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Rural Hospital Flexibility Grants
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FY
2007 Actual |
FY
2008
Enacted |
FY
2009
Estimate |
FY
2009 +/-
FY 2008 |
BA |
$63,538,000 |
$37,865,000
|
--- |
-$37,865,000
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Authorizing Legislation - Section 1820(j), Title XVIII
of the Social Security Act.
FY
2009 Authorization |
$35,000,000 |
Allocation
Method |
Competitive
Grants |
Program
Description and Accomplishments
The Rural Hospital Flexibility activities are a component
of the Office of Rural Health Policy and support a
range of activities focusing on small rural hospitals
including Critical Access Hospitals. There are three
grant programs administered under this authority,
two of which work directly with small rural hospitals
while the third works to address health disparities
and address infrastructure challenges in the Delta
region of Mississippi.
The first program is the Rural Hospital Flexibility
(Flex) grant program, which began in 1999. This program
provides grants to States to support small rural and
critical access hospitals (CAHs). The purpose of the
program is to provide support to the more than 1,282
small, financially vulnerable hospitals that have
converted to Critical Access Hospital (CAH) status
by focusing on a range of performance and quality
improvement activities. The 45 grants awarded through
the program also encourage States to encourage CAHs
to work with rural emergency medical service providers
to promote coordination and integration of pre-hospital
care. In 2007, there was an additional $25 million
in this program which supported 16 additional grants
that focused on assisting CAHs and other health care
providers in implementing health information technology.
The second program is the Small Hospital Improvement
Program (SHIP), which began in 2002. This program
provides grants of about $9,000 to more than 1,600
eligible hospitals (hospitals of 50 beds or less located
in a rural area). The purpose of the program is to
assist small rural hospitals in quality and performance
improvement. The 48 grants awarded through this program
can be used to meet the requirements of the Medicare
Prospective Payments System; comply with the provisions
of the Health Insurance Portability and Accountability
Act (HIPAA); and/or reduce medical errors and support
quality improvement.
The Flex performance measures reflect efforts to increase
the financial viability of Critical Access Hospitals
(CAHs) so they can continue to provide needed access
to inpatient, outpatient and emergency care for isolated
rural communities. The program uses CAH financial
operating margin data as a measure of financial viability.
In FY 1997, when this designation first became available,
CAHs had an average operating margin of -28 percent.
The most recent period for which Medicare cost report
data is available shows that in FY 2006, CAHs had
an average operating margin of -8.8 percent, which
is an improvement from the original baseline margin
of -14.05 and better than the 2005 performance of
-9.6.
This program was covered in OMB’s combined PART
assessment of HRSA’s Rural Health Activities
during 2003. The rural health activities received
a rating of Adequate. (See earlier Office of Rural
Health Policy Summary Request.)
Funding includes costs associated with grant reviews,
processing of grants through the Grants Administration
Tracking and Evaluation System (GATES) and HRSA’s
electronic handbook, and follow-up performance reviews.
Funding History
FY
2004 |
$39,499,000
|
FY
2005 |
$39,180,000
|
FY
2006 |
$63,494,000 |
FY
2007 |
$63,538,000
|
FY
2008 |
$37,865,000 |
Budget Request
There is no FY 2009 request for this program. The
need for this program has decreased as the result
of the approximately $25 billion investment in rural
provisions within the Medicare Modernization Act of
2003 (MMA). There is no target for this program’s
performance measures because there is no request.
See Table
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