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Medicare Rural Hospital Flexibility Program Evaluation Cooperative Agreement

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Health Resources and Services Administration, HHS.


Notice of availability of funds.


The Health Resources and Services Administration (HRSA) announces the availability of up to $1 million in fiscal year 2003 to fund a single competitive cooperative agreement to support the continuing evaluation of the Medicare Rural Hospital Flexibility grant program (Flex). The evaluation project will continue to assess the effectiveness of implementing the grant program in States and in rural communities and to provide recommendations for increasing the impact of the program to improve healthcare in rural America. Public and private entities possessing appropriate qualifications are eligible to apply. Faith based organizations are eligible to apply for these funds. Applications must be postmarked on or before June 30, 2003, to be considered. The award will be for a period of five years; continuation funding of up to $1 million annually in succeeding years is contingent upon availability of funds and grantee performance.

Name of Grant Program: Medicare Rural Hospital Flexibility Program Evaluation (MRHFPE), Catalog of Federal Domestic Assistance (CFDA) number 93.241.

Program Authorization: In 1997, section 1820 of the Social Security Act authorized the Medicare Rural Hospital Flexibility program. Reauthorization is pending. The appropriation for this program is provided in Public Law 108-7 (Consolidated Appropriations Resolution, 2003).

Submitting Applications: To receive a complete application kit, applicants may telephone the HRSA Grants Application Center at 1-877-477-2123 beginning June 4, 2003. This program uses the standard form PHS 5161-1 (revised 7/00) for applications (approved under OMB number 0920-0428). Applications must be received by 4 p.m. eastern time on July 3, 2003. An original and two copies must be submitted to the HRSA Grants Applications Center (GAC), 901 Russell Avenue, Suite 450, Gaithersburg, MD 20879, telephone 1-877-477-2123, e-mail Applicants will be notified through the same channels that currently announce the availability of downloadable and paper application materials, including notices on HRSA Web sites and e-mail communications. HRSA anticipates our first on-line grant applications will be available later in 2003. On-line submission of applications will be encouraged at that time; hard copy applications will still be accepted.

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For the 65 million people living in rural America, the U.S. Department of Health and Human Services' mission to protect health and to provide assistance for those in need is especially relevant. Healthcare in rural communities supports communities' well-being and represents a significant segment of the local economies. These programs, however, frequently lack adequate funds, personnel and support networks.

For more than a decade, the Office of Rural Health Policy (ORHP) has supported activities that assist States, localities and rural citizens as they work to build and sustain high-quality rural health care delivery systems. The Flex program provides funds to States to develop State rural health plans, support conversion of eligible small rural hospital facilities to critical access status (see Medicare conditions of participation for critical access hospitals), support rural EMS, and foster rural health care network development. This combination of activities is managed by each State in a manner that meets program objectives and is simultaneously most appropriate for the individual State. Taken as a whole, the purpose of the program is to improve access to care and quality of care by strengthening and integrating rural health care delivery systems while improving small hospital finances through providing cost based reimbursement.

Evaluation of the Flex program during its first four operational years has produced an important body of knowledge about rural health care, rural hospitals, financial issues, network development, EMS integration and community engagement in rural health care decision-making. This work has been performed by a consortium of six Centers: Southern Maine University, University of Minnesota, University of North Carolina Sheps Center, University of Nebraska (Rural Policy Research Institute), University of Washington and the Walsh Center of Project Hope. Information resulting from the evaluation is publicly available. As the program matures, the evaluation process will focus less on the process of converting hospitals to critical access status and more on development of rural organized systems of care, financial performance, impact on access to and quality of care, disease management, community role, and impact on health status of rural populations served by these emerging systems. Improving clinical, financial and leadership performance of rural healthcare organizations, access to capital and progress in acquisition and use of technology will be important areas of evaluation. Development of appropriate performance measures and documenting the impact of this program will provide enormous value to rural Americans.

Purpose: The purpose of this cooperative agreement is to measure and evaluate the effectiveness of implementation of the Flex program both nationally and at the level of the State, to make the information thus obtained publicly available, and to make recommendations for improving program effectiveness at all levels. Specifically, through this cooperative agreement, the grantee will:

  • Design and implement appropriate mechanisms for the next phase of evaluation and dissemination; Start Printed Page 33168
  • Maintain and disseminate data and information to public entities and the rural healthcare community;
  • Design and apply a logic model to evaluate the effectiveness of State grantees in using Federal funds to improve rural healthcare in their State, achieve program objectives and perform Statewide planning and evaluation processes;
  • Measure changes in quality, network development, EMS, utilization and community participation resulting from the Flex program;
  • Collaborate with other entities in the evaluation process for discrete components and projects;
  • Assess the impact of Flex upon the access to care and health status of rural populations served through Flex supported provider systems;
  • Document the impact on clinical quality, financial performance and leadership of rural providers served through Flex.

