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					         Department of Health and Human Services
       Nevada State Health Division
      Presentation to the Assembly Committee on Health and Human Services



           J-1 Visa Waiver Program for Foreign-born Physicians
                                   Expanding Access to Primary Care
                    The Mission of the Health Division is to Promote and Protect the Wellbeing of
                   Nevadans and Visitors to our State by Preventing Disease, Injury and Disability


Jim Gibbons, Governor                                                     O’
                                                                     Lynn O’Mara, MBA, Health Planning Program
Michael J. Willden, Director                                         Manager

Richard Whitley, MS, Administrator                                   Christine Roden, RN, MPH, Manager, Primary
                                                                     Care Office
Mary Guinan, MD, PhD, State Health Officer
           Nevada State Health Division
                  J-1 Visa for Non-immigrants
♦     Administered by federal Department of State and Department of
      Homeland Security’s U.S. Citizenship and Immigration Services
      (USCIS)
♦     Allows an international medical graduate to come to the US under an
      educational exchange program for up to seven years
♦     Upon expiration, the physician must return to his/her own country
      for at least two years before applying for a permanent US visa
♦     Categories: Physicians, Professor & Research Scholar, Trainee,
      International Visitor, Government Visitor, College & University
      Student, and Short-Term Scholar

    May 6, 2009                 Assembly Committee on                     1
                               Health and Human Services
         Nevada State Health Division
                             J-1 Visa Waiver
♦ Eliminates the two-year home/foreign residency requirement
♦ Allows the physician to remain and practice in the US, in primary care,
  providing access to health care services in medically underserved rural and
  urban communities
♦ Request by a designated state health agency or its equivalent – one of five
  statutory basis permitting waiver of the two-year foreign residency requirement
♦ Exempt from H1-B visa cap
♦ Can be applied to specialists, if the sponsoring agency can demonstrate
  the area to be served has a shortage of the particular specialty
♦ Displacement of an American-born physician is prohibited

  May 6, 2009                    Assembly Committee on                          2
                                Health and Human Services
        Nevada State Health Division
                Conrad State 30 Program
♦ Allows state health agencies to request up to 30 J-1 Visa Waivers
  per federal fiscal year
♦ An important source of qualified physicians for medically
  underserved rural and urban communities – part of the state’s health
  care safety net
♦ Requirements
  ● Full-time offer of employment (40 hours per week) as a primary care physician
    in a federally-designated medically underserved area in the state
  ● Letter of support from the designated state health agency official supporting the J-1
    Visa Waiver application
  ● 3-year employment contract


 May 6, 2009                        Assembly Committee on                                   3
                                   Health and Human Services
        Nevada State Health Division
                                    Program Problems
  Mid-
♦ Mid-1990s: Primary Care Development Center (PCDC), including J-1 Physician Visa Waiver Program,
  transferred from Health Planning to Family Health Services, for personnel reasons
               2001-
♦ Sometime 2001-02: Historic oversight by State Board of Health ceased for reasons unknown
♦ September 2007 – January 2008: Las Vegas Sun “Indentured Doctors” investigation published,
  detailing program problems and deficiencies
♦ October 31, 2007: Health Division first status report about J-1 Physician Visa Waiver Program
  presented to interim Legislative Committee on Health Care
♦ December 14, 2007: J-1 Physician Visa Waiver Program public meeting held to discuss proposed
  changes to program guidelines and to obtain feedback regarding physician recruitment and retention
♦ Late December 2007 – Early January 2008: Health Division explores restoring the PCDC to Health
  Planning Unit
♦ January 14, 2008: PCDC restoration to Health Planning Unit and renamed Primary Care Office (PCO),
  consistent with other states
♦ April 11, 2008: First meeting of the Health Division Primary Care Advisory Council, piloting new,
  transparent application review process



 May 6, 2009                             Assembly Committee on                                         4
                                        Health and Human Services
        Nevada State Health Division
Health Division Primary Care Advisory Council
♦ Mission – To examine, consider, and make recommendations
     about the following issues:
 ● J-1 Physician Visa Waiver applications, in accordance with 8 USC
        1184(214)(k) and Title 22 CFR 41.63
 ● J-1 Visa Waiver Employer Site Visits review
 ● J-1 Physician Visa Waiver program complaints
 ● J-1 Physician Visa Waiver program policies and procedures
 ● Primary care development activities, efforts and initiatives
 ● Primary care provider recruitment and retention efforts
 ● Other issues impacting primary care access, availability and utilization

 May 6, 2009                    Assembly Committee on                         5
                               Health and Human Services
           Nevada State Health Division
    Health Division Primary Care Advisory Council
♦     Seven volunteer representatives from a variety of organizations and
        stakeholders in the private and public sector that have impact on the
        provision of primary care within Nevada, particularly in medically
        underserved areas

♦     Members appointed by the Health Division Administrator for a two-year term

♦     Recommendations of the Council are advisory only

♦     First meeting held April 2008 and bylaws adopted June 2008

♦     Meets at least quarterly – met five times during calendar 2008

♦     Follows Open Meeting Law
    May 6, 2009                    Assembly Committee on                        6
                                  Health and Human Services
       Nevada State Health Division
          Health Division Primary Care Advisory Council
♦ Members
   ● Gabriel Bonnet, MD, Retired Pediatrician/Neonatologist and former Medical
     Director for Renown Health, Reno, NV
   ● Senator Maggie Carlton – Community Development Director, Great Basin Primary
     Care Association, Las Vegas, NV
   ● Caroline Ford, MPH – Vice Chairperson, Assistant Dean/Director, Center for
     Education and Health Services Outreach, University of Nevada School of Medicine,
     Reno, NV
   ● Carl Heard, MD – Chief Medical Officer, Nevada Health Centers, Inc.,
     Carson City, NV
   ● Lawrence P. Matheis – Executive Director, Nevada State Medical Association,
     Las Vegas, NV
   ● Amir Z. Qureshi, MD – Chairman and Infectious Diseases Specialist,
     Las Vegas, NV (former J-1 Visa Waiver physician)
   ● Charles Duarte – Administrator, Nevada Division of Health Care Financing and
     Policy, Carson City, NV

May 6, 2009                       Assembly Committee on                             7
                                 Health and Human Services
        Nevada State Health Division
                     Current Status of Nevada’s J-1 Visa Waiver Program
♦ All applications and provider modifications are being reviewed by the Primary Care Advisory Council and approved
  by the Health Division Administrator
♦ Procedures have been developed for addressing complaints and violations
♦ Program Policies and Procedures reviewed publicly twice and anticipated to be finalized July 2009

♦ Unannounced comprehensive site visits for assessing compliance
   ● 88% of annual visits have been completed – 41 physicians and 26 employers
   ● Only 29% (6/21) were in compliance with federal and state requirements
   ● 7 of 41 physicians were not at the site designated on their H-1B Visa, as required by Immigration
     and by the program
   ● One site remains non-compliant, and the PCO is assisting the physician with finding a
     new employer

♦ Collaboration with the State Board of Medical Examiners to resolve bottlenecks, from receipt of an application
   ● Start to work time has gone from 150 days to less than 60 days
   ● Board staff attending Council meetings
   ● Board staff has provided education and guidance regarding the licensing and complaint investigation processes




 May 6, 2009                                  Assembly Committee on                                                8
                                             Health and Human Services
       Nevada State Health Division
    Current Status of Nevada’s J-1 Visa Waiver Program (continued)

♦ Primary Care Office Management
  ● Contractor hired actively recruit residents from all professionals schools, and
    to develop recruiting materials
  ● Anticipates filling ten Conrad 30 slots during federal fiscal year 2009, fifteen
    for 2010, and twenty for 2011 – the goal is to fill all 30 slots
  ● Contacts have been established with Immigration to report/discuss issues
  ● Over 200 curriculum vitae for physicians and other health care practitioners
    were shared with safety net providers, during FY 2008
  ● An orientation program is in development, for physicians, employers and
    immigration attorneys, to correct a key program deficiency
  ● Facilitating the quarterly meetings of the Primary Care Work Group of stakeholders
    involved with access to care issues
  ● Collaboration initiated with Division of Health Care Financing and Policy, for better J-1
    Visa Waiver program tracking and management and needs assessments

May 6, 2009                         Assembly Committee on                                 9
                                   Health and Human Services
           Nevada State Health Division
                               Program Review and Analysis
♦    Complaints received prior to January 2008 went unaddressed, leading to critical program deficiencies,
        J-12 Visa physician abuse, and decreased participation

♦    Lack of transparency and oversight, with ambiguous ability to enforce federal rules
♦    No collaboration between the PCO and key state and federal agencies
♦    Lack of detailed evaluation of applications, including employment contracts, to ensure compliance with
         federal rules and support of the spirit of the program
♦    Annual site visits not being done
♦    Inconsistent tracking of J-1 Visa Waiver physicians, after H-1B status received
♦    De facto program policies and procedures, with reliance on federal program guidelines that were
         somewhat vague

♦    Employers, J-1 Visa physicians, and immigration attorneys ignorant of or confused about program rules
        and requirements


    May 6, 2009                              Assembly Committee on                                       10
                                            Health and Human Services
           Nevada State Health Division
                         Comparison With Other States
♦     Only Nevada
     ● Employing a transparent process to review applications
     ● Utilizing Medicaid billing data to ensure that J-1 Visa Waiver physicians are providing
        medical services to the underserved
     ● Acknowledging and balancing the rights and responsibilities of both the employers and
        physicians with the program rules
     ● Issuing letters of deficiency, requiring corrective action plans, and re-visiting sites with
        critical deficiencies

♦     While Nevada’s problems are not unique, other states have been hesitant to
       acknowledge similar or related problems
♦     Fourteen states have enacted statutes and/or regulations, chiefly to establish
        minimum state requirements and enable some rules enforcement

    May 6, 2009                          Assembly Committee on                                  11
                                        Health and Human Services
           Nevada State Health Division
                          Where to go from here…
♦    Problem: While all non-legislative actions have been taken, these are not
       sufficient to properly support the program and improve access to care in
       the long term.
     Solution: Legislation has been requested by the Health Division Primary Care
       Advisory Council to enable the State Board of Health to adopt regulations
       to formally establish and enforce program requirements.

