    Health Professional Shortage Areas: Problems Remain with Primary
    Care Shortage Area Designation System (24-OCT-06, GAO-07-84).

    To identify areas facing shortages of health care providers, the
    Department of Health and Human Services (HHS) relies on its
    health professional shortage area (HPSA) designation system. HHS
    designates geographic, population-group, and facility HPSAs. HHS
    also gives each HPSA a score to rank its need for providers
    relative to other HPSAs. The Health Care Safety Net Amendments of
    2002 required GAO to report on the HPSA designation system. GAO
    reviewed (1) the number and location of HPSAs and federal
    programs that use HPSA designations to allocate resources or
    provide benefits, (2) available research on HPSA designation
    criteria and methodology, and (3) the impact of a 2002 provision
    that automatically designates federally qualified health centers
    and certain rural health clinics as facility HPSAs. GAO obtained
    and analyzed HHS's data on primary care HPSA designations as of
    September 2005 and January 2006 and identified reports on HPSA
    criteria and methodology through a literature search of
    peer-reviewed journals and other reports published since 1995.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-07-84
        ACCNO:   A62446
      TITLE:     Health Professional Shortage Areas: Problems Remain with
    Primary Care Shortage Area Designation System
         DATE:   10/24/2006
      SUBJECT:   Allocation (Government accounting)
    	     Eligibility criteria
    	     Health care facilities
    	     Health care personnel
    	     Health care programs
    	     Health care services
    	     Health statistics
    	     Labor shortages
    	     Population statistics
    	     Program evaluation
    	     HHS Health Professional Shortage Area
    	     System

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    GAO-07-84

         * Results in Brief
         * Background
         * HPSAs Are Located in Every State and Are Used by Multiple Fe
              * Number and Location of HPSAs
              * Federal Programs Using HPSA Designations
         * Research Points to Shortcomings with Designation Methodology
         * Many Health Centers and Rural Health Clinics Did Not Benefit
              * Relatively Few Health Centers Had HPSA Scores High Enough to
              * Few Rural Health Clinics Have Received Automatic HPSA Design
         * Conclusions
         * Recommendations for Executive Action
         * Agency Comments
         * GAO Contact
         * Acknowledgments
         * GAO's Mission
         * Obtaining Copies of GAO Reports and Testimony
              * Order by Mail or Phone
         * To Report Fraud, Waste, and Abuse in Federal Programs
         * Congressional Relations
         * Public Affairs

    Report to Congressional Committees

    United States Government Accountability Office

    GAO

    October 2006

    HEALTH PROFESSIONAL SHORTAGE AREAS

    Problems Remain with Primary Care Shortage Area Designation System

    GAO-07-84

    Contents

    Letter 1

    Results in Brief 5
    Background 8
    HPSAs Are Located in Every State and Are Used by Multiple Federal Programs
    14
    Research Points to Shortcomings with Designation Methodology 25
    Many Health Centers and Rural Health Clinics Did Not Benefit from
    Automatic HPSA Designation 29
    Conclusions 34
    Recommendations for Executive Action 35
    Agency Comments 35
    Appendix I Scoring of Health Professional Shortage Areas 38
    Appendix II Medically Underserved Area or Population Designations and
    Medically Underserved Community Definition 41
    Appendix III Scope and Methodology 45
    Appendix IV Federal Programs Using Health Professional Shortage Area and
    Other Designations of Underservice 49
    Appendix V Comments from the Department of Health and Human Services 55
    Appendix VI GAO Contact and Staff Acknowledgments 59
    Related GAO Products 60

    Tables

    Table 1: Number of, Population in, and Physicians Needed in Geographic and
    Population-Group HPSAs, September 2005 15
    Table 2: Programs and Administering Agencies That Used HPSA, MUA, MUP or
    Other Designations to Allocate Resources or Provide Benefits in Fiscal
    Year 2005 49

    Figures

    Figure 1: HPSA Designation Request and Review Process, 2005 9
    Figure 2: Types of HPSAs and Criteria Used to Designate Them, 2005 10
    Figure 3: U.S. Counties with Geographic and Population-Group HPSAs,
    January 2006 16
    Figure 4: Types of Facility HPSAs, September 2005 19
    Figure 5: Distribution of HPSA Scores among Health Centers Automatically
    Designated as Facility HPSAs, September 2005 31
    Figure 6: Distribution of HPSA Scores among Rural Health Clinics
    Automatically Designated as Facility HPSAs, September 2005 34
    Figure 7: Scoring of HPSAs, 2005 39

    Abbreviations

    CMS Centers for Medicare & Medicaid Services COGME Council on Graduate
    Medical Education HHS Department of Health and Human Services HPSA health
    professional shortage area HRSA Health Resources and Services
    Administration IHS Indian Health Service MUA medically underserved area
    MUP medically underserved population NHSC National Health Service Corps
    USCIS U.S. Citizenship and Immigration Services VA Department of Veterans
    Affairs

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
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    separately.

    United States Government Accountability Office

    Washington, DC 20548

    October 24, 2006

    The Honorable Michael B. Enzi Chairman The Honorable Edward M. Kennedy
    Ranking Minority Member Committee on Health, Education, Labor, and
    Pensions United States Senate

    The Honorable Richard Burr Chairman Subcommittee on Bioterrorism and
    Public Health Preparedness Committee on Health, Education, Labor, and
    Pensions United States Senate

    The Honorable Joe Barton Chairman The Honorable John D. Dingell Ranking
    Minority Member Committee on Energy and Commerce House of Representatives

    Many Americans live in areas, such as inner-city neighborhoods or isolated
    rural locations, where obtaining health care is difficult because health
    care providers are in short supply. To identify areas facing a critical
    shortage of providers, the Department of Health and Human Services (HHS)
    relies on its health professional shortage area (HPSA) designation
    system.1 Originally created in 1978 to identify areas in need of
    physicians and other health care providers from HHS's National Health
    Service Corps (NHSC) programs, HPSA designation is now used by a variety
    of federal programs-including programs that provide grants for health
    professions education and training or bonus payments under Medicare for
    physician services-to allocate resources or provide benefits.2

    1Throughout this report, we use the term HPSA to denote health
    professional shortage areas for primary care, which HHS considers to
    include medical specialties of general or family practice, general
    internal medicine, pediatrics, and obstetrics and gynecology. In addition
    to primary care HPSAs, HHS designates HPSAs for fields other than primary
    care, including dental and mental health.

    A HPSA can be a distinct geographic area (such as a county), a specific
    population group within an area (such as low-income individuals), or a
    specific health care facility. Facility HPSAs include federal or state
    correctional institutions, as well as federally qualified health
    centers-facilities that provide primary care services in underserved
    areas3-and certain rural health clinics-facilities that provide outpatient
    primary care services in rural areas.4 HHS's Health Resources and Services
    Administration (HRSA)-the HHS agency that manages the HPSA designation
    system-designates HPSAs based on the ratio of population to the number of
    primary care physicians and other factors.5 HRSA then assigns each HPSA a
    score on the basis of specific criteria that ranks its shortage of primary
    care providers, or need, relative to other HPSAs.6 Some federal health
    care programs, such as NHSC programs, allocate their resources on the
    basis of HPSA scores, not just HPSA designations.

    2HPSAs can be located in all states and the District of Columbia, as well
    as in American Samoa, the Commonwealth of the Northern Mariana Islands,
    the Federated States of Micronesia, Guam, Puerto Rico, the Republic of the
    Marshall Islands, the Republic of Palau, and the U.S. Virgin Islands.

    3Federally qualified health centers, referred to as health centers in this
    report, include (1) health centers that receive a grant or funding from a
    grant under the consolidated health center program authorized under
    section 330 of the Public Health Service Act; (2) facilities, called
    look-alikes, that are determined by the Secretary of Health and Human
    Services to meet the requirements for receiving such a grant; and (3)
    outpatient health programs or facilities operated by a tribe or tribal
    organization under the Indian Self-Determination Act or by an urban Indian
    organization receiving funds under title V of the Indian Health Care
    Improvement Act. Health centers are located in both urban and rural areas
    and are required to treat everyone regardless of ability to pay. According
    to data from HHS's Health Resources and Services Administration (HRSA),
    the agency that administers the consolidated health center program and
    certifies look-alikes, there were over 1,600 health centers as of
    September 2005.

    4Rural health clinics are located in rural areas and, unlike health
    centers, are not required to provide services to all individuals,
    regardless of their ability to pay. According to data from HHS's Centers
    for Medicare & Medicaid Services (CMS), the agency that certifies these
    clinics as rural health clinics for purposes of the Medicare and Medicaid
    programs, there were over 3,600 rural health clinics as of September 2005.

    5In addition to the ratio of population to primary care physicians, HPSA
    designation is based on other factors, such as health care resources
    available in neighboring areas. For those geographic HPSAs that have their
    HPSA designations on the basis of having unusually high needs for primary
    care services, the HPSA designations are also based on at least one of
    three other factors: the area's infant mortality rate, the percentage of
    the population with incomes below the poverty level, or the area's birth
    rate. See HRSA, Bureau of Health Professions, "Health Professional
    Shortage Area Primary Medical Care Designation Criteria,"
    http://bhpr.hrsa.gov/shortage/hpsacritpcm.htm (downloaded May 15, 2006).
    HRSA also automatically designates health centers and certain rural health
    clinics as facility HPSAs; these facilities are not required to meet a
    ratio of population to primary care physicians for HPSA designation.

    HHS's criteria and methodology for designating HPSAs has remained
    unchanged since October 1, 1993.7 In 1998, in an effort to improve the way
    underserved areas were designated, HHS published a proposal to revise the
    HPSA designation system.8 The department received more than 800 comments
    on its proposal from individuals and organizations, including individual
    physicians, state primary care organizations, and university or research
    organizations. These comments raised several issues, such as whether or
    how to count nonphysician providers, such as physician assistants, in the
    total number of practitioners serving a population; the potential number
    of HPSAs that would lose their HPSA designations because of changes in the
    designation criteria; and the incorporation of certain population factors,
    such as the percentage of elderly and uninsured individuals, which reflect
    a population's ability to access care. In response to these comments, HHS
    withdrew its 1998 proposal, and left the existing HPSA designation system
    in place while it began working on another proposal.

    The Health Care Safety Net Amendments of 2002 required that we report on
    the HPSA designation system and on a provision included in the act that
    automatically designates health centers and certain rural health clinics
    as facility HPSAs.9 As discussed with the committees of jurisdiction, this
    report discusses (1) the number and location of HPSAs and the federal
    programs that use HPSA designations to allocate resources or provide
    benefits, (2) available research on the criteria and methodology used to
    designate HPSAs, and (3) the impact of the automatic HPSA designation on
    health centers and rural health clinics.

    6Four factors, including factors used for HPSA designation, determine a
    HPSA's score-ratio of population to primary care physicians, percentage of
    the population with incomes below the poverty level, infant mortality rate
    or low birth weight rate, and time or distance to the nearest source of
    primary care. Each HPSA is scored on a scale of 0 to 25, with higher
    scores indicating greater relative need for primary care providers. See
    appendix I for additional information on HPSA scoring.

    7Since 1995 we have reported on shortcomings of the HPSA designation
    system. See GAO, Health Care Shortage Areas: Designations Not a Useful
    Tool for Directing Resources to the Underserved, GAO/HEHS-95-200
    (Washington, D.C.: Sept. 8, 1995), as well as "Related GAO Products" at
    the end of this report.

    863 Fed. Reg. 46538-55 (Sept. 1, 1998). The proposal included provisions
    to combine the HPSA designation system with HRSA's other designations of
    underservice: the medically underserved area (MUA) and medically
    underserved population (MUP) designations. See appendix II for more
    information on the MUA and MUP designations.

    To conduct our work, we examined relevant laws, regulations, and HHS
    documents related to the HPSA criteria in effect in 2005-criteria that had
    remained unchanged since 1993-and reviewed our prior work on the HPSA
    designation system. To determine the number of HPSAs, we interviewed
    officials from HRSA, who reported that precise, accurate, historical data
    on the total number of HPSAs were not available. Therefore, to estimate
    the number of HPSAs designated as of September 2005, we designed a
    methodology that used data from HRSA, including summary statistics on
    geographic and population-group HPSA designations and data files on the
    facilities that were automatically designated as HPSAs. We also analyzed a
    more detailed database of geographic and population-group HPSAs as of
    January 2006 in order to identify (1) the counties in which geographic and
    population-group HPSAs were located and (2) the HPSAs that were proposed
    for having their designations withdrawn because they no longer met the
    criteria or did not provide updated data in support of their designations.
    After taking steps to eliminate potential duplications or inconsistencies
    in the data we used, we determined that the data were sufficiently
    reliable for our purposes. To obtain information on HPSA designations and
    federal programs that use HPSA designations, we reviewed Federal Register
    notices and other documents obtained from HHS agencies-including HRSA, the
    Centers for Medicare & Medicaid Services (CMS), and the Indian Health
    Service (IHS)-and reviewed our prior work on these programs.

