Georgia health officials map out $1.4 billion plan for new federal rural health funds

State officials have introduced a $1.4 billion plan to improve rural health outcomes over the next five years under the federal Rural Health Transformation Program created as part of this summer’s budget reconciliation bill. In a 96-page application, officials from the state’s Department of Community Health requested funds to improve access to primary and specialty […]

Georgia state officials plan to invest funds from the federal Rural Health Transformation Program across 29 separate projects, which fall into five major categories. Jill Nolin/Georgia Recorder

State officials have introduced a $1.4 billion plan to improve rural health outcomes over the next five years under the federal Rural Health Transformation Program created as part of this summer’s budget reconciliation bill.

In a 96-page application, officials from the state’s Department of Community Health requested funds to improve access to primary and specialty care in rural areas, strengthen telehealth infrastructure and recruit more health care providers across the state’s dozens of rural counties.

“Our broader vision is that rural populations are healthier, live longer, have an improved quality of life, and can both live and work in the communities they love,” said Stuart Portman, Georgia’s Medicaid director, during the Board of Community Health meeting this month.

Georgia’s rural counties face higher rates of poverty, heart disease and cancer than their urban counterparts, according to the state’s application for the program. Rural counties are also less likely to have pediatricians or OB/GYNs, and have lower rates of employee-sponsored health insurance.

There are limits to how Georgia can use the money, however. Funding must be allocated according to the program’s guidelines and will be subject to strict oversight by the federal government, Portman explained to the committee. The portion of money that goes to payments for health care providers, for instance, cannot exceed 15% of the total funds.

“We could not do things that created ongoing obligations for the state or the federal government,” Portman said. “Importantly, there’s a strong desire to not include things that create a [financial] cliff.”

There were also a few rules that echo larger priorities of President Donald Trump and his administration. Funds cannot be used toward gender-affirming care for children or adults and largely cannot be used to cover abortion care. Hospitals may also be required to collect information on patients’ immigration status to be eligible for reimbursement under the program.

All 50 states submitted applications for the program, which were due in early November. Half of the annual $10 billion in federal funding will be divided evenly among states with approved plans across a five-year period, and the rest will be awarded based on need, program design and federal scoring criteria. 

Officials at the Georgia Department of Community Health said the funds for the first year could be delivered by the end of the year.

How would Georgia’s rural health funding be allocated?

Georgia’s program, which state officials have named Georgia Rural Enhancement And Transformation of Health, or GREAT Health, would invest funds from the Rural Health Transformation Program across 29 separate projects, which fall into five major categories.

If approved, the largest bucket of funding, encompassing over $428 million, will be used to help up to 86 eligible hospitals transition to a program known as Achieving Healthcare Efficiency through Accountable Design, or the AHEAD Model. The program, which was created by the federal CMS Innovation Center, is designed to limit the growth of health care spending, in part by emphasizing primary and preventative care.

The program would also allocate $175 million toward improving hospital infrastructure in rural areas. The proposal would help fund electrical grid improvements, water and air quality assessments and other upgrades to ensure that facilities can weather severe storms and natural disasters without endangering patients or disrupting their care.

A proposed $148 million would go toward recruiting and retaining health care providers in rural areas by establishing 75 new residency slots each year in fields like family medicine, internal medicine, pediatrics and obstetrics, as well as establishing a new rural recruitment incentive grant program for certain providers who agree to practice in rural areas for at least five years.

A few private organizations, including the Georgia Alliance of Community Hospitals and the Georgia Hospital Association, also submitted letters as part of the state’s application for the program, alongside letters from state officials like Gov. Brian Kemp and Department of Public Health Commissioner Kathleen Toomey.

HomeTown Health CEO Jimmy Lewis, who also signed onto the state’s application for the program, said he was glad to see such a comprehensive interest in rural health at the state and federal levels.

The funds, he added, “could help us offset some of the years-ago losses” that some of the rural hospitals in his network are facing.

H.R. 1 fallout

For proponents of the Rural Health Transformation Program, the estimated $1.4 billion in rural health funding comes as a much-needed reprieve for struggling providers.

But critics say the program won’t make up for drastic Medicaid funding cuts enshrined in the “one big, beautiful bill” that Trump signed into law over the summer. According to a new report from the Georgia Health Initiative, the state will lose an estimated $5.4 billion in Medicaid funding over the next 10 years as a result of the legislation, and 460,000 people will become uninsured.

Leah Chan, director of health justice at Georgia Budget and Policy Institute, said that higher rates of uninsured Georgians could spell disaster for rural hospitals, many of which receive the vast majority of their funding from Medicaid payments. If that Medicaid funding is diminished, hospitals may be required to provide emergency care without any compensation.

“We know that many of those rural safety net hospitals are already under substantial pressure due in part to high uncompensated care costs,” Chan said. “The loss of the supplementary federal funds basically adds fuel to what is already a smoldering fire for us in terms of our health care system.”

Though some congressional Republicans billed the Rural Health Transformation Program as a solution to Medicaid funding cuts, Chan argued that the funds will not address the biggest issue facing rural hospitals.

“What we can see from the application is, in fact, these rural health transformation funds do not address the loss of these federal provider payments,” she said. “So essentially, our state is left to pick up the tab.”