U.S. Department of Health and Human Services

---

Contents

NAC Committee Members

About the Committee

Executive Summary

Introduction
References

Access to Pharmaceuticals and Pharmacy Services in Rural Areas
Recommendations
References

Health Information Technology in Rural Areas
Recommendations
References

Family Caregiver Support of the Rural Elderly
Recommendations
References

Acronyms Used

Acknowledgements

The Committee relied on a number of important data sources for this report. The American Hospital Association and the Office of the National Coordinator for Health Information Technology provided data for the chapter on Health Information Technology in Rural Communities. The Rural Assistance Center, American Pharmacists Association and the American Society of Health Systems Pharmacists provided data for the Access to Pharmaceuticals and Pharmacy Services chapter. Rick Greene from the U.S. Administration on Aging, Kathleen Kelly from the Family Caregivers Alliance, and Charlene Harrington and Martin Kitchner from the University of California, San Francisco provided data for the chapter on Family Caregiver Support of the Rural Elderly.

The contributions of Federal staff also improved this report to a large extent. They include Marcia Brand, Tom Morris, Jennifer Riggle, Michele Pray-Gibson, Karen Stewart, Emily Cook and Keith Midberry in the Health Resources and Services Administration's (HRSA) Office of Rural Health Policy; Nikki Bratcher-Bowman in the Office of Intergovernmental Affairs at the Department of Health and Human Services; Dennis Dudley of the Administration on Aging; and Jimmy Mitchell from the HRSA Office of Pharmacy Affairs.

The Committee also benefited from the hospitality and rich information provided by various individuals involved with the Committee's two site visits over the past year. In June of 2005, the Committee visited Johnson City, Tennessee. The organizations representing the region, which included Johnson County Health Center, Wilson Pharmacy and Mountain Empire Older Citizens, Inc., all helped to inform the report you see here. We heard from several key speakers including Paul Stanton and Ron Franks from East Tennessee State University, Howard Chapman from Southwest Virginia Community Health Systems, Lisa Jenkins from CareSpark, Nancy Peace from the Tennessee Commission on Aging and Disabilities, Kathy Whitaker from First Tennessee Development District Area Agency on Aging and Paul Moore, an independent pharmacist from Atoka, Oklahoma. Special thanks go to Bruce Behringer and Joellen Edwards for coordinating and hosting this meeting. In September of 2005, the Committee visited Wilson, Wyoming and benefited greatly from the work of the individuals in the region at the St. John's Medical Center, St. John's Medical Center Foundation and the Star Valley Senior Citizens Center. We appreciated the information presented by Brent Sherard, Bev Morrow and Roxanne Homar from the Wyoming Department of Health, Robert Kelley from the University of Wyoming College of Health Sciences, Michael Stelmach from John Snow Inc., Kris Urbanek from the Mountain-Pacific Quality Health Organization and Gary Shatto from Frontier Drug. Thank you to Michael Enright, for coordinating and hosting the fall meeting. Special thanks should also go to Lynn Weidel and Penny Hunt for their assistance in planning the Wyoming meeting.

Finally, the Committee would like to recognize the passing of an important leader in the field of rural health. James Bernstein's work on improving the health of rural Americans through the creation of the first State Office of Rural Health in North Carolina and his commitment to training the next generation of rural health leaders has been felt throughout the United States. The Committee hopes to honor Bernstein's legacy continually through its work in advocating for improved rural health and human services.

The National Advisory Committee on Rural Health and Human Services

Members

Susan Birch, RN, MBA*
Northwest Colorado Visiting Nurse Association Inc.
Steamboat Springs, CO
Term: 07/01/03 - 06/30/07

Evan S. Dillard, FACHE
Chief Operating Officer
Tallahassee Memorial Hospital
Tallahassee, Florida
Term: 07/01/02 - 06/30/06

Joellen Edwards, Ph.D., NP
Dean and Professor
East Tennessee State University
College of Nursing
Johnson City, TN
Term: 07/01/02 - 06/30/06

Michael Enright, Ph.D.
Chief of Psychology
St. John's Medical Center
Jackson Hole, WY
Term: 07/01/02 - 06/30/06

Bessie Freeman-Watson
Department of Social Services
Portsmouth, VA 23704-3103
Term: 04/01/03 - 03/31/07

Joseph D. Gallegos
Vice President of Operations
Western Regions- VI, VII, VIII, IX, X
National Association of Community Health Centers
Albuquerque, New Mexico
Term: 07/01/03 - 06/30/07

Julia Hayes
Assistant Director of Minority Health
Alabama Office of Primary Care and Rural Health
Montgomery, AL
Term: 07/01/04 - 07/01/08

Lenard Kaye, D.S.W.
Director, Center on Aging
Professor, School of Social Work
College of Business, Public Policy and Health
University of Maine
Orono, ME
Term: 04/01/03 - 03/31/07

Michael Meit, M.P.H.*
Executive Director
University of Pittsburgh Center for Rural Health Practice
Bradford, PA
Term: 07/01/04 - 07/01/08

Arlene Jaine Jackson Montgomery, Ph.D.
Professor of Nursing
Hampton University
Newport News, VA
Term: 07/01/03 - 06/30/07

Ron L. Nelson, P.A.
President & CEO
Health Services Associates
Fremont, Michigan
Term: 07/01/03 - 06/30/07

Sister Janice Otis
SE Idaho Community Action Agency
Pocatello, ID
Term: 04/01/03 - 03/31/07

Larry K. Otis
Rural Community Development
Tupelo, MS
Term: 04/01/03 - 03/31/07

Patti J. Patterson, M.D., MPH
Vice-President for Rural and Community Health
Texas Tech University Health Science Center
Lubbock, TX
Term: 07/01/04 - 07/01/08

Raymond Rawson, D.D.S.
Professor Emeritus
University and Community Colleges System of Nevada
Las Vegas, Nevada
Term: 07/01/02 - 06/30/06

Heather Reed, MA
Rural Health Administrator
Ohio Department of Health
Primary Care and Rural Health Program
Columbus, OH
Term: 07/01/03 - 06/30/07

Thomas C. Ricketts, Ph.D.*
Deputy Director
Cecil G. Sheps Center for Health Services Research
University of North Carolina
Chapel Hill, NC
Term: 07/01/04 - 07/01/08

Tim Size, MBA
Executive Director
Rural Wisconsin Health Cooperative
Sauk City, WI
Term: 07/01/03 - 06/30/07

* Subcommittee chairs
 

2005-2006 Subcommittees

Pharmacy

Thomas Ricketts, Chair
Joellen Edwards
Evan Dillard
Joseph Gallegos
Ron Nelson
Raymond Rawson

Health Information Technology

Michael Meit, Chair
Michael Enright
Julia Hayes
Larry Otis
Patti Patterson
Heather Reed
Tim Size

Family Caregiver Support

Sue Birch, Chair
Arlene J. Jackson Montgomery
Len Kaye
Sister Janice Otis
Bessie Freeman-Watson
 

For Committee members’ biographies, please visit the National Advisory Committee on Rural Health and Human Services web site at:
http://ruralcommittee.hrsa.gov/.