    To identify available research on the criteria and methodology used to
    designate HPSAs, we conducted a literature search of reports, including
    those published in peer-reviewed journals, issued from January 1, 1995,
    through November 1, 2005. We identified other published reports discussing
    the HPSA designation methodology, including one by the Council on Graduate
    Medical Education (COGME). Of the more than 340 articles, studies, and
    reports-which we refer to as reports-identified in the search, we
    identified 7 that addressed the relationship between key elements of the
    HPSA designation criteria, such as income, and primary care physician
    supply or shortages, or that addressed factors related to the HPSA
    designation methodology. We also interviewed researchers who have studied
    primary care provider shortages, as well as HRSA officials knowledgeable
    about the HPSA designation system. To review the impact of the automatic
    designation on health centers and rural health clinics, we analyzed HRSA's
    data on automatic HPSA designations, including the HPSA scores associated
    with automatic designation, and interviewed HRSA officials and officials
    from associations representing these types of facilities. We performed our
    work from August 2005 through September 2006 in accordance with generally
    accepted government auditing standards.10

    9Pub. L. No. 107-251, S: 302(a)(1)(A), (e); 116 Stat. 1621, 1643-1645.
    Under this act, health centers and those rural health clinics certifying
    that they serve all individuals, regardless of ability to pay,
    automatically receive designation as facility HPSAs.

                                    Results in Brief

    We identified more than 5,500 HPSAs designated throughout the United
    States as of September 2005; multiple federal programs relied on these
    designations to allocate resources or provide benefits. We estimated that
    slightly more than half of the HPSAs were designated for geographic areas
    or population groups, and these geographic and population-group HPSAs were
    located in all 50 states and the District of Columbia. Facility HPSAs,
    which accounted for slightly less than half of the total number of HPSAs,
    were also located in every state and the District of Columbia. In fiscal
    year 2005, more than 30 federal programs-including programs administered
    by HRSA, CMS, and federal agencies outside of HHS-relied on HPSA
    designations and, in some cases, HPSA scores, to allocate resources or
    provide benefits. These included NHSC programs that award scholarships or
    educational loan repayment to students and health professionals in
    exchange for a commitment to practice in HPSAs for at least 2 years. Other
    programs relying on HPSA designations to allocate resources or provide
    benefits included programs that pay physicians bonus payments for services
    provided to Medicare beneficiaries in geographic HPSAs and programs that
    waive certain requirements for foreign physicians if they agree to
    practice in HPSAs or other underserved areas of the United States. The use
    of the HPSA designation by numerous federal programs to allocate resources
    or provide benefits is an incentive for obtaining and retaining a HPSA
    designation.

    10See appendix III for additional information on our scope and
    methodology.

    Of the seven reports we identified that discuss the criteria and
    methodology used to designate HPSAs, one supported a relationship between
    a key element of the HPSA criteria and primary care physician supply,
    while the remaining six pointed to shortcomings in the methodology. The
    one report we identified that supported a key element of the criteria
    found that areas with higher incomes had more primary care physicians than
    areas with lower incomes. The other six reports included observations that
    were consistent with what we reported in 1995, including the fact that the
    HPSA designation methodology does not account for the presence of certain
    types of primary care providers in a HPSA, which can result in an
    overstatement of the shortage of primary care providers. Researchers have
    highlighted other problems in the methodology used to designate HPSAs,
    such as relying on geographic boundaries that do not necessarily reflect
    areas' health care needs. Recognizing the shortcomings of the current
    methodology, HHS has been working since 1998 on a proposal to revise the
    HPSA designation system, which, as of September 2006, was in the
    department's clearance process. In 1995, we reported on an additional
    problem involving the timeliness with which HRSA identified and removed
    the HPSA designations of those areas, population groups, and facilities
    that no longer met the HPSA criteria-a problem that has continued in
    recent years. For example, in 2005, the HHS Office of Inspector General
    reported that, as of 2003, HRSA had not reviewed HPSA designations in a
    timely manner. In addition, we found that since 2002, HHS has not complied
    with the statutory requirement to annually publish a list of designated
    HPSAs in the Federal Register or otherwise remove the HPSA designations
    for those HPSAs that either no longer meet the criteria or have not
    provided updated data in support of their designations. As a result, some
    HPSAs that no longer meet the criteria have retained their HPSA
    designations and possibly received benefits from federal programs that
    rely on the designation for allocating resources.

    Automatic HPSA designation of health centers and certain rural health
    clinics as facility HPSAs provided little or no benefit for many of these
    facilities. For health centers and rural health clinics located in
    geographic or population-group HPSAs before implementation of the 2002
    provision, automatic designation as a facility HPSA resulted in no added
    benefit unless the HPSA score associated with the automatic designation
    was higher than the score for the geographic or population-group HPSA in
    which the facility was located. Although precise data were not available,
    HRSA officials estimated that many of the more than 1,600 health
    centers-all of which received automatic designation as facility HPSAs-were
    located in geographic or population-group HPSAs before 2002. Of the more
    than 3,600 rural health clinics, 590 had certified they would treat
    everyone regardless of ability to pay and, as a result, received automatic
    HPSA designation as of September 2005; however, data were not available to
    determine how many of them were located in geographic or population-group
    HPSAs before receiving automatic HPSA designation. In addition, although
    officials that work with health centers and rural health clinics reported
    that these facilities in general welcomed the automatic HPSA designation
    because it could allow them the benefit of recruiting a physician through
    the NHSC, few had HPSA scores associated with the automatic designation
    that were high enough to qualify for a physician through the NHSC
    Scholarship Program. Specifically, as of September 2005, less than 5
    percent of the health centers and less than 1 percent of the rural health
    clinics with automatic facility HPSA designations had HPSA scores that
    were high enough to qualify for a physician through the NHSC Scholarship
    Program. However, all health centers and rural health clinics that
    received automatic designations as HPSAs, even those with lower HPSA
    scores, could apply in 2005 for a health care provider through another
    NHSC program, the NHSC Loan Repayment Program.

    We are recommending that HHS (1) publish a list of designated HPSAs in the
    Federal Register or otherwise remove, through Federal Register
    notification, the HPSA designations for those HPSAs that no longer meet
    the criteria or have not provided updated data demonstrating they still
    meet the designation criteria and (2) complete and publish HHS's proposal
    to revise the HPSA designation system and address the problems that have
    been identified in the current methodology for designating HPSAs.

    In commenting on a draft of this report, HHS concurred with our
    recommendations. Specifically, the department agreed that more timely
    publication of a list of designated HPSAs in the Federal Register is
    necessary, noting that publication in the Federal Register ensures that
    those HPSAs that have been proposed for withdrawal have their designations
    removed. The department also agreed with our recommendation to complete
    and publish its proposal to revise its HPSA designation system, stating
    that its proposal would address the various shortcomings that we have
    identified in this and previous reports.

                                       Background

    Any agency or individual may request a HPSA designation for a geographic
    area, population group, or facility.11 According to HRSA officials, the
    vast majority of HPSA designation requests are submitted by state primary
    care offices.12 These requests are received and reviewed by the Shortage
    Designation Branch within HRSA. Individual and agency requesters, other
    than state primary care offices, are required to submit a copy of their
    request for HPSA designation to their state's primary care office. The
    state primary care office solicits comments about the request from state
    groups, including the state health department and state professional
    associations, and forwards the comments to HRSA. Other interested parties
    may also provide comments on the request and submit the comments directly
    to HRSA. HRSA's final designation decision is based on a review of the
    request and comments received from the state and other interested parties
    (see fig. 1).

    11HPSA designations may be requested for geographic areas, population
    groups, and facilities located in all states and the District of Columbia,
    as well as in American Samoa, the Commonwealth of the Northern Mariana
    Islands, the Federated States of Micronesia, Guam, Puerto Rico, the
    Republic of the Marshall Islands, the Republic of Palau, and the U.S.
    Virgin Islands. The HPSA request and review process is the same for all
    locations.

    12State primary care offices work toward addressing the needs of the
    medically underserved in their states and receive funding through HRSA
    grants and cooperative agreements. For more information, see HRSA, Bureau
    of Primary Health Care, "Directory of Primary Care Offices (PCO): December
    2005," http://bphc.hrsa.gov/OSNP/PCODirectory.htm (downloaded June 19,
    2006).

    Figure 1: HPSA Designation Request and Review Process, 2005

    aPrimary care associations are private, nonprofit organizations
    representing states or regions that provide training and technical
    assistance to facilities, including health centers, to help ensure that
    these facilities deliver high-quality primary care services in underserved
    communities. For more information, see HRSA, Bureau of Primary Health
    Care, "Directory of Primary Care Associations (PCA): April 2005,"
    http://bphc.hrsa.gov/OSNP/PCADirectory.htm (downloaded Apr. 3, 2006).

    HRSA designates three types of HPSAs: geographic, population-group, and
    facility. Geographic HPSAs include entire counties, a portion of a county,
    or a group of contiguous counties. Population-group HPSAs include groups,
    such as migrant farmworkers, low-income urban populations, or federally
    recognized Native American Tribes or Alaska Natives, within a particular
    geographic area. Facility HPSAs include federal or state correctional
    institutions, health centers, and certain rural health clinics. To receive
    HPSA designation, the requesting agency or individual must provide HRSA
    with information demonstrating that the area, population group, or
    facility meets applicable criteria (see fig. 2).13

    13See 42 C.F.R. pt. 5, apps. A-G (2005).

    Figure 2: Types of HPSAs and Criteria Used to Designate Them, 2005

    aHRSA defines a rational service area for the delivery of primary medical
    care services as (1) a county or group of contiguous counties whose
    population centers are within 30 minutes travel time of each other; (2) a
    portion of a county, or an area made up of portions of more than one
    county, whose population, because of topography, market or transportation
    patterns, distinctive population characteristics, or other factors has
    limited access to contiguous area resources, as measured generally by a
    travel time greater than 30 minutes to such resources; or (3) established
    neighborhoods and communities within metropolitan areas that display a
    strong self-identity (as indicated by a homogeneous socioeconomic or
    demographic structure or a tradition of interaction or interdependency),
    have limited interaction with contiguous areas, and that, in general, have
    a minimum population of 20,000. 42 C.F.R. pt. 5, app. A, I B.1, II A.1.(a)
    (2005).

    bSpecial circumstances exist in an area if it has unusually high needs for
    primary care services or an insufficient supply of primary care providers.
    Unusually high needs may be demonstrated if, for example, more than 20
    percent of the population have incomes below the federal poverty level.
    Insufficient supply of providers may be demonstrated if, for example, the
    area has unusually long waits for appointments for routine medical
    services and at least two-thirds of the area's physicians do not accept
    new patients. 42 C.F.R. pt. 5, app. A, I B.4., 5 (2005).

    Since 2002, two kinds of facilities-(1) health centers and (2) rural
    health clinics that certify that they treat everyone regardless of ability
    to pay-have been automatically designated as facility HPSAs without going
    through the standard request and review process.14 Health centers include
    consolidated health centers, health center look-alikes, and tribal health
    centers:15

               o  Consolidated Health Centers: These health centers-which include
               community health centers, migrant health centers, health centers
               for the homeless, and health centers for residents of public
               housing-receive grants and grant funding16 under section 330 of
               the Public Health Service Act. Consolidated health centers provide
               comprehensive community-based primary care services to individuals
               regardless of their ability to pay and are required to serve the
               medically underserved.17

               o  Health center look-alikes: These facilities have been
               determined to meet all of the requirements necessary to receive a
               grant under section 330 of the Public Health Service Act but do
               not receive such funding.
               o  Tribal health centers: These facilities receive federal support
               to provide outpatient health services and are operated by tribes,
               tribal organizations, or urban Indian organizations under the
               Indian Self-Determination Act or the Indian Health Care
               Improvement Act.

               Rural health clinics are located in rural areas and can operate
               either independently or as part of a larger organization, such as
               a hospital, skilled nursing facility, or home health agency.18
               Unlike health centers, which are public or private nonprofit
               facilities, rural health clinics may function as for-profit
               entities. Rural health clinics must offer primarily outpatient
               primary medical care, but unlike health centers, they are not
               required to serve all individuals regardless of their ability to
               pay. Therefore, those rural health clinics that wish to receive
               automatic facility HPSA designation must certify to HRSA that they
               provide services to all individuals, regardless of their ability
               to pay, in order to receive the designation.

               After receiving the HPSA designation, each geographic,
               population-group, and facility HPSA is scored on a scale of 0 to
               25, with higher scores indicating greater relative need for
               primary care providers. The HPSA score is based on four elements,
               including elements used for HPSA designation: the ratio of
               population to primary care physicians (1 to 5 possible points,
               then doubled), poverty rate (0 to 5 possible points), infant
               mortality rate or low birth weight rate (0 to 5 possible points),
               and travel time or distance to the nearest available source of
               primary care (0 to 5 possible points). For a health center or
               rural health clinic automatically designated as a facility HPSA,
               if complete data are not available or HRSA cannot match the
               facility to appropriate data to calculate a HPSA score, the HPSA
               receives either a score of 0 or a partial score based on the sum
               of factors for which data are obtainable.19 According to HRSA's
               data on health centers and rural health clinics that received
               automatic designation as facility HPSAs, 10 percent of these
               facility HPSAs had a HPSA score of 0 as of September 2005.