♦    Problem: Lack of fiscal resources limits the ability of the Health Division to
       effectively manage the program.
     Solution: Like seven other states have done, permitting the Health Division
       to collect a modest application fee would allow some cost recovery for
       program compliance activities.

    May 6, 2009                     Assembly Committee on                             12
                                   Health and Human Services
Nevada State Health Division
Recommendations for the J-1 Visa Waiver Program for Foreign-born Physicians
POLICY AND PROCEDURES, REGULATIONS AND STATUTES                                                                                                     April 2009


               Issues:                                                             Program and Policy Changes: Health Division
Lack of Oversight and Transparency   Seven volunteer leaders from a variety of organizations and stakeholders in the private and public sectors who have impact on the
                                     provision of primary care in Nevada, particularly in medically underserved areas, were appointed by the Health Division Administrator
                                     to serve on the Health Division Primary Care Advisory Council. No other state seems to have a transparent process for approving J-1
                                     Visa Waiver applications.

                                     Health Division Primary Care Advisory Council meets at least quarterly, follows Open Meeting Law, and examines, considers and makes
                                     advisory recommendations to the Health Division Administrator regarding primary care issues, including the applications for J-1 Visa
                                     Waivers. State Attorney General is represented at Council meetings.
Complaints                           Procedures developed for addressing complaints and violations.

                                     Unannounced comprehensive site visits now being done annually, with return site visits for follow-up of critical deficiencies.

                                     Program review and analysis done, with referrals of issues and complaints to the State Board of Medical Examiners, State Attorney
                                     General, US Immigration, and US Department of Labor.

                                     State Board of Medical Examiners provided education to the Council regarding its complaint investigation process and provided
                                     guidance on typical program complaint scenarios.

                                     Primary Care Office staff have met or spoken with 82% of the current J-1 Visa Waiver physicians.

                                     Web-based complaint system is available.
Medical Licensing Bottlenecks        Collaboration with State Board of Medical Examiners, from the time a J-1 Visa Waiver application is received, has resulted in an
                                     improvement of start to work time from 150 days to less than 60 days.

                                     Board staff attend Council meetings and have provided education on the licensing process.
Lack of Employer / Physician         Unannounced comprehensive site visits are being done, with revisits as necessary.
Compliance
                                     Medicaid billing data is being monitored to establish that the sites are providing primary care to underserved communities, and to
                                     ensure that the J-1 Visa physician is providing service at the designated work site.

                                     Current and past J-1 Visa Waiver employment contracts are being reviewed for program compliance. Seven contracts have been
                                     amended to meet the program rules.

                                     After review by the Attorney General’s Office, deficiency letters have been sent to approximately 71% of employers found not to be in
                                     compliance with program rules. Written plans for corrections were received in all cases.


                                                                                                                                                                          13
Nevada State Health Division
Recommendations for the J-1 Visa Waiver Program for Foreign-born Physicians
POLICY AND PROCEDURES, REGULATIONS AND STATUTES                                                                                                       April 2009


              Issues:                                                                Program and Policy Changes: Health Division
Lack of Employer / Physician          During site visits, emphasis is placed on objective evidence of compliance, such as appointment lists and availability, wages, benefits,
Compliance (continued)                bonuses, moving expenses, direct service hours, and staff feedback on provision of care to the underserved and the site’s sliding fee
                                      scale policy and posting.
Lack of Formal Program Policies and   Draft policies and procedures have been reviewed twice publicly. They are anticipated to be finalized by July 2009.
Procedures
Lack of Program Management            Performance indicators have been developed.

                                      Tracking required semi-annual reports and verify the information provided.

                                      Tracking status of physicians from receipt of H-1B visa status through completion of commitment.

                                      Improved identification and tracking of federal designations and re-designations for Health Professional Shortage Areas (HPSAs).

                                      Employer and Physician satisfaction surveys were conducted and analyzed , and will be repeated annually.

                                      Exit interview developed and will be used with first eligible physician.

                                      Actively recruiting more J-1 Visa Waiver employer sites, and post their job vacancies on our web site. Approximately 200 curriculum
                                      vitae, received by the Primary Care Office, are distributed to J-1 Visa employers annually.

                                      Facilitating quarterly meetings of the Primary Care Work Group of stakeholders who are involved with access to care issues.

                                      Relationship and collaboration re-established with the state’s Primary Care Association (Great Basin Primary Care Association) to
                                      address and improve access to health care for underserved communities and to support the safety net.


              Issues:                                                                  Regulations: State Board of Health
Non-compliance with Federal and       Legislation was requested by the Primary Care Advisory Council to enable the State Board of Health to adopt regulations to formally
State Requirements                    establish and enforce program requirements.

                                      The Health Division briefed the State Board of Health about the program, its issues, and the corrective actions taken. The Board is
                                      aware that it may be authorized to adopt necessary regulations, per pending legislation.
Ambiguity of Federal Regulations      Federal and state requirements can be clarified through the administrative rulemaking process.



                                                                                                                                                                                 14
Nevada State Health Division
Recommendations for the J-1 Visa Waiver Program for Foreign-born Physicians
POLICY AND PROCEDURES, REGULATIONS AND STATUTES                                                                                               April 2009


             Issues:                                         Senate Bill 229: Enhancing Health Division Authority for the J-1 Visa Waiver Program
Program Non-compliance             The Health Division testified to the 2007-2008 interim Legislative Committee on Health Care and to its Subcommittee to Review Laws
                                   Concerning Providers of Health Care, the Use of Lasers, Intense Pulsed Light Therapy, and Injections of Cosmetic Substances that
                                   legislation may be necessary to ensure compliance with federal and state requirements.

                                   The Health Division Primary Care Advisory Council determined that while all non-legislative corrective actions have been taken, these
                                   would not be sufficient to properly support the program and improve access to care in the long term. Council member Senator Carlton
                                   volunteered to sponsor the needed legislation.
Limited Funding for Program        Current available fiscal resources limit the ability of the Primary Care Office to effectively manage the program.
Management




                                                                                                                                                                        15
                       J-1 VISA WAIVER PROGRAM:
               States with Enacted Laws and/or Application Fees
                                  April 2009




           State                 Laws Enacted             Application Fee
Alabama                                                  $2,000 (Proposed)
Arizona                               X
Colorado                                                 $1,000 (Proposed)
Delaware                              X                        $450
Idaho                                 X                       $1,000
Illinois                              X
Maine                                 X
Michigan                              X                       $1,500
Missouri                              X
Nebraska                                                 $500 (Proposed)
Nevada                             Proposed              $500 (Proposed)
Ohio                                                         $3,571
Oregon                                X                      $2,000
South Dakota                          X                        $200
Tennessee                             X
Texas                                 X                       $2,500
Utah                                  X
Vermont                               X
Washington                            X




                                                                             16
                    J-1 VISA WAIVER PROCESS


Step One:     Physician completes medical education on J-1 visa

Step Two:     Physician submits application to US Department of State (DoS), obtains case
              number, and secures bona fide offer of employment from qualified Nevada
              health facility for minimum of 3 years

Step Three:   Physician, employer or both apply to Nevada State Health Division to
              request support for waiver on physician’s behalf and to the Nevada State
              Board of Medical Examiners for physician license

Step Four:    Health Division staff review and validate application, ensuring compliance
              with federal rules

Step Five:    Health Division staff present findings of fact and recommendation to the
              Health Division Primary Care Advisory Council

Step Six:     Health Division submits letter of support for waiver request to DoS

Step Seven:   DoS processes physician’s waiver application, reviews state’s letter of
              support, and makes recommendation to US Department of Homeland
              Security / US Citizenship and Immigration Services (USCIS)

Step Eight:   USCIS reviews recommendation, grants or denies waiver and notifies J-1
              visa physician

Step Nine:    If approved, Physician receives H-1B Visa status and fulfills required
              minimum 3-year employment contract

Step Ten:     Physician leaves US or applies for permanent residence




                                                                                         17
                     IMPROVING ACCESS TO HEALTH CARE
                  FOR NEVADA’S UNDERSERVED POPULATIONS:

                     CONRAD STATE 30 / J-1 VISA WAIVER and
                     NATIONAL INTEREST WAIVER PROGRAMS

OVERVIEW
Many communities throughout the U.S., both urban and rural, experience difficulties
attracting physicians, especially for primary care. To address the issue, states and
federal agencies have utilized foreign physicians who have just completed graduate
medical education in the U.S. under J-1 visas. Ordinarily, these physicians must return
home after completing their programs. However, this requirement can be waived at the
request of a state or federal agency if the physician agrees to practice in an
underserved area. In 1996, the U.S. General Accountability Office (GAO) reported that
J-1 visa waivers had become a major source of physicians for underserved areas, a
trend that continues today.

CONRAD STATE 30 / J-1 VISA WAIVER
The Conrad State 30 program was initiated in October 1994, and was designed to
provide each of the fifty U.S. states up to 20 waivers for physicians each federal fiscal
year. In 2003, the number of maximum waivers was increased to 30. Each state has
been given some flexibility to implement its own guidelines, although there are some
basic requirements that are common to all Conrad State 30 programs. For physicians
who qualify, the Conrad State 30 program is an excellent method of obtaining a waiver.

