Feds signal that rural health fund money should only be used to ‘reshape’ health care

As states race to win their share of a new $50 billion rural health fund, federal officials have signaled that the money cannot be used to maintain regular operations at rural hospitals (Source: “States Jostle Over $50B Rural Health Fund as Trump’s Medicaid Cuts Trigger Scramble,” KFF Health News, Oct. 17).
 
States should submit applications that “rebuild and reshape” how health care is delivered in rural communities, Centers for Medicare & Medicaid Services official Abe Sutton said late last month during a daylong meeting on the fund. Simply changing the way government pays hospitals has been tried and has failed, Sutton told the audience of more than 40 governors’ office staffers and state health agency leaders.
 
“This isn’t a backfill of operating budgets,” said Sutton, CMS’ innovation director. “We’ve been really clear on that.”
 
Rural hospitals and clinics nationwide face a looming financial catastrophe, with the federal spending bill HR 1 expected to slash federal Medicaid spending on health care in rural areas by $137 billion over 10 years, according to KFF estimates. Congressional Republicans added the one-time, five-year Rural Health Transformation Program as a last-minute sweetener to win the support of conservative holdouts who worried about the bill’s financial fallout for rural hospitals.
 
Applications are due Nov. 5. The money will be awarded to states by the end of the year and distributed over five years. Half of the $50 billion will be divided equally among all states with an approved application; the other half will go to states that win points. Of the second half, $12.5 billion will be allotted based on a formula that calculates each state’s rurality. The remaining $12.5 billion will go to states that score well on initiatives and policies that mirror the Trump administration’s “Make America Healthy Again” objectives.