               HRSA calculates the HPSA score using the information from the HPSA
               designation request. For health centers and rural health clinics
               that receive automatic facility HPSA designation, HRSA calculates
               the HPSA score using nationally available data and approximates
               the service area of a health center or rural health clinic by
               using data on the Primary Care Service Area in which the facility
               is located.20 Any automatically designated facility HPSA located
               in a geographic or population-group HPSA may instead use the HPSA
               score for that geographic area or population group, which,
               according to HRSA officials, is likely to be much higher than the
               automatic facility HPSA score.21 According to HRSA officials,
               nationally available data used for automatic facility HPSA scores
               are often not as current or as precise as data collected for
               individual geographic and population-group HPSA designations.

               HHS is required by law to review HPSA designations annually to
               determine if the designations remain appropriate in light of the
               applicable requirements.22 Each year, it must also publish a list
               of designated HPSAs in the Federal Register.23 For HPSAs
               designated through the standard request and review process, HHS
               reviews the designations by giving a list of HPSAs that have been
               designated for 3 full years to each state and asking the relevant
               state groups-including the state's governor's office and state
               health department-to update the information. HPSA designations for
               which data are not provided or that no longer meet the designation
               criteria are proposed for withdrawal. A HPSA that is proposed for
               withdrawal remains designated as a HPSA until HHS publishes in the
               Federal Register either a notification that the HPSA designation
               has been withdrawn or an updated list of designated HPSAs that
               does not include that HPSA.24 Before a HPSA designation can be
               withdrawn, however, interested parties and groups must be allowed
               to provide data and information in support of the designation. A
               health center or rural health clinic receiving automatic facility
               HPSA designation must demonstrate every 6 years after receiving
               its automatic designation that it meets the definition of a
               HPSA.25

               HPSAs Are Located in Every State and Are Used by Multiple Federal
    			  Programs

    			  More than 5,500 HPSAs were located throughout the country as of
               September 2005. We estimated that over half of these HPSAs were
               geographic or population-group HPSAs; the rest were facility
               HPSAs. Numerous federal programs have used these HPSA designations
               to allocate their programs' resources or provide benefits, which
               is an incentive for obtaining and retaining the HPSA designation.

               Number and Location of HPSAs

    			  Using HRSA data, we identified 5,594 designated HPSAs as of
               September 2005. We estimated that slightly more than half (3,032)
               of these HPSAs were designated for geographic areas or population
               groups. HRSA calculated that geographic and population-group HPSAs
               needed 6,941 additional full-time primary care physicians to
               achieve ratios of population to primary care physicians that would
               remove the HPSA designations (see table 1).

               Table 1: Number of, Population in, and Physicians Needed in
               Geographic and Population-Group HPSAs, September 2005

                             Number of       Population in           Primary care
    HPSA type                 HPSAs              HPSAsa     physicians neededb
    Geographic area           1,646          34,821,125                  3,549
    Population group          1,386          24,912,956                  3,392
    Total                     3,032          59,734,081                  6,941

               Source: HRSA.

               aThese numbers represent the resident civilian population of the
               related HPSA. For example, for geographic HPSAs that consist of an
               entire county, this number reflects the resident civilian
               population of the entire county. For population-group HPSAs, this
               number reflects that groups' population within particular
               geographic areas.

               bThe number of additional full-time-equivalent primary care
               physicians required to achieve population-to-primary care
               physician ratios of 3,500:1 (less than 3,500:1 but greater than
               3,000:1 under special circumstances), which are needed to remove
               the HPSA designations.

               Of the 1,646 geographic HPSAs, slightly more than half (831)
               consisted of an entire county, and the remainder (815) consisted
               of other service areas within counties, such as specific census
               tracts. As illustrated in figure 3, geographic and
               population-group HPSAs designated as of January 2006 were located
               in 2,494 counties in all 50 states and the District of Columbia.26

               Figure 3: U.S. Counties with Geographic and Population-Group
               HPSAs, January 2006

    1442 U.S.C. S:S: 254e(a)(1), 254g(a)(1), 1395x(aa)(2), (4).

    15Health centers are reimbursed under CMS's Medicare and Medicaid programs
    using special payment mechanisms that serve as an incentive for becoming a
    health center. See also GAO, Health Centers and Rural Clinics: State and
    Federal Implementation Issues for Medicaid's New Payment System,
    GAO-05-452 (Washington, D.C.: June 17, 2005).

    16Some health centers receive grant funding from another entity that is
    the recipient of such a grant. To be considered a health center, they must
    also be eligible to receive a grant directly.

    17A consolidated health center must serve an area or population designated
    by HHS as an MUA or MUP. See appendix II for information on the MUA and
    MUP designations.

    18Rural health clinics are reimbursed under CMS's Medicare and Medicaid
    programs using special payment mechanisms that serve as an incentive for
    becoming a rural health clinic. To be reimbursed under Medicare and
    Medicaid, a rural health clinic must be located in a geographic or
    population-group HPSA in a rural area, a rural area designated by a
    state's governor (or chief executive officer) and certified by HHS as an
    area with a shortage of personal health services, or a rural area HRSA has
    designated as an MUA. See appendix II for additional information on the
    MUA designation.

    19See appendix I for additional information on the scoring of HPSAs.

    20A Primary Care Service Area is a zip code with one or more primary care
    providers or any contiguous zip codes whose Medicare populations seek the
    largest share of their primary care from those providers. For more
    information, see Center for Evaluative Clinical Sciences at Dartmouth,
    "The Primary Care Service Area Project,"
    http://www.dartmouth.edu/~cecs/pcsa/pcsa.html# (downloaded Jan. 31, 2006).

    21In addition, health centers that provide services at more than one
    delivery site receive a HPSA score for the entire entity, which is
    calculated by averaging the individual HPSA scores assigned to each site.
    If any individual site of a health center is in a geographic or
    population-group HPSA or has been designated as a facility HPSA through
    the standard request and review process, the site may use that HPSA's
    score for purposes of applying for federal programs.

    2242 U.S.C. S: 254e(d)(1); 42 C.F.R. S: 5.4(b) (2005).

    2342 U.S.C. S: 254e(d)(2).

    2442 C.F.R. S: 5.4(d) (2005).

    2542 U.S.C. S: 254e(a)(1).

    26Geographic HPSAs were also located in American Samoa, the Commonwealth
    of the Northern Mariana Islands, the Federated States of Micronesia, Guam,
    Puerto Rico, the Republic of the Marshall Islands, and the Republic of
    Palau. Population-group HPSAs were also located in Puerto Rico and the
    U.S. Virgin Islands.

    Note: Counties that contained both geographic and population-group HPSAs
    are shown as geographic HPSAs. We identified 218 counties that included
    both geographic and population-group HPSAs as of January 2006.

    We estimated that slightly less than half (2,562) of all HPSAs designated
    as of September 2005 were facility HPSAs. Of these, about 63 percent
    (1,625) were health centers,27 about 23 percent (590) were rural health
    clinics, and about 14 percent (347) were federal or state correctional
    institutions (see fig. 4). Excluded from this count of facility HPSAs were
    136 public or nonprofit medical facilities that HRSA's data indicated had
    requested and received a facility HPSA designation, but that HRSA
    officials said could be duplicates of health centers that HRSA's data
    showed as having automatically received a facility HPSA designation. Also
    excluded were 21 health centers that HRSA's data identified as health
    centers for Alaska Natives that received automatic facility HPSA
    designations, but that HRSA and IHS officials said could be duplicates of
    health centers HRSA's data identified as tribal health centers.

    27Of the 1,625 health centers that were automatically designated as
    facility HPSAs as of September 2005, we estimated 989 were grantees under
    HHS's consolidated health center program. (Consolidated health center
    program grantees may provide services at more than one delivery site, and
    although data were not available on the number of these delivery sites, a
    HRSA official estimated that consolidated health center program grantees
    operated more than 3,700 service delivery sites in 2005.) In addition, we
    estimated 99 health center look-alikes and 537 tribal health centers were
    automatically designated as facility HPSAs as of September 2005.

    Figure 4: Types of Facility HPSAs, September 2005

    Note: Percentages of health center subtypes do not add to 63 percent
    because of rounding.

    As of September 2005, health centers with facility HPSA designations were
    located in all 50 states and the District of Columbia.28 Rural health
    clinics with facility HPSA designations were located in 41 states, and
    federal or state correctional institutions with facility HPSA designations
    were located in 46 states.29

    28Health centers with facility HPSA designations were also located in
    American Samoa, Guam, Puerto Rico, the Republic of the Marshall Islands,
    the Republic of Palau, and the U.S. Virgin Islands.

    29As of September 2005, rural health clinics with facility HPSA
    designations were located in all states except the following: Alaska,
    Arizona, Connecticut, Delaware, Hawaii, Massachusetts, Maryland, New
    Jersey, and Rhode Island, as well as the District of Columbia. Federal or
    state correctional institutions with facility HPSA designations were
    located in all states except Alaska, Delaware, North Dakota, and New
    Mexico, as well as the District of Columbia. A federal or state
    correctional institution with a facility HPSA designation was also located
    in Puerto Rico.

    Federal Programs Using HPSA Designations

    Although the HPSA designation system was originally used to designate
    areas for placement of providers through NHSC programs, the HPSA
    designation, and in some cases the HPSA score, have since been used by
    more than 30 federal programs to allocate resources or provide benefits.
    In fiscal year 2005, NHSC-which received $131 million in funding from HRSA
    appropriations-administered four programs that used the HPSA
    designation-three of which also used the HPSA score:30

               o  NHSC Scholarship Program: NHSC awards scholarships to health
               professions students who agree to practice for at least 2 years in
               a HPSA after completing training as a primary care physician,
               nurse practitioner, nurse-midwife, physician assistant, or other
               eligible provider.31 Scholarship recipients are limited to
               practicing at NHSC-approved practice sites in HPSAs with high
               need, as determined by the HPSA designation score.32 For the
               period July 1, 2005, through June 30, 2006, scholarship recipients
               completing training who were primary care physicians were required
               to practice in HPSAs with scores of 14 or higher, while those
               completing training as nurse practitioners, physician assistants,
               and nurse-midwives were required to practice in HPSAs with scores
               of at least 13, 13, and 8, respectively.33 At the end of fiscal
               year 2005, about 670 NHSC scholarship recipients, including
               primary care physicians, nurse practitioners, nurse-midwives, and
               physician assistants, were practicing in HPSAs to complete their
               NHSC service obligations.34

               o  NHSC Loan Repayment Program: NHSC repays educational loans of
               fully trained health professionals who agree to practice for at
               least 2 years in a HPSA.35 In addition to the practice sites
               approved for scholarship recipients, loan repayment
               recipients-including primary care physicians, nurse practitioners,
               physician assistants, nurse-midwives, and other providers-may
               practice at NHSC-approved sites in other HPSAs, including those
               with lower HPSA scores. Loan repayment awards are made to
               providers who practice in higher-scoring HPSAs first, and then to
               providers who practice in lower-scoring HPSAs in descending order
               as long as program funds are available. Sufficient funds were
               available for fiscal years 2003 through 2005 to make awards to all
               providers with eligible and complete loan repayment applications,
               regardless of the practice location's HPSA score. At the end of
               fiscal year 2005, about 1,700 NHSC loan repayment recipients were
               practicing in HPSAs to complete their NHSC service obligations.

               o  NHSC State Loan Repayment Program: NHSC provides grants to
               states to operate state loan repayment programs.36 Eligibility
               requirements and benefits, such as the maximum amount of loan
               repayment each year, may vary from state to state, but state loan
               repayment recipients must agree to provide primary health services
               in a HPSA. At the end of fiscal year 2005, about 680 NHSC state
               loan repayment recipients were practicing in HPSAs under this
               program.

               o  NHSC Ready Responder Program: Providers-including primary care
               physicians, nurse practitioners, physician assistants, and
               nurses-can receive salaries, benefits, and moving expenses to
               serve as commissioned officers in the U.S. Public Health Service
               who are assigned by NHSC to practice for 3 years in the neediest
               HPSAs.37 In determining practice locations for Ready Responders,
               NHSC gives preference to NHSC-approved sites in HPSAs with high
               scores. HRSA's 2004 notice to recruit providers to participate in
               this program stated that NHSC Ready Responders would be part of a
               mobile team of health professionals who, in addition to the
               services they provide to patients at their assigned sites, might
               be called upon to respond to regional or national emergencies. At
               the end of fiscal year 2005, 56 NHSC Ready Responders were
               practicing in HPSAs.

