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entitled 'Hurricane Katrina: CMS and HRSA Assistance to Sustain 
Primary Care Gains in the Greater New Orleans Area' which was released 
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GAO-10-773R: 

United States Government Accountability Office: 
Washington, DC 20548: 

June 30, 2010: 

The Honorable Edolphus Towns: 
Chairman: 
Committee on Oversight and Government Reform: 
House of Representatives: 

Subject: Hurricane Katrina: CMS and HRSA Assistance to Sustain Primary 
Care Gains in the Greater New Orleans Area: 

Dear Chairman Towns, 

More than 4 years after Hurricane Katrina made landfall, the greater 
New Orleans area continues to face challenges restoring health care 
services disrupted by the storm and flooding that followed. Among many 
federal investments to help rebuild health care services in the area, 
in July 2007, the U.S. Department of Health and Human Services (HHS) 
awarded the $100-million Primary Care Access and Stabilization Grant 
(PCASG)[Footnote 1] to the Louisiana Department of Health and 
Hospitals (LDHH). The PCASG was intended to restore and expand access 
to primary care services in the greater New Orleans area[Footnote 2] 
without regard to a patient's ability to pay. The grant provided short-
term funding to outpatient provider organizations to help them take 
such actions as increasing staff, renovating clinics, and opening new 
clinic sites. Like many hurricane relief programs, the PCASG was 
designed to provide a temporary funding source--from July 23, 2007, 
through September 30, 2010. 

The PCASG grant is administered at the federal level by HHS's Centers 
for Medicare & Medicaid Services (CMS). The Louisiana Public Health 
Institute (LPHI) administers the PCASG for LDHH as its local partner; 
[Footnote 3] LDHH and LPHI received a small portion of the PCASG funds 
for their administrative and oversight costs. In 2007, LDHH provided 
grant funds to 25 provider organizations, which we refer to as PCASG-
funded providers.[Footnote 4] For a provider to be eligible for PCASG 
funds, it must have been a public or private nonprofit organization 
serving patients in the greater New Orleans area at the time 
Louisiana's grant proposal was submitted in June 2007. It also must 
have had the intent to be sustainable, that is, able to continue 
providing primary care after PCASG funds were no longer available. 
[Footnote 5] 

We previously reported that PCASG-funded providers have used PCASG 
funds to improve access to primary care services. Specifically, PCASG- 
funded providers reported that they have used PCASG funds to hire or 
retain clinicians, add primary care services, and open new sites. 
[Footnote 6] They also reported taking or planning action to increase 
their ability to be sustainable, by, for example, improving their 
ability to receive reimbursement for services provided to Medicaid 
beneficiaries and individuals with private insurance. However, 
obtaining reimbursement for insured patients may not sufficiently 
ensure PCASG-funded providers' sustainability because, historically, 
about 45 percent of the more than 162,000 patients seen by these 
providers were uninsured.[Footnote 7] The Patient Protection and 
Affordable Care Act (PPACA), enacted in March 2010, may provide some 
relief, for example, by increasing the number of patients with 
insurance in the greater New Orleans area; however, the legislation's 
provisions, and corresponding expected increases in Medicaid and 
private health insurance enrollment, will not be fully implemented 
until 2014.[Footnote 8] 

Given the federal investment in providing and sustaining health care 
in the greater New Orleans area, you asked us to describe what steps 
CMS and the Health Resources and Services Administration (HRSA), the 
latter, an HHS agency responsible for improving access to health care 
services for vulnerable populations, have taken to help the PCASG- 
funded organizations--LDHH, LPHI, and the PCASG-funded providers-- 
sustain the primary care gains made in the greater New Orleans area. 
In this report, we describe the assistance CMS and HRSA have offered 
to the PCASG-funded organizations to help them sustain the primary 
care gains made. 

To address this objective, we interviewed CMS and HRSA officials and 
reviewed related documentation to learn about what assistance, if any, 
they have offered to the PCASG-funded organizations that may help 
sustain the provision of primary care in the greater New Orleans area. 
During these interviews, we asked the officials about their roles with 
the PCASG, any assistance provided to the PCASG-funded organizations, 
and any concerns they had regarding the sustainability of the PCASG- 
funded providers. We also interviewed an official from the Louisiana 
Primary Care Association (LPCA)--a nonprofit organization that 
partners with HRSA to support safety-net providers in Louisiana--
regarding any training, technical, or other assistance provided to 
PCASG-funded providers. Finally, we interviewed officials from LDHH, 
LPHI, and 10 PCASG-funded providers to obtain their perspectives on 
the assistance offered by CMS and HRSA, as well as the sustainability 
of primary care gains made as a result of the PCASG. We invited 
officials from all 25 PCASG-funded providers to participate in a joint 
interview. The participating officials represented PCASG-funded 
providers that varied in size and amount of PCASG funding received. 

