The countdown is on for Montana’s health department to formulate its case for why it should get hundreds of millions of dollars from the feds over the next five years as part of what’s being billed by the Trump administration as a landmark investment in rural health care.
H.R.1, the behemoth federal budget package passed this summer, sets aside a total of $50 billion for states to improve health care in underserved areas and help rural hospitals survive significant disruptions likely to be caused by the same legislation’s changes to Medicaid.
States must prepare an extensive proposal and submit their application by Nov. 5. Money could start flooding the state’s system as soon as early next year.
“The key takeaway is that it is an incredible opportunity for the state of Montana, but we have an extremely short timeline to prepare that plan or that application,” said Charlie Brereton, executive director of the Department of Public Health and Human Services. “We are extremely cognizant of that timeline for obvious reasons.”
There are two pots of funds up for grabs in what’s been named the Rural Health Transformation Program. The first is $25 billion that will be evenly distributed to each state; the second is $25 billion that will be awarded to states at the discretion of the Centers for Medicare and Medicaid Services (CMS) based on factors including the number of rural hospitals and rural residents and how health departments say they’ll use the money.
That means, at a minimum, Montana will receive $500 million. But DPHHS anticipates receiving more based on its conversations with federal officials and Montana’s extreme rural pockets.
“We have every indication that Montana is going to be in very good shape when it comes to our chances to be rewarded that funding,” Rebecca de Camara, health services executive director, told lawmakers at last week’s Health and Human Services Interim Budget Committee meeting.
More than 34% of Montanans live in rural areas, and the state has one of the lowest population densities in the country. It’s not uncommon to drive dozens of miles for basic primary care, face an ambulance ride of more than an hour in an emergency or spend all day traveling to the closest specialist.
These factors create barriers to high-quality health care.
State data from 2023 shows almost one-third of Montanans failed to get an annual physical. All but five of the state’s 56 counties suffer from primary care and mental health provider shortages, and there are 13 counties without any practicing physician.
According to de Camara, the state is likely to emphasize in its application ideas to help address some of these persistent challenges, such as ways that DPHHS could bolster access, increase the workforce and ensure there’s care closer to people’s homes.
DPHHS publicly solicited feedback through a formal request for information process that lasted about two weeks. According to the agency, there were 120 responses, including from a number from organizations that represented multiple members.
An agency spokesperson said early themes identified included technology and virtual care, workforce development, behavioral health, access and infrastructure and tribal partnerships.
There were no responses from legislators, Brereton told the interim committee, but he encouraged lawmakers to provide their thoughts between now and November when the application is due.
Splashy as the rural grant may be, some are wary of the strings attached.
For example, the funds are one-time-only. Though the award will be paced out over five years, each tranche must be used up by the end of the following fiscal year, or roughly a year and a half after a state receives the funds.
DPHHS’ de Camara described this provision as an “interesting and somewhat overwhelming aspect of this funding” because the state wants to avoid standing up programs that it can’t sustain once the money dries up.
It’s also surprisingly difficult to use that much money in such a quick turnaround.
The National Rural Health Association issued a statement cautioning that the one-time infusion of cash, though welcomed, won’t by itself secure long-term stability of rural health care providers. It warned that the money states receive will likely fall short of closing the gaps created by federally mandated changes to Medicaid such as work requirements.
“Without continued policies that guarantee sustainable reimbursement, rural hospitals and clinics will remain at risk,” the association said in a statement. “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.”
Rep. Jane Gillette, the Three Forks Republican who chairs the health budget interim committee, said she has “mixed feelings” about the forthcoming financial windfall because it doesn’t leave a lot of room for the Legislature to ensure it isn’t left with a budget cliff down the line.
“It’s difficult for us to come back next session and write laws around how you should spend that billion dollars because the horse is already out of the barn,” she said.
Despite the notable number of unknowns associated with the funding opportunity coupled with the tight timeline, DPHHS says it plans to ensure that it is “appropriately resourced” to craft a compelling application and get it out the door by the Nov. 5 deadline. CMS says it will notify states of their award by the end of this year.
Carly Graf is the State Bureau health care reporter for Lee Montana.
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Carly Graf
State Bureau Health Care Reporter
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