               In addition to the 4 NHSC programs, more than 26 other federal
               programs have used the HPSA designation to allocate resources or
               provide benefits.38 For example:

               o  CMS's Medicare Incentive Payment program pays physicians a 10
               percent bonus for services provided to Medicare beneficiaries in a
               geographic HPSA.39 According to CMS's Office of Financial
               Management, the Medicare program paid about $148 million in these
               bonus payments in fiscal year 2005.

               o  CMS's Rural Health Clinic program employs special payment rules
               for the reimbursement of services provided by rural health clinics
               under Medicare and Medicaid, which is an incentive for becoming a
               rural health clinic. For example, rural health clinics are
               reimbursed under a modified cost-based method of payment under
               Medicare. For reimbursement purposes, a rural health clinic must
               be located in a geographic or population-group HPSA in a rural
               area, a rural area designated by a state's governor (or chief
               executive officer) and certified by HHS as an area with a shortage
               of personal health services, or a rural area HRSA has designated
               as a medically underserved area (MUA).40

               o  Federal agencies-including HHS, the Appalachian Regional
               Commission,41 and the Delta Regional Authority42-as well as state
               health departments, operate programs, called J-1 visa waiver
               programs, to attract foreign physicians who have just completed
               their graduate medical education in the United States to practice
               in underserved areas. In exchange for a commitment to practice for
               at least 3 years at a facility located in, or treating residents
               of, a HPSA, an MUA, or a medically underserved population (MUP),
               foreign physicians can receive the benefit of a waiver of a 2-year
               foreign residence requirement.43 Of the federal agencies
               administering J-1 visa waiver programs in 2005, HHS required
               foreign physicians receiving J-1 visa waivers through its J-1 visa
               waiver program to practice in certain health centers, rural health
               clinics, or other facilities in HPSAs with a HPSA score of 14 or
               higher.44

               o  More than 15 federal programs that funded health professions
               education and training grants in fiscal year 2005 used the HPSA
               designation to provide funding preferences to grant applicants.45
               Authorized under title VII of the Public Health Service Act-with
               more than $160 million in funding from HRSA's fiscal year 2005
               appropriations-these programs provided funding preferences to
               grant applicants, such as health professions schools that placed a
               high or increasing number of graduates in settings serving
               medically underserved communities, including HPSAs. For purposes
               of the funding preference, the Public Health Service Act defines
               medically underserved communities to include areas or populations
               that are eligible for HPSA designation, or that meet other
               criteria, such as being eligible to be served by a community or
               migrant health center.46

               The use of the HPSA designation by more than 30 federal programs
               to allocate resources or provide benefits is an incentive for
               obtaining and retaining a HPSA designation, even if the HPSA does
               not want or need additional primary care providers. Agencies or
               individuals requesting initial designations or continuations of
               the HPSA designations for geographic areas, population groups, or
               facilities may instead want the designation for other purposes,
               for example, to be eligible for benefits such as the 10 percent
               bonus payment for physician services under CMS's Medicare
               Incentive Payment program. In 1998, COGME reported that one
               possible reason that the number of HPSAs had not declined was that
               "as the penalty for designation loss has increased, organizations
               have become more adept at making the case for retaining or
               attaining this coveted status."47

    			  Research Points to Shortcomings with Designation Methodology

               Of the reports published since 1995 that addressed the criteria or
               methodology used to designate HPSAs, we identified one that
               supported one key element of the criteria and six that pointed to
               shortcomings in the designation methodology. These six reports
               were consistent with what we reported in 1995. HHS officials have
               acknowledged these shortcomings and the department has been
               working on a proposal for revising the HPSA designation system
               since 1998, which, as of September 2006, had not been finalized.
               Another problem we identified in 1995 that persists in 2006 is
               HRSA's lack of timely removal of HPSA designations that no longer
               meet the designation criteria.

               Of the seven reports we identified as research on the HPSA
               criteria or methodology, one of the peer-reviewed reports
               addressed the relationship between one key element of the HPSA
               designation criteria and primary care physician supply. This
               report found a positive association between primary care physician
               supply and an area's income-one of the elements of the HPSA
               criteria used to demonstrate unusually high needs for primary care
               services. Specifically, the researchers found that areas with
               higher incomes had a greater number of primary care physicians
               than areas with lower incomes.48

               Other published reports have, however, pointed to shortcomings in
               the methodology HRSA uses to designate HPSAs-specifically that the
               system has not effectively identified areas with primary care
               shortages or helped target federal resources to benefit those who
               are underserved.49 For example, reports-including one we issued in
               1995-have noted that HRSA's designation methodology does not
               accurately identify those providers available to furnish primary
               health care services.50 As a result, the HPSA methodology can
               overstate the need for additional primary care providers, limiting
               the usefulness of the HPSA designation system as a screen to
               identify which communities should be eligible for additional
               program benefits. Since 1995, we and others have reported problems
               with HRSA's exclusion of several categories of primary care
               providers when calculating the available primary care providers.
               For example, in our 1995 report, we estimated that the reported
               need for additional providers in 1994 would have been reduced by
               up to 50 percent if certain categories of primary care physicians
               and nonphysician providers-which were excluded by HRSA-had been
               included in the HPSA calculations.51 In total, we estimated that
               2,539 primary care physicians already providing services in
               shortage areas (including NHSC physicians and foreign physicians
               with J-1 visa waivers) and other categories of providers who
               deliver primary care services in HPSAs (including physician
               assistants and nurse-midwives) were excluded by HRSA in 1994.

               Reports have also concluded that some of the geographic areas that
               HRSA evaluates for designation-that is, those based on county
               boundaries-may not always provide a realistic reflection of an
               area's health care needs. For these HPSA designation requests,
               measuring the availability of primary care physicians only in the
               county where individuals live may underestimate certain residents'
               access to medical care.52 For example, two reports we identified
               discussed the likelihood of people crossing county lines to obtain
               health care services when these services were not available in
               their community.53 In one report, researchers evaluated the
               relationship between health status and medical care resources and
               found that individuals aged 64 years or younger living in
               nonmetropolitan areas reported better health when there was
               greater physician supply in the county where they lived and
               adjoining counties. According to these researchers, the results
               suggested that younger individuals in nonmetropolitan areas were
               willing and able to cross county lines to obtain health care.54

               Researchers have also noted that the HPSA designation methodology
               favors those states or areas that have experience in completing
               and submitting a HPSA designation request.55 One team of
               researchers reported that officials in certain states and
               localities were effective in identifying areas that would qualify
               for a HPSA designation and in providing timely and appropriate
               data for the request, whereas other areas were unable to navigate
               the process as effectively. The researchers observed that certain
               areas were more likely to have HPSA designations than
               others-independent of the actual local situation.56

               Recognizing the shortcomings in the HPSA designation system
               identified by available research and our prior work, HHS has been
               working on a proposal for a revised designation system since 1998.
               According to HRSA officials, the proposal incorporates factors to
               account for all primary care providers in an area-including
               foreign physicians with J-1 visa waivers, NHSC physicians, and
               nurse practitioners and physician assistants-and includes the
               creation of a master database to house national data relevant to
               HPSA criteria. As of September 2006, this proposal was in the
               department's clearance process.

               Another problem we identified in 1995, that remains a problem in
               2006, is that HRSA does not review designated HPSAs and
               subsequently remove the designation of those areas, population
               groups, or facilities that no longer meet the HPSA criteria in a
               timely manner. While we did not audit HRSA's process for
               periodically reviewing HPSAs, in August 2005, the HHS Office of
               Inspector General reported that as of 2003, HRSA had not conducted
               timely reviews of HPSA designations.57 In the agency's comments
               that were included in the August 2005 report, HRSA acknowledged
               this problem, stating that the agency was unable to complete the
               review of designated HPSAs for continued eligibility in less than
               3 years because of resource limitations. As of September 2006, we
               found that although HHS is required to publish a list of
               designated HPSAs in the Federal Register by July 1 of each
               year-thereby removing the designation of any HPSAs that were
               proposed for withdrawal that are not published-the department has
               not done so since February 2002.58 HRSA officials told us in June
               2006 that the department has not published a list of HPSAs in the
               Federal Register for more than 4 years because of difficulties
               with computer programming, but the agency hoped to resolve those
               issues and to forward an updated list for publication by fall
               2006.59 Meanwhile, those HPSAs that were proposed for withdrawal
               because they no longer meet the HPSA criteria have retained their
               HPSA designation.60 As a result, federal programs that use the
               HPSA designation, such as the Medicare Incentive Payment program
               or HRSA's health professions education and training programs, may
               have been allocating resources or providing benefits to areas,
               population groups, or facilities that no longer meet the HPSA
               criteria.

    			  Many Health Centers and Rural Health Clinics Did Not Benefit from
    			  Automatic HPSA Designation

               Many health centers and rural health clinics did not benefit from
               automatic designation as facility HPSAs because they were located
               in geographic or population-group HPSAs. Most health centers also
               received a HPSA score associated with the automatic designation
               that was too low to qualify them for programs that required a
               minimum HPSA score in 2005, although they qualified for programs
               that did not have such a requirement. Of the relatively few rural
               health clinics that chose to certify that they would treat anyone
               regardless of ability to pay and, as a result, received the
               automatic designation as facility HPSAs, most also received scores
               too low to qualify for benefits from certain programs that
               required a higher HPSA score.

    			  Relatively Few Health Centers Had HPSA Scores High Enough to Obtain
    			  Providers through Certain Federal Programs

               For health centers that were located in a geographic or
               population-group HPSA, automatic designation as a facility HPSA
               provided no benefit unless the HPSA score associated with
               automatic designation was higher than the score for the geographic
               or population-group HPSA in which they were located. According to
               the National Association of Community Health Centers, health
               centers had advocated for automatic HPSA designation because it
               would allow those not located in geographic or population-group
               HPSAs to be eligible for providers from NHSC. Although limitations
               in HRSA's data prevented us from measuring the precise impact of
               the automatic HPSA designation on health centers, HRSA officials
               estimated that about half of the health centers that received
               automatic designation as a facility HPSA in 2002 were located in a
               geographic or population-group HPSA and therefore did not receive
               this benefit.

    			  Few Rural Health Clinics Have Received Automatic HPSA Designation
    			  as Facility HPSAs

               As of September 2005, 73 (less than 5 percent) of the 1,625 health
               centers that had received automatic designation as facility HPSAs
               had an associated HPSA score high enough to qualify for a
               physician through the NHSC Scholarship Program or HHS's J-1 visa
               waiver program.61 These health centers received a HPSA score of 14
               or higher-the HPSA score required by these programs for physician
               placement (see fig. 5). Eighty-six (about 5 percent) of the 1,625
               health centers with automatic facility HPSA designation received a
               HPSA score of 13 or higher-the HPSA score required by the NHSC
               Scholarship Program to qualify for placement of a nurse
               practitioner or physician assistant.

    30A fifth NHSC program-the Community Scholarship Program-did not award any
    new scholarships in fiscal year 2005, and therefore we excluded this
    program from our analysis.

    3142 U.S.C. S: 254l(f)(1)(B)(v). Scholarship recipients receive payment of
    tuition and other educational expenses, such as fees and books, as well as
    a stipend for up to 4 years of education. For each year of support
    received, the recipient is required to serve 1 year in an NHSC-approved
    practice site in a high-need HPSA, with a minimum service commitment of 2
    years.

    32NHSC providers must practice in NHSC-approved practice sites that agree
    to use a sliding fee schedule or other method to reduce fees to ensure
    that no financial barriers to care exist.

    3370 Fed. Reg. 51356-7 (Aug. 30, 2005). The minimum HPSA score for the
    practice sites eligible for NHSC scholarship recipients in a given year
    depends on both the practice sites applying for scholarship recipients in
    that discipline and the number of scholarship recipients graduating in
    each discipline that year.

    34In this report, the numbers of NHSC providers represent those primary
    care providers practicing in HPSAs to fulfill their service obligation at
    the end of fiscal year 2005; they do not include about 550 NHSC dental
    providers and about 920 NHSC mental health providers practicing in HPSAs
    designated for dental or mental health. The numbers also exclude 13 NHSC
    loan repayment recipients who were chiropractors or pharmacists practicing
    in HPSAs to fulfill their NHSC service obligation under a demonstration
    project authorized by the Public Health Service Act. See 42 U.S.C. S:
    254t.

    3542 U.S.C. S: 254l-1(f), (g). For the 2-year minimum service commitment,
    NHSC will pay up to $50,000, based on the loan repayment recipient's
    qualifying educational loans, with the potential to participate in the
    program for additional years, one year at a time, with NHSC paying up to
    $35,000 per year. See HRSA, Bureau of Health Professions, National Health
    Service Corps, "Loan Repayment Program,"
    http://nhsc.bhpr.hrsa.gov/join_us/lrp.asp (downloaded May 13, 2006).

    3642 U.S.C. S: 254q-1. States must provide matching funds to be eligible
    for a grant.

    3769 Fed. Reg.70459 (Dec. 6, 2004). Applicants for the Ready Responders
    must file a U.S. Public Health Service Commissioned Corps application and
    meet the requirements for such commissioning. Initial assignments will
    last up to 3 years, after which providers choosing to stay in the U.S.
    Public Health Service move on to new assignments.

    38See appendix IV for a list of programs using the HPSA designation and
    HRSA's other designations of underservice (MUA and MUP) to allocate
    resources or provide benefits in fiscal year 2005.

    3942 U.S.C. S: 1395l(m).

    40See appendix II for additional information on the MUA designation.

    41The Appalachian Regional Commission is a federal-state economic
    development partnership between the federal government and 13 states. The
    commission initiates economic and community development programs and
    serves as an advocate for the people in the Appalachian Region, including
    all of West Virginia and parts of 12 other states: Alabama, Georgia,
    Kentucky, Maryland, Mississippi, New York, North Carolina, Ohio,
    Pennsylvania, South Carolina, Tennessee, and Virginia.