We conducted this performance audit from April 2010 through June 2010 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe 
that the evidence obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

In summary, during the 3 years since the PCASG grant was awarded, CMS 
and HRSA have offered five types of assistance to the PCASG-funded 
organizations to help them sustain the primary care gains made-- 
funding, training, information sharing, technical assistance, and 
workforce support. For example, HRSA provided about $27.6 million in 
grant funding to five PCASG-funded providers and both CMS and HRSA 
have identified potential future funding that may be available for 
some PCASG-funded providers. Additionally, CMS and HRSA provided 
technical assistance to PCASG-funded providers to improve their 
ability to bill for services and improve their clinic operations. 
Despite the various types of assistance offered, concerns remain about 
whether the primary care gains made will be sustainable after the 
PCASG funding ends. In commenting on a draft of this report, HHS 
indicated that it contained an accurate account of the assistance 
offered by HHS. 

Background: 

According to the American Community Survey, in 2008, more than a third 
of individuals living in the New Orleans metropolitan area had incomes 
below 200 percent of the federal poverty level.[Footnote 9] 
Furthermore, survey results indicated that nearly 20 percent of those 
living in the metropolitan area were uninsured. Since Hurricane 
Katrina, the health care delivery system for the low-income and 
uninsured population in the greater New Orleans area has changed from 
one that was largely hospital-based to a more community-based system 
of primary care, in part due to the PCASG. 

Health Services in Greater New Orleans: 

Before Hurricane Katrina, much of the health care for the low-income 
and uninsured population in the greater New Orleans area was provided 
in emergency rooms and outpatient clinics at Charity and University 
hospitals. These two hospitals, known together as the Medical Center 
of Louisiana at New Orleans (MCLNO), were part of the Louisiana State 
University's (LSU) statewide system of public hospitals. About half of 
MCLNO's patients were uninsured, and about one-third were covered by 
Medicaid. As a result of damage from Hurricane Katrina and subsequent 
flooding, Charity and University hospitals were closed. LSU reopened 
University Hospital in November 2006 under its new, temporary name, 
Interim LSU Public Hospital, but has not and does not intend to reopen 
the Charity Hospital facility. However, according to an LSU official, 
LSU plans to build a new academic medical center, expected to open in 
approximately 5 years.[Footnote 10] 

In addition to Charity and University hospitals' outpatient clinics, 
other types of clinics provided primary care for the low-income and 
uninsured population before Hurricane Katrina. These included health 
centers participating in HRSA's Health Center Program. To increase 
access to primary care, HRSA provides grants to health centers 
nationwide under Section 330 of the Public Health Service Act. 
[Footnote 11] To be eligible for a Health Center Program grant, a 
health center must provide comprehensive primary care services, be 
available to all individuals with fees adjusted based on an 
individual's ability to pay, and be governed by a community board 
where at least 51 percent of the members are health center patients. 
[Footnote 12] HRSA uses a competitive process to award Health Center 
Program grants, including New Access Point grants for new grantees or 
for existing grantees to establish additional sites. Existing grantees 
may also compete for grants to (1) increase medical capacity, such as 
by expanding operating hours, or (2) add or expand services, such as 
by adding mental health, oral health, and pharmacy services. All 
Health Center Program grantees are designated as Federally Qualified 
Health Centers (FQHC), entitling them to certain federal benefits such 
as enhanced Medicaid and Medicare payment rates. However, not all 
FQHCs receive Health Center Program grants. For example, providers 
that meet all of the requirements for the Health Center Program but do 
not receive Health Center Program grants can also be designated as 
FQHCs. These FQHCs are often referred to as "look-alikes." Four FQHCs, 
all of which received Health Center Program grants, served the greater 
New Orleans area at the time HHS awarded the PCASG in July 2007. 

PCASG: 

In response to Hurricane Katrina, several federal agencies provided 
grants to Louisiana to assist with the restoration of primary care in 
the greater New Orleans area.[Footnote 13] CMS awarded the PCASG to 
LDHH, which selected LPHI as the local partner responsible for 
administering the grant program. LDHH and LPHI determined that 25 
organizations met the PCASG requirements that CMS established, and 
awarded funding to these organizations.[Footnote 14] The 25 PCASG- 
funded providers varied in size and other characteristics. For 
example, some PCASG-funded providers were affiliated with an 
institution--such as a university, or state or local government--and 
some were grantees of HRSA's Health Center Program. In addition to 
primary care services, which the PCASG defined as including medical, 
mental health, and dental care services, PCASG-funded providers could 
use the grant funds to provide specialty care, such as cardiology and 
podiatry services; or ancillary services, including supporting 
services such as translation, health education, transportation, and 
outreach. 