This cooperative agreement involves substantial ORHP policy expertise and programmatic involvement with the awardee. Under the terms of this cooperative agreement in addition to the required monitoring and technical assistance, Federal responsibilities will include:

(1) Participation in annual project meetings conducted during the period of the agreement;

(2) Ongoing review of evaluation activities and procedures;

(3) Review of project information prior to public dissemination;

(4) Participation in design of evaluation process;

(5) Shared decision-making on collaborators and their projects;

(6) Assistance with the establishment of contacts with Federal and State agencies, grant projects and other contacts that may be relevant to the project's mission.

Eligibility: Any public or private entity is eligible to apply. Under the President's initiative, community-based and faith based organizations that are otherwise eligible and believe they can contribute to HRSA's program objectives are encouraged to consider this initiative. There is no requirement for matching funds with this program.

Review criteria: Applications that are complete and responsive to the guidance will be evaluated by an objective review panel specifically convened for this solicitation in accordance with HRSA grants management policies and procedures. Preference will be given to applicants who have participated in the first four years of the evaluation project. This means that applications carrying the preference and recommended for approval by the panel will be considered ahead of applications without the preference.

Applications will be reviewed using the following criteria:

  • Demonstrated knowledge and understanding of relevant issues (30%) including the Medicare rural hospital flexibility program, rural healthcare networking, rural health care quality, performance of rural healthcare organizations, and rural organized systems of care.
  • Merits of the proposal (20%) including: (1) Degree to which the application responds to grant guidance and project vision, 6%; (2) quality and feasibility of the design and implementation proposal, 5%; (3) understanding of collaborative relationships between the project officer and the grantee, 3%; and (4) clear and comprehensible presentation of budget with tight connection to project objectives, activities and required resources, 6%.
  • Applicant capability, capacity and relevant experience (40%) including prior experience with and relevant knowledge of the Medicare Rural Hospital Flexibility program, prior experience in program evaluation, established working relationships with potential collaborators with relevant experience and strong capabilities, adequacy of staff, facilities and technology, and commitment and demonstrated ability to manage projects and adhere to agreed timelines and delivery schedules.
  • Appropriateness of budget (10%) including maximization of the proportion of funds devoted to program objectives, the extent to which the proposed budget is realistic, adequately justified and consistent with the proposed project plan, and the degree to which the costs of the proposed project are economical in relation to the proposed activities.

Additional criteria may be used in the review of applications for this competition. Any such criteria will be identified in the program guidance included in the application kit. Applicants should pay strict attention to addressing these criteria in addition to those referenced above.

Program Contact Person: Forrest Calico, M.D., M.P.H., Office of Rural Health Policy, HRSA, Rm. 9A-55, Parklawn Bldg., 5600 Fishers Lane, Rockville, MD 20857. Phone (301) 443-0835, Fax (301) 443-2803, e-mail

Paperwork Reduction Act: OMB approval for any data collection in connection with this corporate agreement will be sought, as required under the Paperwork Reduction Act of 1995.

This program is subject to the provisions of executive order 12372 concerning intergovernmental review of Federal programs by appropriate health planning agencies, as implemented by 45 CFR part 100. Executive Order 12372 allows States the option of setting up a system for reviewing applications from within their States for assistance under certain Federal programs. Please visit the Web site​omb/​grants/​spoc.html for a listing of these States. The application packages to be made available under this notice will contain a listing of States which have chosen to set up such a review system and will provide a single point of contact (SPOC) in the States for review. Applicants (other than federally-recognized Indian tribal governments) should contact their State SPOCs as early as possible to alert them to the prospective applications and receive any necessary instructions on the State process. For proposed projects serving more than one State, the applicant is advised to contact the SPOC of each affected State. The due date for State process recommendations is 60 days after the application deadline for new and competing awards. The granting agency does not guarantee to “accommodate or explain” for State process recommendations it receives after that date. (See part 148, Intergovernmental Review of PHS Programs under Executive Order 12372 and 45 CFR part 100 for a description of the review process and requirements). This program is not subject to the public health systems reporting requirements.

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Dated: May 8, 2003.

Elizabeth M. Duke,


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[FR Doc. 03-13758 Filed 6-2-03; 8:45 am]