    42The Delta Regional Authority is a federal-state partnership between the
    federal government and eight states. The authority was created to remedy
    severe and chronic economic distress by stimulating economic development
    and fostering partnerships that will have a positive impact on the economy
    of the region. The authority covers 240 counties and parishes in Alabama,
    Arkansas, Illinois, Kentucky, Louisiana, Mississippi, Missouri, and
    Tennessee.

    43Foreign physicians may enter the United States for graduate medical
    education as participants under an exchange visitor program administered
    by the Department of State. These physicians enter the United States with
    J-1 visas and are required to return to their home country or country of
    last legal residence for at least 2 years when they complete their
    graduate medical education. They may, however, obtain a waiver of this
    requirement from the Department of Homeland Security's U.S. Citizenship
    and Immigration Services (USCIS) at the request of a state or federal
    agency, if the physician has agreed to practice in or work at a facility
    that treats residents of a geographic area or areas designated by the
    Secretary of Heath and Human Services as having a shortage of health care
    professionals, such as a HPSA, for 3 years. 8 U.S.C. S: 1184(l)(1)(D). In
    May 2006, we testified that, in fiscal year 2005, states and federal
    agencies requested more than 1,000 waivers for physicians-including those
    practicing primary care specialties and those practicing nonprimary care
    specialties-to work in facilities that are located in, or treat residents
    of, HPSAs or other underserved areas. More than 90 percent of these were
    states' waiver requests; less than 10 percent were federal agencies'
    requests. See GAO, Foreign Physicians: Preliminary Findings on the Use of
    J-1 Visa Waivers to Practice in Underserved Areas, GAO-06-773T
    (Washington, D.C.: May 18, 2006).

    44Effective April 3, 2006, HHS revised its J-1 visa waiver policy. Rather
    than require foreign physicians to practice in HPSAs with a score of 14 or
    higher, the revised policy requires foreign physicians seeking a waiver to
    practice in HPSAs with a score of 7 or higher in order for HHS to request
    a J-1 visa waiver through its program. See HHS, "Applications for Waiver
    of the Two-year Foreign Residence Requirement (Clinical Care) of the
    Exchange Visitor Program,"
    http://www.globalhealth.gov/newguidelines1.shtml (downloaded Mar. 17,
    2006).

    45See 42 U.S.C. S:S: 295d(c), 295j. Funding preferences are factors that
    place a grant application ahead of others without a preference on a list
    of applicants recommended for funding by a review committee.

    4642 U.S.C. S: 295p(6)(A), (B).

    47Council on Graduate Medical Education, Department of Health and Human
    Services, Health Resources and Services Administration, Tenth Report:
    Physician Distribution and Health Care Challenges in Rural and Inner-City
    Areas (Rockville, Md.: February 1998).

    48Kevin Grumbach et al., "Physician Supply and Access to Care in Urban
    Communities," Health Affairs, vol. 16, no. 1 (1997). For this report,
    researchers analyzed data from a 1993 survey of a sample of California
    residents from 41 urban communities based on guidelines for defining
    primary care service areas developed by state agencies. Researchers
    examined the relationship between income of the respondents and the number
    of physicians per 100,000 population in those areas, using data from the
    1994 American Medical Association Physician Masterfile for physicians in
    medical specialties of general or family practice, general internal
    medicine, pediatrics, and obstetrics and gynecology.

    49See, for example, Council on Graduate Medical Education, Department of
    Health and Human Services, Health Resources and Services Administration,
    Tenth Report: Physician Distribution and Health Care Challenges in Rural
    and Inner-City Areas, and Donald H. Taylor Jr. and Thomas C. Ricketts,
    "Examining Alternative Measures of Medical Underservice for Rural Areas:
    Executive Summary" (Working Paper No. 39, North Carolina Rural Health
    Research Program, Cecil G. Sheps Center for Health Services Research,
    University of North Carolina at Chapel Hill, August 1995).

    50See GAO/HEHS-95-200 .

    51This estimate was derived by subtracting the total number of primary
    care providers practicing in HPSAs from the total number reported as
    needed by the HPSA system. See GAO/HEHS-95-200 .

    52Not all HPSAs rely on county-level data. For example, in September 2005,
    although 831 geographic HPSAs were entire counties, 815 geographic HPSAs
    were portions of counties, such as census tracts.

    53See John Robst and Glenn G. Graham, "The Relationship between the Supply
    of Primary Care Physicians and Measures of Heath," Eastern Economic
    Journal, vol. 30, no. 3 (2004), and Richard A. Wright et al., "Finding the
    Medically Underserved: A Need to Revise the Federal Definition," Journal
    of Health Care for the Poor and Underserved, vol. 7, no. 4 (1996).

    54Robst and Graham, "The Relationship between the Supply of Primary Care
    Physicians and Measures of Heath."

    55See, for example, Council on Graduate Medical Education, Department of
    Health and Human Services, Health Resources and Services Administration,
    Tenth Report: Physician Distribution and Health Care Challenges in Rural
    and Inner-City Areas, and Taylor and Ricketts, "Examining Alternative
    Measures of Medical Underservice for Rural Areas: Executive Summary."

    56Taylor and Ricketts, "Examining Alternative Measures of Medical
    Underservice for Rural Areas: Executive Summary."

    57Office of Inspector General, Department of Health and Human Services,
    Status of the Rural Health Clinic Program, OEI-05-03-00170 (Chicago:
    August 2005). The Inspector General's review was limited to those HPSAs
    where rural health clinics were located. HRSA stated in its response to
    this report that the actual submission of updates of HPSA data by
    interested parties and groups, and the review and action for existing HPSA
    designations by HRSA, took place after the fourth or possibly fifth year
    after a HPSA designation was received. HRSA also stated that its ability
    to review depended on the number of requests HRSA received for individual
    HPSA updates and the complexity of those requests.

    5867 Fed. Reg. 7740-88 (Feb. 20, 2002).

    59According to HRSA officials, the impact of not publishing a list of
    designated HPSAs in the Federal Register may have been lessened because
    (1) HRSA has a publicly available Web-based application that can be used
    to search a regularly updated, real-time database of HPSA designations,
    including those proposed for withdrawal, and (2) NHSC, for which the HPSA
    designations were originally developed and the major reason for the
    designations, does not place providers in HPSAs that are proposed for
    withdrawal, so the absence of the Federal Register publication has not
    affected the practice locations for NHSC programs. HHS officials also
    noted that, for other programs that use the HPSA designation, the decision
    to use or not use HPSAs proposed for withdrawal is generally made by the
    individual programs.

    60Of the 2,746 geographic and population-group HPSAs designated as of
    January 2006, about 12 percent were proposed for withdrawal because they
    no longer met the criteria or had not provided HRSA with updated data in
    support of their designations.

    61One tribal health center had not received a HPSA score from HRSA as of
    September 2005. Although health centers receiving automatic designation
    could also use the score of a geographic or population-group HPSA if the
    facility was located in one, HRSA officials we spoke with did not have
    data on how many health centers that were eligible for this provision
    chose to use it when applying for federal programs.

    Figure 5: Distribution of HPSA Scores among Health Centers Automatically
    Designated as Facility HPSAs, September 2005

    Notes: This figure includes scores for 1,624 of the 1,625 health centers
    that, as of September 2005, received a HPSA score as part of automatic
    designation as a facility HPSA. One tribal health center had not received
    a HPSA score from HRSA as of September 2005. Health centers that
    automatically received facility HPSA designation include those that
    received grants under the consolidated health center program, health
    center look-alikes, and tribal health centers.

    aFor assignment of NHSC providers through the NHSC Scholarship Program for
    the period July 1, 2005, through June 30, 2006, a HPSA score of 14 or
    higher was required to be eligible for a physician; a score of 13 or
    higher was required for a nurse practitioner or physician assistant; and a
    score of 8 or higher was required for a nurse-midwife. HHS's J-1 visa
    waiver program required a HPSA score of 14 or higher for all of 2005.

    bThe maximum HPSA score a health center can receive is 25.

    In contrast, automatic facility HPSA designation made health centers
    eligible, regardless of HPSA score, to apply in 2005 for a physician or
    other health care provider through the NHSC Loan Repayment Program.62
    According to an official with the National Association of Community Health
    Centers, health center officials were pleased with this benefit but also
    viewed it with caution because NHSC loan repayment awards are made first
    to providers who agree to practice in higher-scoring HPSAs and then to
    providers who agree to practice in lower-scoring HPSAs, in decreasing
    order of HPSA score. Although NHSC had sufficient funding for all
    qualifying loan repayment applicants from 2003 through 2005, health center
    officials were concerned that in future years, NHSC funding may be
    insufficient to sustain this benefit for health centers with relatively
    low HPSA scores.

    62In addition to the NHSC Loan Repayment Program, health centers with
    automatic facility HPSA designations were eligible to apply for other
    programs that did not require a HPSA score, such as J-1 visa waiver
    programs administered by the Appalachian Regional Commission, the Delta
    Regional Authority, and many state health departments.

    As of September 2005, 590 (16 percent) of the 3,637 rural health clinics
    in the United States had received automatic designation as facility HPSAs.
    To receive automatic designation, rural health clinics, unlike health
    centers, must certify that they provide health care services regardless of
    an individual's ability to pay. To qualify for automatic HPSA designation,
    some rural health clinics-including those that are for-profit
    entities-would have to restructure their billing practices, and according
    to officials at the National Association of Rural Health Clinics and
    HRSA's Office of Rural Health Policy, it may not be in their interest to
    do so.

    As with health centers, the main benefit cited by officials at the Office
    of Rural Health Policy of automatic HPSA designation for rural health
    clinics is to be eligible for NHSC physicians or other primary care
    providers. Rural health clinics that were located in geographic or
    population-group HPSAs would not benefit from automatic designation unless
    the associated HPSA score was higher than the score for the geographic or
    population-group HPSAs in which they were located. Data were not available
    to determine how many of the 590 rural health clinics with automatic
    facility HPSA designations were located in geographic or population-group
    HPSAs before the 2002 provision was implemented. An official at the
    National Association of Rural Health Clinics reported, however, that a
    recent study estimated that over 70 percent of all rural health
    clinics-including those that did not receive the automatic facility HPSA
    designation-were located in geographic HPSAs before 2002 and were
    therefore already eligible for federal programs requiring HPSA
    designation.63

    As of September 2005, less than 1 percent of the 590 rural health clinics
    that had received automatic designation as facility HPSAs had associated
    HPSA scores of 14 or higher needed to qualify for a physician through the
    NHSC Scholarship Program or HHS's J-1 visa waiver program (see fig. 6).64
    About 1 percent received a HPSA score of 13 or higher-the HPSA score
    required by the NHSC Scholarship Program to qualify for a nurse
    practitioner or physician assistant. Like health centers with lower HPSA
    scores, rural health clinics automatically designated as facility HPSAs
    but scoring lower than 14 could recruit a physician or other provider
    through the NHSC Loan Repayment Program.65

    63See John A. Gale and Andrew F. Coburn, The Characteristics and Roles of
    Rural Health Clinics in the United States: A Chartbook, (Portland, Me.:
    Maine Rural Health Research Center, Institute for Health Policy, Edmund S.
    Muskie School of Public Service, University of Southern Maine, 2003). In
    addition, our analysis of data prepared for HRSA's Office of Rural Health
    Policy using 2003 and 2004 CMS data on rural health clinics and 2005 HRSA
    data on HPSAs indicated that nearly half of all rural health
    clinics-including those that did not receive automatic designation-were
    located in geographic or population-group HPSAs.

    64As of September 2005, 7 of the 590 rural health clinics that received
    automatic HPSA designation had not received a HPSA score from HRSA.
    Although rural health clinics receiving automatic designation could also
    use the score of a geographic or population-group HPSA if the facility was
    located in one, HRSA officials we spoke with did not have data on how many
    rural health clinics that were eligible for this provision chose to use it
    when applying for federal programs.

    65In addition to the NHSC Loan Repayment Program, rural health clinics
    with automatic facility HPSA designations were eligible to apply for other
    programs that did not require a HPSA score, such as J-1 visa waiver
    programs administered by the Appalachian Regional Commission, the Delta
    Regional Authority, and many state health departments.

    Figure 6: Distribution of HPSA Scores among Rural Health Clinics
    Automatically Designated as Facility HPSAs, September 2005

    Notes: This figure includes scores for 583 of the 590 rural health clinics
    that, as of September 2005, received a HPSA score as part of automatic
    designation as a facility HPSA. Seven rural health clinics that received
    the automatic HPSA designation had not received a HPSA score from HRSA as
    of September 2005.

    aFor assignment of NHSC providers through the NHSC Scholarship Program for
    the period July 1, 2005, through June 30, 2006, a HPSA score of 14 or
    higher was required to be eligible for a physician; a score of 13 or
    higher was required for a nurse practitioner or physician assistant; and a
    score of 8 or higher was required for a nurse-midwife. HHS's J-1 visa
    waiver program required a HPSA score of 14 or higher for all of 2005.

    bThe maximum HPSA score a rural health clinic can receive is 25.

