto Rico, and the
Virgin Islands.

[30] The urban/rural designation is self-reported by health centers in
their grant application. HRSA instructs health centers to classify
themselves as urban or rural based on where the majority of their
patients reside. For example, if a health center is located in an urban
area, but more than 50 percent of its patients reside in rural areas,
the center should classify itself as rural.

[31] 42 U.S.C. § 254b(k)(4). This requirement has applied to all types
of health centers since the programs were consolidated in 1996. Health
Centers Consolidation Act of 1996, Pub. L. No. 104-299, sec. 2, §
330(k)(4), 110 Stat. 3626, 3639 (1996). Prior to the consolidation,
this requirement applied only to community health centers, and it was
added to their authorizing legislation by the Health Services and
Centers Amendments of 1978, Pub. L. No. 95-626, § 104(d)(5)(B), 92
Stat. 3551, 3557-58 (1978).

[32] As of February 2005, 100 health center reviews had been conducted;
an additional 220 reviews were scheduled to be conducted in 2005.

[33] If the health center receives grants from other HRSA programs,
additional measures are selected for those grant programs.

[34] HRSA officials told us that, beginning in January 2005, all health
center reviews began to include the number of patients receiving care
as one measure. They said the agency is exploring the use of additional
measures that would be included in all health center reviews starting
in 2006.

[35] In addition to our interviews of officials from 12 health centers,
we also interviewed officials from 6 other health centers that had
completed an OPR performance review.

[36] Other measures selected by health centers related to the number of
health center patients receiving care, accuracy of data, and the
financial condition of the health center.

[37] HHS's Healthy People 2010 is a set of health promotion and disease
prevention objectives for the nation to achieve by 2010.

[38] Health center officials told us their center also used other tools
and local data sources to measure performance and identify areas for
improvement. Some of these tools included UDS data, county and
community health assessments, patient surveys, patient health data, and
the center's governing board. For example, one official told us the
center regularly compared its individual performance with federal and
state disease and infant mortality rates.

[39] Patient-level data elements include sex, ethnicity, race,
education level, smoking status, weight, and blood pressure and
cholesterol levels. Encounter-level data elements include the date the
service was provided and procedure and diagnosis codes. Practitioner-
level data elements include primary and secondary specialties and
number of years the practitioner has been employed by the health
center.

[40] The Community Health Center User and Visit Survey collects
information from about 2,000 health center patients about their health
center experiences.

[41] In 1998, HRSA and the Institute for Healthcare Improvement (a
private not-for-profit organization) developed the first Health
Disparities Collaborative, which focused on diabetes care. Since that
time, additional collaboratives have focused on asthma, depression,
cardiovascular disease, and cancer.

[42] Health centers participating in a Health Disparities Collaborative
initially go through a 12-month training period. Teams from the health
centers attend learning sessions, test and implement changes in
practice, and collect data to measure the impact of these changes on
patient health outcomes in specific disease areas. HRSA's service
expansion grants have included awards to support health centers'
continued implementation of the collaborative model after the training
period; 52 health centers in fiscal year 2003 and 32 health centers in
fiscal year 2004 received, on average, about $40,000 each. HRSA
officials told us that these grants are often used to support centers'
infrastructure, such as computer systems for data management.

[43] Past studies of the health center program that HRSA conducted with
researchers from Johns Hopkins included a study that examined the role
of health centers in reducing disparities in access to care and a study
that examined the role of health centers in reducing ethnic disparities
in perinatal care and birth outcomes. See Robert Politzer and others,
"Inequality in America: The Contribution of Health Centers in Reducing
and Eliminating Disparities in Access to Care," Medical Care Research
and Review, vol. 58, no. 2 (2001); and Leiyu Shi and others, "America's
Health Centers: Reducing Racial and Ethnic Disparities in Perinatal
Care and Birth Outcomes," Health Services Research, vol. 39, no. 6,
Part I (2004). HRSA also has contracts with other organizations for
evaluating health center data. For example, HRSA has contracts with
researchers at Harvard Medical School and the University of Chicago
Medical School to evaluate the effect of the collaboratives on patient
care.

[44] GAO/HEHS-00-39.

[45] In 2003, all grantees that had been operating for more than 90
days were required to submit UDS data.

[46] When submissions are unsatisfactory, the contractor follows up
with grantees to obtain missing data.

[47] HRSA officials said nearly all submissions generate at least one
potential error that requires an editor to contact a grantee.

[48] If the editor is unable to obtain accurate data, the information
is rated "questionable" and the editor documents the reason.

[49] We conducted 25 edit checks for all 890 grantees reporting to UDS
in 2003. For 16 of the 25 checks, there were no missing data, 8 checks
had missing data for 1 or 2 grantees, and 1 check had missing data for
12 grantees.

[50] UDS defines specialty care as services provided by medical
professionals trained in allergy, dermatology, gastroenterology,
general surgery, neurology, optometry, ophthalmology, otolaryngology,
pediatric specialties, and anesthesiology. UDS also collects data on
other specialty care services--directly observed tuberculosis therapy
(delivery of therapeutic tuberculosis medication under direct
observation of health center staff) and respite care (recuperative or
convalescent services used by people who are homeless and have medical
problems but are too ill to recover on the streets or in a shelter)--
and certain professional services, such as podiatry.

[51] A formal referral arrangement means the health center either had a
written agreement with the specialty care provider or could document
the service in the patient record.

[52] In some cases, health centers referred patients to specialty care
services beyond those included in UDS's definition of specialty care,
such as orthopedics, cardiology, oncology, and rheumatology.

[53] Primary care associations are private, nonprofit membership
organizations of health centers and other providers.

[54] GAO, Community Health Centers: Adapting to Changing Health Care
Environment Key to Continued Success, GAO/HEHS-00-39 (Washington, D.C.:
Mar. 10, 2000). This report focused only on community and migrant
health centers.

[55] The 2005 HRSA preview is available on HRSA's Web site at http://www.hrsa.gov/grants/preview/.

[56] Measures of barriers to care include the distance or time to the
nearest primary care provider and percentage of the population age 5
years or older who speak a language other than English. Health
disparity factors include the rates of specific diseases and health
outcomes, such as cancer, infant mortality, low-birth-weight infants,
and teen pregnancy.

[57] 42 U.S.C. § 254b(p).

[58] The law requires new access point and service expansion grants to
be awarded so that the population expected to be treated at centers
receiving these grants is 40 to 60 percent rural. 42 U.S.C. §
254b(k)(4). The law also requires awards to be made so as to maintain
funding levels for the three types of centers serving special
populations (homeless, migrant, and residents of public housing) at the
same proportions that existed in fiscal year 2001. 42 U.S.C. §
254b(r)(2)(B).

[59] Of the applications received in fiscal year 2004, HRSA approved
other types of health centers for funding in fiscal year 2005, pending
funding availability.

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