While the exact requirements vary from state to state, the following are generally
required:

   1. A full-time offer of employment (40 hours per week) as a primary care physician
      in a health professional shortage area or medically underserved area in a
      particular state;
   2. A letter of support from the particular State Director of Health supporting the
      physician's Conrad State 30 request;
   3. A “no-objection” letter from the foreign physician's home country, if needed; and
   4. A three-year employment contract.

Physicians participating in graduate medical education on J-1 visas are required to
return to their home country or country of last legal residence for at least 2 years before
they may apply for an immigrant visa, permanent residence, or certain nonimmigrant
work visas. They may, however, obtain a waiver of this requirement from the
Department of Homeland Security at the request of a state or federal agency, if they
have agreed to practice in an underserved area for at least 3 years. Once the physician
is granted the waiver, the employer petitions Department of Homeland Security’s U.S.
Citizenship and Immigration Services (USCIS) for the physician to obtain H-1B status (a
nonimmigrant classification used by foreign nationals employed temporarily in a
specialty occupation).


                                                                                        18
Obtaining a J-1 Visa Waiver at the request of a state or federal agency to practice in an
underserved area involves multiple steps, which may take up to 18 months to complete.
A physician must submit an application to obtain a case number from the Department of
State and must secure a bona fide offer of employment from a health care facility that is
located in an underserved area or, in the case of flexible waivers, from a health care
facility that treats residents of an underserved area. The physician, the prospective
employer, or both apply to a state or federal agency to request a waiver on the
physician’s behalf. If, after reviewing the application, the state or federal agency decides
to request a waiver, the state or federal agency submits a letter of request to the
Department of State affirming that it is in the public interest for the physician to remain
in the United States. If the Department of State decides to recommend the waiver, it
forwards its recommendation to the USCIS, who is then responsible for making the final
determination and notifying the physician when the waiver is granted. According to
officials involved in recommending and approving waivers at the Department of State
and USCIS, after a review for compliance with statutory requirements and security
issues, nearly all waiver requests are recommended and granted.

The physician must work at the facility specified in the waiver application for a minimum
of 3 years, unless the physician obtains approval from USCIS to transfer to another
facility. USCIS considers transfer requests only in extenuating circumstances, such as
closure of the physician’s assigned facility. Once the physician fulfills the employment
contract, the physician may apply for permanent residence, continued H-1B status, or
other nonimmigrant status, if the physician wishes to remain in the United States.

NATIONAL INTEREST WAIVER
As part of the J-1 Visa Waiver program, the foreign physician cannot obtain permanent
residence status (obtain a "green card") from the USCIS until after fulfilling his/her
three-year commitment. However, the employer may start the process in stages. There
are two options for the immigrant visa process: the Labor Certification or the National
Interest Waiver (NIW).

The National Interest Waiver (NIW) also seeks to address the problem of physician
shortages in designated shortage areas by relieving the petitioner from fulfilling the U.S.
Labor Certification requirements, set by the U.S. Department of Labor, which allows the
physician to get permanent U.S. residence sooner. The amendment is applicable only
to practicing licensed physicians (allopathic and osteopathic) and requires a letter from
a state department of health with central authority for oversight of where the physician is
actually practicing. The national interest waiver for physicians in underserved areas
relieves the petitioner only from the labor certification process, and the individual must
still meet all eligibility requirements for this immigrant classification in order to be eligible
for the NIW. There is no limit on the number of NIW applicants a state may
recommend during a federal fiscal year.

The Labor Certification process requires the employer to initiate a recruitment period
and place one journal ad. There is a risk to this process because if a qualified U.S.
worker applies for the position, the labor certification application cannot be filed.



                                                                                              19
To bypass the labor certification process entirely, the USCIS will grant a NIW on behalf
of any foreign physician who has met the following criteria:

   1. The foreign physician agrees to work full-time in an area designated as having a
      shortage of healthcare professionals;
   2. A state public health department has previously determined that the foreign
      physician's working in such an area was in the public interest; and
   3. The foreign physician works full-time in such an area for an aggregate of five
      years before he or she is eligible to adjust status or obtain an immigrant visa
      under the waiver provision.

The advantage of the NIW is that no labor certification is required. The foreign
physician, however, is obligated to work in the underserved area for a minimum of five
years. Consequently, his/her visa would have to be extended beyond the initial three
years. The NIW and the Application for Adjustment of Status to Permanent Residence
may be submitted before the five-year period is completed. However, permanent
residence may not be granted until the period of commitment ends in five years.

NEVADA CONRAD STATE 30 / J-1 VISA WAIVER and NIW PROGRAMS
The purpose of both the Nevada Conrad State 30 / J-1 Visa Waiver and National
Interest Waiver programs is to improve access to health care in underserved areas of
the state by increasing the number of physicians who will provide primary care to
underserved populations. Currently, there are over 30 J-1 physicians serving their three
year commitment in Nevada.

In the summer of 2008, the Nevada Primary Care Office (PCO) began an evaluation of
the Conrad State 30 / J-1 Visa Waiver (J-1) and National Interest Waiver (NIW)
programs in the following areas: the provision of care to Medicaid recipients, the factors
involved in the recruitment and retention of physicians in underserved areas, and the
performance of the PCO.

The program evaluation used three sources of data: demographic data collected
routinely on the J-1/NIW physicians serving in Nevada, aggregate data from the Division
of Health Care Financing and Policy regarding services provided to Medicaid clients,
and the J-1/NIW survey data collected in the summer of 2008. Following are some of
the areas that stood-out as successes when analyzing the performance of the PCO.

         Over 120 J-1 visa waiver physicians worked for Nevada sponsors in the past 8
         years.
         87% percent of J-1 visa waiver physicians completed their three years in
         Nevada.
         65% of the J-1 visa waiver physicians continue working in Nevada for one year
         past their commitment.
         Over the last 7 years, J-1 visa waiver physicians have successfully increased
         access to care for the medically underserved populations of Nevada. An
         example of that success is: In North Las Vegas, the population to physician
         ratio is 1:5,765 without the J-1s included in the calculation; with the J-1s
         included in the calculation, the ratio is 1:3,459.

                                                                                        20
           Initial data from the Division of Health Care Finance and Policy revealed that a
           large number of Medicaid recipients receive services from J-1 visa waiver
           physicians. Data collection and analysis are still in process.

Table 1: Conrad State 30 / J-1 Visa Waivers in Nevada 2001-2008

   2001              2002          2003          2004    2005          2006      2007     2008
   20/20             20/20         27/30         18/30   13/30         11/30     9/30     9/30
   100%              100%          90%           60%     43%           37%       30%      30%

The reasons are not clear regarding a 67% decline in J-1 physicians coming to Nevada
since 2003. Following are some of the possible explanations:

   •   The number of physicians who conduct their residency training on J-1 Visas
       dropped nationwide from 11,600 in 1996 to 6,200 in 2004. Part of this decline,
       according to the GAO, is that more foreign-born medical students are coming to
       the U.S. on the less-restrictive H-1B visa, rather than the J-1 visa. The H-1B
       program does not require three years of service in a HPSA area.
   •   There has been a slow increase over the last seven years in the annual number
       of J-1 physicians placed by government agencies in a HPSA area. According to
       the statistics from the Primary Care Office in Texas, 579 J-1s were placed in
       2001 and 694 were placed in 2007. There was a peak year of placement, 2003,
       with 1033 physicians placed in that year alone.

           Table 2: J-1s nationwide 2001 – 2007


                                                     1033
                                                                 964       954
                                           854                                      866
             #s of J-1




                                                                                             694
                             579                                                                   J-1




                         2001        2002         2003      2004        2005     2006     2007
                                                            Year

   •   Since the 9/11 catastrophe, the screening process for immigration has been
       more stringent.
   •   According to a 2006-07 investigation conducted by the Las Vegas Sun, the J-1
       program in Nevada is avoided by some foreign physicians because they have
       heard stories of mistreatment by sponsors. In 2001 and 2002, there were six
       written complaints from J-1 physicians regarding Nevada sponsors not abiding
       by the terms of the contract. There was one complaint from a sponsor regarding
       the physician not abiding by the terms of the contract. Since 2002, the PCO has
       not received any written complaints from physicians regarding Nevada sponsors.

                                                                                                         21
   •   There has been a decline in J-1s placed in several of the other states with
       populations similar to Nevada. However, two states, Arkansas and Iowa, have
       managed to attract nearly 30 J-1 physicians per year to their state. The PCO
       has contacted those particular states to elicit their strategy for recruitment and
       retention.

Table 3: Decline of J-1s among states with similar population
State          Pop.        2001     2002     2003      2004       2005     2006      2007
Arkansas       2,811,000     0       30        30       30         29       14        N/A
Iowa           2,982,000    20       30        30       30         28       29        N/A
Kansas         2,764,000     0        4        14       26         17       17        14
Mississippi    2,911,000    14       13        19       17         18        8         9
Nevada         2,496.000    20       30        27       18         13       11         4
Utah           2,550,000    18       17         4        6          5        4         1

   •   States that have successfully placed all available J-1s each year since 2001:
       Arizona, California, Illinois, Kentucky, Massachusetts, Michigan, Missouri, North
       Carolina, Texas and Washington.

Chart 1 details the Country of Birth for Nevada J-1s placed between 2001-2008. Just
over half of the waivers (55%) were granted to a combination of J-1 physicians from
India, the Philippines and Pakistan. The remainder went to a combination from all over
the globe.

Chart 2 provides information about the counties and towns where the J-1s have been
placed during that same time period. Of the 122 physicians, 105 (86%) were in the
southern part of the state, and 17 (14%) were placed in the north. This is consistent
with the geographic location of the state’s population and the federally designated
HPSAs. Eighty-three (68%) of the J-1s were placed in the Las Vegas – North Las
Vegas area.




