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Rural Health Briefing, February 18, 2003
Special Edition: Focus on Budget Issues
1. Update: Rural Hospital Flexibility Program
a. Arizona Flex Program Website Remodelling
b. State Budget Action
c. National Budget Action
2. Arizona News
a. State Budget Action
b. Arizona Department of Health Services
c. Legislative Appointment
d. Arizona Congressional Delegation Seeks Data From INS
e. Public Health Grand Rounds: Diabetes Wound Care
f. Rural Health Conference Call for Presentations
3. National News
a. Expanded Opportunities for Sites to Qualify for NHSC Physician Assistants
b. President's FY 2004 Budget for Health and Human Services
4. How to Contact Your Representatives
a. Arizona Congressional Delegation
b. Arizona State Legislators
5. Grant Opportunities
a. Telehealth Grant Program
b. Reminder: Nurse Loan Repayment Program
6. Conferences Relevant to Rural Health
a. NRHA National Policy Institute
7. Other: Publications
a. RUPRI Policy Brief on Medicare Physician Payment
1. Update: Rural Hospital Flexibility Program
a. Arizona Flex Program Website Remodelling: Although some work remains to be done, the Arizona Flex Program website is now available online at: Arizona Flex Program The Rural Health Briefing E-Newsletters, both current and archived issues, are available through the website for those who may have difficulty with the electronic transmission.
b. State Budget Action: The Joint Legislative Budget Committee's Proposed Budget for FY 2004 recommends elimination of the $1.7 million Special Medicaid Fund for critical access hospitals. Governor's staff appeared before the committee on February 4 to testify against the proposed cuts, stating that the critical access hospitals are part of the rural safety net and cannot afford the cuts. Legislators and legislative staff are requesting information about the impact of the proposed budget cuts on the affected hospitals.
c. National Budget Action:
(1) FY 2003 Appropriation: The final FY 2003 appropriations bill sent to the President this week included $40 million for the Medicare Rural Hospital Flexibility Program. However, $15 million of that is carved out for the Small Hospital Improvement Program (SHIP) grants.
The history regarding the Flex Program appropriation is an interesting one. The FY 2002 budget, passed on January 10, 2002, also included $40 million for the Flex Program. In July 2002, the Secretary of Health announced a new Rural Health Initiative that would include $46 million in funding from three separate grants to improve the services HHS provides to rural communities. These grants would include $23 million for the Flex Program, $15 million for small rural and frontier hospitals, and $8 million to the State Offices of Rural Health. In October 2002, the Secretary announced $26.7 million in grants, including $14.8 million for the Small Rural Hospital Improvement Grant Program and $11.9 million for the Rural Access to Emergency Devices Grant. These grant programs were described as part of the Secretary's Initiative on Rural Communities.
Interestingly, the appropriations for Rural Economic Development, contained in the Agriculture budget, includes $7 million specifically made "available for a Rural Community Development Initiative . . . not less than $1,000,000 . . . shall be available until expended to carry out a demonstration program on Replicating and Creating Rural Cooperative Home Based Health Care."
Figuring out the appropriations puzzle reveals the bottom line: the budget for Flex Program was $25 million in FY 2000, FY 2001, FY 2002, FY 2003. See item (4) below for the FY 2004 proposed budget. To review the conference report, see Division G (HHS Budget, Title II, Health Resources and Services Administration) in the Joint Conference Explanation at: Conference Report
(2) Special Appropriations for Two Rural Arizona Hospitals: Special funding for health care facilities in the FY 2003 budget for HRSA includes $500,000 for Benson Hospital and $500,000 for Northern Cochise Community Hospital in Willcox. Other Arizona designated lines in the HRSA budget include: the University of Arizona Institute for Biomedical Science and Biotechnology ($700,000); the University of Arizona for Bioscience and Biomedicine Institute, International Genomics Consortium ($1,500,000); and Carondelet St. Mary's Hospital in Tucson ($600,000).