About the Committee

The 21-member Committee's private and public-sector members reflect wide-ranging, firsthand experience with rural issuesin medicine, nursing, administration, finance, law, research, business, public health, aging, welfare and human service issues.

Each year, the Committee chooses key health and human service issues affecting rural communities to highlight. Background documents are then prepared for the Committee by both staff and contractors to help inform members on the issues. The Committee then produces a report with recommendations on those issues for the Secretary by the end of the year. The Committee also sends letters to the Secretary after each meeting. The letters serve as a vehicle for the Committee to raise other issues with the Secretary separate and apart from the report process.

The Committee meets three times a year. The first meeting is held in early winter in Washington. The Committee then meets twice in the field (in June and September). The Washington meeting usually coincides with the opening of a Congressional session and serves as a starting point for setting the Committee's agenda for the coming year. The field visits include ongoing work on the yearly topics with some time devoted to site visits and presentations by the host community.

The Committee is staffed by the Office of Rural Health Policy, which is located within the Health Resources and Services Administration of the U.S. Department of Health and Human Services. Additional staff support is provided by the Administration on Children and Families, the Administration on Aging and the Office of the Secretary's Office of Intergovernmental Affairs.

Executive Summary

This is the 2006 Report to the Secretary of Health and Human Services by the National Advisory Committee on Rural Health and Human Services.  This year’s report examines three key topics: access to pharmaceuticals and pharmacy services in rural areas; health information technology in rural areas; and family caregiver support of the rural elderly.  All are pertinent and timely topics that the Committee chose during its March 2005 meeting.

Access to Pharmaceuticals and Pharmacy Services in Rural  Areas

Access to pharmaceuticals and pharmacy services is an increasing challenge for rural communities. As prescription medications increase in usage and cost, problems with affordability and access continue to result. This issue is particularly important for rural areas because of their particular socio-economic, demographic and health status challenges. This chapter focuses on the evolving prescription drug marketplace alongside obstacles dealing with financial access and workforce availability.

Financial access to pharmaceuticals is a major issue in rural areas where a higher percentage of families lack health insurance and there are fewer employment opportunities that include insurance coverage for prescriptions.  Spending on prescription drugs nationwide increased 16 percent from 2000 to 2001 compared to a 9 percent increase in physician and clinical services and an 8 percent increase in hospital costs. The high cost of pharmaceuticals is especially difficult for rural communities that have millions of low-income workers and a disproportionate share of rural residents enrolled in Medicare, Medicaid or the State Children’s Health Insurance Program.

Both rural consumers and rural pharmacists are dealing with the financial issues of prescription drugs.  Independent pharmacies are the most common type of pharmacy in rural areas, yet they are increasingly receiving competition from mail-order companies and retail chains. Given their small size and thin profit margins, many independent pharmacies are facing the possibility of impending closure.

In addition, the issue of workforce availability of pharmacists and other qualified health care professionals who can dispense drugs in rural areas is a crucial factor in the access to pharmaceuticals and pharmacy services discussion.  Only 12 percent of pharmacists nationwide practice in rural areas and rural areas have fewer pharmacists proportionally than urban areas. Rural communities are also dealing with an aging population of pharmacists whose impending retirement is threatened by an insufficient number of younger pharmacists practicing in rural areas.

Besides financial accessibility and workforce availability, the chapter also discusses the possible impacts that implementation of the Medicare Modernization Act (MMA) might have on rural residents and rural independent pharmacies.  Clearly, the creation of a drug plan for Medicare beneficiaries will have a tremendous benefit to seniors and, particularly, to rural seniors who are less likely to have had coverage through a third-party or supplemental provider.  Still, with any dramatic change in the Medicare program, there are growing pains and unintended consequences.  Through testimonies and site visits, the Committee discovered concerns among rural seniors and rural policy experts about the impact of the new Medicare drug benefit. For example, the Committee heard from seniors that signing up for the new benefit is confusing given the complex choices among competing plans that offer different pre-approval requirements, different formularies for covered drugs, different access points and other variables. Moreover, some rural experts are worried that access to local pharmacies may be at risk in rural communities if the prescription drug plans rely too heavily on mail-order companies to distribute the drugs or if rural beneficiaries are forced to use mail-order services because of potentially lower costs in co-pays.  In that situation, there is concern that the MMA could indirectly contribute to the loss of business for independent pharmacies as well as lead to decreased consumer knowledge of prescription drug use.

In the Committee’s examination of the issues surrounding access to pharmaceuticals and pharmacy services in rural areas, the Committee makes several recommendations to the Secretary, including:

• The Secretary should seek authorization to allow pharmacists to be eligible for the National Health Service Corps, and to provide the funding for the National Health Service Corps to provide them with scholarships and loan repayments options.
• The Secretary should support research on the potential risks of pharmacy closures in rural communities using Evidence-based Practice Centers supported by the Agency for Healthcare Research and Quality.
• The Secretary should support an annual study for the next five years that examines the impact of the Medicare Modernization Act on rural pharmacies and rural residents’ access to pharmaceuticals and pharmacy services.

Health Information Technology in Rural Areas

In April of 2004, President George W. Bush issued an Executive Order calling for most Americans to be connected to an electronic health record within ten years. In order to implement this ambitious plan, the Office of the National Coordinator on Health Information Technology (ONCHIT) was created under the Department of Health and Human Services (HHS), and HHS Secretary Mike Leavitt has made this one of his key priorities.  Before this Executive Order, concerns over health information technology (HIT) needs were voiced throughout the United States in both rural and urban discussions about health care quality, medical errors, access to care and population health.  Discussions on HIT have ranged from technology such as bar coding and computerized provider order entry to the provision of direct clinical care via telemedicine and telehealth technologies.