                                                                                            22
Chart 1: Country of Birth


    Nevada: 2001 - 2008 J-1 Placements          B angladesh - 3
                                                Canada - 1
                                                Dominican Republic - 2
                                                Ecuador - 1
                                                Egypt - 3
                                                Ghana - 4
                                                Grenada - 1
                                                India - 34
                                                Iran - 1
                                                Ireland - 1
                                                Israel - 2
                                                Jordan - 1
                                                Kuwait - 1
              Philippines - 19                  Lebanon - 7
                                                Libya - 1

                                   India - 34   M alaysia - 1
                                                M exico - 2
                                                Nigeria - 3
                                                P akistan - 15
                                                P anama - 1
                                                P eru - 3
                                                P hilippines - 19
                   Pakistan - 15
                                                Romania - 3
                                                Syria - 3
                                                Tanzania - 1
                                                Thailand - 1
                                                Trinidad - 2
                                                Turkey - 2
                                                UK - 3




                                                                    23
Chart 2: County and Towns in Nevada where J-1s were placed


                          Nevada: 2001 - 2008: J-1 Placements

                                                                          Clark - Las Vegas - 83
           Pahrump - 15                                                   Clark - Mesquite - 2
                                                                          Clark - Laughlin - 1
                                                                          Clark - Moapa - 2
                                                                          Lander – Battle Mtn - 2
                                                                          Washoe - Reno - 6
                                                                          Washoe - Gerlach - 1
                                                                          Eureka - Eureka - 1
                                                                          Nye - Pahrump - 15
                                                                          Nye - Beatty - 2
                                     Las Vegas – 83 (68%) North
                                            Las Vegas -                   Elko - Elko - 1
                                            Las Vegas - 83
                                                                          Elko - Carlin - 1
                                                                          Elko - Owyhee - 2
                                                                          Lyon – Silver Springs - 1
                                                           Total 122      Lyon - Yerington - 1
                                                            Total = 122
                                                                          Mineral - Hawthorne -1




RE-ENGINEERING OF NEVADA’S CONRAD STATE 30 PROGRAM
The Las Vegas Sun published an extensive investigation regarding mistreatment of
Conrad State 30 / J-1 Visa Waiver physicians by their sponsors/employers, beginning in
late September 2007. Health Division Administration realized that an important health
care access program was in jeopardy, and developed a corrective action plan.

In mid-January 2008, the PCO, including the Conrad State 30 / J-1 Visa Waiver
Program, was restored to the Health Division’s Bureau of Health Statistics, Planning
and Emergency Response and placed under a new program manager, as the critical
first step in a comprehensive corrective action plan, which included hiring a new
Manager for the Primary Care Office (May 2008). Currently, there are 1.25 FTEs
dedicated to the Conrad State 30 Program, and funding is provided by a combination of
federal grants and a small amount (less than 5%) of General Fund.

After performing a thorough program evaluation, areas requiring re-engineering were
identified. There was a great need to establish a transparent process for approving J-1
Visa Waiver requests that ensured compliance with both the spirit and requirements of
the Conrad State 30 Program and provided enhanced program oversight. The PCO
also was not accurately tracking the J-1s from the time of application through
completion of their commitment. Annual site visits were not being done. The

                                                                                        24
relationship with the State Board of Medical Examiners (BME) was minimal and
ineffective.

The Health Division determined that to ensure a transparent process, it would be best to
convene a panel of external subject matter experts, who could also provide some
additional program oversight. In April 2008, the Health Division Primary Care Advisory
Council held its first meeting, in accordance with Nevada Open Meeting Law, and
adopted its bylaws during its June 2008 meeting. The Council is comprised of
representatives from a variety of organizations and stakeholders in the private and
public sector that have impact on the provision of primary and specialty care within
Nevada, particularly in medically underserved areas. The recommendations of the
Council are advisory only, to the Administrator of the Health Division, regarding: the
Conrad State 30 program; primary care provider and specialty care provider recruitment
and retention efforts; health care workforce development activities, efforts and
initiatives; federal Health Professional Shortage Areas and Medically Underserved
Areas/Populations designations analysis, impact and stratification; and other issues
impacting access to primary care and health care workforce development.

The Council meets at least quarterly and the seven members are volunteers appointed
by the Health Division Administrator for a term of two years. During calendar year 2008,
the Council met five times and recommended approval of nine J-1 Visa Waiver
applicants. Current Council members are:

     Gabriel Bonnet, MD – Retired Pediatrician and former Medical Director for
      Renown Health, Reno, NV
     Senator Maggie Carlton – Community Development Director, Great Basin
      Primary Care Association, Las Vegas, NV
     Charles Duarte– Administrator, Nevada Division of Health Care Financing and
      Policy, Carson City, NV
     Caroline Ford, MPH – Vice Chairperson and Assistant Dean/Director, Center for
       Education and Health Services Outreach, University of Nevada School of
       Medicine, Reno, NV
     Carl Heard, MD – Chief Medical Officer, Nevada Health Centers, Inc., Carson
       City, NV
     Lawrence P. Matheis – Executive Director, Nevada State Medical Association,
        Las Vegas, NV
      Amir Z. Qureshi, MD – Chairman, Infectious Diseases Specialist and former J-1
        Visa Waiver physician, Las Vegas, NV


The Council’s formation has resulted in interesting outcomes. The first is an effective,
collaborative relationship between the PCO and State Board of Medical Examiners. J-1
Visa Waiver applicant bottlenecks are being addressed and licenses are being issued in
a timely manner. BME staff regularly attends Council meetings, and PCO staff
represent the Health Division at the quarterly BME meetings. The two agencies are
working together on how to handle mistreatment complaints and prevent further abuse
of the J-1s. Also, the two are working together to gather data, for better tracking of the
all physicians, in order to meet various other related statutory and federal requirements.
The PCO has drafted program policies and procedures, which have been vetted
                                                                                       25
through an open meeting process, to ensure that the program is administered in a
manner that is consistent and compliant with federal requirements. These policies and
procedures are expected to be implemented by the end of state fiscal year 2009.
Because the Council has found some of the program’s federal requirements lack clarity,
Senator Carlton is seeking legislation during the 2009 session to remedy this situation;
as several other states have this type of legislation, including Oregon, Utah and
Washington.

The PCO has developed and implemented a tracking system that allows it to monitor a
J-1 physician from the time a waiver application is received through the completion of
their waiver commitment. Both annual and ad hoc site visits are now being conducted
and these have enhanced both program compliance and communication with the J-1s
and their employers. The PCO has found that neither the J-1s nor the employers fully
understood their rights and responsibilities, and an education/orientation program is in
development. It is also expected to become an effective recruitment tool.

INTERIM LEGISLATIVE REPORTS
During the 2007-2008 interim and a result of the Las Vegas Sun investigative reports,
two program reports were requested by the Legislative Committee on Health Care
(October 2007 and February 2008) and one by the Legislative Committee on Health
Care Subcommittee to Review the Laws and Regulations Governing Providers of Health
Care, the Use of Lasers and Intense Pulsed Light Therapy, and the Use of Injections of
Cosmetic Substances (May 2008). While the members of both Committees were
pleased with the program changes made, they will continue to monitor the situation until
the problems have been resolved to their satisfaction.

SUMMARY
Nevada’s Conrad State 30 / J-1 Visa Program is critical for improving access to health
care for the those residents living in underserved areas. While sustainable, effective
measures have been put into place to resolve key problems, the program has a long
way to go toward rebuilding its credibility and reputation. The Health Division is
committed to strengthening this program, as a means to better meeting health care
needs in the Silver State.




                                                                                         26
            PRIMARY CARE ACCESS: UNDERSERVED AREAS

Nevada’s Primary Care Office is responsible identifying and obtaining federal
designation for a Health Professional Shortage Area (HPSA), Medically Underserved
Area (MUA), and Medically Underserved Population (MUP) within the Silver State.


HPSA designations and renewals are awarded by the U.S. Department of Health and
Human Services Health Resources and Services Administrations (HRSA).


Health Professional Shortage Area (HPSA): The designation is based on a
minimum practitioner to population ratio, and is awarded for shortages of primary
care, dental or mental health providers The designation can be given to an entire county
or to certain areas within a county. HPSA designations are used by over 30 federal
programs for funding determinations, including Medicare and Medicaid.


                                HPSA Ratio (minimum)                 Ideal Ratio
Primary Care                          1 : 3,500                        1 : 2,000
Dental                                1: 5,000                         1 : 3,000
Mental Health                        1 : 30,000                       1 : 10,000


Medically Underserved Area (MUA): The designation may be given to a whole county
or to a group of contiguous counties, a group of county or civil divisions, or a group of
urban census tracts in which residents have a shortage of personal health services.


Medically Underserved Population (MUP): The designation may include groups of
persons who face economic, cultural or linguistic barriers to health care.



