With
$50
billion
set
to
flow
to
states
over
the
next
five
years,
CMS’
new
Rural
Health
Transformation
Program
represents
one
of
the
largest
federal
investments
in
rural
healthcare
in
decades.
However,
experts
believe
that
it
will
fall
short
of
addressing
the
ongoing
vulnerabilities
that
keep
rural
hospitals
and
clinics
in
such
dire
financial
circumstances.
CMS’
new
fund
is
part
of
the
One
Big
Beautiful
Bill
Act,
which
was
signed
into
law
in
July.
Last
month,
the
agency
announced
how
the
fund
will
work
and
invited
states
to
apply.
The
program
will
distribute
$50
billion
to
states
between
fiscal
year
2026
and
fiscal
year
2030,
with
$10
billion
released
each
year.
That
represents
roughly
a
50%
increase
in
federal
spending
on
rural
healthcare,
which
currently
totals
about
$19
billion
per
year
through
Medicaid.
To
qualify
for
funding,
states
must
submit
a
detailed
plan
outlining
how
they
intend
to
use
the
money
to
improve
rural
healthcare.
All
50
states
have
already
filed
their
intent
to
apply
for
the
funding,
with
grant
applications
due
by
November
5
and
funding
to
be
allocated
by
the
end
of
this
year.
Just
how
dire
is
the
state
of
rural
healthcare?
About
a
third
of
rural
hospitals
are
currently
at
risk
of
closure. Most
rural
providers
struggle
with
low
patient
volumes,
high
fixed
costs,
heightened
workforce
shortages
and
heavy
reliance
on
Medicaid
and
Medicare
reimbursement.
CMS
wants
to
“right-size”
the
rural
healthcare
system
CMS
Administrator
Dr.
Mehmet
Oz
framed
the
fund
as
a
“grand
experiment”
during
a
talk
last
week
at
Sanford
Health’s
Annual
Summit
on
the
Future
of
Rural
Health
Care.
He
said
it’s
time
to
rethink
the
rural
care
model,
prioritizing
sustainability
and
quality.
“We
want
transformative,
big
ideas
that
will
dramatically
change
our
expectations
of
the
rural
healthcare
system,”
Dr.
Oz
declared.
CMS’
new
fund
doesn’t
seek
to
simply
pay
bills
or
patch
over
problems
—
rather,
the
program
aims
to
“right-size”
and
modernize
healthcare
delivery
in
rural
communities,
he
explained.
As
part
of
that
effort,
CMS
will
reevaluate
the
number
and
types
of
rural
hospitals
and
clinics
needed
in
each
region.
Dr.
Oz
also
said
that
the
agency
will
encourage
partnerships
between
large
health
systems
and
smaller
rural
facilities.
Larger
hospitals
could
help
sustain
local
providers
by
offering
services
like
telehealth
and
specialty
care.
Dr.
Oz
added
that
the
program
also
aims
to
strengthen
the
rural
workforce
through
funding
for
regional
training
programs
for
nurses
and
physicians,
as
well
as
by
potentially
expanding
the
role
of
existing
providers.
For
example,
pharmacists
could
play
a
greater
role
in
addressing
routine
issues
—
such
as
prescribing
medication
refills
or
diagnosing
strep
throat
via
telehealth
consultations
—
to
improve
patients’
access
and
reduce
their
unnecessary
travel.
Political
fix
or
structural
solution?
Even
though
Dr.
Oz
is
adamant
that
CMS’
new
fund
isn’t
designed
to
just
apply
quick
fixes,
one
healthcare
expert
said
the
project
risks
repeating
the
same
dependency
issues
created
by
temporary
Affordable
Care
Act
subsidies.
Michael
Abrams,
managing
partner
of
Numerof
&
Associates,
warned
that
while
this
new
funding
can
help
hospitals
and
states
launch
important
initiatives,
many
of
those
programs
could
completely
fall
apart
after
this
five-year
fund
runs
out.
“An
awful
lot
of
people
in
healthcare
are
not
business
people,
so
they
don’t
understand
something
as
straightforward
as
this:
If
you
build
a
program
that
constantly
spends
more
than
it
makes,
and
it
only
gets
by
because
of
a
special
event
like
this
bailout
fund,
when
the
bailout
fund
stops,
the
program
either
finds
another
source
or
it
collapses,”
Abrams
declared.
He
called
CMS’
fund
as
a
“band-aid
solution”
driven
more
by
political
compromise
than
by
a
genuine
effort
to
solve
rural
healthcare’s
structural
problems.
Abrams
noted
that
the
fund
was
introduced
into
the
One
Big
Beautiful
Bill
Act
as
a
gesture
for
hospitals
and
rural
lawmakers
in
light
of
the
Trump
administration’s
budget
plan
—
which
includes
more
than
$911
billion
in
Medicaid
cuts
that
disproportionately
hurt
rural
communities.
“If
this
bailout
fund
weren’t
needed
to
get
the
One
Big
Beautiful
Bill
[Act]
through
Congress,
this
wouldn’t
have
happened
—
nobody
would
give
any
thought
to
the
precarious
status
of
rural
health
care
at
all.
I
think
that’s
the
shame
of
it
all
—
60
million
Americans,
20%
of
our
population,
live
in
areas
that
are
designated
as
rural,”
he
remarked.
