Highest Share of Federal Rural Funds Going to Texas Public Hospital Districts
By Alisa Pierce

Texas updated its Rural Health Transformation Program (RHTP) budget after the state received more funding than originally requested – and plans to use the additional funds to expand support for rural hospitals and other providers of rural health care.

The plan for RHTP funding will directly support 80 rural hospital districts with publicly owned and operated public hospitals in their jurisdictions, up from 68 districts originally proposed in Texas’ application. The funding represents an estimated $3.5 million per district award if all choose to participate. In the second year of the program, eligibility will be extended to public and private rural hospitals.

“If we want a healthier Texas, we need to support all elements of the Texas health care system, and that includes supporting rural hospitals,” John Hellerstedt, MD, a past commissioner of the Texas Department of State Health Services (DSHS) told Texas Medicine Today.

In January, the Centers for Medicare & Medicaid Services (CMS) announced Texas would receive the largest RHTP award given to any state to implement Texas’ Rural Texas Strong program – approximately $281 million for the first of five years, $81 million more than what the state asked.

Following the announcement, the Texas Health and Human Services Commission (HHSC) submitted budget revisions to CMS to accommodate additional funding for year one, as well as revised funding requests for years two through five based on the increased amount awarded for year one.  

Per HHSC’s revisions, Texas rural hospitals will receive the largest boost in funding from the original proposal. Dr. Hellerstedt, a Georgetown preventive health physician, believes Texas’ focus on supporting rural hospitals is a step in the right direction.

During his time as DSHS commissioner, Dr. Hellerstedt saw successful hospitals in rural areas attract physicians to those communities, elevating the standard of care for rural patients and supporting a “thriving [health care] ecosystem,” one that “creates a level of care that wouldn't exist otherwise, making the entire community safer.”

Among budget revisions, HHSC made changes to three of Texas’ six core initiatives:

• Initiative one, “Make Rural Texans Healthy Again,” which aims to reduce chronic disease rates in rural populations by developing and supporting community-based prevention, wellness, and nutrition programs or services. Item one will receive $433.5 million over five years – 31% of Texas’ available federal funding – with $280 million over the five-year program directly given to rural hospital districts;
• Initiative four, “The Next Generation of the Small Town Doctor and Team,” which seeks to create programs that train and attract health care professionals to rural Texas. Item four now has access to approximately $330.1 million over five years, or 23% of the budget. The allocation will be broken into two parts: $255.1 million over the five-year period for all rural health care professionals, and $75 million available specifically to providers of behavioral health care; and

• Initiative six, “Infrastructure and Capital Investments for Rural Texas,” which plans to use funds to modernize health care equipment and upgrade technology for hospitals and facilities in rural communities. This item will now receive $126.3 million over five years, or 14% of available federal funding.

Once CMS approves HHSC’s revisions to year one of the Rural Texas Strong budget, HHSC will begin implementation, though there was not a set date for that approval as of this writing.

State officials have not yet shared when or how physicians can apply, and the TMA continues to monitor the process for updates.

Although Dr. Hellerstedt understands why physicians may be “disappointed” the program plan does not indicate physicians will receive a direct allocation of funds like rural hospitals, he recommends they view the initiative as one piece of a larger puzzle, one with the potential to strengthen the entire Texas health care system.

In email correspondence with Texas Medicine Today, HHSC confirmed it will announce future funding opportunities via electronic communication service Gov Delivery, and physicians and others can subscribe for updates to the Rural Texas Strong program here.  Interested applicants can also monitor the Electronic State Business Daily site for the program’s procurement opportunities.

For questions about the Rural Texas Strong Program and RHTP funding, contact HHSC Rural Texas Strong. To receive email updates from HHSC, sign up here.