It is evident that HIT presents a number of opportunities for the health of rural America.  HIT can help disparate rural providers from across the spectrum of care better coordinate services for their patients.  It also has the ability to help rural communities improve public health through disease surveillance and targeted health education.  A recent Institute of Medicine report asserts that investing in HIT in rural America will help achieve the six quality aims set forth in its original Crossing the Quality Chasm report: make health care safer, more effective, patient-centered, timely, efficient and equitable.

Despite the discourse surrounding the myriad of HIT options, the focus of the President and ONCHIT has been on electronic health records (EHRs).  What makes this national issue especially pertinent to rural communities is that EHR adoption is not equal across health care providers.  Rural America cannot afford to be left behind in the adoption of this technology.  Many rural providers lack the resources of their urban and suburban counterparts, which makes any investment in EHRs a potential risk given the limited capital for HIT investment, rapid changes in technology and the dearth of national technical standards.

To aid in HIT adoption, ONCHIT has produced a Framework for Strategic Action with the following four goals for the implementation of HIT, and specifically, EHRs.  These goals are:

• Inform clinicians
• Interconnect clinicians
• Personalize care
• Improve population health

This chapter examines each of the four goals as well as the National Coordinator’s proposed phases of implementation within each of these goals from a rural perspective.  The general conclusion of this chapter is that rural providers must successfully achieve adoption of HIT at the start of the national movement.  The limited infrastructure and availability of capital in rural areas makes the planning and adoption an even more critical and immediate step for rural America.  The Committee specifically highlights challenges in rural infrastructure, workforce and resources, and also emphasizes that rural health systems are not just smaller versions of urban and suburban systems—HIT adoption in rural communities may follow different phases of implementation than other systems.  This chapter attempts to explain the adoption gap and proposes recommendations on how to ensure that rural America is not left behind as the HIT agenda moves forward.

The chapter draws from a wide variety of literature as well as limited data sources and conversations with Federal, State and local stakeholders.  Through its findings, the Committee makes several recommendations, including:

• The Secretary should work with the Congress and the Federal Communications Commission to allow the use of Universal Service Funds for rural health care providers to build greater infrastructure for broadband access in rural communities.
• The Secretary should encourage groups like the American Health Information Community to consult with the Federal Office of Rural Health Policy, HHS Office of Intergovernmental Affairs and other key national rural health organizations about the impacts of their decision-making on rural communities.
• The Secretary should devote funding resources to ensure that technical assistance is available for rural communities after the final release and dissemination of the VistA-Office EHR software.

Family Caregiver Support of the Rural Elderly

Families—not nursing homes, social service agencies or other formal programs—provide the most long-term care to older persons with disabilities.  The Administration on Aging (AoA) reported in 1994 that there are 44 million family caregivers in the United States and 34 million of them care for someone 50 years old or older.  The majority of family caregivers are female, comprising 56 percent of the total number.

Two-thirds of all family caregivers also work outside the home.  Some 62 percent of caregivers have had to make some kind of adjustment in their work life, such as reducing hours, taking early retirement, going from full-time to part-time work or taking unpaid leave.  The American Geriatrics Society reports that one in five family caregivers will quit his or her job to become a full-time (and unpaid) caregiver.

The issue of family caregiver support may be more pressing in rural areas where there is a higher proportion of the elderly.  On the whole, the rural elderly have less access to skilled nursing and other long-term care services compared to their urban and suburban counterparts.  In fact, access to quality health services, in general, was identified as the top rural health priority among State and local health care leaders.  Without these formal services available, the rural elderly rely even more on family and friends for assistance.

This chapter focuses on the challenges of rural family caregivers, who are characteristically more independent and, therefore, more hesitant to seek help and more resistant to using formal services than their urban and suburban counterparts.  In its site visits, the Committee found that rural family caregivers are often geographically isolated and hence lack the opportunity to learn of available services from the limited service providers that do serve rural communities. Isolation, resentment, guilt and anger plague the caregiver, in addition to missed work and other financial difficulties. Research shows that informal caregivers suffer from high levels of stress, burnout and insomnia, and are more likely to use psychotropic drugs.  It is estimated that 20 percent of family caregivers suffer from depression, which is twice the rate of the general population.

Utilization of caregiver support services can be expanded through increased outreach and education to diminish the stigma related to these services. One factor that limits adequate family caregiver support for rural areas is fragmentation and a resulting lack of coordination among health and human services programs in rural areas, within Federal, State and local levels. Caregiving is an ongoing, long-term concern.  Informal caregiving is the backbone of the American long-term care system, where the value of the services provided by informal caregivers is estimated to be $257 billion annually, two times the amount currently spent on home care and nursing home care.  Significant benefits to individuals and society can be accrued by offering assistance to caregivers, especially in the first weeks of caregiving.

Given the increased need for more resources, more education and outreach, the Committee makes several recommendations to the Secretary, including:

• The Secretary should encourage better assessment of rural caregiver needs as part of the National Family Caregiver Support Program (NFCSP).
• The Secretary should create a prominent, national social marketing campaign on rural caregiving.
• The Secretary should establish a research grant program to study the rural application and impact of the five required NFCSP service areas.
• The Secretary should lower the match requirement for the Title III E program from 25 percent to 15 percent, thus aligning it with the match required of other AoA programs.

Introduction

During the March 2005 meeting, a cadre of rural health experts testified before the Committee to inform them about the issues relevant to the three selected topics. Rebecca Slifkin of the Rural Health Research Center at the University of North Carolina at Chapel Hill and Jimmy Mitchell of the HRSA Office of Pharmacy Affairs presented information on pharmacy issues facing rural areas.  Kelly Cronin of the HHS Office of the National Coordinator for Health Information Technology and Helen Burstin of the HHS Agency for Healthcare Research and Quality met with the Committee on issues related to health information technology.  Rick Greene of the HHS Administration on Aging testified before the Committee on the National Family Caregiver Support Act and other issues topical to family caregiver support.  Greene was joined by Donna Butts of Generations United.

Following the March 2005 meeting, the Committee’s chair, David Beasley, identified three Committee members to serve as chair of each of the subcommittees. Thomas Ricketts of North Carolina chaired the Access to Pharmaceuticals and Pharmacy Services Subcommittee.  Michael Meit of Pennsylvania chaired the Health Information Technology Subcommittee.  Finally, Sue Birch of Colorado chaired the Family Caregiver Support of the Rural Elderly Subcommittee.