LPHI is responsible for distributing funds to PCASG-funded providers, 
including an initial disbursement and five supplemental 
disbursements.[Footnote 15] CMS required that a greater share of funds 
be disbursed during the early part of the grant period and that 
funding decline over the term of the grant to ensure that PCASG-funded 
providers did not rely primarily on PCASG funds for their continued 
operation and sustainability. After being awarded PCASG funds, the 
providers had to meet several CMS requirements, including creating 
referral relationships with local specialists and hospitals, 
establishing a quality assurance or improvement program, and providing 
a long-term sustainability plan.[Footnote 16] 

In previous work, we noted that PCASG-funded providers reported taking 
or planning action to increase their ability to be sustainable. For 
example, in response to our October 2008 survey, many PCASG-funded 
providers reported planning to apply for additional federal, state, or 
private funding, such as HRSA's Health Center Program funding or 
grants from foundations. The PCASG-funded providers also reported 
taking or planning action to increase their ability to receive 
reimbursement from patients' health insurance, including Medicaid and 
private health insurance. 

As of May 2010, 18 of the 25 PCASG-funded providers reported to LPHI 
that they were billing at least one type of health insurance--namely 
Medicaid, Medicare, or private insurance--for services provided. 
[Footnote 17] However, between March 21, 2009, and March 20, 2010, 45 
percent of patients seen by the PCASG-funded providers were uninsured; 
at 10 of the 25 PCASG-funded providers, greater than 70 percent of the 
patients seen were uninsured. As of July 2009, the most recent 
information reported to LPHI, PCASG funds still accounted for a large 
portion of many of the providers' revenue. Specifically, for 10 of the 
25 PCASG-funded providers, PCASG funds accounted for more than 50 
percent of their funding between August 2008 and July 2009.[Footnote 
18] For the remaining 15 PCASG-funded providers, PCASG funding ranged 
from 7 to 50 percent of their total funding. (See enclosure I for more 
information about the distribution of PCASG funding.) As we have 
previously reported, LPHI officials expected that when PCASG funding 
ends, some PCASG-funded providers might have to close and others could 
be forced to scale back their current capacities by laying off staff 
or reducing the services offered. 

CMS and HRSA Have Offered Five Types of Assistance to the PCASG-funded 
Organizations, but Sustainability Remains a Concern: 

During the 3 years since the PCASG grant was awarded, CMS and HRSA 
have offered five types of assistance to the PCASG-funded 
organizations to help them sustain the primary care gains made, 
namely: (1) funding, (2) training, (3) information sharing, (4) 
technical assistance, and (5) workforce support. 

* Funding. In addition to the PCASG funds provided by CMS, some PCASG- 
funded providers received funds from HRSA. Specifically, from October 
2007 through May 2010, HRSA provided about $27.6 million in Health 
Center Program grant funding to five PCASG-funded providers. (See 
table 1.) About $20.2 million of the HRSA funding was through the 
agency's regular Health Center Program grants[Footnote 19] and about 
$7.4 million was through grant funds made available by the American 
Recovery and Reinvestment Act (Recovery Act).[Footnote 20] Over $1.6 
million of the Recovery Act funds were provided to St. Thomas 
Community Health Center, a PCASG-funded provider that had not 
previously received a Health Center Program grant. The remaining 
Recovery Act funds were provided to the four PCASG-funded providers 
who had previously received Health Center Program funding for 
activities such as expanding the services offered. In addition to the 
funding already provided, CMS and HRSA have identified potential 
future revenue sources for PCASG-funded providers. Specifically, in 
fiscal years 2011 through 2015, HRSA expects to hold additional 
national competitions for Health Center Program grants using funds 
made available through PPACA.[Footnote 21] According to HRSA 
officials, they are considering a revised evaluation process for 
awarding some of this funding which would put greater emphasis on 
need.[Footnote 22] The officials told us that, if made, this change 
may improve the competitiveness of PCASG-funded providers, increasing 
the likelihood that they would receive funding. In addition, CMS is 
considering an extension of the PCASG, which would allow unspent funds 
to be redistributed by LPHI to PCASG-funded providers who (1) spend 
all PCASG funds already received and (2) continue to meet all PCASG 
program requirements through September 30, 2010. Those PCASG-funded 
providers would then have 12 months to expend the redistributed funds. 