                                      Conclusions

    Many federal programs continue to rely on HPSA designations to allocate
    federal resources or provide benefits, even though shortcomings we and
    others have reported since 1995 have not been addressed. In particular,
    the omission of important categories of primary care providers-such as
    foreign physicians with J-1 visa waivers and nonphysician primary care
    providers-from calculations for HPSA designation can overstate the need
    for additional primary care providers. Although HHS has recognized the
    need for improvements and has been working since 1998 on a proposal to
    revise the HPSA designation system, it remains to be seen when HHS will
    make such improvements and what changes will be made. In addition, HRSA
    has not regularly removed the HPSA designation of those areas, population
    groups, or facilities that no longer meet the designation criteria.

    Available information suggests that the provision to automatically
    designate health centers and certain rural health clinics as facility
    HPSAs has benefited a relatively small number of these facilities. The
    precise impact of the provision could not be measured, however, because of
    limitations with available HHS data. For example, the available data did
    not include sufficient geographic information to determine which of these
    facilities were located in geographic or population-group HPSAs before
    receiving automatic designation as facility HPSAs.

                          Recommendations for Executive Action

    We recommend that the Secretary of Health and Human Services take the
    following two actions: (1) publish a list of designated HPSAs in the
    Federal Register or otherwise remove, through Federal Register
    notification, the HPSA designations for those HPSAs that no longer meet
    the criteria or have not provided updated data in support of their
    designations and (2) complete and publish HHS's proposal to revise the
    HPSA designation system and address the shortcomings that have been
    identified in the current methodology for designating HPSAs.

                                    Agency Comments

    We received comments on a draft of this report from HHS (see app. V). The
    department generally agreed with our findings and concurred with both
    recommendations. Specifically, the department agreed that a more timely
    publication of the Federal Register listing of designated HPSAs is
    necessary to ensure that only those areas meeting the regulations remain
    designated, and stated that HRSA should publish lists of HPSAs or HPSA
    withdrawals to ensure that designations that have already been proposed
    for withdrawal are actually withdrawn. The department also noted that it
    is proposing a change in the process for withdrawing HPSA designations,
    but it did not provide any details on this proposal. HHS also agreed with
    our recommendation that the department complete and publish its proposal
    to revise the HPSA designation system. HHS stated that this proposal would
    address shortcomings that we identified in this and previous reports and
    would also affect the regulations governing MUA and MUP designations.

    HHS also commented on our finding that many health centers and rural
    health clinics did not benefit from automatic designation as facility
    HPSAs. Specifically, HHS stated that our draft report provided a somewhat
    misleading assessment of the impact of the automatic designation process
    and the department provided additional information on NHSC placements in
    automatically designated HPSAs in 2005. Our draft report stated that few
    health centers had HPSA scores associated with automatic designation that
    were high enough to qualify for a physician through the NHSC Scholarship
    Program, but that all health centers that received automatic designation
    as HPSAs, even those with lower HPSA scores, could apply in 2005 for a
    health care provider through the NHSC Loan Repayment Program. The data the
    department provided on NHSC placements in automatically designated health
    centers were actually consistent with the statement in our draft report.
    HHS's data, which HHS officials said included both primary care and
    nonprimary care providers, showed that of 216 NHSC providers placed in
    health centers, relatively few (less than 5 percent) were placed through
    the NHSC Scholarship Program and the NHSC Ready Responder Program (less
    than 1 percent), whereas the vast majority (more than 95 percent) were
    placed through the NHSC Loan Repayment Program. According to HRSA
    officials, data for primary care provider placements (which were not
    included in the department's comments), showed a similar distribution
    between the three NHSC programs for 155 primary care NHSC placements in
    health centers in 2005. In its comments, HHS also provided information on
    the process for scoring automatically designated HPSAs and on NHSC and J-1
    visa waiver programs. In response, we added information on J-1 visa waiver
    programs administered by federal agencies other than HHS and by state
    health departments.

    Finally, HHS suggested that we clarify that our scope was limited to
    primary care HPSAs. We made revisions to the report to highlight that our
    review only examined primary care HPSA designations.

    The department also provided technical comments, which we incorporated as
    appropriate.

    We are sending copies of this report to the Secretary of Health and Human
    Services, the Administrator of HRSA, the Administrator of CMS, and to
    appropriate congressional committees. We will also provide copies to
    others upon request. In addition, the report will be available at no
    charge on the GAO Web site at http://www.gao.gov .

    If you or your staff members have any questions about this report, please
    contact me at (312) 220-7600 or aronovitzl@gao.gov. Contact points for our
    Offices of Congressional Relations and Public Affairs may be found on the
    last page of this report. GAO staff members who made contributions to this
    report are listed in appendix VI.

    Leslie G. Aronovitz
    Director, Health Care

    Appendix I: Scoring of Health Professional Shortage Areas

    Each designated health professional shortage area (HPSA) receives a score
    that the Department of Health and Human Services's (HHS) Health Resources
    and Services Administration (HRSA) uses to rank its shortage of primary
    care providers, or need, relative to other HPSAs. The HPSA score is used
    by some federal programs, such as the National Health Service Corps (NHSC)
    Scholarship Program, which requires participants to practice in locations
    with higher HPSA scores. The scores, ranging from 0 to 25, are based on
    four factors, for which each HPSA is given a certain number of points (see
    fig. 7). To calculate a HPSA score, points for the population-to-primary
    care physician ratio, ranging from 1 to 5 points, are doubled and then
    summed with the points for each of the other three factors. For health
    centers and rural health clinics receiving automatic designation as
    facility HPSAs, if complete data are not available, or if HRSA cannot
    match the facility to appropriate data to calculate a HPSA score, the HPSA
    receives either a score of 0 or a partial score based on the sum of
    factors for which data are obtainable.

    Figure 7: Scoring of HPSAs, 2005

    aFor HPSA designation and scoring, HRSA counts nonfederal physicians who
    practice principally in one of the primary care specialties of general or
    family practice, general internal medicine, pediatrics, or obstetrics and
    gynecology. HRSA does not count federal physicians; physicians with NHSC
    or J-1 visa waiver obligations; or physicians engaged solely in
    administration, research, or teaching. See HRSA, Bureau of Health
    Professions, "Health Professional Shortage Area Guidelines for Primary
    Medical Care/Dental Designation,"
    http://bhpr.hrsa.gov/shortage/hpsaguidepc.htm (downloaded Nov. 14, 2005).

    bHHS's poverty guidelines for 2005 set the poverty level for a family of
    four at an annual income of $19,350 in the 48 contiguous states and the
    District of Columbia ($24,190 in Alaska and $22,260 in Hawaii). Poverty
    guidelines are not defined for American Samoa, the Commonwealth of the
    Northern Mariana Islands, the Federated States of Micronesia, Guam, Puerto
    Rico, the Republic of the Marshall Islands, the Republic of Palau, and the
    U.S. Virgin Islands; offices administering federal programs may decide
    whether to use the guidelines for the 48 contiguous states and the
    District of Columbia for those jurisdictions or some other procedure. 70
    Fed. Reg. 8373-75 (Feb. 18, 2005).

    cInfant mortality rate is defined as the number of infant deaths per 1,000
    live births. Low birth weight rate is defined as the percentage of live
    births below 2,500 grams (5 pounds, 8 ounces).

    Appendix II: Medically Underserved Area or Population Designations and
    Medically Underserved Community Definition

    Medically underserved areas (MUA) and medically underserved populations
    (MUP) generally are areas, or populations within areas, that are
    designated by HHS's HRSA as having a shortage of health care services. The
    MUA and MUP designations were developed about the same time as the HPSA
    designation system but independently from it. Authorized by the Health
    Maintenance Organization Act of 1973, MUA and MUP designations have been
    used for identifying areas eligible to participate in the consolidated
    health center program. That is, in order to receive health center grant
    funding as a community health center, migrant health center, or a center
    serving residents of public housing or the homeless, the health center
    must be located in or serve the residents of an MUA or MUP.

    MUAs are designated for the entire population of a particular geographic
    area. MUP designations are limited to particular groups of underserved
    people within an area. Individual facilities are not eligible for MUA or
    MUP designations as they are under the HPSA designation system. As of
    September 2005, HRSA had designated 3,443 geographic areas as MUAs and 488
    population groups as MUPs.

    HRSA designates MUAs and MUPs on the basis of four factors of health
    service need, the first three of which are also used for HPSA designation
    or scoring:

               o  ratio of population to number of primary care physicians,

               o  infant mortality rate,

               o  percentage of the population with incomes below the federal
               poverty level, and

               o  percentage of population aged 65 or over.

               To determine if an area meets the criteria to be designated as an
               MUA or if a population within an area meets the criteria to be
               designated as an MUP, each factor is assigned a weighted value,
               and these values are summed to obtain a combined score.1 This
               score is used to determine if an area or population can be
               designated as an MUA or MUP. Areas and populations in the country
               are ranked using this score to determine their order of need of
               health services. Areas and populations with scores at or below 62
               (the median score that was calculated for all U.S. counties in
               1975 for the four criteria) are designated MUAs or MUPs. Those
               populations within areas with scores above 62 may still be
               designated as MUPs if they demonstrate that unusual local
               conditions impede access to or the availability of personal health
               services. Such requests must be documented and recommended by the
               state chief executive officer and the responsible local officials.

               One of the ways in which MUAs and MUPs differ from HPSAs is that
               MUA and MUP designations are not required to be regularly updated.
               According to a HRSA official, some areas with MUA or MUP
               designations have not been reviewed since the 1980s. In 1998, HHS
               published a proposal in the Federal Register to revise the MUA and
               MUP designations and combine them with the HPSA designation
               system.2 The department received over 800 comments on the
               proposal; subsequently, HHS withdrew the proposal and began
               working on another one, which, as of September 2006, was in the
               department's clearance process.

               Another term-medically underserved community-is used to identify
               underserved areas for purposes of funding preferences for health
               professions education and training programs authorized under title
               VII of the Public Health Service Act.3 A medically underserved
               community is defined as an urban or rural area or population that

               o  is eligible for HPSA designation;
               o  is eligible to be served by a community health center, migrant
               health center, or a grantee serving residents of public housing or
               the homeless;

               o  has a shortage of personal health services, as determined under
               criteria issued by the Secretary of Health and Human Services
               under section 1861(aa)(2) of the Social Security Act (relating to
               rural health clinics); or

               o  is designated by a state governor (in consultation with the
               medical community) as a shortage area or medically underserved
               community.4

               In fiscal year 2005, 15 programs authorized under title VII, with
               funding of more than $160 million, provided funding preferences
               for any qualified applicant, such as a health professions school,
               that had a high rate for placing graduates in practice settings
               having the principal focus of serving residents of medically
               underserved communities or that achieved a significant increase in
               the rate of placing graduates in such settings during the previous
               2-year period.5

               In addition, two nursing traineeship programs authorized under
               title VIII of the Public Health Service Act used the medically
               underserved community definition in providing a funding preference
               to grant applicants. Title VIII provides a funding preference that
               includes nursing workforce grant applicants with projects that
               will substantially benefit rural or underserved populations.6 For
               purposes of this statutory funding preference for two title VIII
               programs-the Advanced Education Nursing Traineeship Program and
               Nurse Anesthetist Traineeship Program-HHS used established
               clinical sites identified under the definition of medically
               underserved community as proxies for rural and underserved
               populations. In fiscal year 2005, these two programs authorized
               under title VIII had about $17 million in funding.

               To conduct our work, we examined relevant laws, regulations, and
               HHS documents related to the HPSA criteria and designation
               methodology that were in effect in 2005 for primary care HPSAs,
               and reviewed our prior work on the HPSA designation system.

               To determine the number of HPSAs, we interviewed officials from
               HRSA, who reported that precise, accurate, historical data on the
               total number of HPSAs were not available. Therefore, we designed a
               methodology that HRSA officials confirmed was reasonable for
               estimating the number of HPSAs designated as of September 2005. We
               used the following HRSA data sources for our methodology:

               o  For geographic and population-group HPSAs, we obtained and
               analyzed summary statistics on HPSA designations as of September
               2005 from the Shortage Designation Branch within HRSA's Bureau of
               Health Professions.

               o  For facility HPSAs that were federal or state correctional
               institutions and public or nonprofit medical facilities, we
               reviewed a more detailed HRSA database of HPSAs designated as of
               September 2005, downloaded from HRSA's Geospatial Data Warehouse.1

               o  For facility HPSAs that were health centers and rural health
               clinics with automatic facility HPSA designations, we analyzed
               HRSA's data files of facilities with automatic HPSA designations
               as of September 2005.