   Underserved Type             # Nevada designations        Total # US Designations
HPSA – Primary Care                      51                            6,033
HPSA – Dental                            17                            4,048
HPSA – Mental Health                     18                            3,059
MUA                                       8                        Not Available
MUP                                       5                        Not Available




                                                                                      27
                    Nevada Health Care Shortage / Underserved Areas
                                           HPSA
  County/Area         Primary Care         Dental    Mental        MUA             MUP
                                                     Health
Carson City            FQHC only      FQHC only     FQHC only                   Eastern only
Churchill County       Tribal only                     X
Clark County           FQHCs and       All except      X
                       Tribal only     North Las
                                        Vegas
Clark –                    X
Cambridge
Clark – Indian             X
Springs
Clark – Las Vegas          X                                                         X
Metro
Clark – Laughlin           X
Clark – North Las          X                                                         X
Vegas
Clark – Overton            X
Clark – Sunrise            X
Douglas County         Tribal only
Elko County            Tribal only           X         X                        City of Elko
                                                                                    only
Elko – Northern         Jawbridge,
                      Mountain City
                       and Owyhee
                           only
Elko – Eastern        Jackpot, West                              Jackpot and
                      Wendover and                                  West
                        Wells only                              Wendover only
Esmeralda                   X                X         X             X
County
Eureka County              X                 X         X             X
Humboldt County            X                           X
Lander County              X                 X         X             X
Lincoln County             X                 X         X             X
Lyon County                X                           X             X
Mineral County             X                 X         X
Nye County                 X                 X         X
Pershing County            X                 X         X
Storey County              X                 X         X             X
Washoe County          FQHC and              X         X
                       Tribal only
Washoe –                   X                                                         X
Reno/Sparks
Washoe –                   X
Gerlach
White Pine                 X                 X         X
County
FQHC = Federally Qualified Health Center


                                                                                          28
                         Federal Programs Using HPSA Designations

National Health Service Corps (NHSC)—Section 333 of Public Health Service Act.
Provides for the assignment of federally-employed and/or service obligated physicians and
dentists to Health Professional Shortage Areas (HPSAs)
NHSC –Scholarship Program (Section 338A) provides scholarships for training of health
professionals to serve in HPSAs
NHSC Loan Repayment Program (Section 338 B) provides load repayment to health professional
who serve in HPSAs
Rural Health Clinics Act (PL 95-210) provides Medicare and Medicaid reimbursement for
services provided by PAs and Nurse Practitioners in clinics in rural HPSAs
CMS (Center for Medicare and Medicaid Services) Medicare Incentive Payment for Physician’s
Services provided in HPSAs (PL 100-203, Section 4043 as amended) gives 10% bonus payment
for Medicare-reimbursable physician services within geographic HPSAs. (Does not apply to
population group HPSAs)
CMS (Center for Medicare and Medicaid Services) Higher “Customary Charges” for new
physicians in HPSAs (PL 100-203 Section 4047) exempts new physicians opening practices in
non-metropolitan geographic HPSAs from new Medicare limitations on “customary charges”
AHECs (Section 781 (a)(1) gives special consideration to centers that serve HPSAs with higher
percentage of underserved minorities
Federal Employees Health Benefits Programs—provides reimbursement for non physician
services in states with high percentages of their population residing in HPSAs
Conrad State30 / J-1 Visa Waiver program for foreign born physicians
Nevada State Immunization Program
Tribal Health Centers and outpatient health programs (Indian Self Determination Act or Indian
Health Care Improvement Act)
Eligibility for various Title VII and VIII Grants
    • Graduate and Residency trainings in Family Medicine
    • Faculty Development in Family Medicine, General Internal Medicine & General Practice
    • Faculty training project in Geriatric Medicine and Dentistry
    • Residency Training & Advanced Education in General Practice of Dentistry
    • Preventative Medicine & Dental Public Health
    • Physician Assistant Training Program
    • Podiatric Primary Care Residency Program
    • Allied Health Project Grants
    • Health Education and Training Programs
    • Interdisciplinary training for Health Care in Rural Areas
    • Health Administration Traineeships and Special Projects
    • Special Project grants to Schools of Public Health
    • Nurse Practitioner and Nurse Midwifery Education programs
    • Programs of Excellence in Health Professions Education for Minorities
    • Cooperative Agreements to Improve the Health Status of Minority Population
    • Emergency Medical Services for Children
    • Professional Nurse and Nurse Anesthetist Traineeships
    • Nurse Training Improvement: Special Projects
SAMHSA (Substance Abuse and Mental Health Services Administration—grants for Mental
Health Clinics and AIDS SERVICE-Related Training
FQHC (Federally Qualified Health Centers) funded by PHS Act Section 330 – automatic HPSA
designation
FQHCLA (Federally Qualified Health Center Look Alike) certified by CMS as meeting the
definition of Health Center in Section 330 but do not receive grant funding


                                                                                                29
 F A C T
 SHEET


  Federally Qualified
  Health Center
T  HE   FEDERALLY QUALIFIED HEALTH CENTER (FQHC) benefit under Medicare was added
   effective October 1, 1991 when Section 1861(aa) of the Social Security Act (the Act) was
amended by Section 4161 of the Omnibus Budget Reconciliation Act of 1990. FQHCs are
“safety net” providers such as community health centers, public housing centers, outpatient
health programs funded by the Indian Health Service, and programs serving migrants and the
homeless. The main purpose of the FQHC Program is to enhance the provision of primary care
services in underserved urban and rural communities.
Federally Qualified                                               as an urban Indian
Health Center Designation                                         organization receiving
An entity may qualify as an FQHC if it:                           funds under Title V of
                                                                  the Indian Health Care
   ■ Is receiving a grant under Section 330 of the
                                                                  Improvement Act as of
        Public Health Service (PHS) Act;
                                                                  October 1, 1991.
   ■ Is receiving funding from such grant under a
        contract with the recipient of a grant and        Covered Federally
        meets the requirements to receive a grant         Qualified Health
        under Section 330 of the PHS Act;                 Center Services
   ■ Is not receiving a grant under Section 330 of        Payments are made directly to the FQHC for covered
        the PHS Act but determined by the Secretary       services furnished to Medicare beneficiaries. Services are
        of the Department of Health and Human             covered when furnished to a beneficiary at the FQHC,
        Services (HHS) to meet the requirements for       the beneficiary’s place of residence, or elsewhere (e.g., at
        receiving such a grant (i.e., qualifies as a      the scene of an accident). A FQHC generally furnishes
        FQHC look-alike) based on the recommenda-         the following services:
        tion of the Health Resources and Services             ■ Physician services;
        Administration;                                       ■ Services and supplies incident to the services
   ■ Was treated by the Secretary of the Depart-                  of physicians;
        ment of HHS for purposes of Medicare                  ■ Nurse practitioner (NP), physician assistant
        Part B as a comprehensive Federally funded                (PA), certified nurse midwife (CNM), clinical
        health center as of January 1, 1990; or                   psychologist (CP), and clinical social worker
   ■ Is operating as an outpatient health program                 (CSW) services;
        or facility of a tribe or tribal organization         ■ Services and supplies incident to the services
        under the Indian Self-Determination Act or                of NPs, PAs, CNMs, CPs, and CSWs;




                               F EDER A L LY QU AL IF IED HEAL T H C ENT ER F AC T SHEET
                                                          1
   ■ Visiting nurse services to the homebound in              ■ Clinical breast examination;
       an area where the Centers for Medicare &               ■ Referral for mammography; and
       Medicaid Services (CMS) has determined that
                                                              ■ Thyroid function test.
       there is a shortage of Home Health Agencies;
   ■ Otherwise covered drugs that are furnished           Federally Qualified Health
       by, and incident to, services of physicians and    Center Preventive Primary
       nonphysician practitioners of the FQHC; and        Services that are NOT Covered
   ■ Outpatient diabetes self-management training         FQHC preventive primary services that are NOT
       and medical nutrition therapy for beneficiaries    covered include:
       with diabetes or renal disease (effective for          ■ Group or mass information programs, health
       services furnished on or after January 1, 2006).          education classes, or group education activities
FQHCs also furnish preventive primary health services            including media productions and publications;
when furnished by or under the direct supervision of a           and
physician, NP, PA, CNM, CP, or CSW. The following             ■ Eyeglasses, hearing aids, and preventive
preventive primary health services are covered when              dental services.
furnished by FQHCs to Medicare beneficiaries:             Items or services that are covered under Part B, but
   ■ Medical social services;                             are NOT FQHC services include:
   ■ Nutritional assessment and referral;                     ■ Certain laboratory services;

   ■ Preventive health education;                             ■ Durable medical equipment, whether rented
                                                                 or sold, including crutches, hospital beds,
   ■ Children’s eye and ear examinations;
                                                                 and wheelchairs used in the beneficiary’s
   ■ Well child care including periodic screening;               place of residence;
   ■ Immunizations including tetanus-diphtheria               ■ Ambulance services;
       booster and influenza vaccine;                         ■ The technical component of diagnostic tests
   ■ Voluntary family planning services;                         such as x-rays and electrocardiograms;
   ■ Taking patient history;                                  ■ The technical component of the following
   ■ Blood pressure measurement;                                 preventive services:
   ■ Weight measurement;                                            Screening pap smears;

   ■ Physical examination targeted to risk;                         Prostate cancer screening;

   ■ Visual acuity screening;
                                                                    Colorectal cancer screening tests;
                                                                    Screening mammography; and
   ■ Hearing screening;
                                                                    Bone mass measurements;
   ■ Cholesterol screening;
   ■ Stool testing for occult blood;
   ■ Tuberculosis testing for high risk beneficiaries;
   ■ Dipstick urinalysis; and
   ■ Risk assessment and initial counseling
       regarding risks.
For women only:
   ■ Prenatal and post-partum care;
   ■ Prenatal services;

                          F EDER A L LY Q U AL IFI ED H EAL T H C EN T ER F AC T SHEET
                                                          2
   ■ Prosthetic devices that replace all or part of an       area for FQHC payment limit purposes.
       internal body organ including colostomy bags,         Freestanding FQHCs must complete Form
       supplies directly related to colostomy care,
                                                             CMS-222-92, Independent Rural Health Clinic and
       and the replacement of such devices; and
                                                             Freestanding Federally Qualified Health Center
   ■ Leg, arm, back, and neck braces and artificial          Cost Report, in order to identify all incurred costs
       legs, arms, and eyes including replacements           applicable to furnishing covered FQHC services.
       (if required because of a change in the               Form CMS-222-92 can be found in the Provider
       beneficiary’s physical condition).
                                                             Reimbursement Manual—Part 2 (Pub. 15-2),
Federally Qualified                                          Chapter 29, located at http://www.cms.hhs.gov/
Health Center Payments                                       Manuals/PBM/list.asp on the CMS website.