Table 1: Health Center Program Funding Provided to PCASG-funded 
Providers, October 2007 through May 2010: 

PCASG-funded provider: EXCELth, Inc.; 
Health Center Program grants: $9,963,753; 
Grants awarded using American Recovery and Reinvestment Act funds: 
$1,033,974; 
Total: $10,997,727. 

PCASG-funded provider: City of New Orleans Health Department, Health 
Care for the Homeless; 
Health Center Program grants: $4,467,586; 
Grants awarded using American Recovery and Reinvestment Act funds: 
$469,896; 
Total: $4,937,482. 

PCASG-funded provider: Jefferson Community Health Care Centers, Inc.; 
Health Center Program grants: $3,667,427; 
Grants awarded using American Recovery and Reinvestment Act funds: 
$2,029,400; 
Total: $5,696,827. 

PCASG-funded provider: St. Charles Community Health Center, Inc.; 
Health Center Program grants: $2,117,339; 
Grants awarded using American Recovery and Reinvestment Act funds: 
$2,221,267; 
Total: $4,338,606. 

PCASG-funded provider: St. Thomas Community Health Center, Inc.; 
Health Center Program grants: $17,000; 
Grants awarded using American Recovery and Reinvestment Act funds: 
$1,650,000; 
Total: $1,667,000. 

PCASG-funded provider: Total; 
Health Center Program grants: $20,233,105; 
Grants awarded using American Recovery and Reinvestment Act funds: 
$7,404,537; 
Total: $27,637,642. 

Source: GAO analysis of HRSA data. 

[End of table] 

* Training. HRSA has offered various trainings to providers, including 
PCASG-funded providers, to explain and provide guidance on how to meet 
Health Center Program requirements and how to develop effective 
applications to participate in the program and for look-alike 
designations. These trainings were performed under cooperative 
agreements between HRSA and two of its grantees--the National 
Association of Community Health Centers (NACHC) and the LPCA. 
Specifically, NACHC conducted a 2.5-day training in New Orleans in 
September 2008, and NACHC and LPCA conducted training in Baton Rouge 
in April 2010. 

* Information Sharing. CMS has shared information with PCASG-funded 
organizations in an effort to help them sustain the primary care gains 
made in the greater New Orleans area. For example, according to CMS 
and LDHH officials, CMS offered feedback to LDHH on changes the agency 
has considered making to its Medicaid program that would increase 
funding for primary care providers, including the PCASG-funded 
providers.[Footnote 23] Specifically, CMS provided information to LDHH 
on how it might be able to redistribute Medicaid funding traditionally 
given to hospitals that serve a disproportionate share of low-income 
or uninsured patients to outpatient primary care providers that serve 
those patients. Additionally, CMS officials told us they provided 
PCASG-funded providers with information about potential sources of 
additional funding; specifically, they shared information on 
registering for an e-mail listserv on available federal grants. 
Furthermore, according to agency officials, HRSA held an information 
session about its grant programs and application process in New 
Orleans on June 14, 2010. 

* Technical Assistance. CMS and HRSA provided various types of 
technical assistance to PCASG-funded providers. For example, according 
to PCASG-funded providers, CMS provided technical assistance on how to 
become a Medicare provider so that they could begin billing for 
Medicare patients.[Footnote 24] Officials from LPCA told us that, as 
part of its cooperative agreement with HRSA, LPCA offered technical 
assistance to PCASG-funded providers receiving Health Center Program 
grants on operational and quality improvement issues. For example, 
LPCA officials conduct an annual assessment of Health Center Program 
grantees in the state, including those with PCASG funding, which 
addresses each provider's potential for sustainability by focusing on 
areas such as fiscal and operational issues, and recruitment and 
retention of clinicians. In addition, officials from LPCA told us they 
provided two PCASG-funded providers with assistance developing an 
agreement on how to share Health Center Program grant funding that had 
been awarded based on the combined patient volume of both providers. 

* Workforce Support. Both CMS and HRSA offered workforce support 
assistance to PCASG-funded providers by funding programs that provide 
incentives for clinicians to work in the greater New Orleans area. 
Specifically, HRSA administers two programs, one of which the state of 
Louisiana jointly funds, through which clinicians can receive 
repayment of student loans if they agree to work in the greater New 
Orleans area for a certain period of time.[Footnote 25] Similarly, CMS 
provided workforce support through its Professional Workforce Supply 
Grant, a $50 million grant to Louisiana to reduce shortages in the 
professional health care workforce following Hurricane Katrina. 
[Footnote 26] While the grant has been awarded, according to officials 
from CMS and LDHH, some of the clinicians receiving incentive payments 
as a result of the grant may be required by their agreements to stay 
in the greater New Orleans area until 2012. 

