The Rural Health Transformation Program (RHTP) was supposed to help rural hospitals deal with cuts to federal funding as a result of H.R. 1, or the “One Big Beautiful Bill,” but so far, those in rural health care say they’re not seeing any results.
While some said it’s too early to see results, others said the program isn’t helping what really needs to be helped — rural hospitals.
Kevin Stansbury, the CEO of Lincoln Health Community Hospital in Hugo, Colorado, said the negative impact of H.R. 1 has been real. Hugo, he said, is a town of about 800 people, but the hospital serves an area roughly the size of the state of Connecticut.
“We operate on a negative margin typically, and we’re able to stay open because of tax support, and because of other income streams like the 340B program, and the supplemental payments that we get through the Medicaid program that are being targeted by H.R. 1,” Stansbury said in an interview with the Daily Yonder.
“It worries us a lot. The projections we have from the Colorado Hospital Association say that when the cuts are complete, we could lose about $1.5 million in revenue to our already non-existent bottom line, which will really stress us tremendously. We’re trying to figure out ways to mitigate that the best we can.”
The Rural Health Transformation Program was one of the compromises out of that legislation designed to offset budget cuts to Medicaid. According to the Congressional Budget Office, the law will cut federal Medicaid spending by $911 billion over 10 years and will increase the number of uninsured people by 10 million in 2034.
To offset those cuts, Congress created the RTHP, which would invest $500 billion into rural health over the next five years. Administered by the Centers for Medicare and Medicaid Services, the program allocates money to states to use on rural health initiatives. In December of last year, CMS determined how much each state would receive.
Awards ranged from $147 million to $281 million, with the average being $200 million. States then began the process of allocating that money to different programs and initiatives within their borders. The money was intended to “expand access to care in rural communities, strengthen the rural health workforce, modernize rural facilities and technology, and support innovative models that bring high-quality, dependable care closer to home,” according to the CMS.
“More than 60 million Americans living in rural areas have the right to equal access to quality care,” Health and Human Services Secretary Robert F. Kennedy, Jr., said last year. “This historic investment puts local hospitals, clinics, and health workers in control of their communities’ healthcare.”
The one thing it didn’t do, however, was allocate money directly to rural hospitals.
Despite the RHTP, rural hospitals are at a tipping point, according to Chartis, an American healthcare consulting firm.
“This is an unprecedented investment in rural healthcare, but states will only use a small fraction to stabilize rural hospitals. Estimates also indicate that the program won’t offset the nearly $140 billion in expected losses from Medicaid-related cuts stemming from the One Big Beautiful Bill Act (H.R. 1),” Chartis claimed in a statement.
“Rural healthcare is at a crossroads. RHT-funded initiatives will support innovation and improve care delivery, but our latest analysis suggests that time is of the essence. Many baseline indicators that Chartis has tracked for more than a decade, as well as new measures, reveal that the challenges facing rural hospitals and the difficulties in accessing care within rural communities are deepening.”
Alan Morgan, CEO of the National Rural Health Association (NRHA), said it’s too early to tell what kind of an impact RHT funds will have on rural hospitals.
“It’s not the fault of CMS. The states are trying to get everything in line to put out their contracts and get everything lined up on their end, and it’s just taking a while,” Morgan said. “I think close to all (of the states) have put out RFPs [Requests for Proposal]. But I’m hopeful that within the next 30 to 60 days we’ll be able to … give examples of how it’s working.”
For now, though, rural hospitals are waiting to see what will happen. And the impacts should happen soon, Morgan said.
“At our annual conference, there was a lot of angst and concern just because (NRHA members) hadn’t seen anything. I’m hopeful that as RFPs start rolling out, some rural hospitals will be able to say, ‘This can work for us,’” he said. “This thing is happening so quickly. The federal government does not work this quickly.”
Stansbury said hospitals in his state are waiting to see what happens as well. He works with a group called the Colorado Rural Futures Group. The group is doing what it can to prepare for the coming cuts. Rural hospitals have a higher proportion of patients who are on Medicaid, Stansbury said. The cuts to Medicaid are going to hit them harder. Rural hospitals, like his in Hugo, are taking action to mitigate the coming cuts — including shutting down their OB/GYN programs and other services.
“In the community that I serve, the median household income is below the state average. There’s just not a lot of resources in this area to get a tax increase,” he said. “In Colorado, we have significant budget challenges. There was a billion-dollar shortfall this year that they had to make up, and, in part, they made it up through cuts to the Medicaid program, which again disproportionately impacts rural hospitals.”
Located just south of I-70, Hugo is roughly 100 miles southeast of Denver and about 100 miles east of Colorado Springs. The next closest hospital, he said, is between 75 and 100 miles away.
The funding cuts to healthcare are not just an issue for rural residents, he said. His hospital is one that urban residents should care about too.
“There are 64 counties in the state of Colorado. We’ve cared for patients from close to 50 of those counties in the last 18 months,” he said. “Folks from the urban areas vacation and travel through rural areas, and they should expect to have good healthcare available to them if something bad happens. More importantly, the people who live in these areas deserve to have access to good primary care services and good basic healthcare services to help keep them healthy.”
It’s something lawmakers need to invest in, he said.
“All of the indicators are that we have challenges in rural America and we’re trying to get people to say ‘What do we do about that?’” he said. “There’s an investment that’s necessary to take care of it.”
The post Rural Hospital Administrators: The Rural Health Transformation Program Isn’t Helping, Yet appeared first on The Daily Yonder.
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