Raleigh
The North Carolina Department of Health and Human Services announced today it will begin preparing to submit its application to receive funding from the Rural Health Transformation Program (RHTP). The program is part of H.R. 1, a federal bill signed into law by President Trump in July to address rural health concerns due to federal cuts to the Medicaid program.
NCDHHS has created a website with a link for providers to give feedback now on what should be considered for North Carolina’s application and will host several opportunities for partner organizations to provide input for the state’s RHTP application in the coming months.
The Medicaid program will see cuts resulting in approximately $1 trillion in losses nationwide in the next 10 years due to H.R. 1, including $49.9 billion in North Carolina, and these cuts will disproportionately impact people who live in rural communities. NCDHHS works to create a healthier state for everyone who calls this state home, including the more than 3 million people in rural North Carolina.
“Rural communities need access to health care to thrive,” said Governor Josh Stein. “People in these communities won’t stop getting sick if their health care is gone – and towns will struggle to grow or attract businesses without a hospital. This program will help us mitigate those impacts, and we will do everything we can to put it to good use. Even so, it will not fully solve the problem we’re facing. We’ve got to come together as North Carolinians to support our Medicaid program.”
“We are rooted in our commitment to improve the health and well-being of all North Carolinians, and that includes the more than 3 million people who live in our rural communities,” said NC Health and Human Services Secretary Dev Sangvai. “As we navigate changes at the federal level, we will not lose sight of the mission to create a healthier North Carolina for all, despite the steep cuts to Medicaid and rural health.”
North Carolina’s rural population is the second largest in the country, behind only Texas. People in rural areas have higher rates of chronic disease and less access to care, and North Carolina has the highest rate of rural hospital closures behind only Texas and Tennessee. The funding from the RHTP would provide an opportunity to address the financial strain rural providers, especially hospitals, have felt for years. NCDHHS leaders intend to participate in every opportunity for additional funding for rural health care.
The RHTP would provide temporary funding over the next five years but would not replace the funds North Carolina’s rural hospitals and providers would have received if H.R. 1 not been signed into law. For reference, RHTP would replace only about half of the $3.7 billion North Carolina rural hospitals will lose due to the Medicaid cuts in H.R. 1.
The RHTP is $50 billion that will be distributed in 10 payments to all 50 states over the next five years.
- The first $25 billion will be split evenly between all 50 states and would equal about $100 million each year for the next five years for North Carolina.
- The second $25 billion will be split with some considerations at CMS discretion among all 50 states over the next five years.
“It is our mission to increase access to care to ensure our hospitals and providers can continue to provide a broad array of health services that we know are needed to keep North Carolinians healthy,” said NCDHHS Deputy Secretary for Health Debra Farrington. “We will continue to work with hospitals and providers across the state as we develop the plan to distribute the funds in a way that best supports rural North Carolina.”
As part of the plan North Carolina submits to CMS to opt into the RHTP, NCDHHS will specify how it will improve access to rural hospitals and other health care providers, improve health care outcomes for rural residents, foster partnerships between rural providers, and strengthen the rural health care workforce.
Guidance from CMS on application instructions is expected in September, and after that NCDHHS may have to develop its application on an accelerated timeline. CMS expects to approve state plans for participation in the RHTP by December 31, 2025. Once the application is approved, a public notice will be issued to let providers and hospitals know when they are able to apply for a portion of the funding. NCDHHS will provide more information about the funding application process in early 2026.