Despite the various types of assistance offered, all of the officials 
we spoke with, including CMS and HRSA officials, were concerned that 
the primary care gains made in the greater New Orleans area may not be 
sustainable after PCASG funding ends. For example, officials noted 
that the anticipated expansion of Health Center Program grants and 
FQHC look-alike designations could potentially increase grant funding 
and revenues for some providers, which may enable some of the PCASG-
funded providers to expand their operations. However, some PCASG-
funded providers may not be eligible for, or competitive for, these 
grants or designations, and others may not be interested in pursuing 
them.[Footnote 27] In addition, officials noted that the high 
percentage of uninsured patients served by PCASG-funded providers 
raises sustainability concerns. Although more PCASG-funded providers 
are able to bill patients' health insurance, such as Medicaid and 
Medicare, today than they were 3 years ago, officials noted that this 
may be insufficient to ensure sustainability. While officials 
acknowledged that PPACA should reduce the number of uninsured patients 
served by these providers, they also noted that there is a 3-year gap 
between the end of PCASG funding and the expected increases in health 
insurance coverage. The officials are concerned that in the interim, 
even if all available health insurance revenue is captured by these 
providers, some will not be sustainable without funding from other 
sources. 

Agency Comments: 

We provided a draft of this report to HHS for review and comment. In 
its comments, HHS indicated that the report contained an accurate 
account of the assistance offered by HHS and accurately reflected the 
department's concern about the sustainability of primary care gains in 
the greater New Orleans area (see enclosure II). HHS also provided 
technical comments that we incorporated as appropriate. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
after its issue date. At that time, we will send copies to the 
Secretary of HHS and other interested parties. In addition, the report 
will also be available at no charge on GAO's Web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions regarding this report, please 
contact me at (202) 512-7114 or draperd@gao.gov. Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this report. GAO staff who made major 
contributions to this report are listed in enclosure III. 

Sincerely yours, 

Signed by: 

Debra A. Draper: 
Director, Health Care: 

Enclosures - 3: 

[End of section] 

Enclosure I: 

Table 2: Distribution of the Primary Care Access and Stabilization 
Grant (PCASG) by PCASG-funded Provider: 

PCASG-funded provider: Administrators of Tulane Educational Fund; 
Total amount of PCASG funds[A]: $7,678,297; 
Amount of PCASG funds as a percent of total funding[B]: 40. 

PCASG-funded provider: Catholic Charities Archdiocese of New Orleans; 
Total amount of PCASG funds[A]: $578,459; 
Amount of PCASG funds as a percent of total funding[B]: 34. 

PCASG-funded provider: Children's Hospital Medical Practice 
Corporation; 
Total amount of PCASG funds[A]: $5,831,036; 
Amount of PCASG funds as a percent of total funding[B]: 15. 

PCASG-funded provider: City of New Orleans Health Department; 
Total amount of PCASG funds[A]: $5,144,913; 
Amount of PCASG funds as a percent of total funding[B]: 58. 

PCASG-funded provider: Common Ground Health Clinic; 
Total amount of PCASG funds[A]: $2,719,983; 
Amount of PCASG funds as a percent of total funding[B]: 55. 

PCASG-funded provider: Covenant House New Orleans; 
Total amount of PCASG funds[A]: $881,549; 
Amount of PCASG funds as a percent of total funding[B]: 83. 

PCASG-funded provider: Daughters of Charity Services of New Orleans; 
Total amount of PCASG funds[A]: $7,989,962; 
Amount of PCASG funds as a percent of total funding[B]: 44. 

PCASG-funded provider: EXCELth, Inc; 
Total amount of PCASG funds[A]: $3,219,327; 
Amount of PCASG funds as a percent of total funding[B]: 55. 

PCASG-funded provider: Jefferson Community Health Care Centers, Inc.; 
Total amount of PCASG funds[A]: $7,656,773; 
Amount of PCASG funds as a percent of total funding[B]: 32. 

PCASG-funded provider: Jefferson Parish Human Services Authority; 
Total amount of PCASG funds[A]: $5,906,509; 
Amount of PCASG funds as a percent of total funding[B]: 7. 

PCASG-funded provider: Leading Edge Services International (also known 
as Family Health Center); 
Total amount of PCASG funds[A]: $1,064,420; 
Amount of PCASG funds as a percent of total funding[B]: 43. 

