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centers. I was very disappointed to learn that 25 percent of the funds appropriated for that initiative were awarded to health centers in areas that don't have particularly high infant mortality rates. And that cities accounting for 40 percent of infant deaths, and 60 percent of black infant deaths, were not eligible for these funds because they don't have community or migrant health centers.

Question. What steps has HRSA taken to ensure that funds for this initiative will be targeted to the areas that need them the most? Do you agree with Inspector General Kusserow that targeting infant mortality funds to other health care providers in addition to community health centers could help reduce high infant mortality in target areas?

Answer. We agree that targeting, as has increasingly been done over the period of the operation of the Comprehensive Perinatal Care Program (CPCP), is essential in efforts to reduce infant mortality. The Healthy Start Initiative will build on the success of CPCP and will broaden the scope of the effort and the participation of providers and service agencies beyond the community and migrant health center primary care system.

To ensure that funds are targeted to the areas of greatest need, applications must be made for a geographically defined community, either urban or rural, where problems are most severe, where resources can be concentrated, implementation managed, and progress measured.

The existing CPCP, which was initiated in 1987, reinforced the importance of the perinatal lifecycle and the provision of essential services like outreach/case finding and referral/linkages. This initiative earmarked Section 330 funds specifically for enhanced services in already funded Community and Migrant Health Centers (C/MHCs), where efforts and resources were already focused on providing comprehensive, continuous, and coordinated primary care services to underserved populations. This care includes perinatal care as well as care throughout a child's life, including pediatric, adolescent, adult and geriatric primary care services. In order to compete for the earmarked funds, centers were required to have viable perinatal programs which they wanted to enhance.

The populations served by C/MHCs include a high proportion of women at risk for poor pregnancy outcomes, such as minorities, migrant women, teenagers, new immigrants, and women living in poverty. Many are in two or more of these high risk groups, and early detection and management of risk factors such as alcohol and drug abuse, smoking, and poor nutrition are critical.

Infant mortality rates vary substantially among and within States and counties. Since infant mortality is generally calculated as a county rate, the overall infant mortality rate will take on the characteristic of the dominant population group. A county with a predominantly white population will generally skew the minority infant mortality rate. An example is a county in Maryland with an overall infant mortality rate of 9.0, while the black infant mortality rate is 20.4, well over twice the infant mortality rate of 7.8 for white babies.

C/MHCs are encouraged to document their specific service area infant mortality rate. However, it is extremely difficult to measure infant mortality in geographic areas with small populations, or in a very specific area within a large community. Because of these difficulties, the HRSA is working with other Federal and private agencies to develop a sound methodology to evaluate the health status in these populations.

Current activities include studies to refine "Small Area Analysis" for use by C/MHCs to measure health status indicators, like infant mortality. We believe this analysis will provide better measures for currently funded centers to do an even better job of targeting populations within their service areas. Further, these measures will be useful in assisting newly funded programs under "Healthy Start" to target areas and populations most in need of services.

HEAL

Question. Please provide the Committee with an update on the HEAL loan program, including the current funds available for loan, funds available in the SLIF for repayment of defaulted loans, and suggested alternatives to the HEAL loan available to students of health professions.

Answer. HEAL borrowing for FY 1991 is set by the FY 1991 appropriations at $260 million. The Student Loan Insurance Fund (SLIF) currently has $36.1 million available for payment of defaults, including the $25 million appropriated in FY 1990. The Department anticipates ending FY 1991 with a SLIF balance of $17.7 million. As part of credit reform, the Administration has requested appropriations of $35.5 million to pay defaults arising in FY 1992, and $21.8 million to pay future defaults on loans made in FY 1992.

With regard to alternatives to HEAL, the Administration proposes to increase scholarship and low interest loan support for disadvantaged/minority students. The FY 1992 budget requests an increase of $1.1 million for the Exceptional Financial Need scholarship program (including the Financial Assistance for Disadvantaged Students program) and $5 million for the National Health Service Corps Recruitment program. The budget also requests $15 million to recapitalize the Health Professions Student Loan program.

Further assistance to middle income/disadvantaged borrowers no longer eligible for HEAL would be provided through the Department of Education's proposed increased borrowing limits for the Supplemental Loans for Students program. The Administration has proposed that the individual borrowing limit for this program be increased from $4,000 per year to $10,000 per year. In addition, preliminary communications with private loan sources indicate that private entities might be available to provide loans to borrowers no longer eligible for HEAL.

NATIONAL PRACTITIONER DATA BANK

Question. HRSA recently proposed tripling the fee for data bank inquiries. What is the basis for this request?

Answer. The July 24, 1990 Federal Register announcement indicated that the user fee would be reviewed periodically and revised as necessary, based upon experience. A reassessment of the costs related to processing requests for disclosure of data bank information and of providing such information indicates that revenues generated through application of the $2 fee are not sufficient to cover the present transaction processing costs. This determination was based on a review of actual operating costs during the first four months of the data bank's operation. This review shows that the number of staff and the amount of staff time needed to process a transaction are significantly greater than what was originally projected. Based on revised cost estimates, the Department is increasing the user fee to $6 per request. In determining the amount of the $6 user fee, HRSA applied the criteria set forth in section 60.12(b) of the regulations. The criteria include such cost factors as electronic data processing time, equipment, materials, operators or other employees; and preparation of report materials, photocopying, postage, and personnel.