Generally, Medicare pays FQHCs (which are considered         Provider-based FQHCs must complete the appropriate
suppliers of Medicare services) an all-inclusive per visit   worksheet designated for FQHC services within the
payment amount based on reasonable costs as reported         parent provider’s cost report. For example, FQHCs
on its annual cost report. The beneficiary pays no Part      based in a hospital complete Worksheet M of Form
B deductible for FQHC services but is responsible for        CMS-2552-96, Hospital and Hospital Complex Cost
paying the coinsurance with the exception of FQHC-           Report. At the beginning of the FQHC’s fiscal year, the
supplied influenza and pneumococcal vaccines, which          Fiscal Intermediary or A/B Medicare Administrative
are paid at 100 percent. Generally, the coinsurance for      Contractor calculates an interim all-inclusive visit rate
FQHC services is 20 percent of the clinic’s reasonable       based on either estimated allowable costs and visits
and customary charge except for psychological or             from the FQHC (if it is new to the FQHC Program)
psychiatric therapeutic services (generally furnished by     or on actual costs and visits from the previous cost
CPs and CSWs), which are subject to the 62.5 percent         reporting period (for existing FQHCs). The FQHC’s
outpatient mental health treatment limitation. This limit    interim all-inclusive visit rate is reconciled to actual
does not apply to diagnostic services. The application       reasonable costs at the end of the cost reporting
of the outpatient mental health treatment limitation         period. Form CMS-2552-96 can be found in the
increases the beneficiary’s copayment to 50 percent of       Provider Reimbursement Manual—Part 2 (Pub. 15-2),
the clinics’s reasonable and customary charge.               Chapter 36, located at http://www.cms.hhs.gov/
                                                             Manuals/PBM/list.asp on the CMS website.
The FQHC all-inclusive visit rate is calculated, in
general, by dividing the FQHC’s total allowable              Influenza and Pneumococcal
cost by the total number of visits for all FQHC              Vaccine Administration and Payment
patients. The FQHC payment methodology includes              The cost of the influenza and pneumococcal vaccines
two national per-visit upper payment limits—one              and related administration are separately reimbursed at
for urban FQHCs and one for rural FQHCs. The                 annual cost settlement. There is a separate worksheet
two national FQHC per-visit upper payment limits             on the cost report to report the cost of these vaccines
are increased annually by the Medicare Economic              and related administration. These costs should not be
Index applicable to primary care physician services.         reported on a FQHC claim when billing for FQHC
A FQHC is designated as an urban or rural entity             services. The beneficiary pays no Part B deductible
based on definitions in Section 1886(d)(2)(D) of the         or coinsurance for these services. When a FQHC
Act. If a FQHC is not located within a Metropolitan          practitioner (e.g., a physician, NP, PA, or CNM) sees
Statistical Area (now generally known as a Core Based        a beneficiary for the sole purpose of administering
Statistical Area) or New England County Metropolitan         these vaccinations, the FQHC may not bill for a visit;
Area, it is considered rural and the rural limit applies.    however, the associated costs are included on the
Rural FQHCs cannot be reclassified into an urban             annual cost report and reimbursed at cost settlement.

                            F EDER A L LY Q U AL IFI ED H EAL T H C EN T ER F AC T SHEET
                                                             3
Hepatitis B Vaccine                                                                                                                      Medicare Prescription Drug,
Administration and Payment                                                                                                               Improvement, and Modernization Act of
The cost of the Hepatitis B vaccine and related                                                                                          2003 Provisions that Impact
administration are covered under the FQHC’s all-                                                                                         Federally Qualified Health Centers
inclusive rate. If other services that constitute a                                                                                      Section 410 of the Medicare Prescription Drug,
qualifying FQHC visit are furnished at the same time as                                                                                  Improvement, and Modernization Act of 2003 states
the Hepatitis B vaccination, the charges for the vaccine                                                                                 that professional services furnished on or after
and related administration can be included in the                                                                                        January 1, 2005 by physicians, NPs, PAs, and CPs who
charges for the visit when billing and in calculating                                                                                    are affiliated with FQHCs are excluded from the Skilled
the coinsurance. When a FQHC practitioner                                                                                                Nursing Facility Prospective Payment System, in the
(e.g., a physician, NP, PA, or CNM) sees a beneficiary                                                                                   same manner as such services would be excluded if
for the sole purpose of administering a Hepatitis B                                                                                      furnished by individuals not affiliated with FQHCs.
vaccination, the FQHC may not bill for a visit; however,                                                                                 To find additional information about FQHCs, see Chapter 9
the associated costs are included on the annual cost                                                                                     of the Medicare Claims Processing Manual (Pub. 100-4)
report. Charges for the Hepatitis B vaccine may be                                                                                       and Chapter 13 of the Medicare Benefit Policy Manual
included on a claim for the beneficiary’s subsequent                                                                                     (Pub. 100-2) at http://www.cms.hhs.gov/Manuals and the
FQHC visit and used in calculating the coinsurance.                                                                                      Federally Qualified Health Centers Center at http://www.
                                                                                                                                         cms.hhs.gov/center/fqhc.asp on the CMS website.

                                                                                     HELPFUL RURAL HEALTH WEBSITES
       CENTERS FOR MEDICARE & MEDICAID SERVICES’                                                                                         OTHER ORGANIZATIONS’ WEBSITES
       WEBSITES                                                                                                                          American Hospital Association Section for Small or
       CMS Manuals                                                                                                                       Rural Hospitals
        http://www.cms.hhs.gov/Manuals                                                                                                     http://www.aha.org/aha/key_issues/rural/index.html
       Critical Access Hospital Center                                                                                                   Health Resources and Services Administration
         http://www.cms.hhs.gov/center/cah.asp                                                                                             http://www.hrsa.gov
       Federally Qualified Health Centers Center
                                                                                                                                         National Association of Community Health Centers
         http://www.cms.hhs.gov/center/fqhc.asp
                                                                                                                                           http://www.nachc.org
       Hospital Center
         http://www.cms.hhs.gov/center/hospital.asp                                                                                      National Association of Rural Health Clinics
                                                                                                                                           http://www.narhc.org
       HPSA/PSA (Physician Bonuses)
         http://www.cms.hhs.gov/                                                                                                         National Rural Health Association
         hpsapsaphysicianbonuses/01_overview.asp                                                                                           http://www.nrharural.org
       Medicare Learning Network                                                                                                         Rural Assistance Center
        http://www.cms.hhs.gov/MLNGenInfo                                                                                                  http://www.raconline.org
       MLN Matters Articles                                                                                                              U.S. Census Bureau
        http://www.cms.hhs.gov/MLNMattersArticles                                                                                          http://www.Census.gov
       Rural Health Center
         http://www.cms.hhs.gov/center/rural.asp
       Telehealth
         http://www.cms.hhs.gov/Telehealth
This fact sheet was prepared as a service to the public and is not intended to grant rights or impose obligations. This fact sheet may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be
a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations, and other interpretive materials for a full and accurate statement of their contents.
The Medicare Learning Network (MLN) is the brand name for official CMS educational products and information for Medicare fee-for-service providers. For additional information visit the Medicare Learning Network’s web page at http://www.cms.hhs.
gov/MLNGenInfo/ on the CMS website.
Medicare Contracting Reform (MCR) Update
In Section 911 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) Congress mandated that the Secretary of the Department of Health and Human Services replace the current contracting authority under Title XVIII of
the Social Security Act with the new Medicare Administrative Contractor (MAC) authority. This mandate is referred to as Medicare Contracting Reform. Medicare Contracting Reform is intended to improve Medicare’s administrative services to beneficiaries
and health care providers. All Medicare work performed by Fiscal Intermediaries and Carriers will be replaced by the new A/B MACs by 2011. Providers may access the most current MCR information to determine the impact of these changes and to view
the list of current MACs for each jurisdiction at http://www.cms.hhs.gov/MedicareContractingReform on the CMS website.                                                                                                                        April 2008 ICN: 006397


                                                            F EDER A L LY Q U AL IFI ED H EAL T H C EN T ER F AC T SHEET
                                                                                                                                         4
  k aiser
     commission                             on
                                                        medicaid
                                                           and the
                                                                   unin sured
                                                                                                                                                                 March 2009
                                              Community Health Centers
Community health centers represent a key component of the
health care system, providing comprehensive primary care to                                                              Figure 1


16.1 million patients in 2007. Nearly all health center                     Health Center Patients by Income, 2007
patients have low family incomes and live in medically
underserved communities, and many have complex medical                                                        >200% FPL
conditions. Health centers serve as an important source of                                                       9%
                                                                                                               (1.2 million)
care for these patients, but their role is even more critical
during an economic recession when families are more
                                                                                        101-200% FPL
vulnerable to economic loss and unmet health care needs.                                     21%
                                                                                            (3.2 million)


KEY CHARACTERISTICS OF HEALTH CENTERS
                                                                                                                                               <100% FPL
Health centers operate 7,200 sites throughout the United                                                                                          70%
                                                                                                                                                (10.6 million)
States, particularly in economically depressed inner-city and
rural communities. Over the past ten years, as the number                                                     Total = 16.1 million
of health center sites has grown, the number of patients
served at health centers has nearly doubled, from 8.3 million      SOURCE: GWU Department of Health Policy analysis of 2007 UDS data, HRSA.
to 16.1 million in 2007. Health centers include two types of
clinics: those that receive federal funding under Section 330    In part because of their low-income, three-quarters of health
of the Public Health Service Act, as well as clinics that meet   center patients are uninsured or covered by Medicaid. In
all requirements applicable to federally funded health centers   2007, nearly 40 percent of all health center patients were
are supported through state and local grants. Both types of      uninsured and another 35 percent were covered by
community health centers are classified as “federally            Medicaid. While 16 percent of health center patients have
qualified health centers” (FQHCs), a designation that entitles   some level of private health insurance, research suggests
them to special payment rates under Medicare, Medicaid,          that many of these patients have policies that have high
and the Children’s Health Insurance Program (CHIP).              deductibles and cost-sharing and limited coverage, leaving
                                                                 them un- or underinsured for key services (Figure 2).
Federal law requires that health centers must:
ƒ Be located in, or targeted to serve, populations and                                                                   Figure 2

   communities that are medically underserved or                                              Health Center Patients
   experience a shortage of primary care professionals;                                      by Insurance Status, 2007
ƒ Provide a comprehensive array of specified primary
   health care services and fully participate in government                                                                               Private
                                                                                                                                            16%
   insurance programs;                                                                                                                  (2.5 million)