PCASG-funded provider: Louisiana State University (LSU) Healthcare 
Network Behavioral Science Center; 
Total amount of PCASG funds[A]: $2,252,811; 
Amount of PCASG funds as a percent of total funding[B]: 43. 

PCASG-funded provider: LSU Health Sciences Center New Orleans (School 
Based Health Centers); 
Total amount of PCASG funds[A]: $1,260,536; 
Amount of PCASG funds as a percent of total funding[B]: 53. 

PCASG-funded provider: Lower 9th Ward Health Clinic; 
Total amount of PCASG funds[A]: $1,018,363; 
Amount of PCASG funds as a percent of total funding[B]: 74. 

PCASG-funded provider: Medical Center of Louisiana at New Orleans; 
Total amount of PCASG funds[A]: $7,805,514; 
Amount of PCASG funds as a percent of total funding[B]: 50. 

PCASG-funded provider: Metropolitan Human Services District; 
Total amount of PCASG funds[A]: $3,703,479; 
Amount of PCASG funds as a percent of total funding[B]: 12. 

PCASG-funded provider: New Orleans Adolescent Hospital and Community 
Services; 
Total amount of PCASG funds[A]: $428,275; 
Amount of PCASG funds as a percent of total funding[B]: 100. 

PCASG-funded provider: New Orleans Musicians' Assistance Foundation; 
Total amount of PCASG funds[A]: $1,853,541; 
Amount of PCASG funds as a percent of total funding[B]: 48. 

PCASG-funded provider: NO/AIDS Task Force; 
Total amount of PCASG funds[A]: $1,992,592; 
Amount of PCASG funds as a percent of total funding[B]: 20. 

PCASG-funded provider: Odyssey House Louisiana, Inc.; 
Total amount of PCASG funds[A]: $2,187,709; 
Amount of PCASG funds as a percent of total funding[B]: 74. 

PCASG-funded provider: Plaquemines Medical Center; 
Total amount of PCASG funds[A]: $1,839,563; 
Amount of PCASG funds as a percent of total funding[B]: 11. 

PCASG-funded provider: Sisters of Mercy Ministries (also known as 
Mercy Family Center); 
Total amount of PCASG funds[A]: $1,794,840; 
Amount of PCASG funds as a percent of total funding[B]: 30. 

PCASG-funded provider: St. Bernard Health Center, Inc.; 
Total amount of PCASG funds[A]: $6,511,531; 
Amount of PCASG funds as a percent of total funding[B]: 46. 

PCASG-funded provider: St. Charles Community Health Center - Kenner; 
Total amount of PCASG funds[A]: $3,353,028; 
Amount of PCASG funds as a percent of total funding[B]: 54. 

PCASG-funded provider: St. Thomas Community Health Center; 
Total amount of PCASG funds[A]: $7,819,832; 
Amount of PCASG funds as a percent of total funding[B]: 65. 

PCASG-funded provider: Total; 
Total amount of PCASG funds[A]: $92,492,842. 

Source: GAO analysis of data from the Louisiana Public Health 
Institute. 

[A] This represents payments made to PCASG-funded providers through 
December 2009; it does not include funding provided to the 
administrators of the PCASG. 

[B] Data represent the payments made to each PCASG-funded provider for 
August 1, 2008, through July 31, 2009, as a percent of each provider's 
total funding for that time period. Other provider funding sources 
included Medicaid, Medicare, and federal, state, local, and private 
grants. 

[End of table] 

[End of section] 

Enclosure II: 

Comments from the Department of Health and Human Services: 

Department Of Health & Human Services: 
Office Of The Secretary: 
Assistant Secretary for Legislation: 
Washington, DC 20201: 

JUN 16 2010: 

Debra A. Draper: 
Director, Health Care: 
U.S. Government Accountability Office: 
441 G Street N.W. 
Washington, DC 20548: 

Dear Ms. Draper: 

Attached are comments on the U.S. Government Accountability Office's 
(GAO) proposed correspondence entitled: "Hurricane Katrina: CMS and 
HRSA Assistance to Sustain Primary Care Gains in the Greater New 
Orleans Area" (GAO 10-773R). 

The Department appreciates the opportunity to review this 
correspondence before its publication. 

