Rural senators are calling on the Centers for Medicare and Medicaid Services to more explicitly target funds from the $50 billion Rural Health Transformation Program (RHTP) toward smaller hospitals and to relax some restrictions on how that money can be used.
The program was authorized by Congress last summer to finance long-term investments in rural care delivery and, in part, to offset other healthcare cuts included in its parent bill, the One Big Beautiful Bill Act. Following a fast-paced grant application process, the five-year program’s first wave of dollars began making their way to all 50 states on Jan. 1.
While Congress outlined the totals and several topline goals for the fund, the bill gave CMS and the Trump administration substantial leeway on what types of state-led initiatives to reward with greater sums, and which types of spending would be barred or limited from using program funds.
In a recent letter to CMS Administrator Mehmet Oz, M.D., a bipartisan group of lawmakers said they were “concerned … that the current structure and guidance for implementing the RHTP may unintentionally disadvantage many of the rural hospitals and clinics the program was intended to support.”
Compared to larger systems and other stakeholders, smaller hospitals or clinics might lack the people or technical expertise needed to secure funding from the program, they wrote. RHTP needs “clear protection and targeted support” for these providers in medically underserved areas to avoid “the real risk that funding may not reach the frontline rural providers that communities depend upon most,” the letter reads.
Meanwhile, some of the funding restrictions outlined by CMS may keep rural providers from addressing the greatest threats to their stability and effectiveness, the senators said.
They acknowledged an April FAQ update from CMS clarifying that states have the flexibility to deploy the funds for workforce recruitment and retention, some infrastructure investments and alternative payment model system development, but added that “implementation can be improved further by lifting the cap on infrastructure and capital improvements for rural facilities, as many need significant improvement and equipment upgrades. We also believe that clarifying the permissibility of direct payments to providers is crucial.”
The letter goes on to urge CMS to allow for enhanced reimbursement rates and uncompensated care offsets, “recognizing that low reimbursement rates and low patient volumes continue to threaten the stability of rural providers;” and to reconsider the 5% spending limitation on upgrades and enhancements to an existing electronic health record system and other health IT systems “so rural hospitals can maintain and modernize the systems necessary to coordinate care, improve quality, and participate in value-based care arrangements.”
Sen. Michael Bennet, D-Colorado, who co-chairs the Senate Rural Health Caucus, and Sen. Susan Collins, R-Maine, led the request, and were joined by Sen. Alex Padilla, D-California, and Sen. John Hickenlooper, D-Colorado.
The missive was endorsed by a slew of healthcare provider organizations, including the Federation of American Hospitals, the Colorado Hospital Association, the Colorado Rural Health Center, the Eastern Plains Healthcare Consortium, the National Association of Rural Health Clinics and the National Rural Health Association, according to a release.
"In order to protect the integrity of this historic investment, it is critical that CMS ensure funds reach the rural health facilities they were intended for," Alan Morgan, CEO of the National Rural Health Association, said in a statement. "Providing greater flexibility for provider payments, workforce investments, and health information technology, while ensuring smaller and independent rural providers can meaningfully access funding opportunities, will help RHTP fulfill its purpose of strengthening rural healthcare systems and improving access to care in rural communities,”