Armed with information from the testimonies, the Committee then conducted two field meetings to gather more information on these issues at the community level.  The field meetings and site visits by the subcommittees took place in Johnson City, Tennessee and Wilson, Wyoming.  The Tennessee meeting offered the Committee a perspective on the three issues in the context of the rural underserved in the Appalachian region.  The Wyoming meeting afforded the Committee the opportunity to examine the three topics in the context of isolated rural frontier areas.

Undertaking a rural analysis of these issues was not without its challenges.  The issue of access to pharmaceuticals and pharmacy services is extremely broad, given that there are multiple sub-issues to consider and weigh in on.  While the issue is a challenge for both urban and rural areas, there are specific dimensions and implications that apply more to rural communities.   As a result, this may have been the most challenging issue taken on by the Committee in recent years.  In the case of the family caregiver support of the rural elderly and health information technology topics, the Committee faced the added burden of a lack of rural-specific data that would have better quantified the rural aspects of both issues.  The challenge of finding rural-specific data is an ongoing concern for the Committee.  While HHS supports and conducts a great deal of research each year, it does not often analyze the data by rural and urban demographics.  This is an unfortunate opportunity loss for the Secretary.  Having data separated between rural and urban areas would allow the Secretary to better understand the rural impacts of particular health and human service issues, and to identify how certain HHS programs can be utilized to address those problems.

Despite these hurdles, the Committee did its best to examine any relevant research studies, to use existing data sources, as appropriate, and to develop proxy measures that help to quantify rural concerns.  In addition, the Committee drew on the experience of all of its members and of the many experts both nationally and in the field to inform the report.

As in years past, the Committee sought to select topics that are timely within the national health care debate though still crucial within the context of rural health.  The three topics in this year’s report are currently being examined by HHS and other national policymakers.  With the 2006 Report, the Committee hopes to contribute to the national discussion of these issues and to ensure that rural concerns are taken into account, particularly as they relate to HHS activities in these areas.

In the report, the Committee provides the current national context for each chapter’s topic in the section, “Why the Committee Chose This Topic.”  Then, the discussion moves from the national level onto rural-specific issues in the chapter section, “What Is Known About (the Topic).”  Next, the Committee highlights the work of HHS and other governmental agencies in “Current HHS and Governmental Role.”   The Committee then offers a “Conclusion” and its “Recommendations” for the Secretary on how HHS can address some of the obstacles and challenges related to the topic.

The high cost of medications has brought the issue of access to pharmaceuticals and pharmacy services to the forefront of the national debate.  Central to the discussion is the tremendous increase in medications to treat an ever-widening array of diseases and conditions.  These trends provide health professionals and the patients they care for expanded opportunities to treat disease, save lives and manage chronic conditions.  The potential to improve quality of health care, however, is undermined by serious issues concerning the steep rise in medication costs and lack of pharmacy access for many Americans.  The elderly are at the center of the medication issue because they have a disproportionate share of prescription drugs utilization.1 Thus, the elderly as a group are most vulnerable to the challenges of access to pharmaceuticals and pharmacy services.  The case is keener in rural communities where there is a higher proportion of the elderly, a higher rate of the uninsured and a higher rate of poverty.2 These combined factors signify the need to highlight rural areas’ obstacles in obtaining adequate access to pharmaceuticals and pharmacy services.

Alongside the prominent discussion about pharmaceuticals, health information technology has garnered a tremendous amount of attention, and appropriately so. Health information technology provides an effective means to improve quality of care. This issue is especially important for rural communities since health information technology has the ability to streamline the process of communication within and between health care facilities.  Though urgently needed, the Committee discovered that rural areas do not currently possess the same level of expertise, funding and infrastructure to adopt and implement health information technology, as do their urban and suburban counterparts.

Finally, the pending move of a significant portion of the baby boom generation into retirement is already creating service challenges for many Americans.  Within the next 30 years, the number of people eligible for retirement is expected to double.3 This issue provides timeliness and pertinence to the Committee’s choice to address the family caregiver support topic. Already many families are filling the role of caregiver for elderly relatives and friends.  In some cases, it is children caring for elderly parents, while in others it is siblings caring for siblings or spouses for spouses.  Although these situations might be more ideal than nursing homes or assisted living, the strain on the caregivers is evident and the challenges are further complicated in rural areas due to a higher proportion of the elderly, a higher burden of chronic diseases among rural residents and a lack of infrastructure to support the caregivers.

No issue exists solely on its own.  This is especially valid for the three topics chosen this year.  Each of the topics has mutually reinforcing impacts, and though they are treated as separate chapters within the report, the need to recognize their interdependency must be noted.

What links these three topics can be explained through one general example.  More than ever, Americans are utilizing medications. In a California survey conducted by the U.S. House of Representative’s Committee on Government Reform, the study found that 91 percent of the elderly were taking some form of medication and, on average, each elderly person was taking four pills a day.4 Given the fact that rural areas have a disproportionate share of the elderly, the potential burden of the family caregiving role there is greater. Like other caregivers, rural caregivers have to juggle keeping abreast of all the possible drug side effects and drug-drug interactions along with the other responsibilities of caregiving.  However, rural areas face a lack of health information technology to facilitate a streamlined process of communication among disparate health care providers.  In addition, health information technology such as bar coding, software programming to detect adverse drug reactions, etc., could significantly improve the medication safety in rural areas but, unfortunately, rural areas have not been able to adequately implement these technologies.

On the whole, the discussion of how these three topics are linked begs the need for collaboration.  As was noted in the Committee’s 2005 Report, collaboration is key in addressing rural health and human service issues and this year’s topics are no exceptions.  Thus, while the Committee examined these issues in-depth in the individual chapters, it is important for policymakers in the Department to understand and take into account how the issues interact.

References

1. Families USA. (2003, October 27). Out of bounds: Rising prescription drug prices for seniors. Families USA Publication No. 03-106. http://www.familiesusa.org/assets/pdfs/Out_of_Boundsab79.pdf.
2. Committee on The Future of Rural Health Care, Institute of Medicine. (2005). Quality through collaboration: The future of rural health. Washington, DC: The National Academies Press.
3. Social Security Administration. (2005, September). Fast facts & figures about Social Security, 2005.  SSA Publication No. 13-11785.
4. Minority Staff, Special Investigations Division, Committee on Government Reform, U.S. House of Representatives.  (2000, August 17). Prescription drug coverage, utilization, and affordability for senior citizens in California.