Sincerely, 

Signed by: 

Andrea Palm: 
Acting Assistant Secretary for Legislation: 

Attachment: 

[End of letter] 

General Comments Of The Department Of Health And Human Services On The 
Government Accountability Office's (GAO) Proposed Correspondence 
Entitled, "Hurricane Katrina: CMS And HRSA Assistance To Sustain 
Primary Care Gains In The Greater New Orleans Area" (GAO-10-773R): 

The Department appreciates the opportunity to review and comment on 
this GAO draft correspondence. It contains an accurate account of the 
technical assistance offered by HHS. Since Hurricane Katrina, CMS and 
HRSA have worked diligently to provide relief to Gulf Coast 
communities severely impacted by the storm and subsequent flooding. 
From February 2007 through June 2008, CMS issued $389 million through 
five grants, and six supplemental awards to Alabama, Louisiana, and 
Mississippi under the authority of section 6201(a)(4) of the Deficit 
Reduction Act of 2005. The purpose of this particular award was to 
restore access to primary care, especially for low-income and 
uninsured individuals. 

The draft correspondence accurately reflects the Department's concern 
about the sustainability of primary care gains in the greater New 
Orleans area. 

[End of section] 

Enclosure III: 

GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Debra A. Draper, (202) 512-7114 or draperd@gao.gov: 

Acknowledgments: 

In addition to the contact named above, Michelle B. Rosenberg, 
Assistant Director; Gerardine Brennan, Assistant Director; Jennie F. 
Apter; Christina E. Ritchie; Laurie F. Thurber; and Jennifer Whitworth 
were major contributors to this report. 

[End of section] 

Footnotes: 

[1] This grant was made under a provision of the Deficit Reduction Act 
of 2005 authorizing payments to restore access to health care in 
communities affected by Hurricane Katrina. Pub. L. No. 109-171, § 
6201(a)(4), 120 Stat. 4, 133 (2006). Notice of Single Source Grant 
Award, 72 Fed. Reg. 51, 230 (Sept. 6, 2007). 

[2] For the purposes of the grant, the greater New Orleans area was 
defined as Jefferson, Orleans, Plaquemines, and St. Bernard parishes. 
The PCASG aimed to restore and expand access for primary care, dental 
care, and mental health services, and to decrease costly reliance on 
emergency room use for primary care services for patients who were 
uninsured, underinsured, or covered by Medicaid (the joint federal- 
state program that finances health insurance coverage for certain 
categories of low-income adults and children). 

[3] LPHI is an independent, nonprofit, New Orleans-based organization 
focused on promoting and improving health and quality of life in 
Louisiana. As LDHH's local partner for administering the PCASG, LPHI 
is responsible for the day-to-day administration of the PCASG. 

[4] As of March 2010, these PCASG-funded providers were operating 93 
sites that were eligible to use the funds. 

[5] For the PCASG, CMS defines sustainability as the ability to 
continue to provide primary care to all patients (regardless of 
ability to pay) through some funding mechanism other than the PCASG 
funds, such as enrolling as a provider in Medicaid or another public 
or private insurer and billing those payers for services rendered. 

[6] See GAO, Hurricane Katrina: Federal Grants Have Helped Health Care 
Organizations Provide Primary Care, but Challenges Remain, [hyperlink, 
http://www.gao.gov/products/GAO-09-588] (Washington, D.C.: July 13, 
2009); and GAO, Hurricane Katrina: Federal Grants Have Helped Health 
Care Organizations Provide Primary Care, but Sustaining Services Will 
Be a Challenge, [hyperlink, http://www.gao.gov/products/GAO-10-273T] 
(Washington, D.C.: Dec. 3, 2009). In these reports, we referred to the 
PCASG-funded providers as PCASG fund recipients. 

[7] Data, which were provided by LPHI, represent an unduplicated count 
of patients seen at PCASG-funded providers between March 21, 2009, and 
March 20, 2010. 

[8] Pub. L. No. 111-148, 124 Stat. 119 (2010), as amended by the 
Health Care and Education Reconciliation Act of 2010 (HCERA), Pub. L. 
No. 111-152, 124 Stat. 1029. In this report, we refer to the law, as 
amended by HCERA, as PPACA. Beginning in fiscal year 2011, PPACA also 
provides funding for health centers, which some PCASG-funded providers 
may be eligible to receive. 

[9] The American Community Survey, which is conducted by the Census 
Bureau, is an annual household survey designed to capture community- 
level demographic, housing, and socioeconomic data. The survey 
provides data on the New Orleans-Metairie-Kenner metropolitan 
statistical area which consists of Jefferson, Orleans, Plaquemines, 
St. Bernard, St. Charles, St. John the Baptist, and St. Tammany 
parishes. In 2008, 200 percent of the federal poverty level equated to 
$42,400 for a family of four. 

[10] The Federal Emergency Management Agency is required to provide a 
grant of over $474 million for the replacement of Charity Hospital. 

