Part of the “One Big Beautiful Bill” passed by Congress in 2025, the RHTP was promoted as a way to stabilize the rural healthcare crisis. As part of the legislation, federal health care funding faces a cut of between $1.4 trillion and $1.5 trillion over the next decade.
To offset the cuts, Congress inserted into the legislation the RHTP initiative that would inject $50 billion back into rural American communities over the next five years to address rural healthcare needs, according to the Centers for Medicare and Medicaid Services.
However, instead of giving funding directly to individual hospitals or clinics, the funding gives money to each state, which in turn provide grants to institutions with ideas for addressing health challenges specific to their areas. Rural hospitals can apply for those grants through their states, but the states determine the qualifications for the grants themselves — and many small hospitals, particularly in rural areas, are hesitant to sign up.
Alan Morgan, CEO of the National Rural Health Association, said he’s hearing concerns from rural hospitals across the country about the costs and risks of even applying for an RHTP grant.
“We have heard loud and clear from some hospitals in a certain number of states that the application process is too onerous to manage with their limited staff, and that the potential for claw backs in funding has scared some hospitals off from applying for the grants,” Morgan said in an interview with the Daily Yonder. “I get a sense that after this cycle that we will get a better idea of how things are managed and what those claw backs will look like.”
Effie Carlson, CEO of Watershed Health, a company that helps rural hospitals manage technology and resources, said some of the rural hospitals the company works with have decided not to apply for RHTP grants for those reasons.
“If you’re a large academic medical center, you’ve got a whole group of people that do (grant applications) all day long,” Carlson said in an interview with the Daily Yonder. “If you’re a smaller organization or an organization that maybe doesn’t participate in that process as frequently, or[…]ever, it’s a scary and overwhelming process. It’s not as simple as you submit a piece of paper, and they hand you a check, and you’re off to the races. You have to have financial infrastructure, and reporting policy processes and policies in place.”
Some hospitals are also putting off applying for the grants because of concerns about what happens at the end of the grant period. Hospitals are wondering, she said, if they will have the money to pay for those programs after the grant period is over, as well as the lingering questions of whether the money will be clawed back if the hospital can’t meet the performance requirements set by federal and state agencies. That is causing some hospitals and clinics to wait until the next round to apply.
“A lot of hospitals we know are waiting to see what kind of programs and projects people are putting out there, and see how it goes, and then to see what will inevitably change in the next iterations of the grants as they move forward,” Carlson said.
One of the things that makes the program difficult to talk about in generalities is that it’s different in every state. Kevin Stansbury, CEO of Lincoln Community Health’s Hugo Hospital in Hugo, Colorado, said many hospitals in his state aren’t as hesitant because of how the program is being handled. Colorado will disburse the money as reimbursements, he said, so there isn’t as much concern about the money being clawed back.
However, there are concerns about the program’s flexibility, he said.
“One of the biggest concerns I have is the lack of flexibility,” Stansbury said. “The program requirements had us submit applications covering five years. But now, even three months later, a lot has changed. In a few months, Colorado will have a new governor. And that governor will have a different set of priorities. We have to have the flexibility to reset the priorities based on the priorities of the new administration. It would be helpful to have that kind of flexibility on a national level.”
Morgan said the nature of the program — the speed in which it has been implemented, the narrow window for applications, and the short term of the grants themselves — presents its own set of challenges.
“I think one can argue something like this has never happened before,” Morgan said “Some people point to Covid as an example of when something of this nature was provided, but those payments went directly to hospitals. The nature of this particular grant program is problematic. There are federal regulations, and then there are state procurement regulations on top of that making this really difficult. With this rapidly stood up grant program, learning is happening in real-time.”
The post Some Rural Hospitals Are Turning Away from the RHTP Grants appeared first on The Daily Yonder.
Follow