ƒ Establish sliding fee scales based on patients’ ability to                                Uninsured
                                                                                                 39%
   pay for care; and                                                                        (6.2 million)

ƒ Have community boards, a majority of whose members
   are health center patients.
                                                                                                                                              Medicaid
PATIENTS SERVED BY HEALTH CENTERS                                                             Other Public                                     35%
                                                                                                   2%                                     (5.7 million)
                                                                                              (0.4 million)    Medicare
Health center patients are predominantly low-income and                                                            8%
                                                                                                              (1.2 million)
racially and ethnically diverse. In 2007, 70 percent of all
                                                                                                            Total = 16.1 million
patients had family incomes at or below 100 percent of the
federal poverty level ($21,203 for a family of four) and more      SOURCE: GW Department of Policy analysis of 2007 UDS data, HRSA.

than 90 percent of patients had family incomes at or below
twice the poverty level (Figure 1). In 2007, minority patients   SERVICES, ACCESS AND QUALITY
comprised half of all health center patients, and one-third of
all health center patients were of Hispanic/Latino ethnicity.    Health centers provide primary and preventive care services
Health centers serve one in four low-income minority             to a complex population. Health centers also increasingly
residents. They also provide services to rural and homeless      provide, or arrange for, an array of services including dental
populations, and to migrant workers, all of whom would           and mental health care. Health centers play an especially
otherwise not likely have access to care.                        important role for low-income women of childbearing age,


                    /   K C M U
kaiserission
  com m
infants, and children. In 2007, approximately one in eight                                                                                                                             Figure 4

low-income babies was born to health center patients.                                                                                        Health Center Patients and Revenues by
Health centers serve an important role in improving access                                                                                         Payer Source, 1985 to 2007
to care and reducing disparities.                                                                                                                      Medicaid          Uninsured          Private       Medicare          Other

                                                                                                                                                                                                     2%
                                                                                                                                               9%                                                              8%
Research shows that on measures for which data have been                                                                                      14%                   29%                                                            29%
                                                                                                                                                                                                              16%
collected, the quality of care provided to health center
                                                                                                                                                                    5%                                                              6%
patients is comparable to the care received in other health                                                                                                                                                                         7%
                                                                                                                                                                                                              39%
care settings and to some national benchmarks. Research                                                                                       49%
                                                                                                                                                                                                                                   21%
                                                                                                                                                                    51%
also shows that Medicaid and uninsured patients served in
health centers are more likely to receive preventive services                                                                                                                                                 35%                  37%
                                                                                                                                              28%
such as counseling on diet, smoking cessation, and alcohol                                                                                                          15%

consumption, than in other practice settings.                                                                                              Patients            Revenues                                    Patients            Revenues
                                                                                                                                                        1985                                                            2007
While health centers are able to provide comprehensive                                                                         NOTE: 1985 Other revenue includes Private Insurance revenue
                                                                                                                               SOURCE: Center for Health Services Research and Policy analysis of 2007 UDS, HRSA; 1985 estimates

primary care, access to specialty care for patients with                                                                       by NACHC using BCRR data (no private revenue data provided for 1985).



complex medical problems is limited due to a lack of
available providers, particularly for uninsured and Medicaid                                                              CHALLENGES AND OPPORTUNITIES
patients (Figure 3). It is especially difficult to refer these
patients for mental health and substance abuse services.                                                                  The current economic recession has led to economic
                                                                                                                          instability and unmet health needs for many families. While
                                                                                                                          health centers are uniquely positioned to provide care to
                                                           Figure 3                                                       these families, meeting the increased demand for services
          Patient Visits Experiencing Referral Difficulties,                                                              will be a challenge.
                        by Coverage Source:
           Health Centers and Physician Practices, 2006                                                                   Federal support has been especially important in health
                                                                                          Physician Office                centers’ ability to meet the ongoing needs of their patients.
                 72%
                                                              Health Center
                                                                                                                          The Health Care Safety Net Act of 2008 reauthorizes the
                                                                                                                          health centers program for four years and anticipates
                                          54%
                                                                                                                          program growth of 50 percent over this time period. Other
                        39%                       40%                                                                     recent legislation provides support in the areas of capital
                                                                                                                          investment, workforce, modernization, and operations, and
                                                                    14%
                                                                           10%               12% 14%                      extends to CHIP the same payment methodology for health
                                                                                                                          centers that is used in Medicaid.
                 Uninsured                 Medicaid                   Medicare                 Private
                                                                                                                          While these legislative actions should strengthen health
    SOURCE: CDC/NCHS, 2006 National Ambulatory Medical Care Survey by Esther Hing and David A. Woodwell, Differences in
                                                                                                                          centers, other challenges remain. Across the country, the
    physician visits at community health centers and physician offices: United States, 2008.
                                                                                                                          primary care workforce has been unable to keep up with
                                                                                                                          growing demand. Health centers, especially those in rural
                                                                                                                          locations, will continue to struggle to attract and retain
FINANCING                                                                                                                 clinical staff. Barriers to referring Medicaid and uninsured
                                                                                                                          patients for specialty care will also be a major obstacle to
Health Centers depend on a combination of Medicaid                                                                        obtaining needed services. Additionally, health centers may
payments, grant revenues, and other sources of funding to                                                                 struggle to afford health information technology that care
support their operations. Over the years, the funding mix                                                                 providers across the country are looking to adopt.
that health centers receive has significantly changed (Figure
4). As grants have declined, health center expansions have                                                                Despite these challenges, health centers remain an essential
been fueled by Medicaid growth resulting from eligibility                                                                 part of our health care system. As the country prepares for a
expansions, coverage reforms, and changed payment rules.                                                                  major debate over how to reform the health care system and
                                                                                                                          provide coverage to the 45 million uninsured, understanding
In 1985, Medicaid patients reflected 28 percent of all patients                                                           the components of the current system will be important. The
but only 15 percent of revenues. By 2007, Medicaid patients                                                               health reform debate will likely focus on health coverage, but
and revenues were aligned while grants for the care of the                                                                also on access, quality, and efficiency. In light of their critical
uninsured decreased from 51 percent to 21 percent. At the                                                                 position in the health care system, health centers appear to
same time, private insurance represented 16 percent of                                                                    lie at the nexus of this broadened concept of health reform.
patients but only 6 percent of operating revenues.
                                                                                                                          This publication (#7877) is available on the Kaiser Family Foundation’s
                                                                                                                          website at www.kff.org.
 F A C T
 SHEET



  Rural Health Clinic
       RURAL HEALTH CLINIC (RHC) PROGRAM was established in 1977 to address an inadequate supply
T HE
   of physicians who serve Medicare and Medicaid beneficiaries in rural areas. The program provides
qualifying Clinics located in rural and medically underserved communities with payment on a cost-related
basis for outpatient physician and certain nonphysician services. For RHC purposes, any area that is not
defined by the U.S. Census Bureau as urbanized is considered non-urbanized. RHCs are located in areas
that are designated or certified by the Secretary of the Department of Health and Human Services as
Health Professional Shortage Areas (HPSA) or Medically Underserved Areas (MUA). A Clinic cannot be
Medicare approved concurrently as a RHC and a Federally Qualified Health Center.

Rural Health Clinic Services
RHCs furnish the following:
       Physicians’ services;
       Services and supplies incident to the
       services of physicians;
       Services of registered dietitians or
       nutritional professionals for diabetes
       training services and medical nutrition
       therapy (the costs of such services are
       covered but not as a billable RHC visit);                    & Medicaid Services (CMS) has certified a
       Otherwise covered drugs that are                             shortage of home health agencies exists.
       furnished by, and incident to, services of
       physicians and nonphysician practitioners           Rural Health
       of the RHC;                                         Clinic Designation
       Services of nurse practitioners (NP),               To qualify as a Rural Health Clinic, a Clinic must
                                                           be located in:
       physician assistants (PA), certified nurse
       midwives (CNM), clinical psychologists                     A non-urbanized area, as defined by the
       (CP), and clinical social workers (CSW);                   U.S. Census Bureau, and in an area with
                                                                  one of the following current designations:
       Services and supplies incident to the
       services of NPs, PAs, CNMs, CPs, and                         • MUA;
       CSWs; and                                                    • Geographic or population-based HPSA; or
       Visiting nurse services to the homebound                     • Governor-designated and Secretary-
       in an area where the Centers for Medicare                       certified shortage area.



                                     R U R A L H E A LT H C L I N I C FA C T S H E E T
                                                            1
A shortage or underserved designation must
have been designated or redesignated in the
current year or in one of the previous three
years. A RHC must also:
       Employ a midlevel practitioner who is avail-
       able to furnish services at least 50 percent
       of the time the Clinic is furnishing services;
       Furnish routine diagnostic and laboratory
       services;
       Establish arrangements with providers and
       suppliers to furnish medically necessary
       services not available at the Clinic; and
       Furnish first response emergency care.