[11] 42 U.S.C. § 254b. 

[12] In addition, to be eligible for a Health Center Program grant, a 
health center must serve a medically underserved area or population; 
provide support services that facilitate access to health care, like 
translation or transportation; and meet performance and accountability 
requirements for administrative, clinical, and financial operations. 

[13] Federal grants included HHS's Professional Workforce Supply 
Grant, which provided funds to Louisiana to reduce shortages in the 
professional health care workforce following Hurricane Katrina. 
Louisiana used the funds to create and fund the Greater New Orleans 
Health Service Corps, which recruited individual health care providers 
for health care organizations by offering incentive payments to the 
individuals. In addition, the Federal Emergency Management Agency 
provided funds to Louisiana for certain mental health services through 
its Crisis Counseling Assistance and Training Program Grants and HHS's 
Administration for Children and Families' Social Services Block Grant 
provided supplemental funds that could be spent on health care and 
other services. 

[14] CMS, in collaboration with officials from other HHS agencies, 
including HRSA, developed guidance that helped LDHH and LPHI to 
identify potential applicants for funds; 35 provider organizations in 
the greater New Orleans area applied for PCASG funds. 

[15] As of December 2009, more than $92 million had been disbursed to 
the PCASG-funded providers. 

[16] Other requirements were that the provider had to establish a 
system to collect and organize patient and encounter data and report 
the data to LDHH through LPHI. 

[17] This is up from 15 PCASG-funded providers in September 2007, the 
month when PCASG funding for providers began. 

[18] This information is based on data provided by the PCASG-funded 
providers to LPHI. 

[19] Health Center Program grants are intended to offset the cost of 
uncompensated care by filling the gap between a provider's expected 
revenue and expenses. HRSA determines the amount of grant funds to 
award to a provider based on a budget submitted to the agency by the 
provider. 

[20] The Recovery Act appropriated an additional $2 billion for Health 
Center Program grants nationally. Pub. L. No, 111-4, div. A, title 
VIII, 123 Stat. 115, 175. 

[21] The PPACA appropriated $9.5 billion over 5 years to a new 
Community Health Centers Fund to enhance funding for the community 
health center program, including $1 billion for fiscal year 2011. It 
also provided $1.5 billion for the construction and renovation of 
community health centers. Pub. L. No. 111-148, § 10503, 124 Stat. 119, 
(2010); Pub. L. No. 111-152, § 2303, 124 Stat. 1029, 1083. 

[22] Historically, the grants have been awarded competitively to 
applicants that earned the highest scores based on an evaluation of 
eight criteria, including need, impact, and readiness. Each of the 
eight criteria was assigned a point value with a combined total value 
of 100. In 2007, HRSA adjusted the point values for these criteria in 
its evaluation of grant applications for high-poverty counties-- 
increasing the point values for the need criterion from 10 to 35, and 
reducing the points for most other criteria. The agency is considering 
making a similar change for the grants to be awarded beginning in 
fiscal year 2011. 

[23] In addition, according to officials we spoke with, earlier this 
spring CMS and HRSA officials met with the transition team for the new 
mayor of New Orleans, as well as other local and state officials, and 
shared information on the provision of primary care in the area and 
options for changing the state's Medicaid program. 

[24] Similarly, according to LDHH officials, LDHH provided technical 
assistance to PCASG-funded providers on how to become eligible to bill 
for Medicaid patients. 

[25] Both programs offer school loan repayment to clinicians who work 
in federally designated health professional shortage areas, including 
the greater New Orleans area. The first program, which is financed 
entirely by HRSA, is called the National Health Service Corps 
Scholarship Program and Loan Repayment Program. The second program, 
which is jointly financed by HRSA and the state, is called the 
Louisiana State Loan Repayment Program. 

[26] LDHH, which administers the grant for the state, used the funds 
to create and fund the Greater New Orleans Health Service Corps, which 
provided funds to clinicians who either came to, or agreed to stay in, 
the greater New Orleans area and serve Medicare, Medicaid, and 
uninsured patients. 

[27] To be eligible for a Health Center Program grant or FQHC look- 
alike designation, a provider must meet certain requirements, such as 
having a community governing board of which at least 51 percent are 
patients. According to officials we spoke with, some PCASG-funded 
providers may have difficulty meeting some of these requirements and 
others may be reluctant to take on the responsibility of fulfilling 
the various requirements. Additionally, officials we spoke with 
indicated that some PCASG-funded providers may not have the 
infrastructure, such as information systems, necessary to be 
competitive with other applicants. 

[End of section] 

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