New Medicaid Office Launched to Oversee Rural Health Funding

The Centers for Medicare & Medicaid Services announced the creation of a new office focused on addressing challenges that impact healthcare in rural America.

The Office of Rural Health Transformation will oversee the $50 billion Rural Health Transformation Program, a grant initiative established this year by Republicans’ tax and spending law that will offer funding to states to revamp rural healthcare infrastructure to improve healthcare outcomes for patients in underserved rural communities.

The announcement, posted Friday in the Federal Register, comes as rural hospitals grapple with a confluence of unique financial pressures not found in urban facilities, including having lower patient volumes, sicker patients overall, and a greater reliance on Medicaid for reimbursement. Since 2010, over 150 rural hospitals have had to either close or convert to scaled-back facilities, according to the University of North Carolina Sheps Center for Health Services Research.

The office will be tasked with monitoring states’ implementation of rural health transformation plans, ensuring the proper use of resources, and holding states accountable for meeting outlined goals. The office will also serve as CMS’s primary point of contact for public inquiries, including communications with lawmakers and providers.

A Division of State Rural Engagement within the office will provide oversight and guidance to states receiving funding under the transformation program. The division will leverage data systems at its disposal to track performance and identify areas for quality improvement.

All 50 states applied for a share of the $50 billion program before the deadline in November, submitting plans for how they would use the funding.

“We look forward to working with this new office to help protect and strengthen rural hospitals and expand access to high-quality care,” Jennifer DeCubellis, president and CEO of America’s Essential Hospitals, said in an emailed statement. “We will continue to work with the administration and lawmakers to find positive solutions to sustain and strengthen essential hospitals.”