Abrams
said
these
Americans
“have
a
right
to
expect”
that
the
federal
government
would
take
a
more
thought-out
approach
to
ensuring
they
have
access
to
an
emergency
department
without
traveling
30
to
50
miles.
He
thinks
a
more
sustainable
solution
would
require
lawmakers
to
confront
the
underlying
economics
of
healthcare
in
rural
America.
This
would
involve
aligning
reimbursement
with
the
true
cost
of
care,
as
well
as
incentivizing
operational
efficiency
rather
than
perpetuating
dependence
on
temporary
federal
aid.
The
fund
helps
—
but
not
enough
Like
Abrams,
rural
hospitals
have
also
raised
concerns
that
CMS’
program,
while
significant,
cannot
by
itself
stabilize
rural
providers’
finances,
especially
in
the
wake
of
devastating
Medicaid
cuts.
“Without
continued
policies
that
guarantee
sustainable
reimbursement,
rural
hospitals
and
clinics
will
remain
at
risk.
This
program
is
an
important
step
forward,
but
it
must
be
paired
with
durable
reforms
that
ensure
rural
Americans
have
reliable
access
to
care
for
years
to
come,”
the
National
Rural
Health
Association
(NRHA)
said
in
a
statement
released
the
day
the
fund
was
announced.
In
an
interview
this
week,
NRHA
CEO
Alan
Morgan
emphasized
that
CMS’
rural
health
fund
and
the
Trump
administration’s
Medicaid
cuts
should
be
discussed
separately.
He
thinks
the
fund
shouldn’t
be
dismissed
or
overlooked
simply
because
it
is
much
smaller
than
the
Trump
administration’s
Medicaid
cuts.
“Obviously
the
Medicaid
cuts
have
to
be
repealed
going
forward.
That
just
has
to
happen.
I
think
both
sides
acknowledge
that
the
cuts
just
are
not
sustainable
for
the
rural
healthcare
system.
That
receives
so
much
of
the
attention
that
this
transformation
fund
hasn’t
received
adequate
discussion,”
Morgan
stated.
Learning
what
works
In
Morgan’s
eyes,
there
are
two
ways
the
CMS’
program
could
play
out
over
the
next
five
years.
In
the
best
case,
states
will
use
the
funds
to
build
rural
health
networks
—
which
consist
of
hospitals
and
clinics
collaborating
to
improve
rural
providers’
workforce
development,
data
sharing
and
AI
integration,
Morgan
explained.
In
the
worst
case,
funds
could
be
diverted
to
large
urban
providers,
leaving
rural
areas
without
support.
Morgan
stressed
the
importance
of
ensuring
that
funding
reaches
rural
communities
directly.
Even
though
the
states
will
technically
be
the
ones
submitting
the
grant
applications
to
CMS,
states
typically
rely
on
input
and
proposals
from
the
hospitals
and
health
systems
within
their
borders.
Larger,
well-resourced
health
systems
—
that
may
have
their
headquarters
in
urban
areas
but
also
have
a
presence
in
some
rural
communities
—
can
typically
write
stronger,
more
polished
grant
proposals
than
small
rural
hospitals
or
clinics.
Independent
rural
providers
usually
have
limited
administrative
capacity
and
might
struggle
to
fully
leverage
the
application,
Morgan
noted.
The
deadline
for
state
applications,
quickly
approaching
on
November
5,
is
also
a
major
challenge,
he
added.
“It’s
an
incredibly
tight
application
deadline,
and
now
you
throw
on
top
of
that
the
federal
government
is
shut
down.
That
raises
issues
and
concerns
about
how
states
are
able
to
obtain
the
answers
they
need
from
the
federal
government
about
details
on
this
application,”
Morgan
explained.
For
him,
the
success
of
the
program
hinges
on
whether
the
funds
will
truly
reach
the
rural
providers
that
need
them
most.
Overall,
Morgan
does
not
view
the
rural
health
fund
as
a
band-aid
solution.
Instead,
he
sees
it
as
a
temporary,
innovation-focused
program
that
aims
to
test
various
approaches
over
the
next
five
years.
“You’re
going
to
have
a
lot
of
innovation
hubs.
Honestly,
each
one
of
these
states
is
going
to
be
trying
new
approaches
to
sustainability
and
innovation,”
Morgan
remarked.
“Let’s
learn
from
these
next
five
years
and
then
replicate
what
works.”
Innovators
should
focus
on
initiatives
such
as
rural
residency
programs,
better
workforce
pipelines,
faster
technology
integration
and
the
introduction
of
more
alternative
payment
models,
he
said.
He
cautioned
against
over-reliance
on
technology,
saying
that
it
can
be
useful
but
is
not
a
complete
solution
to
rural
providers’
woes
—
and
noted
that
payment
reforms
will
always
be
the
most
important
piece
of
ensuring
the
long-term
sustainability
of
rural
hospitals.
The
program
is
far
from
a
silver
bullet,
and
rural
providers
will
still
face
challenges
once
the
five-year
funding
window
closes,
but
Morgan
said
it
has
the
potential
to
set
a
blueprint
for
making
rural
healthcare
more
resilient.
Photo:
Petri
Oeschger,
Getty
Images