(3) Study of Reimbursement Disparities Based on Wage Indices: Also of interest is a directive to the Secretary of HHS to "review the Medicare Geographic Classification Review Board's critieria for reclassification determinations with respect to making payments to hospitals . . . . to include a detailed analysis of disparities among reimbursement rates for hospitals in metropolitan statisical areas that border on areas that have higher wage indices; the difficulty hospitals face in losing skilled medical personnel to neighboring areas with urban classifications and higher wage and salary structures; geographic and environmental impediments to traditional community routes; the base costs on which the wage index is applied; and the effect lower wage indices have on the quality of care."
(4) Executive FY 2004 Proposed Budget: The Executive FY 2004 budget states: "Additional funds will expand the Rural Hospital Flexibility Grant program, for a total of $30 million, to provide grants to implement new hospital technologies in isolated rural areas."
Finally, of note in the Executive FY 2004 budget is a described increase in IHS Health Insurance Reimbursements "based on cooperative work between the IHS and CMS to develop a cost-based reimbursement methodology;" the budget narrative states that the 2003 IHS Medicare and Medicaid rates will be published shortly in the Federal Register.
2. Arizona News
a. State Budget Action: The JLBC's Proposed Budget for FY 2004 eliminates funding for Kidscare, the state Medically Needy Account, the Breast and Cervical Cancer Line, Adult Emergency Dental Care, ALTCS Growth Line, and Graduate Medical Education. This proposed budget is subject to negotiation in the legislative process. Rural constituents need to contact their representatives to have input into this process.
Programs eliminated in the Medically Needy Account include:
- Primary Care Programs (FY 03-$5,720,000; FY 04-0)
- Qualifying CHCs (FY03-$4,680,000; FY04-0)
- Mental Health (Non-Title XIX) (FY 03-$3,120,000; FY 04-0)
- Rural PC Loan Repayment (FY 03-$115,000; FY 04-0)
- HIV/AIDs Drug Assistance Program (FY 03-$1,000,000; FY 04-0)
- Seriously Mentally Ill (SMI) Non-Title XIX Meds (FY 03-$10,790,000; FY 04-0)
- Arizona Immunization Information Program (FY 03-$477,000; FY 04-0)
- Hepatitis C Surveillance (FY 03-$350,000; FY 04-0)
- Detoxification Services (FY 03-$390,000; FY 04-0)
- Renal Disease Management (FY 03 $260,000; FY 04-0)
- Nonrenal Disease Management FY 03-$208,000; FY 04-0)
- Evaluations (FY 03-$854,200; FY 04-0)
- Telemedicine-DHS (FY 03-$260,000; FY 04-0)
- County Public Health (FY 03-$200,000; FY 04-0)
- DHS Health Crisis Fund (FY 03-$1,000,000; FY 04-0)
Total funding eliminated from the Medically Needy Accout for FY 04: $29,424,800.
The JLBC FY 04 Budget is available at: JLBC Summary JLBC Complete Recommendations
JLBC Website: JLBC
The Governor's FY 04 Budget is available at: Executive Summary Executive Recommendations
Governor's Website: Governor
b. Arizona Department of Health Services: The Director of the Arizona Department of Health Services submitted an analysis of the proposed budget cuts to the Governor and staff on January 29. ADHS Analysis
c. Legislative Appointment: The Yuma County Board of Supervisors appointed Amanda Aguirre, Director of the Western Arizona Area Health Education Center (WAHEC) in Yuma/San Luis, to represent District 5 in the Arizona House of Representatives. Ms. Aguirre was appointed to replace Dr. Bob Cannell, who moved to the Senate following appointment of former Senator Herb Gunther to head the Department of Water Resources. Ms. Aguirre also worked for the Western Arizona Community College, and has extensive experience with rural and border health issues.
