Rural Hospital Grant Facilitation

According to the U.S. Centers for Medicare and Medicaid Services (CMS), about 57 million Americans live in rural communities, and many use Medicare and/or Medicaid as their health insurance. Rural communities face unique challenges when providing health care services, including limited transportation, shortages of facilities and providers, and a lack of technological and delivery innovations.

To improve health care access and outcomes in rural communities, the Texas Legislature enacted Senate Bill 1621 during the regular session of the 86th Legislature in 2019, which required HHSC to create a strategic plan to ensure that Texans residing in rural areas have access to hospital services.

Implementing a Rural Hospital Services Strategic Plan and identifying grant funding are two methods that HHSC is facilitating to ensure rural hospitals remain an integral part of the rural healthcare system.

Rural Hospital Services Strategic Plan

Senate Bill 1621, 86th Legislature, Regular Session, 2019, required HHSC to create a strategic plan to ensure Texans residing in rural areas have access to hospital services. This legislation requires HHSC to provide updates on the strategies and operational milestones set forth in the plan that was initially published on January 1, 2020. The plan is to be updated by November 1 of each even numbered year.

In the most recent Rural Hospital Services Strategic Plan Progress Report (PDF), HHSC identified three key strategies, outlined below, to further the goal of ensuring access to hospital services and reducing rural hospital closures:

  1. Ensure that Medicaid reimbursements are adequate and appropriate.
  2. Increase access to established revenue opportunities to maximize reimbursement for hospitals.
  3. Identify challenges that hospitals experience in providing services to persons covered by Medicare and other payers.

To accomplish the second strategy, HHSC is working with other state agencies to identify federal grant opportunities for rural hospitals and health care providers.

Grant Funding

Rural Hospital COVID-19 in Healthcare Relief Grant Program

In 2021, the Texas Legislature enacted Senate Bill 8, 87th Legislature, 3rd Called Session and appropriated funds to HHSC for grants to support Texas healthcare providers affected by the COVID-19 pandemic. The legislation identified $75 million in federal American Rescue Plan Act funding to rural hospitals for grants to support health care providers during the COVID-19 pandemic in 2022. The funding will be distributed in two Tiers under the Rural Hospital COVID-19 In Healthcare Relief Grant program (RH-CHRG). The Tier 1 funds totals $38 million and will be released as direct grant awards and Tier 2 funds, totaling $37 million will be released through competitive grants. The grant reporting requirements include documentation to HHSC to describe what types of costs were paid for with the funds.

Community Health Access and Rural Transformation Model Program

In August 2020, CMS announced a new funding opportunity called the Community Health Access and Rural Transformation (CHART) Model specifically for rural hospitals.

The CHART Model will test whether aligned financial incentives, increased operational flexibility, and robust technical support can assist rural health care providers’ capacity to implement an effective redesign of their health care delivery system. The CMS Center for Medicare and Medicaid Innovation will evaluate the impact of the CHART Model on Medicare and Medicaid expenditures, access to care, quality of care and health outcomes.

To assist rural communities overcome challenges and build on previous successes, HHSC partnered with a limited number of rural Texas hospitals to apply for the CHART Model funding opportunity for the Community Transformation Track.

On September 10, 2021, CMS announced HHSC is one of four Lead Organizations selected for the Community Transformation Track federal funding opportunity. As the Lead Organization, HHSC will be responsible for driving health care delivery system redesign by leading the development and implementation of Transformation Plans as well as convening and engaging the Advisory Council.