Access to Pharmaceuticals and Pharmacy Services in Rural Areas

Why the Committee Chose This Topic

In studying rural access to pharmaceuticals, the Committee analyzed the issue on several levels. As noted above, access is affected by how the medications are paid for and by whom, how they are prescribed and how they are delivered to the patient, as well as the supply of pharmacists and other pharmacy personnel in rural areas. In addition to these factors, rural areas are especially vulnerable to the rapidly changing marketplace for prescription medications and the special challenges they have created for small independent pharmacy providers in rural areas.  This chapter will touch upon all of these factors, recognizing that any one of them could be the subject of a much more thorough investigation.

Through its review of the literature and from information gathered at field meetings and site visits, the Committee has learned that current barriers to pharmaceutical access stem mainly from financial barriers.  However, factors of geographic access and lack of adequate pharmacy services also play roles that contribute to the access to pharmaceuticals issue. Often these factors interact with each other to compound the challenges of access to pharmaceuticals in rural areas.

The Committee hopes that this chapter will focus the attention of policymakers on emerging issues that could have significant implications for access to pharmaceuticals and pharmacy services in rural areas of the country.  The Committee believes that policymakers must be attentive to these issues and work to protect and enhance existing pharmacy resources such as Federal programs that promote increased access to pharmaceuticals and those that promote the recruitment and retention of pharmacy professionals who serve rural communities.

What Is Known About Access to Pharmaceuticals and Pharmacy Services in Rural Areas

Financial Access

Prescription Medication Assistance Programs Some States and private organizations have programs to assist low-income rural residents in applying for prescription medication assistance programs. One such program at the Southwest Virginia Community Health Systems, Inc. involves patient advocates who are paid to complete the application forms for patients that need financial assistance with medications. A new software program was developed specifically for this purpose. The program was so successful in its first year that the State of Virginia provided a State grant in 2002 to support and expand the program. Increased State funding has been made available in all subsequent years. In one 10-month period the program served 2,536 patients' prescriptions valued at $3.1 million.

The high cost of pharmaceuticals is an especially difficult challenge for millions of low-income workers in rural areas and their families. Many of them are eligible for some coverage through public insurance programs such as Medicare, Medicaid or the State Children’s Health Insurance Program.  However, these programs target specific population groups such as the elderly, the disabled, and poor mothers and children. There are other rural residents who earn too much and hence do not qualify for these programs.  These individuals may not be insured or may not be able to afford adequate insurance even if some coverage is provided through their employment.  Part of the problem arises from the economic realities of rural America.  Agriculture and small businesses dominate in rural areas and these industries tend to not provide adequate health insurance.

Many individuals without medication coverage rely on pharmacy assistance programs provided by pharmaceutical companies. These programs can provide free or low-cost prescription medications to low-income groups or individuals who meet the criteria set by the medication manufacturers. The medication industry’s trade group, the Pharmaceutical Research and Manufacturers of America (PhRMA), reports that medication manufacturers donated $4 billion in medications in 2004 by filling 22 million prescriptions nationwide.3 To date, there have been no studies of these programs that would determine whether they play a bigger role in securing prescription drugs for rural residents compared to urban or suburban residents.  However, it is clear that they are a lifeline for a significant sector of the population; the Committee believes more study is needed to determine the rural implications of this pharmacy resource.

While many patients have become reliant on these assistance programs, the programs are not without their challenges.  Some patient advocates believe that eligibility rules for these kinds of programs are becoming stricter and that the application process can be bureaucratic, confusing to applicants and time-consuming. Some manufacturers have cancelled or suspended their programs without notice, while others have frequently changed the types of medications that are available.  These programs also work best for individuals with chronic conditions as opposed to emergent pharmaceutical needs.  Even in the best scenario, there is considerable delay between applying for these programs and receiving the prescription medications. Due to the difficulties with pharmacy assistance programs, several states have developed programs to assist patients in navigating the process of applying, whether utilizing the aid of patient advocates or software programming to streamline the process.

Medication Access and Review Program (MARP) The North Carolina Office of Research, Demonstrations and Rural Health Development, with funding from the North Carolina Health and Wellness Trust Fund, has developed a software program called Medication Access and Review Program (MARP) that automates the complicated process of searching for low-cost and no-cost medications available through Patient Assistance Programs for low-income patients. MARP determines patient eligibility, completes applications, tracks requests, reminds the user when it is time to reorder and provides a place for the user to maintain a permanent record of a patient's medication history. The MARP database lists more than 1,200 medications offered by more than 100 leading pharmaceutical manufacturers. MARP has been implemented in 119 clinics and has resulted in receipt of over $20 million a year in pharmaceuticals for low-income patients in North Carolina.

Individuals without medication coverage or who cannot meet their needs through pharmacy assistance programs must pay full price for their prescription medications.  For rural areas, this is a concern given the higher rate of poverty of rural residents. Individuals with limited financial capabilities are more apt to forgo treatment for illnesses and chronic conditions, resulting in worse outcomes, increased hospitalizations and poorer health.

Insurers have employed a number of mechanisms to manage costs and control utilization of prescription medications, including the use of preferred medication prices that encourage the use of generic medications over name-brand medications.  As prescription medication costs continue to rise and the number of prescription medications continues to expand, insurers have quickly turned to tools such as pharmacy benefit managers (PBMs) to manage medication benefits and negotiate prices with the pharmaceutical companies.  The PBMs have also looked for ways to reduce costs in their dealings with pharmacists by reducing dispensing fees in return for steering a higher volume of patients toward pharmacists who will contract with them directly.  These kinds of strategies may be ill-suited to rural communities where there are smaller numbers of patients and pharmacists are not necessarily competing in the same way they would in urban areas. States are using similar strategies to control the rising costs of medication benefits under their Medicaid programs, and rural health policy experts are worried about the possibilities for disproportionate effects on rural Medicaid beneficiaries.

Financial Issues for Rural Pharmacies

Another common complaint from rural pharmacists who testified to the Committee is the lack of transparency in pricing for prescription medications. Manufacturers offer different prices to different classes of providers and these price variations are not disclosed. Independent pharmacists in rural areas have no way of comparing their costs to those of other providers and are handicapped in developing their purchasing options and strategies.

These emerging forces in the marketplace for retail pharmacies are raising concerns about the continued financial viability of rural independent pharmacies. While the changes predate passage of the Medicare Modernization Act (MMA), they may be accelerated as a result of the legislation. Today, third parties pay 75 percent of all prescriptions. Partly as a result of the lower reimbursements rates from third parties, most pharmacies operate on profit margins as low as 1 to 2 percent. For rural pharmacies, this poses significant difficulties because they cannot offset the small margins through increased sales.4 Moreover, small pharmacies with lower volumes of prescription medication sales are more dependent on the revenue generated from prescription medications. Nearly 93 percent of revenue generated by independent pharmacies is from prescription medication sales, compared with 64.6 percent in chain stores, 12.4 percent in supermarkets and 5.8 percent for mass merchant outlets.5 This greater dependence on prescription medication revenues leaves independent pharmacies especially vulnerable to reductions in third-party reimbursements for prescription medications and competition from higher-volume suppliers. They are also more vulnerable to reductions in dispensing fees by Medicaid and private insurance carriers.