Rural Health Clinic Payments                                  claim when billing for RHC services. There is no
Payment for RHC services furnished to Medicare                coinsurance or deductible for these services;
patients is made on the basis of an all-inclusive             therefore, when these vaccines are administered,
rate per covered visit with the exception of                  the charges for the vaccines and related adminis-
psychological or psychiatric therapeutic services.            tration are never included with the visit charges
All therapeutic services furnished by CSWs and                when calculating coinsurance or deductible for
CPs are subject to the outpatient mental health               the visit. When a RHC physician, PA, NP or   ,
treatment limitation. This limit does not apply to            CNM sees a beneficiary for the sole purpose of
diagnostic services. A visit is defined as a face-to-         administering these vaccinations, the RHC may
face encounter between the patient and one of                 not bill for a visit; however, the associated costs
the following practitioners, during which a RHC               should still be included on the annual cost report.
service is furnished:                                         The cost of the Hepatitis B vaccine and related
       A physician;                                           administration are covered under the RCH’s all-
       NP;                                                    inclusive rate. If other services that constitute a
       PA;                                                    qualifying RHC visit are furnished at the same
                                                              time as the Hepatitis B vaccination, the charges
       CNM;
                                                              for the vaccine and related administration can be
       CP;
                                                              included in the charges for the visit when billing
       CSW; or                                                and in calculating the coinsurance and /or
       Visiting nurse (in very limited cases).                                                    ,
                                                              deductible. When a physician, NP PA, or CNM
The cost of the influenza and pneumococcal                    sees a beneficiary for the sole purpose of admin-
vaccines and related administration are separately            istering a Hepatitis B vaccination, he or she may
reimbursed at annual cost settlement. There is a              not bill for a visit; however, the associated costs
separate worksheet on the Independent Rural                   should still be included on the annual cost
Health Clinic and Freestanding Federally                      report. Charges for the Hepatitis B vaccine may
Qualified Health Center Cost Report to report the             be included on a claim for the beneficiary’s
cost of these vaccines and related administration.            subsequent RHC visit and in calculating co-
These costs should never be reported on the                   insurance and/or deductible.

                                   R U R A L H E A LT H C L I N I C FA C T S H E E T
                                                               2
Encounters at a single location on the same day              to furnishing covered Clinic services and the
with more than one health professional and                   RHC’s appropriate share of the parent provider’s
multiple encounters with the same health profes-             overhead costs. A RHC that is provider-based to
sional constitute a single visit, except when one            a hospital with less than 50 beds is not subject
of the following conditions exist:                           to the national per-visit payment ceiling and has
       The patient suffers an illness or injury              an encounter rate that is based on its full reason-
       requiring additional diagnosis or treat-              able cost. If a RHC is in its initial reporting
       ment subsequent to the first encounter; or            period, the all-inclusive visit rate is determined
       The patient has a medical visit AND a                 on the basis of a budget the RHC submits. The
       clinical psychologist or clinical social              budget estimates the allowable cost that will be
       worker visit.                                         incurred by the RHC during the reporting period
Payment is made directly to RHCs for covered                 and the number of visits for RHC services expected
services furnished to a patient at the Clinic, the           during the reporting period. Form CMS-2552-96
patient’s place of residence, or elsewhere (e.g.,            can be found in the Provider Reimbursement
the scene of an accident). Laboratory tests are              Manual–Part 2 (Pub. 15-2), Chapter 36, which can
paid separately.                                             be found at www.cms.hhs.gov/Manuals/PBM/
The Medicare Part B deductible applies to RHC                list.asp on the CMS website.
services and is based on billed charges.                     To determine the payment rate for new RHCs
Noncovered expenses do not count toward the                  and for those that have submitted cost reports,
deductible. After the deductible has been                    the Fiscal Intermediary (FI) applies screening
satisfied, RHCs will be paid 80 percent of the all-          guidelines and the maximum payment per-visit
inclusive interim encounter payment rate for                 limitation as described below. For subsequent
each RHC visit with the exception of all psycho-             reporting periods, the all-inclusive visit rate is
logical or psychiatric therapeutic services                  determined, at the discretion of the FI, on the
furnished by CSWs and CPs.                                   basis of a budget or the prior year’s actual costs
Independent RHCs must complete Form                          and visits with adjustments to reflect anticipated
CMS-222-92, Independent Rural Health Clinic and              changes in expenses or utilization.
Freestanding Federally Qualified Health Center               In general, the payment rate is calculated by
Cost Report, in order to identify all incurred costs         dividing the total allowable cost by the number
applicable to furnishing covered Clinic services             of total visits for RHC services. At the end of the
including RHC direct costs and any shared costs              annual cost reporting period, RHCs submit a
applicable to the RHC. An independent RHC is                 report to the FI that includes actual allowable
limited to the yearly national RHC per-visit                 costs and actual visits for RHC services for the
payment ceiling for its encounter rate. Form                 reporting period and any other information that
CMS-222-92 can be found at www.cms.hhs.gov/                  may be required. After reviewing the report, the
CMSForms/CMSForms/list.asp on the                            FI divides actual allowable costs by the number
CMS website.                                                 of actual visits to determine a final rate for the
Provider-based RHCs must complete Worksheet                  period. Both the final rate and the interim rate
M of Form CMS-2552-96, Hospital Cost Report,                 are subject to screening guidelines for evaluating
in order to identify all incurred costs applicable           the reasonableness of the Clinic’s productivity,
                                                             payment limit, and mental health treatment limit.

                                  R U R A L H E A LT H C L I N I C FA C T S H E E T
                                                              3
Annual Reconciliation                                                                                                                    Prospective Payment System, in the same manner
                                                                                                                                         as such services would be excluded if furnished
At the end of the annual cost reporting period,
                                                                                                                                         by individuals not affiliated with RHCs.
the FI determines the total payment due and the
amount necessary to reconcile payments made
during the period with the total payment due.

Medicare Prescription
Drug, Improvement, and
Modernization Act of 2003
Section 410 of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003
states that professional services furnished on or
after January 1, 2005, by physicians, PAs, NPs,
and CPs who are affiliated with RHCs are
excluded from the Skilled Nursing Facility

                                                                                     HELPFUL RURAL HEALTH WEBSITES
         CENTERS FOR MEDICARE & MEDICAID SERVICES’ WEBSITES
         CMS Forms                                                                                                                               Rural Health Center
           www.cms.hhs.gov/CMSForms/CMSForms/list.asp                                                                                              www.cms.hhs.gov/center/rural.asp
         CMS Mailing Lists                                                                                                                       Telehealth
           www.cms.hhs.gov/apps/mailinglists                                                                                                        www.cms.hhs.gov/Telehealth
         Critical Access Hospital Provider Center
            www.cms.hhs.gov/center/cah.asp
         Federally Qualified Health Centers Provider Center                                                                                      OTHER ORGANIZATIONS’ WEBSITES
           www.cms.hhs.gov/center/fqhc.asp
                                                                                                                                                 American Hospital Association Section for Small or
         Hospital Provider Center                                                                                                                Rural Hospitals
           www.cms.hhs.gov/center/hospital.asp                                                                                                     www.aha.org/aha/key_issues/rural/index.html
         HPSA/PSA (Physician Bonuses)                                                                                                            Government Printing Office—Code of Federal Regulations
           www.cms.hhs.gov/HPSAPSAPhysicianBonuses                                                                                                 www.gpoaccess.gov/cfr/index.html
         Internet-Only Manuals
            www.cms.hhs.gov/Manuals/IOM/list.asp                                                                                                 Health Resources and Services Administration
                                                                                                                                                   www.hrsa.gov
         Paper-Based Manuals
           www.cms.hhs.gov/Manuals/PBM/list.asp                                                                                                  National Association of Community Health Centers
                                                                                                                                                   www.nachc.org
         Medicare Learning Network
           www.cms.hhs.gov/MLNGenInfo                                                                                                            National Association of Rural Health Clinics
         Medicare Modernization Update                                                                                                             www.narhc.org
           www.cms.hhs.gov/MMAUpdate/MMU/list.asp
                                                                                                                                                 National Rural Health Association
         MLN Matters Articles                                                                                                                      www.nrharural.org
           www.cms.hhs.gov/MLNMattersArticles
                                                                                                                                                 Rural Assistance Center
         Physician’s Resource Partner Center
                                                                                                                                                   www.raconline.org
           www.cms.hhs.gov/center/physician.asp
         Regulations & Guidance                                                                                                                  U.S. Census Bureau
           www.cms.hhs.gov/home/regsguidance.asp                                                                                                   www.census.gov

This fact sheet was p epared as a service to the public and is not intended to grant rights or impose obligations. This fact sheet may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be
a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations, and other interpretive materials for a full and accurate statement of their contents.
The Medicare Learning Network (MLN) is the brand name for official CMS educational products and information for Medicare fee-for-service providers. For additional information visit the Medicare Learning Network’s web page at
www.cms.hhs.gov/MLNGenInfo/ on the CMS website.
Medicare Contracting Reform (MCR) Update
Section 911 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) Congress mandated that the Secretary of the Department of Health and Human Services replace the current contracting authority under Title XVIII of the
Social Security Act with the new Medicare Administrative Contractor (MAC) authority. This mandate is referred to as Medica e Contracting Reform. Medicare Contracting Reform is intended to improve Medicare’s administrative services to beneficiaries and
health care providers. Currently, there are three Durable Medical Equipment (DME) MACs that handle the processing of DME claims and one A/B MAC (Jurisdiction 3) to handle the processing of both Part A and Part B claims for those beneficiaries located
within the states included in Jurisdiction 3. All Medicare work performed by Fiscal Intermediaries and Carriers will be replaced by the new A/B MACs by 2011. Providers may access the most cur ent MCR information to determine the impact of these
changes at www.cms.hhs.gov/MedicareContractingReform on the CMS website.
                                                                                                                                                                                                                                              June 2007 ICN: 006398

                                                                                   R U R A L H E A LT H C L I N I C FA C T S H E E T
                                                                                                                                          4

				
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