Question. If provided, would the increase provide full funding for data bank operations in FY 1992? If not, what are the estimated operating costs for the data bank?

Answer. The $6 user fee will fully fund data bank operations in FY 1992 provided that the Administration's proposed bill language is adopted which specifies that user fees cover the full cost of operating the data bank.

The FY 1992 budget proposes $5 million to operate the data bank. At $6 per query, the data bank must receive approximately 833,300 paid queries to collect $5 million. The $5 million will fully fund current operations, but does not include development costs associated with needed technology improvements or implementation of Section 5 of the Medicare and Medicaid Patient and Program Protection Act of 1987, as amended.

HEALTH CENTERS

Question. Recent legislation mandated that Federal Qualified Health Centers be reimbursed at reasonable cost under Medicare and Medicaid. Please provide the Committee with any cost-estimates of these proposals, and how they are expected to impact health centers' finances.

Answer. The following estimates were provided by the HCFA Office of the Actuary:

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The economic assumptions are those used in the FY 1992 President's Budget.

HCFA estimates that the Medicaid provision in OBRA 89 will increase Federal Medicaid expenditures by $5 million. To the extent that these funds represent increased payment for services, FQHCs will be able to use the additional payments to extend services to additional individuals without adequate finances or insurance coverage.

Question. Who is responsible for utilization review HRSA, or Medicare carriers?

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Answer. The review will be carried out by HCFA's Fiscal Intermediaries. Decisions regarding the specific requirements for FQHCs under Medicare have not yet been finalized. Staff are currently working on draft regulations for Medicare's FQHC benefit. This undertaking is being closely coordinated with the Health Resources and Services Administration in the Public Health Service. Because of the number of organizations involved in the deliberative process, details on the policies that will be employed in administering the FQHC benefit are not yet available.

We have not yet developed specific utilization review standards for related entities, such as Federally Funded Health Centers or Rural Health Clinics, under the Medicare program. These entities fall under the federal utilization review criteria employed by our Medicare Contractors.

We have, however, specified minimum utilization thresholds, called productivity screens, to be employed in determining reasonableness of Medicare reimbursable costs for rural health clinic services. The current screens require that a rural health clinic provide 6,300 visits per year for each full-time-equivalent health care term (one physician and one nurse practitioner or physician assistant).

We are looking at the policies employed in these related programs in developing FQHC provisions. Where the policies have been successful and do not conflict with the intent of the FQHC statute, we will be considering the value of adapting the policy to the FQHC environment.

With regard to Medicaid, State Medicaid agencies are responsible for review of the utilization of services under the surveillance and utilization review (S/UR) process. Under this process, States are responsible for development and implementation of a program that safeguards against unnecessary use of Medicaid services and excess payments, and assesses the quality of services provided to Medicaid recipients.

Question. Several recent reports suggest that caps on Federal Medicaid payments are being instituted in some areas, thereby limited health centers' reimbursement in spite of the law requiring cost-based payment. Does the Administration support spending caps or any other type of payment limitation, as has been reported?

Answer. With respect to the Medicaid program, HCFA policy has been that States have flexibility, until Federal regulations are promulgated, to define a reasonable cost payment system for FQHC services. These methods may contain limits on the amount of costs that States will recognize as reasonable. The issue of Federally

caps will be addressed in HCFA's regulations on FQHC payments. We expect to publish these rules this summer.

We do not think reasonable limits on costs are inconsistent with the statute providing for FQHC payments.

HEALTH PROFESSIONS

Once again, the budget proposes to eliminate all funding for health professions programs, except for programs for minority students and institutions.

Question. What is the basis for these proposed cuts?

Answer. Very difficult choices among priorities for Federal funds must be made in order to meet budget targets for the FY 1992 budget request. The FY 1992 proposed budget request would provide a well balanced approach to addressing the disparities in the health status of minorities and their underrepresentation in the health professions, and represents BHPr's highest priority.

Question. What evidence exists that minority and disadvantaged health professionals who have received educational assistance through these initiatives are more likely to serve in HPSAs?

Answer. A 1985 study by Stephen N. Keith, et al. and published as a Special Article in The New England Journal of Medicine (December 12, 1985) entitled: Effects of Affirmative Action in Medical Schools (pages 1519-1525) found that significantly more minority physicians than nonminority physicians (12 percent vs. 6 percent) practiced in locations designed as health manpower shortage areas by the Federal Government and had more Medicaid recipients in their patient populations (31 percent for blacks, 24 percent for hispanics, and 14 percent for whites). A mid-1970s study of treatment practices of black and white physicians indicated that 89 percent of all black patient visits were to non-black physicians. However, the patients of black physicians were predominantly black (87 percent). It is estimated that these indicators are similar for hispanics on whom data is not available.

In addition to the fact that a significant number of minority students tend toward primary care specialties, they also account for more than 50 percent of the Exceptional Financial Need Scholarship recipients. This combination makes them particularly strong candidates for the National Health Service Corps (NHSC).

Question. Are the numbers of minorities in health professions representative of the proportion of minorities in the population?

Answer. With regard to Asians, the proportion of Asian health care practitioners is representative of their proportion of the general population.

With regard to the proportion of Black, Hispanic and American Indian health care providers, the percentages remain significantly below percentages of these groups in the general population. In 1985 Blacks and Hispanics constituted about 3 percent each of physicians and 2.7 percent and 1.7 percent respectively of dentists.

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