Wyoming's PharmAssist Program The State of Wyoming has a unique PharmAssist Program that is being studied by other States. A coordinator receives calls from citizens, evaluates their pharmacy needs and, if required, refers the call to a pharmacist in the patient's community who will arrange a one-on-one consultation with the patient within a two-week period. The program has contracted with pharmacists throughout the State to provide this service. Clients pay only $5 and the State pays pharmacists a $120 consulting fee. This program is unique in that it is open to all Wyoming residents, regardless of income.

Compounding the problems of small rural independent pharmacies is their greater dependence on cash sales of prescription medications. In 2002, rural areas had a higher percentage of prescriptions paid for by cash than urban areas (18 percent vs. 13 percent).6 This raises potential issues concerning the new Medicare medication benefit. While the MMA will provide benefit to rural seniors, it may have negative implications for independent pharmacies. With the implementation of the MMA, Medicare beneficiaries who paid full price for medications at their local pharmacies will now have third-party pharmacy benefits. Pharmacies may be negatively affected as some of their business shifts from more lucrative cash payments to less profitable third-party payments. In addition, negative effects might occur if MMA implementation increases the use of competing mail-order suppliers. While MMA regulations state that beneficiaries must be allowed to receive benefits through community pharmacies, they may have a higher cost sharing compared to using retail outlets and mail-order suppliers.
 

Utilization

While patients are more informed, clinicians face real challenges in navigating the increasing array of medications to treat illness and manage chronic diseases.  Some insurance companies and health systems have responded by developing clinical protocols and preferred medication lists to guide clinicians in making the best possible choices based on evidence-based studies.  For rural clinicians, this is particularly helpful, since many are busy and these protocols allow them to quickly sift through the ever-growing pharmaceutical options for treating a particular condition.  In addition, due to the shortage of pharmacists in rural areas, many rural clinicians find themselves tackling not only the responsibilities of prescribing but also of medication counseling, tasks traditionally reserved for pharmacists.
 

Geographic Access and Workforce

The Committee believes any discussion of access is tied strongly to workforce.  Within that, pharmacists play a key role, but so do other health professionals, particularly in those settings where medications are dispensed but a full-time pharmacist is not available.  Physicians, physician assistants, nurse practitioners and many other health care professionals aid in helping patients to obtain necessary medications and provide necessary medication counseling.

However, the most visible face of access to pharmaceuticals and pharmacy services is still the community pharmacist.  In rural areas, this can be a community pharmacist operating in his own drugstore or it can be a chain drugstore.  Rural pharmacists play a key role in maintaining the health of their communities, which often exceeds their basic responsibilities for dispensing medications. In many rural communities, the local pharmacist is frequently the patient’s first point of contact with the health care system. The local pharmacist is also likely to be providing essential services under arrangements with local hospitals, nursing homes, home health agencies and other health providers. Patient counseling is also a critical component of pharmacy practice in rural areas. These services are increasing in importance as more new and modified prescription medications come to market and the rural population continues to age.

A recurring theme in the pharmacy literature is the importance of integrating pharmacists and pharmacy services with other components of the health care system. This theme was also emphasized by rural pharmacists and other experts who provided testimony to the Committee. Integration is particularly important in rural areas where health providers are in short supply. Pharmacists receive clinical training that goes well beyond the dispensing of medications. They should be viewed as part of a patient’s health management team, whether the patient is at home, in the hospital or residing in a long-term health care facility. The Committee believes that Federal programs need to promote integration.

A recent study of pharmacy services in Minnesota, North Dakota and South Dakota found that the vast majority of rural pharmacies in these States deliver prescriptions to private homes and nursing homes. Further, almost all of the pharmacies contacted in the study provided medication interaction screening services and patient education, as well as consultations with physicians and other primary care providers on medication dosages and other patient management issues.8 Other studies have found that rural pharmacists have been more involved than their urban colleagues in providing cognitive, nondispensing pharmacy services.9 Examples include the education of patients with chronic conditions such as diabetes and assisting patients in monitoring their blood pressure. In some isolated rural communities the local pharmacist is the only health care provider. He or she may know customers on a personal level and be familiar with their medical histories. Also, the pharmacist may be on-call 24 hours a day and would be the only readily accessible source of expertise on medication issues for local health care institutions such as hospitals and nursing facilities.10

HRSA's Study of the Pharmacy Workforce The HRSA study of the pharmacy workforce discussed several factors that distinguish rural pharmacy practice and create problems in recruitment and retention of pharmacy personnel: 1) Isolation from other health professionals; 2) Low profit margins of community pharmacies and lower potential earnings for pharmacists; 3) Competition from large retail chains and mail-order houses; 4) The growing number of women pharmacists and the difficulties rural communities might have in meeting their family and professional needs; 5) Isolation from pharmacy and pharmacy technician schools; 6) The disproportionate number of Medically Underserved Areas in rural America that forces residents to seek medical care elsewhere, including purchase of prescription medications; 7) The nationwide conversion from Bachelor of Science Degree in pharmacy to the Doctor of Pharmacy Degree that has lengthened the education program for pharmacists.

The Committee found two studies on geographic access to pharmacy services in rural areas. Both studies covered limited areas in the Midwest and the results are not generalizable to other rural areas of the country.

A study of pharmacy services in Minnesota, North Dakota and South Dakota was published in 2002. It was based on a telephone survey of all licensed rural retail pharmacists, public health officials, clinic staff and social service workers in those States who were in communities with potential pharmacy access problems. The study also included an analysis of distances between rural pharmacies and pharmacy closures. The researchers found that the vast majority of rural residents in the three States live within 20 miles of a pharmacy and that many pharmacies help to ensure access by remaining open during evenings and weekends. While geographic access was not a significant issue in the three States, the study results raised some significant concerns about the future financial viability of rural pharmacies and shortages in the pharmacy workforce. For example, the study reported that 11 percent of the pharmacies expect to be sold during the next two years and 4 percent expected to close. Forty-six rural pharmacies closed during 1996 to 1998, with 10 closures resulting in several rural communities no longer having a pharmacy.11 Although this limited data does not raise alarms, the Committee is concerned that the growing financial pressures on independent rural pharmacies, when combined with the other issues discussed in this chapter, could lead to an increase in pharmacy closures that will not be detected without greater vigilance.