d. Arizona Congressional Delegation Seeks Data From INS: A February 7 article by from the Arizona Citizen reports that Arizona's eight Republican lawmakers have requested data from the Acting Commissioner, Michael Garcia, of the Immigration and Naturalization Service, about how many non-U.S. citizens, legal and illegal, are using local hospitals. "In Arizona, the need is seen as urgent because of next year's projected $1 billion budget deficit. Lawmakers say the federal government's failure to keep out illegal immigrants means local and state governments must pay to jail tem or provide them with medical treatment. . . . . The lawmakers who signed the letter want to know how many illegal immigrants required medical attention after coming into contact with U.S. Border Patrol agents. The INS, which includes the Border Patrol, won't pay medical bills unless illegal immigrants are in agents' physical custody. The lawmakers also want to know the number of legal immigrants admitted monthly for 'humanitarian' reasons. Under federal law, the U.S. attorney general can 'parole' a foreigner into the country on a case-by-case basis for urgent humantarian reasons. INS rules require foreigners to file written requests. INS officials said permission is granted 'sparingly' and in 'very compelling' emergencies, but did not provide specific numbers. Lawmakers said the massive flow of illegal immigrants has wreaked financial havoc on hospitals near the border. About 1 million to 2 million people illegally cross the Arizona border each year. Arizona border hospitals provided $31 million worth of uncompensated care in 2000. Kyl plans to introduce a bill . . . . that would reimburse all states for providing emergency medical care for illegal immigrants."
e. Kyl to Chair Senate Finance Subcommittee on Health Care: On Tuesday, Senator Jon Kyl was named chariman of the Senate Finance Subcommittee on Health Care. New reports indicate he seeks to play a centrol role in efforts to provide prescription drug coverage to seniors, reform medical malpractice laws, and come to the aid of border states overwhelmed by health care costs related to illegal immigration.
f. Kyl / McCain Bill Would Reimburse States For Emergency Care of Illegals: On February 13, Senator Kyl and Senator John McCain introduced legislation (Senate Bill 412) to reimburse states $1.45 billion per year for the costs of federally-mandated emergency treatment of illegal immigrants. The bill is cosponsored by Senators Pete Domenici (R-NM), John Cornyn (R-TX), and Dianne Feinstein (D-CA).
g. 30th Annual Arizona Rural Health Conference: The Rural Health Office and the Arizona Rural Health Association has issued a Call for Workship Presentations and Call for Poster Sessions for the 2003 Arizona Rural Health Conference, "Policies, Programs, and Practices for Preserving Arizona's Rural Public Health Safety Net," to be held July 21-23 at the Sheraton El Conquistador Resort in Tucson. Deadline: All proposals and submissions must be received by mail, fax, or email on or before February 21, 2003 at 5:00 pm. Notification of the review panel decision will be sent on March 21, 2003. For an application form, please contact: Rebecca Ruiz. Call for Presentations
3. National News
a. Rural Programs FY 2003 Budget Sent to President: Funds appropriated for grants administered through the Federal Office of Rural Health Policy in the FY 2003 budget sent to the President, in addition to the Medicare Rural Hospital Flexibility Program and the Small Hospital Improvement Program grants, include the following:
Rural Health Outreach and Rural Health Network Development Grants: $58.5 million;
State Offices of Rural Health: $8.5 million;
Rural Access to Emergency Devices: $12.5 million;
Title XII Trauma and EMS Systems Development program co-administered by the Bureau of Maternal of Child Health and the Office of Rural Health Policy, $3.49 million.
Funds appropriated for distance learning and telemedicine programs include $56,941,00 for loans and grants for services in rural areas, with $10 million for grants to finance broadband transmission and local dial-up Internet service in areas that meet the definition of "rural area" used for the Distance Learning and Telemedicine Program.
Separate funding of $27 million is appropriated for telehealth, with a special appropriation of $250,000 to the Banner Health System Telemedicine Program for equipment and infrastructure to help provide care to rural and underserved areas in Arizona, Colorado, and Alaska.
b. President's FY 2004 Budget for Health and Human Services: The HHS proposed budget for FY 04 is now available online. A February 5 press release from the National Rural Health Association cites cuts in the Health Professions programs, which prepare health professionals to serve rural and other underserved communities, as failing to address the healthcare workforce shortages of rural America. The NRHA also points to the proposed elimination of the Community Access Program (CAP), which helps to integrate networks of health care providers in rural areas, and reductions in funding for State Offices of Rural Health as areas of concern.
