Jobs, EMS and a 'Center of Excellence': How will MT spend $233M on rural health this year?

Plans are taking shape for how Montana intends to dole out hundreds of millions of dollars in the next year to bolster rural health care, an ambitious undertaking that’s going to require the slow-moving apparatus of state government to work at lightning speed.

It’s a breakneck pace that’s become typical of the Rural Health Transformation Program, the Trump administration initiative that let states apply for huge sums of money designed, in part, to offset Medicaid cuts baked into last summer’s “big, beautiful” budget bill.

Montana health officials last year hurried to submit a proposal in seven weeks.

Out of $50 billion total, the state was awarded $1.2 billion. It will be distributed by the federal government in annual payments over the next five years, the fourth-largest allocation in the country behind only Texas, California and Alaska.

Now, Montana’s health department is tasked with spending those dollars on a tight timeline or risk forfeiting the funds.

The first year’s reward of $233 million must be obligated to projects by Oct. 31. State health officials told lawmakers last week that they will open applications for organizations to bid for those funds as soon as this month.

“As you can imagine, the vendor interest in this program has been extensive,” said Rebecca de Camara, Medicaid and Health Services Executive Director for the Montana Department of Public Health and Human Services.

Montana’s application, which was approved in full by the Trump administration, focuses on five key areas for the grant’s first year: workforce, rural hospital sustainability, innovation, community health and technological upgrades.

All the funds will flow through DPHHS. It will distribute money for specific projects through a combination of grants and contracts issued through a competitive procurement process.

By September, DPHHS will have launched eight requests for proposals that will account for the bulk of the first year dollars, staff said last week.

“The state has a lengthy procurement process so we have really prioritized these … so we can get funding out as soon as possible,” de Camara said.

There will be $5 million made available for school-based care programs and $1.5 million for workforce recruitment campaign efforts.

Yet-to-be-determined amounts will go toward a contractor who can develop a new statewide emergency dispatch system and another to build out emergency response infrastructure in rural communities.

But the largest pot of money – about $117 million total, or about half of the first year’s reward – will go toward what’s been dubbed the Montana Rural Health Center of Excellence, a still fairly opaque project that aims to “right-size” rural hospitals and health care facilities relative to community needs.

State health officials have attempted to explain the center several times.

A governance board responsible for the effort will analyze the economics of rural hospitals and craft options for increased efficiency. One example the department has used is if a hospital provides inpatient care but those beds are rarely used, perhaps the hospital would be better served if they reduced that service and invested in outpatient care instead.

The center will develop financial incentives for facilities that implement the recommendations, which is how much of the money will ultimately flow into the health care system.

Some providers have raised concerns that this will lead to service cuts in rural communities.

Officials have reiterated that the program will be voluntary. De Camara said the department hopes facilities that participate will be financially stabilized beyond the five years of the Rural Health Transformation Program.

The health department will also roll out four grant opportunities by September. Those will primarily fund numerous efforts including training community paramedics and modernizing electronic health records.

It’s a heavy lift for what’s already the state’s largest executive agency to get the funds out the door, track their impact and comply with the federal government’s reporting requirements. To that end, DPHHS is hiring 21 new staff members to oversee the project and convening a stakeholder committee to solicit community feedback.

More information about the Rural Health Transformation Program can be found here.