A 1999 study of rural pharmacy services in 74 rural counties of Illinois found that between 1970 and 1996 there was a 17 percent loss of pharmacies overall. Among the rural Illinois counties, 44 lost pharmacies, 20 experienced a gain and the average population served by individual pharmacies increased significantly. The study concluded that while current access to a local pharmacy remains good, a further decline in rural pharmacies could erode access to the range of services offered by local pharmacies and many residents may lose another health professional and source of health information in their community.12

Both of the studies described above noted that reduced access to pharmacy services may cause rural consumers to forego essential treatments with prescription medications and deprive them of professional help in preventing and resolving medication-related health problems. They emphasized that the rural elderly are especially vulnerable because of their high rates of prescription medication usage and greater likelihood of experiencing transportation problems.

Maintaining geographic access to pharmacy services in rural areas depends upon an adequate supply of health care providers, including pharmacy personnel. Currently, the pharmacy workforce is not evenly distributed across the country. Only 12 percent of pharmacists practice in rural areas even though 21 percent of the country’s population is in rural areas.13  Moreover, while the national ratio is 78 pharmacists per 100,000 people, the rural ratio is only 66 pharmacists per 100,000 people.14

In 2000, a report to Congress on the nation’s pharmacy workforce prepared by HRSA found that during the 1990s the demand for pharmacists began to exceed the supply. At the same time, the use of prescription medications had increased rapidly. The report showed that the average number of prescriptions handled by retail pharmacists increased by 31.4 percent from 1992 to 1999.15 There is nothing in the current research literature to suggest that growth in the use of medications and demand for pharmacists is slowing.

The same HRSA study cited a decline in the number of pharmacy graduates during the 1990s and a corresponding decline in the number of applications to pharmacy schools. However, this situation appears to have changed. Data from the American Association of Colleges of Pharmacy indicate that the number of applicants increased in 2004.16 At the same time, the number of pharmacy schools has grown to 96, with more schools expected to open in the next few years.17  Despite these trends, the U.S Department of Labor includes pharmacists among the high-demand occupations where job vacancies will exceed the supply of candidates for the foreseeable future.18

Identifying Rural Pharmacies At Risk for Closure The College of Pharmacy at the University of Minnesota has developed a protocol for identifying rural pharmacies at greatest risk of closure. There were four factors used to generate the risk assessment score for each of the pharmacies surveyed. 1) The distance to the nearest pharmacy patients would have to go if the surveyed pharmacy closed, with the greater the distance, the higher the risk score; 2) The difference between the age of the pharmacy owners and the ideal age when they would have liked to sell their pharmacy. The study observed that many pharmacy owners maintain their pharmacies beyond the age that they would have liked to sell; 3) Total pharmacy revenues; 4) The difficulty in recruiting pharmacists to rural areas.

Some studies have raised concerns about the high proportion of aging pharmacists in rural areas and what this means for the future. One study in Minnesota found that the average age of pharmacists who owned pharmacies in rural areas was 52.8 years and that a significant number of pharmacists would like to sell their pharmacy in three years or less.19 Concurrently, a survey of pharmacy students revealed their concerns about lifestyle limitations and their lack of interest in pharmacy ownership.20 The analysis suggests that when these aging independent rural pharmacists retire, their pharmacies will close permanently, leading to a loss of access to pharmaceuticals and pharmacy services for many rural communities.

Pharmacy technicians are also a vital part of the pharmacy workforce. They dispense medications with the supervision of a pharmacist, whether it is directly or via telepharmacy. The distribution of pharmacy technicians vary throughout the country, with certain states utilizing Pharmacy Technician Certification Boards whereas others do not. There has been limited research on pharmacy technicians and their potential role in helping to alleviate the pharmacy personnel shortage.  A key factor of the issue is that pharmacy technicians are not considered extenders of care, such as physician assistants are for physicians; rather, pharmacy technicians require pharmacist supervision.

Pharmacy Services in Rural  Hospitals, Nursing Facilities and Extended Care Facilities

Rural nursing homes and extended care facilities often contract with local pharmacies or regional suppliers for their pharmaceuticals. The Committee visited an independent pharmacy in Johnson City, Tennessee that serves health care providers located in surrounding isolated areas of Appalachia. The pharmacy was using advanced automatic dispensing technology to provide pre-packaged pharmaceuticals and other biologicals for individual patients in nursing homes and extended care facilities. It provides consultation and expertise to local physicians, institutional providers and individual patients on a wide range of issues, including medication safety, medication management, options for prescription medications and other issues.  These relationships took many years to be forged, thus there is concern that emerging market forces and Medicare Part D could disrupt long-standing relationships between this pharmacy and the patients and providers it serves as many consumers enroll in mail-order medication programs. In addition, this site visit illustrated the strength of marrying health information technology with quality pharmacy services. In its study concerning pharmacist staffing in rural hospitals, the Upper Midwest Rural Health Research Center concludes that the usage of information technology increases the safety of medication dispensation; this site demonstrated the feasibility of such a link.22

Current HHS and Governmental Role

Medicare

The Committee is encouraged by the number of pharmacy plans that are available in rural areas in addition to the 11 national plans.  It is clear that HHS is actively working to bring access to pharmaceuticals and pharmacy services to many Medicare beneficiaries.

However, rural researchers and policy advocates have identified concerns about how the program will be implemented in rural areas, with many of the concerns centering on the access issue.  The MMA adopted access standards used by the TRICARE Retail Pharmacy Program that insures military health care beneficiaries. In rural areas, the TRICARE standard for access is that at least 70 percent of beneficiaries must live within 15 miles of a retail pharmacy. In other words, 30 percent of rural Medicare beneficiaries can live more than 15 miles from a pharmacy and the standard might still be met. Depending on how the standard is implemented, about 7.8 million rural beneficiaries may not have access to a network pharmacy.

Providers of the Medicare drug benefit must include in their network “any willing pharmacy” that can meet the providers’ terms and conditions. Some rural pharmacies may not be able to meet the requirements (i.e., information processing capabilities) and could be excluded from the networks.

