HAZARD, KY. -- Kentucky has quietly passed one of the most progressive and comprehensive rural health care laws in the country, a measure state health experts say is the most significant effort in years to expand access to medical care in the state's poor, rural areas.

The law's use of funding, manpower and education has also drawn national attention from health policy analysts.

"It puts Kentucky in the same league with progressive states that have begun to find creative ways to solve the problems of the uninsured," said Trish Riley, executive director of the National Academy for State Health Policy in Portland, Me.

Formally known as the Health Care Reform Act of 1990, the law provides for:

Prenatal care for at least 8,000 low-income women and children who do not currently qualify for Medicaid.

Recruiting and residency programs and financial incentives to draw physicians to rural areas.

Increased reimbursements to rural hospitals for revenue lost while caring for indigent patients.

Guidelines for medical practitioners to open private clinics to increase manpower in rural areas.

Tax credits for businesses to provide employee health insurance.

Twelve new senior-citizens' centers, 12 day-care centers, two 100-bed personal-care centers, four group homes for the mentally retarded and one 100-bed psychiatric hospital.

"The fact that anybody could get all those elements into one bill is unbelievable," said Gar Elison, who works with the National Academy for State Health Policy and has studied health policy for 22 years. "It is one of the few total packages in the country."

Because it relies on a large amount of federal funding, the law will only state taxpayers only $9 million over the next two years, according to the bill's sponsor, state Sen. Benny Ray Bailey.

Construction of new facilities will be funded through a $5.5 million bond issue by the state Property and Buildings Commission.

In 1986, one in four pregnant women in this state received either no prenatal care or services only after the first trimester. At least 100 babies who died in the state received little or no prenatal care, according to state figures.

This fall, the state will try to change that by raising Medicaid income guidelines. The income limit for a family of four for pregnancy services will rise from $15,875 to $23,495. Coverage will include medication, doctors' fees and up to a year of hospitalization for infants.

However, county health workers say expanded coverage will solve only part of the problem. Many pregnant women who currently qualify for free care do not seek it because they don't understand its importance, workers say.

"I spend a lot of my time running down people who have not kept appointments," said Janie Morgan, who has worked for the Perry County Health Department since 1974. "Frankly, I don't think throwing money at it is the answer."

The state and counties need to increase education to develop a consciousness about prenatal care in rural areas, health workers say. "The problem is going out and getting the people who aren't motivated," said John Poundstone, commissioner for the Lexington-Fayette County Health Department.

But even when people in rural areas seek health care, sometimes there are no doctors to provide it.

When the $8.5 million Middle Kentucky River Medical Center opened in Breathitt County nearly two years ago, it was equipped with two nurseries and a delivery room to handle the 550 pregnancies annually in the area.

Today, the nurseries serve as storage space for medical supplies; the delivery room has only been used twice this year. High malpractice insurance rates and the resulting shortage of obstetricians have slowed the hospital's two-year effort to find someone to deliver babies.

"We've had deliveries here, but not by choice," said Donna Smith, director of personnel relations at the hospital in Jackson.

The medical center's problem is not unique. Shrinking physician incomes and increased specialization have made it harder to lure doctors to impoverished rural areas.

Starting this month, however, hospital administrators and smaller communities will have more resources. The universities of Kentucky and Louisville will begin recruiting physicians from their residency programs and young graduates for rural areas.

The placement program will work on a bounty system. Universities will charge $1,000 to $10,000 for each physician they find. Pediatricians will go for $2,000 each. An obstetrician/gynecologist will cost $8,000. Hospitals will be expected to pay the full bounty, but the state will pay the fee for rural communities.

For the past two years, Bernard Poe has helped recruit physicians to rural Owen County in north central Kentucky with thousands of dollars in no-interest loans. Poe, who has helped raise nearly $70,000 in recruiting funds, thinks the bounty fees could be better spent helping physicians get their practices off the ground.

Others say that, as public institutions, the universities should provide placement as a free service to rural hospitals and communities. "They are going to get paid for doing something they should've been doing anyway," said Dan Miller, administrator of the Middle Kentucky River Medical Center.

In addition to the placement service, the University of Kentucky will try to attract physicians to rural areas early in their careers by establishing a family practice residency in Hazard. Students will rotate through on a six-week basis.

Physicians often shy away from poor, rural areas because many of their patients are on Medicaid, which pays only a percentage of doctors' fees.

To try to alleviate the financial burden, family-practice physicians in areas with no more than one primary-care doctor per 5,000 people will receive 25 cents more for every dollar of Medicaid they currently receive. For instance, in Hancock County, where the doctor-patient ratio is 1 to 8,054, a physician who normally receives about $11 of Medicaid for an office visit, would now make $13.60.

"It's not going to make you rich," said Bailey. But "we're willing to pay you a bonus to go to areas where people don't have access to a physician."

But the state has a long way to go to provide adequate pay to doctors in poor, rural areas. The current Medicaid payment scale favors physicians who work in cities.

For instance, a doctor who receives $11 for an office visit in rural Kentucky might receive as much as $20 for the same service in Louisville or Lexington.

"We're getting ripped off," said Jordon MacLean, a family physician in Owsley and Breathitt counties, two remote, coal-produucing areas in eastern Kentucky. Payment "ought to be equal. Are the illnesses any less out here?"

The current fee scale is based on what urban and rural doctors charged in 1980. Because urban doctors generally charged more, they have received more, according to the state Commission for Medicaid Services. The commission plans to adjust the fee scale in July to create some parity, but director Roy Butler said the effort will fall far short of providing equal pay.

About 700,000 Kentuckians do not have health insurance, according to state figures. Half of those people either have jobs or are members of families in which at least one parent is employed.

To encourage small companies to provide health benefits to workers, area development districts will act as insurance brokers. The state also will offer income-tax credits to companies that start employee health insurance programs.

Development districts will create an insurance trust for companies of 50 employees or less and then find the most economical and comprehensive insurance available.

Companies joining the trust will receive a 20 percent state income tax credit the first year and 15 percent the second year. A $75-a-month policy covering at least 14 days in the hospital and 50 percent of physicians' fees would cost a company only $13.56 a month for the first year, Bailey said.

"If you aren't willing to put up $13.56 for employee insurance," Bailey said, "you shouldn't be in business."