A February 11 press release from the Sec. of Health and Human Services, Tommy Thompson, cites the President's initiatives for the uninsured: expanded funding for community health centers, an increase in funding for the National Health Service Corps; flexibility for states in serving non-mandatory Medicaid populations; health credits for private health insurance; extending availability of unexpended funds from the State Childrens' Health Insurance Program (SCHIP); extending transitional medical assistance for families in transition from welfare to work; continued support to help states create qualified high-risk pools to provide health coverage to individuals who would otherwise have difficulty obtaining coverage because of their health status; and expanding and extending Medical Savings Accounts.
Actual Executive Budget Numbers:
Community Health Centers: FY 02- $1,343,000, FY 03- $1,458,00; FY 04-$1,627,000
National Health Service Corps: FY 02-$15 million; FY 03-$25 million; FY 04-45 million
Health Professions Training Programs: FY 02-$295 million; FY 03-$11 million FY 04-$11 million
Nurse Training Programs: FY 02-$93 million; FY 03-$98 million; FY 04-$98 million
Children's Hospitals Graduate Medical Education: FY 02-$285 m; FY 03-$200 m; FY 04- $199 m
Community Access Program: FY 02-$120 million; FY 03-0; FY 04-0
Rural Health: FY 02-$127 million; FY 03-$75 million; FY 04-$80 million
In addition to funding for new hospital technologies, described in the proposed budget narrative related to the Flex Program, other proposed hospital related-funding includes:
Bioterrorism Hospital Preparedness: FY02-$135 million; FY03-$518 million; FY04-$518 m
Bioterrorism Medical School Curriculum: FY 02-0; FY 03-$60 million; FY 04-$60 million
Hospital Emergency Relief: FY 02-$140 million; FY 03-0; FY 04-0
To review the FY 2004 HHS proposed budget: HHS Budget
b. Expanded Opportunities for Sites to Qualify for NHSC Physician Assistants: Due to a shortage of placement sites for NHSC Physician Assistant Scholars, all current PA vacancies will be upgraded to Scholarship sites. Any site in a designated Health Professional Shortage Area (HPSA) is eligible to apply to be considered an eligible service site for NHSC Physican Assistant Scholars. For information about how to become an eligible service site, call 1-800-221-9393. NHSC Communities
4. How to Contact Your Representatives
a. Arizona Congressional Delegation:Links to Arizona members of the U.S. House of Representatives are available at: U.S. Representatives Links to Arizona members of the U.S. Senate are available at: U.S. Senate
b. Arizona State Legislators: Available through the Arizona Legislative Information System (ALIS): Call 1-800-352-8404 Arizona Legislature
5. Grant Opportunities
a. Telehealth Network Grant Program: The FY 2003 Telehealth Network Grant Program Guidance is now available online. In addition, the Office for the Advancement of Telehealth will be conducting a series of pre-application technical assistance conference calls. To obtain the grant guidance, see: Telehealth Grant The Arizona technical assistance conference call will be held on February 27 from 3:30-5:00 EST. To participate, download the registration form at: Registration
b. Reminder - Nurse Loan Repayment Program: Applications are due by midnight on March 31, 2003. See: Nurses
6. Conferences Relevant to Rural Health
a. 14th Annual Rural Health Policy Institute: "Making a Difference,"March 3-5, 2003; Grand Hyatt Hotel, Washington, D.C. Download brochure at: Rural Health Policy
7. Other: Publications
a. RUPRI Policy Brief on Medicare Physician Payment: Describes the components of Medicare's payment to physicians, focusing on differences in payment across geographic areas; outlines rural issues in physician payment; suggests how the components of Medicare physician payment affects health care delivery in rural areas. Medicare Physician Payment
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