Another concern is that rural residents have little prior experience selecting from multiple insurance plans. Under the new Medicare medication benefit, beneficiaries will have to make difficult and confusing choices among competing plans that are offering different pre-approval requirements, different formularies for covered medications, different access points and other variables. A related concern is that the penalty for late enrollment may disadvantage rural beneficiaries if they delay enrolling because they have more limited access to information and assistance in making plan choices. Beneficiaries will need access to information and assistance in understanding plan options.

Finally, there is the concern that rural seniors who are dually eligible for Medicare and Medicaid may be adversely affected by the MMA in some States. Under the law, seniors in some States will be moving from generous Medicaid medication coverage to less generous coverage under Medicare.

The validity of these concerns will not be known until the new benefit begins. The Committee will be tracking MMA implementation issues in rural areas over the next few years.

Medicaid and SCHIP

Some States have already taken action. According to a study by the HHS Office of the Inspector General, 17 of 43 States responding to a 2003 survey had recently reduced their Medicaid reimbursements for prescription medications.26  States adopted a number of different strategies to reduce their costs, including lowering their medication acquisition costs, implementing maximum allowable costs for certain classes of medications, adopting more restrictive medication formularies and reducing dispensing fees paid to pharmacists. Further, many States have tried to control costs by freezing or reducing provider payments, restricting eligibility to certain populations, adding cost-sharing requirements and other strategies.

Many rural advocates believe that these cost-cutting measures will have a disproportionate effect in rural areas because the percentage of the rural population dependent on Medicaid is proportionally greater than for urban areas.27 Further, there are proportionately more rural elderly receiving Medicaid (10.1 percent) than urban elderly (8.2 percent); hence, with the reduction in Medicaid benefits, the elderly in rural areas will be affected more. Efforts to control pharmacy costs also could create unique access barriers in rural areas because rural pharmacists are more reliant on Medicaid reimbursement than urban pharmacists.28

In addition to Medicare and Medicaid, HHS administers other significant programs to improve access to pharmacy services in rural and urban areas.

340B Program

Prior to the 2003 MMA, most rural hospitals with under 100 beds were ineligible for the program.   However, effective April 1, 2004, Section 402 of MMA raised the DSH adjustment rate cap for most rural hospitals to 12 percent, making approximately 360 small rural and urban hospitals that provide a significant amount of charity care eligible to participate in 340B.  As of October 2005, only 120 hospitals (30 percent) have enrolled in 340B. Although the number of hospitals participating in 340B is growing slowly, the Committee is concerned about why more hospitals are not taking advantage of this beneficial program.

Some potential barriers to participation include:

1. The need for private non-profit rural DSH hospitals to have a written agreement or contract with State or local government to provide uncompensated care;
2. The confusion regarding participation in group purchasing organizations;
3. The program's non-coverage of inpatient medications;
4. The confusion about program benefits;
5. The perception that the program is complicated and overly burdensome.

The Office of Rural Health Policy and the HRSA Office of Pharmacy Affairs are working together to promote the benefits of 340B to eligible rural hospitals and increase enrollment in this cost-saving program, which can help increase access to affordable medications for rural patients.

Telepharmacy Programs

National Health Service Corps Demonstration

Quentin Burdick Interdisciplinary Grants

HIV/AIDS Drug Assistance Program

Rural Health Outreach and Network Development Grants

Area Health Education Centers

Agency for Healthcare Research and Quality

Conclusion

Recommendations

Department Grant Programs:

The Committee has identified several grant programs in the Department that could be used effectively to promote and support access to pharmaceuticals and pharmacy services in rural areas. These include the Quentin Burdick Interdisciplinary Grants authorized under Title VII of the Public Health Service Act; the Rural Health Network Development Grants authorized under Title II, Section 330A of the Public Health Service Act; the Rural Health Outreach Grants authorized under Title II, Section 330A(f) of the Public Health Service Act; grants to support schools of pharmacy authorized by Title VII of the Public Health Service Act; and the 340B Medication Discount Program.  The Secretary should identify other programs as well. Programs with appropriate authorizations should encourage applications from qualified organizations that can present innovative ideas for improving or sustaining access to pharmaceuticals and pharmacy services in rural areas, and for integrating pharmacy services with other components of rural health care delivery systems.

National Health Service Corps:

The National Health Service Corps recently completed a demonstration program that placed a small number of pharmacists in underserved areas of the country. The Committee believes that the mission of the Corps should now be expanded to include pharmacists among the other health professionals eligible for loan repayments, scholarships and placements through the Corps.  Moreover, the Committee is aware of the potential difficulties posed by the lack of criteria for designating pharmacist shortage areas in rural parts of the country. The Committee believes, however, that the existing criteria for designating Health Professionals Shortage Areas are a reasonable proxy for shortages of pharmacists and could be used by the Corps until such time as more specific criteria could be developed.

Area Health Education Centers (AHEC):

The AHEC program has been, and continues to be, an effective source of support for educational programs and other efforts to help rural communities and rural health care providers develop more integrated systems of care. The critical role of pharmacy providers in rural areas and the need for them to become a more integral part of local health care delivery systems should be recognized and supported through the AHEC program.

Workforce Studies:

In presenting this chapter, the Committee was able to use some limited information from a major study of the nation’s pharmacy workforce conducted by HRSA in 2000. That study (and others like it) did not provide data on urban and rural differences in the pharmacy workforce. The Committee believes that any future studies should attempt to identify and present workforce data that allows comparisons between urban and rural areas. Further, the Committee recommends that the Secretary require HRSA to do an analysis of the urban/rural distribution of pharmacists in 2006. This study is critical given the projected disparity in the nation’s supply and demand for pharmacists.

Evidence-Based Practice Research:

The Committee has found that more research needs to be conducted as to the potential factors that might place a rural community at risk of losing their local pharmacy.  In identifying those issues, the Committee believes it will be easier to develop programs to target those risks.

The 340B Drug Pricing Program:

Under the 340B program, rural health clinics should qualify if they operate on a sliding fee scale and Critical Access Hospitals should qualify if they show that they have a Disproportionate Share Percentage greater than 11.75 percent if paid under the Medicare Inpatient Prospective Payment System. Rural Health Clinics and Critical Access Hospitals that meet these criteria must be considered a vital part of the health care safety net in rural areas and should be recognized as such under the 340B program.

The Committee also recommends that the Secretary provide additional resources to the HRSA Office of Pharmacy Affairs that administers the 340B program.  Throughout the year, the Committee received testimony that many entities eligible for the program are not aware of its benefits or have been unable to seek participation because of staffing limitations and other factors. Further, these entities often need technica