               We also analyzed HRSA data on the HPSA scores of health centers
               and rural health clinics that received automatic HPSA designation
               to determine which of these facilities qualified for federal
               programs that required a minimum HPSA score as of September 2005.
               In addition, we reviewed data as of January 2006 downloaded from
               HRSA's Geospatial Data Warehouse to identify the locations of
               geographic and population-group HPSAs and the HPSAs that were
               proposed to have their HPSA designations withdrawn because they no
               longer met the criteria or did not provide updated data in support
               of their designations.2

               We performed reliability checks on the HRSA data to identify
               potential duplicate entries or inconsistencies in the data-for
               example, inconsistencies between HRSA's published summary
               statistics and our analysis summarizing the data from HRSA's
               Geospatial Data Warehouse-and interviewed HRSA officials, Indian
               Health Service (IHS) officials, and officials from associations
               representing health centers and rural health clinics about the
               data. We accounted for limitations in the data by excluding from
               our analysis the lists of two categories of facility HPSAs-public
               or nonprofit medical facilities and Alaska Native health
               centers-that HRSA officials stated could have been duplicates of
               facilities in HRSA's data of health centers that received
               automatic HPSA designation and that HRSA had not yet identified as
               duplicates and removed from its data.3 In total, we excluded 136
               public or nonprofit medical facilities and 21 Alaska Native health
               centers. After taking these steps, we determined that the data
               were sufficiently reliable for our purposes.

               To obtain information on HPSA designation and federal programs
               that use HPSA designations, we reviewed Federal Register notices,
               laws, regulations, and documents from HHS's Centers for Medicare &
               Medicaid Services (CMS), HRSA, and IHS, including HRSA's National
               Health Service Corps (NHSC) summaries of the NHSC programs' field
               strength at the end of fiscal year 2005, and we reviewed our prior
               work on these programs.4

               To identify available research on the criteria used to designate
               HPSAs since we last reported on the criteria in 1995, we conducted
               a literature search of articles, studies, and reports-which we
               call reports-issued from January 1, 1995, through November 1,
               2005. We focused our review on the HPSA criteria that were in
               effect both in 2002 when the Health Care Safety Net Amendments
               were enacted and at the time of our review. We performed the
               literature search of peer-reviewed reports using the ProQuest
               search engine and keywords that were related to the following key
               elements of the HPSA designation criteria, including factors for
               determining areas with unusually high needs for primary medical
               care services:5

               o  ratio of population to primary care physicians,

               o  indicators of the population with incomes below the poverty
               level (poverty or income),

               o  infant mortality rate,

               o  distance to health care services, and

               o  birth rate.

               We also identified reports published during that time frame
               related to the HPSA criteria or methodology from the
               bibliographies of relevant reports, recommendations from experts
               we interviewed, and our prior work. We did not independently
               assess the methods used in the reports we located.

               Of the more than 340 reports located through the search, we
               identified 12 reports that we determined to be potentially
               relevant.6 After reviewing these 12 reports, we found 1 report in
               a peer-reviewed journal published from January 1, 1995, through
               November 1, 2005, that addressed the relationship between one of
               the key elements of the HPSA designation criteria (income) and
               primary care physician shortages or supply. We selected this
               report because it met the following criteria, in addition to the
               criteria outlined above:

               o  The report assessed the relationship between at least one key
               element of the HPSA designation criteria and primary care
               physician shortages or supply at the county, metropolitan
               statistical area, health service area, or other local level.7

               o  The report used a definition of primary care similar to the
               definition used for the HPSA designation (e.g., general or family
               practice, general internal medicine, pediatrics, and obstetrics
               and gynecology).

               Of the 12 reports reviewed, 6 reports discussed aspects of the
               methodology used to designate HPSAs: 1 issued by the Council on
               Graduate Medical Education (COGME), 1 issued by the Cecil G. Sheps
               Center for Health Services Research at the University of North
               Carolina at Chapel Hill, and 4 published in peer-reviewed
               journals.

               To review the impact of the automatic designation on health
               centers and rural health clinics as facility HPSAs, we analyzed
               HRSA's data on automatic HPSA designations and their associated
               scores. We also analyzed data on rural health clinics prepared by
               the Cecil G. Sheps Center for Health Services Research at the
               University of North Carolina at Chapel Hill for HRSA's Office of
               Rural Health Policy, which used 2003 and 2004 CMS data on rural
               health clinics and 2005 HRSA data on HPSAs. However, limitations
               in these data prevented us from determining exactly how many
               health centers and rural health clinics benefited when all health
               centers and certain rural health clinics received automatic
               designation as a result of the provision included in the Health
               Care Safety Net Amendments of 2002. For example, the available
               data did not include sufficient geographic information to
               determine which of these facilities were located in geographic or
               population-group HPSAs before receiving automatic designation as
               facility HPSAs. Because of the data limitations, we also
               interviewed HHS officials in HRSA's Office of Rural Health Policy
               and Bureau of Primary Health Care, as well as officials from the
               National Association of Community Health Centers and the National
               Association of Rural Health Clinics, to discuss the impact of the
               automatic designation.

               We performed our work from August 2005 through September 2006 in
               accordance with generally accepted government auditing standards.

    1Criteria for designation of MUAs and MUPs are based on the index of
    medical underservice, published in the Federal Register on October 15,
    1976, and on the provisions of Pub. L. No. 99-280, enacted in 1986. Areas
    or populations are scored on a scale of 0 to 100, where 0 represents
    completely underserved and 100 represents best served or least
    underserved. Each service area or population group within an area found to
    have a score of 62 or less qualifies for designation as an MUA or MUP. See
    HRSA, Bureau of Health Professions, "Guidelines for Medically Underserved
    Area and Population Designation,"
    http://bhpr.hrsa.gov/shortage/muaguide.htm (downloaded on June 23, 2006).

    263 Fed. Reg. 46538-55 (Sept. 1, 1998).

    3Funding preferences are factors that place a grant application ahead of
    others without a preference on a list of applicants recommended for
    funding by a review committee.

    442 U.S.C. S: 295p(6). In fiscal year 2005 guidance to grant applicants,
    HRSA stated that medically underserved communities include health centers
    (including those for migrant workers, the homeless, and residents of
    public housing); rural health clinics; National Health Service Corps
    (NHSC) sites; Indian Health Service (IHS) sites; HPSAs; state or local
    health departments; and sites in a shortage area designated by a state
    governor.

    542 U.S.C. S: 295j. An additional grant program authorized under title VII
    of the Public Health Service Act provides a funding preference for
    applicants that have not less than 25 percent of their graduates in
    full-time practice settings in medically underserved communities, that
    recruit and admit students from medically underserved communities, that
    have established relationships with public and nonprofit providers of
    health care in the community involved, and that emphasize employment with
    public and nonprofit entities in their training of students. 42 U.S.C. S:
    295d(c).

    642 U.S.C. S: 296d. The preference also applies to applicants that will
    help meet public health nursing needs in state or local health
    departments.

    Appendix III: Scope and Methodology

    1The HRSA Geospatial Data Warehouse provides a single point of access to
    HRSA programmatic information, related health resources, and demographic
    data for reporting on HRSA activities. The data warehouse provides access
    to information for reporting and mapping of HRSA data, including HPSAs.
    For more information, see HRSA, "HRSA Geospatial Data Warehouse,"
    http://datawarehouse.hrsa.gov (downloaded Mar. 12, 2006). We downloaded
    data on HPSA designations as of September 2005 from the data warehouse on
    October 27, 2005. We limited our analysis of the HPSA database downloaded
    from the data warehouse to those data elements that we determined,
    following discussion with HRSA officials, were reliable for our purposes.

    2We downloaded data on HPSA designations as of January 2006 from HRSA's
    Geospatial Data Warehouse on March 12, 2006.

    3As of May 2006, the HRSA official responsible for designating HPSAs said
    that the agency was in the process of removing the duplicate entries of
    health centers for Alaska Natives so these facilities would be counted
    only once as a facility HPSA in HRSA's databases. The HRSA official also
    reported that HRSA would remove duplicate public or nonprofit medical
    facilities when these HPSA designations were reviewed for continued
    eligibility.

    4We reviewed information from these same sources to obtain information on
    federal programs that use other federal designations of medical
    underservice.

    5The factors used to calculate the HPSA score were also generally
    represented in our keywords.

    6We identified reports as potentially relevant if they addressed the
    relationship between key elements of the HPSA designation criteria and
    primary care physician shortages or supply, including primary care
    disciplines, such as pediatrics. We determined the following types of
    reports not to be potentially relevant: those specific to other
    disciplines or professions, such as dental care, chiropractic care,
    specialty care, or nursing care; those related to recruitment and
    retention of physicians that focused on physician characteristics; those
    related to workforce projections; those using data from countries other
    than the United States or focusing on health care markets outside of the
    United States; and those with a narrow focus, such as on vaccine
    shortages.

    7We excluded reports that used state-level data because these data are not
    necessarily applicable to smaller geographic units such as counties, and
    HPSAs are often based on county boundaries or parts of counties.

    Appendix IV: Federal Programs Using Health Professional Shortage Area and
    Other Designations of Underservice

               Various federal programs have used the HPSA, MUA, MUP or other
               designations, such as medically underserved communities, to
               allocate resources, such as scholarships or grants, or to provide
               benefits, such as the waiver of requirements associated with a
               foreign physician's visa (see table 2).

    Table 2: Programs and Administering Agencies That Used HPSA, MUA, MUP or
    Other Designations to Allocate Resources or Provide Benefits in Fiscal
    Year 2005

                     Agency
                     administering Resource
                     program or    allocated or     Federal funding Designation(s)
    Program       benefit       benefit provided informationa    used by program
    Consolidated  HRSA and CMS  Awards grants    $1,734 million  MUA
    health center               for operation of (funding from
    program                     health centers   FY 2005         MUP
                                   and other        appropriations
                                   activities;      for HRSA)b
                                   provides
                                   benefits
                                   associated with
                                   federally
                                   qualified health
                                   center status,
                                   including
                                   eligibility to
                                   participate in a
                                   drug discount
                                   program and to
                                   receive
                                   reimbursement
                                   from Medicare
                                   and Medicaid
                                   using special
                                   payment
                                   mechanisms,
                                   which serve as
                                   an incentive for
                                   becoming a
                                   health center.
    Federally     HRSA and CMS  Provides         b               MUA
    qualified                   benefits
    health center               associated with                  MUP
    look-alike                  federally
    program                     qualified health
                                   center status,
                                   including
                                   eligibility to
                                   participate in a
                                   drug discount
                                   program and to
                                   receive
                                   reimbursement
                                   from Medicare
                                   and Medicaid
                                   using special
                                   payment
                                   mechanisms,
                                   which serve as
                                   an incentive for
                                   becoming a
                                   health center.
    Indian Health IHS           Awards American  $9 million      HPSAc
    Scholarship                 Indian and       (funding from
    Program                     Alaska Native    FY 2005
                                   students with    appropriations
                                   scholarships for for IHS)
                                   service in
                                   certain
                                   practices in
                                   HPSAs or other
                                   practice
                                   locations
                                   authorized by
                                   statute.c
    J-1 visa      Department of Waives           Not applicable  HPSAe
    waivers for   Homeland      requirement for
    physicians at Security's    certain foreign                  MUA
    the request   U.S.          physicians to
    of federal    Citizenship   return to their                  MUP
    agencies (3   and           home country or
    programs)     Immigration   country of last
                     Services      legal residence
                     (USCIS),      for 2 years
                     Department of after graduate
                     State,        medical
                     Appalachian   education at the
                     Regional      request of an
                     Commission,   interested
                     Delta         federal agency
                     Regional      in exchange for
                     Authority,    at least 3 years
                     HHS's Office  of service in an
                     of Global     area designated
                     Health        by the Secretary
                     Affairs, and  of Health and
                     HRSAd         Human Services
                                   as having a
                                   shortage of
                                   health
                                   professionals.
    J-1 visa      USCIS,        Waives           Not applicable  HPSA:f Practice
    waivers for   Department of requirement for                  in a HPSA or
    physicians at State, state  certain foreign                  treating the
    the request   health        physicians to                    residents of
    of state      departmentsd  return to their                  HPSAs
    health                      home country or
    departments                 country of last                  MUA: Practice in
    (also known                 legal residence                  an MUA or
    as the Conrad               for 2 years                      treating the
    Program)                    after graduate                   residents of
                                   medical                          MUAs
                                   education in
                                   exchange for at                  MUP: Practice in
                                   least 3 years of                 an MUP or
                                   service in an                    treating the
                                   area designated                  residents of
                                   by the Secretary                 MUPs
                                   of Health and
                                   Human Services
                                   as having a
                                   shortage of
                                   health
                                   professionals.
                                   Limited to 30
                                   waivers per
                                   state per year.
                                   Up to five
                                   waivers may be
                                   for physicians
                                   to practice
                                   outside of
                                   shortage areas
                                   as long as they
                                   practice in a
                                   facility that
                                   serves patients
                                   residing in such
                                   areas.
    Medicare      CMS           Provides 10      $148 million    HPSA: Geographic
    Incentive                   percent bonus    (FY 2005        HPSAs only
    Payment                     payment on       Medicare
    program                     Medicare         expenditures)
                                   payments for
                                   physician
                                   services in
                                   geographic
                                   HPSAs.
    National      HRSA          Awards           $131 million    HPSA
    Health                      scholarships to  (funding from
    Service Corps               or provides      FY 2005
    (4 programs)g               money to repay   appropriations
                                   educational      for HRSA)
                                   loans of
                                   students and
                                   health
                                   professionals in
                                   exchange for at
                                   least 2 years of
                                   service in a
                                   HPSA; supports
                                   commissioned
                                   officers of the
                                   U.S. Public
                                   Health Service
                                   to serve for 3
                                   years in the
                                   neediest HPSAs.
    National      USCIS         Waives the job   Not applicable  HPSA: Geographic
    Interest                    offer                            HPSAs only
    Waivers for                 requirement
    Immigrant                   placed on                        MUA
    Physicians                  certain
                                   immigrants,
                                   including
                                   physicians who
                                   agree to
                                   practice in a
                                   HPSA, an MUA, an
                                   MUP, or at
                                   Department of
                                   Veterans Affairs
                                   facilities.h
    Rural Health  CMS           Provides special $413 million    HPSA: Rural
    Clinic                      Medicare and     (2004 Medicare  geographic and
    program                     Medicaid payment expenditures);i population-group
                                   mechanisms for   $333 million    HPSAs only
                                   rural health     (FY 2004
                                   clinics, which   Medicaid        MUA: Rural MUAs
                                   serve as an      expenditures)i  only
                                   incentive for
                                   becoming a rural                 Other: Rural
                                   health clinic.                   areas designated
                                                                    by a state's
                                                                    governor as
                                                                    shortage areas
    Scholarships  HRSA          Awards grants to $47 million     HPSA
    for                         health           (funding from
    Disadvantaged               professions      FY 2005         MUA
    Students                    schools to       appropriations
    Program                     provide          for HRSA)       MUP
                                   scholarships to
                                   full-time,                       Other: Other
                                   financially                      medically
                                   needy students                   underserved
                                   from                             communitiesk
                                   disadvantaged
                                   backgrounds
                                   enrolled in
                                   eligible health
                                   professions or
                                   nursing
                                   programs.
                                   Funding priority
                                   is given to
                                   schools applying
                                   for the funding
                                   based on the
                                   proportion of
                                   graduating
                                   students going
                                   into primary
                                   care, the
                                   proportion of
                                   underrepresented
                                   minority
                                   students, and
                                   the proportion
                                   of graduates
                                   working in
                                   medically
                                   underserved
                                   communities.j, k
    Title VII     HRSA          Provides grants  $165 million    HPSA
    health                      for health       (funding from
    professions                 professions      FY 2005         MUA
    education and               education and    appropriations
    training                    training         for HRSA)       MUP
    grant                       programs.
    programsl (16               Funding                          Other: Other
    programs)                   preference is                    medically
                                   given to                         underserved
                                   applicants that                  communitiesk
                                   (1) place a high
                                   or increasing
                                   number of
                                   graduates or
                                   program
                                   completers in
                                   settings having
                                   the principal
                                   focus of serving
                                   medically
                                   underserved
                                   communities or
                                   (2) have 25
                                   percent or more
                                   of their
                                   graduates in
                                   full-time
                                   practice
                                   settings in
                                   medically
                                   underserved
                                   communities and
                                   meet other
                                   statutory
                                   requirements.k,
                                   m
    Title VIII    HRSA          Provides grants  $17 million     HPSA
    nursing                     to institutions  (funding from
    education                   to provide       FY 2005         MUA
    programsn (2                financial        appropriations
    programs)                   support through  for HRSA)       MUP
                                   traineeships for
                                   registered                       Other: Other
                                   nurses enrolled                  medically
                                   in advanced                      underserved
                                   education                        communitiesk
                                   nursing programs
                                   or in a master's
                                   degree nurse
                                   anesthesia
                                   program. In
                                   awarding grants,
                                   a funding
                                   preference is
                                   given to
                                   applicants whose
                                   projects will
                                   substantially
                                   benefit rural or
                                   underserved
                                   populations,
                                   using sites
                                   identified under
                                   the definition
                                   of medically
                                   underserved
                                   community as
                                   proxies, and
                                   gives special
                                   consideration
                                   for applicants
                                   with students
                                   who have
                                   committed to
                                   practicing in
                                   HPSAs after
                                   graduation.k, o

