OFFICE OF RURAL HEALTH POLICY

The purpose of the Office of Rural Health Policy is to serve as a focal point for rural health activities within the Department. The Office meets that charge by serving as a policy and research resource on rural health issues. In addition, the Office administers several grant programs that focus on supporting and enhancing health care delivery in rural communities. Created in 1987, ORHP advises the Secretary and other components of the Department on rural health issues with a particular focus on working with rural hospitals and other rural health care providers to ensure access to high quality care in rural communities. The Department has maintained a significant focus on rural activities for 20 years. Historically, rural communities have struggled with issues related to access to care, recruitment and retention of health care providers and maintaining the economic viability of hospitals and other health care providers in isolated rural communities.

The administration requests $16,878,000 for Rural Health Activities, including:

• $8,737,000 for Rural Health Policy Development which reflects an increase of $153,000. Funding will support activities such as the rural health research center grant program as well as policy analysis and information dissemination activities on a range of rural health issues.
• There is no FY 2009 request for Rural Health Outreach, Network Development and Quality Improvement Grants, which reflects a reduction of $48,031,000. The reduction in support for these activities will be offset through other existing programs within HHS that can meet the same need.
• There is no FY 2009 request for Rural Hospital Flexibility Grants, which reflects a reduction of $37,865,000. The Rural Hospital Flexibility Grants have supported grants that assist small rural hospitals including Critical Access Hospitals (CAHs). The reduction in support for these activities will be met through other existing programs within HHS.
• The reduction in support for these activities will be offset by enhanced reimbursement for rural hospitals as a result of the Medicare Modernization Act of 2003 that included more than $25 billion in rural health payment improvements.
• $8,141,000 for State Offices of Rural Health Grants, which reflects an increase of $142,000. The State Offices of Rural Health Grants provide matching grants to States to ensure the existence of a focal point for rural health activity within each of the 50 States.
• There is no FY 2009 request for Rural Access to Emergency Devices Grants, which reflects a reduction of $1,461,000. The Rural Access to Emergency Devices Grants provide funds to rural communities for the purchase of automatic external defibrillators (AEDs) and the training of first responders in their use. The reduction in support for these activities will be met through other existing programs within HHS. Previous federal investments have largely met the need.
• There is no FY 2009 request for the Denali Commission, which reflects a reduction of $38,597,000. The Denali Commission, an Agency of the Department of Commerce, supports the planning, designing and construction of health care facilities in Alaska. The reduction in support for these activities is offset by previous Federal investments which have largely met the need. This activity has already received more than $300 million in funding since 2000.
• There is no FY 2009 request for the Delta Health Initiative, which reflects a reduction of $24,563,000. The purpose of this grant is to meet health care needs in the rural Delta region of the State of Mississippi with an emphasis on improving access to rural health care services, increased rural training of health care professionals, implementation of electronic health records, and the construction of healthcare facilities. Other programs in HRSA address many of these needs

The ORHP programs have two annual performance measures. The Rural Health Care Services Outreach program served 627,120 individuals in 2006, the most recent year for which data are available. The Rural Hospital Flexibility Grant program has helped improve operating margins for Critical Access Hospitals (CAHs) with these facilities reporting a -8.8 operating margin in 2006, an improvement from 2005 when CAHs had an average operating margin of -9.6 percent. This reflects a continued improvement trend as the targets have been exceeded each year since the benchmark margin of -14.05 operating margin was set based on 1999 data. There is no request to support these rural activities in the 2009 budget so there is no target for performance measures.

The ORHP programs went through the PART process as a single entity (Rural Health Activities) in 2003. The program received a rating of Adequate. The review noted that some of its programs may be duplicative of other programs within HHS and that one of the primary challenges for the programs comes from flaws in the program’s various program authorizations, which are fragmented. As a result of the review, ORHP is developing new health and quality-related annual performance measures to further demonstrate program accomplishments.

Funding History

Budget Request
The FY 2009 request of $16,878,000 will support the Rural Health Policy Development program and State Offices of Rural Health. This will continue funding for activities such as the rural health research center grant program as well as policy analysis and information dissemination activities on a range of rural health issues. The Budget reduces funding for smaller scale activities that have fulfilled their intended purpose or are duplicative of one of the hundred of HHS activities that focus on rural health care activities. Additionally, support for the State Offices of Rural Health Grants will provide matching grants to States to ensure the existence of a focal point for rural health activity within each of the 50 States.

Notes:

NA = For FY 2009: Not applicable as no funding is requested. Rural Health programs were reduced due to the
investment contained in the rural provisions of the Medicare Modernization Act of 2003.