    Source: GAO analysis of HHS and other federal and state agency
    information.

    Note: In addition to the programs included in the table, other programs,
    including rural health grant programs administered by HRSA, have used the
    HPSA designation to some degree in allocating resources. For example, in
    fiscal year 2005, HRSA's announcement for rural health network development
    grants stated that a funding preference would be given to those qualified
    applicants where the service area was located in a designated HPSA, was a
    medically underserved community, or served medically underserved
    populations. HRSA does not maintain a list of all programs using the HPSA
    designation to allocate resources or provide benefits.

    aFunding amounts from HRSA and IHS reflect fiscal year 2005 appropriations
    or budget authority as reported in the agencies' fiscal year 2006 budget
    justifications and provided by agency officials. Budget authority is the
    authority provided by federal law to enter into financial obligations that
    will result in future outlays involving federal government funds. Budget
    authority includes appropriations and also includes the authority to
    borrow, enter into contracts, or to obligate and expend offsetting
    receipts and collections. Funding amounts from CMS reflect expenditure
    amounts under the Medicare and Medicaid programs from data in reports
    provided by CMS officials.

    bAccording to CMS officials, although data on Medicare and Medicaid
    payments to federally qualified health centers are available, data on
    expenditures for specific types of health centers, such as consolidated
    health centers or federally qualified health center look-alikes, are not
    available. Data from reports provided by CMS officials show that in 2004,
    the most recent year for which complete data were available, Medicare
    payments to federally qualified health centers totaled about $278 million;
    in fiscal year 2004, the most recent year for which data were available,
    Medicaid payments to federally qualified health centers totaled about $778
    million.

    cScholarship recipients must fulfill a service requirement by, for
    example, being engaged in full-time private practice in a HPSA addressing
    the health care needs of a substantial number of Indians. Other types of
    service opportunities are also available for scholarship recipients.

    dA federal agency or state (including the District of Columbia, Guam,
    Puerto Rico, and the U.S. Virgin Islands) can request J-1 visa waivers for
    physicians who entered the United States for graduate medical education
    under the Department of State's exchange visitor program. After being
    recommended by the Department of State, waivers are granted by USCIS.
    Three federal agencies-HHS, Appalachian Regional Commission, and Delta
    Regional Authority-requested waivers for physicians to practice in
    underserved areas in fiscal year 2005. Also in fiscal year 2005, all 50
    states, the District of Columbia, and Guam requested J-1 visa waivers for
    physicians to practice in facilities located in or treating residents of
    underserved areas under a provision of the Immigration and Nationality
    Act, also known as the Conrad Program.

    eThe Appalachian Regional Commission's and HHS's J-1 visa waiver programs
    require waiver physicians to practice in HPSAs. The Delta Regional
    Authority's J-1 visa waiver program requires waiver physicians to practice
    in HPSAs, MUAs or MUPs.

    fIndividual state requirements may vary. For example, one state may
    require J-1 visa waiver physicians to practice in HPSAs, while other
    states may require them to practice in HPSAs, MUAs, or MUPs.

    gNational Health Service Corps programs include the Scholarship Program,
    federal Loan Repayment Program, State Loan Repayment Program, and Ready
    Responders.

    h8 U.S.C. S: 1153(b)(2)(B)(ii), 8 C.F.R. S: 204.12 (2006).

    iAccording to CMS officials, the most recent completed year for which data
    on rural health clinics were available was 2004 for Medicare payments and
    fiscal year 2004 for Medicaid payments.

    jFunding priorities are factors that provide a grant applicant with a
    fixed amount of additional rating points, which could place the applicant
    in a more favorable position to receive a grant award than the applicant
    would be without the additional rating points.

    kA medically underserved community is an urban or rural area or population
    that (1) is eligible for HPSA designation; (2) is eligible to be served by
    a community health center, migrant health center, or a grantee serving
    residents of public housing or the homeless; (3) has a shortage of
    personal health services, as determined under criteria issued by the
    Secretary of Health and Human Services relating to rural health clinics;
    or (4) is designated by a state governor (in consultation with the medical
    community) as a shortage area or medically underserved community.

    lIncludes 15 health professions education programs authorized under title
    VII of the Public Health Service Act that have a funding preference for
    applicants that place a high or increasing number of graduates or those
    completing the program in settings having the principal focus of serving
    medically underserved communities, including (1) programs for training in
    family medicine, general internal medicine, general pediatrics, physician
    assistants, general dentistry, or pediatric dentistry; (2) programs for
    area health education centers; (3) Health Education and Training Centers
    program; (4) Quentin N. Burdick Program for Rural Interdisciplinary
    Training; (5) programs for allied health projects and other disciplines;
    and (6) geriatric education programs. In addition to these 15 programs, 1
    additional grant program authorized under title VII of the Public Health
    Service Act, Health Administration Traineeships and Special Projects, has
    a funding preference for applicants that have not less than 25 percent of
    their graduates in full-time practice settings in medically underserved
    communities, that recruit and admit students from medically underserved
    communities, that have established relationships with public and nonprofit
    providers of health care in the community involved, and that emphasize
    employment with public and nonprofit entities in their training of
    students.

    mA funding preference is also available to applicants implementing new
    programs if they meet at least four of seven statutory criteria.

    nIncludes the Advanced Education Nursing Traineeship Program and Nurse
    Anesthetist Traineeship Program.

    oThe funding preference also applies to applicants that will help meet
    public health nursing needs in state or local health departments. Special
    considerations are factors considered in making funding decisions that are
    not review criteria, preferences, or priorities, for example, ensuring
    that there is an equitable geographic distribution of grant recipients.

    Appendix VI: GAO Contact and Staff Acknowledgments

                                      GAO Contact

    Leslie G. Aronovitz, (312) 220-7600 or aronovitzl@gao.gov

                                    Acknowledgments

    In addition to the person named above, Kim Yamane, Assistant Director;
    Ellen W. Chu; Jennifer DeYoung; and Julian Klazkin made key contributions
    to this report.

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    (290486)

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    Highlights of GAO-07-84 , a report to congressional committees

    October 2006

    HEALTH PROFESSIONAL SHORTAGE AREAS

    Problems Remain with Primary Care Shortage Area Designation System

    To identify areas facing shortages of health care providers, HHS relies on
    its health professional shortage area (HPSA) designation system. HHS
    designates geographic, population-group, and facility HPSAs. HHS also
    gives each HPSA a score to rank its need for providers relative to other
    HPSAs.

    The Health Care Safety Net Amendments of 2002 required GAO to report on
    the HPSA designation system. GAO reviewed (1) the number and location of
    HPSAs and federal programs that use HPSA designations to allocate
    resources or provide benefits, (2) available research on HPSA designation
    criteria and methodology, and (3) the impact of a 2002 provision that
    automatically designates federally qualified health centers and certain
    rural health clinics as facility HPSAs. GAO obtained and analyzed HHS's
    data on primary care HPSA designations as of September 2005 and January
    2006 and identified reports on HPSA criteria and methodology through a
    literature search of peer-reviewed journals and other reports published
    since 1995.

    What GAO Recommends

    GAO recommends that HHS (1) remove the designations of HPSAs that no
    longer qualify by publishing a list of designated HPSAs in the Federal
    Register and (2) complete and publish HHS's proposal to revise the HPSA
    designation system. HHS concurred with both recommendations.

    GAO identified more than 5,500 HPSAs designated throughout the United
    States as of September 2005; multiple federal programs relied on these
    designations to allocate resources or provide benefits. GAO estimated that
    slightly more than half of the HPSAs were designated for geographic areas,
    such as counties or portions of counties, or population groups, such as
    migrant farmworkers. The remaining HPSAs were designated for facilities,
    such as rural health clinics. In fiscal year 2005, more than 30 federal
    programs relied on HPSA designations, and in some cases HPSA scores, to
    allocate resources or provide benefits. The use of the HPSA designation by
    numerous federal programs to allocate resources or provide benefits is an
    incentive for obtaining and retaining a HPSA designation.

    Published reports have pointed to shortcomings in the methodology used for
    designating HPSAs. These reports' observations were consistent with
    findings in GAO's 1995 report, Health Care Shortage Areas: Designations
    Not a Useful Tool for Directing Resources to the Underserved,
    (GAO/HEHS-95-200, Sept. 8, 1995), including that HHS's methodology did not
    account for certain types of primary care providers already serving in a
    HPSA, which can result in an overstatement of the provider shortage.
    Recognizing the shortcomings of the current methodology, HHS has been
    working since 1998 on a proposal to revise the designation system. In
    addition, some HPSAs that no longer meet the criteria have retained their
    HPSA designation and possibly received benefits from federal programs that
    rely on that designation. HHS has not complied since 2002 with the
    statutory requirement to annually publish a list of designated HPSAs in
    the Federal Register-which would remove the designations of those HPSAs
    that are no longer listed.

    Many federally qualified health centers and rural health clinics did not
    benefit from automatic designation as facility HPSAs because they were
    located in geographic or population-group HPSAs. In addition, most of the
    more than 1,600 federally qualified health centers received HPSA scores
    associated with the automatic designation that were too low to qualify
    them for certain federal programs that required a minimum HPSA score in
    2005, although they qualified for other programs that did not have such a
    requirement. Of the 590 rural health clinics that chose to certify that
    they would treat anyone regardless of ability to pay and, as a result,
    received automatic designation as facility HPSAs, most also received
    associated HPSA scores too low to qualify for benefits from certain
    federal programs that required a higher HPSA score.
    *** End of document. ***