Feds Promised ‘Radical Transparency’ but Are Withholding Rural Health Fund Applications

Drones delivering medicine and telehealth to local libraries are among the ideas state leaders revealed in November to spend their share of a $50 billion federal rural health program.

The Trump administration, which has promised “radical transparency,” said in an FAQ that it plans to release the “project summary” to winning states. Following the lead of federal regulators, many states are withholding their complete applications and some have refused to release details.

“Let’s be clear,” said Alan Morgan, executive director of the National Rural Health Association. “Hospital CEOs, clinic administrators, community leaders: They will want to know what their states are doing.” NRHA members include struggling rural hospitals and clinics, which federal lawmakers promised would benefit from the Trump administration’s rural health transformation agenda.

Morgan said his members are interested in what states are proposing, what ideas are approved or rejected, as well as their budget narratives, which detail how the money could be spent.

Improving rural health care is an “incredibly complicated and difficult task,” Morgan said.

The five-year Rural Health Transformation Agenda was approved by Congress in legislation – the One Big Beautiful Bill Act – that also significantly reduces Medicaid spending, on which rural providers rely heavily. It’s being closely watched because it’s a much-needed influx of funds — with a caveat from the Trump administration that the money should be spent on transformational ideas, not just supporting struggling rural hospitals.

The law states that half of the $50 billion will be distributed equally among all states whose applications have been approved. The rest will be distributed via a points-based system. In the second half, $12.5 billion will be allocated based on the rurality of each state. The remaining $12.5 billion will go to states that perform well on initiatives and policies that in part reflect the Trump administration’s goals of “Make America Healthy.”

Health and Human Services Secretary Robert F. Kennedy Jr. has repeatedly promised to open the government to the American people. His agency has a web page dedicated to “radical transparency.”

“We are working to make this the most transparent HHS in its 70-year history,” Kennedy said in written testimony to lawmakers in September.

Lawrence Gostin, a professor of public health law at Georgetown University, said HHS is “acting in a way that completely lacks transparency” and that the public has the right to demand “more openness and clarity.” Without transparency, the public cannot hold HHS accountable, he said.

Centers for Medicare & Medicaid Services spokeswoman Catherine Howden said the agency will follow federal regulations governing competitive grants when releasing information about the rural health program.

Grant applications “are not made public during the merit review process,” Howden said, adding, “The purpose of this policy is to protect the integrity of the reviews, the confidentiality of applicants and the competitive nature of the process.” »

Democrats and many health care advocates worry the policy could affect the amount of money states receive.

“I am very concerned about retaliation,” said Rep. Nikki Budzinski (D-Illinois). Because Democrats control her state’s politics, “our candidacy may not be considered as seriously as other Republican-led states,” she added.

Illinois Democratic members of the U.S. House of Representatives sent a letter to CMS Administrator Mehmet Oz in November requesting a “full and fair review” of their candidacy in the state. Illinois officials have not yet released their state’s proposal to KFF Health News, which has a public records request pending.

Heather Howard, a professor of the practice at Princeton University, said she was “pleasantly surprised to see how transparent states have been.”

Howard directs the university’s State Health and Value Strategies program, which tracks the rural health fund, and praised most states for publicly releasing their project summaries.

“To me, that speaks to the intense interest in this program,” Howard said. His team, reviewing about two dozen state summaries, found themes such as the expansion of home and mobile services, increased use of technology and workforce development initiatives such as scholarships, signing bonuses and child care assistance for high-demand positions.

“I think it’s exciting,” Howard said. “What’s great here is the experimentation we’re going to learn from.”

Telerobotics has appeared in applications in Georgia and Alabama, she said, including a proposal to use robotic equipment for remote ultrasound.

Another theme that “warms my heart,” Howard said, has been efforts by states to create advisory groups or committees, including in Idaho, where task forces are expected to focus on technology, workforce development, tribal collaboration and behavioral health.

All 50 states submitted their applications to federal regulators by the Nov. 5 deadline and awards will be announced by the end of the year, according to CMS.

By the end of November, nearly 40 states had released their project narrative, the main part of the application, which describes the proposed initiatives, according to KFF Health News tracking. More than a dozen states also released their budget statements.

A handful of states — Idaho, Iowa, Kansas, Minnesota, New Mexico, North Dakota, South Carolina and Wyoming — have released all parts of the application.

KFF Health News has filed public records requests for the states’ complete requests. Some states have refused to release any of their application materials.

Nebraska, for example, denied a public records request, saying the application materials constituted “proprietary or commercial information” that would “give an advantage to business competitors.”

Kentucky shared the summary of its application, but said the rest of the application is a “draft draft” not subject to publication under state law.

Erika Engle, a spokeswoman for Hawaii Gov. Josh Green, said the governor “is committed to transparency” but declined to share any of the state’s proposals.

Hawaii and other states are still processing formal public records requests.

The rural health program is part of July legislation planned to cut federal Medicaid spending in rural areas by $137 billion over 10 years.

These reductions are expected to affect the bottom lines of rural health care facilities, threatening their ability to remain open. A recent Commonwealth Fund report found that rural areas still lack access to primary care. But rural health program guidelines say states can only use 15% of their new funding to pay patient care providers.

Between the Medicaid cuts and increased funding for the new program, “there is a real opportunity for national policy to have a potential impact on rural, both negative and positive,” said Celli Horstman, a senior research associate at the New York-based policy think tank and co-author of the report.

Among publicly available rural health transformation proposals, Democratic-leaning states are showing support for, or willing to adopt, some of the administration’s goals, but will lose points if they avoid others.

For example, New Mexico announced it would pass legislation requiring students to take the presidential fitness test and doctors to take continuing education courses on nutrition. But that won’t stop people from using Supplemental Nutrition Assistance Program benefits to buy “non-nutritious” foods like soda and candy.

Many states want to invest in technology, including telehealth, cybersecurity and remote patient monitoring equipment. Other themes include improving access to healthy food, improving emergency services, preventing and managing chronic diseases, and recruiting community health workers and paramedical staff for home visits.

Specific proposals include:

• Arkansas wants to spend $5 million through its “FAITH” program – Faith-Based Access, Interventions, Transportation and Health – to recruit rural religious institutions to host education and preventative screening events. Congregations could also install walking circuits and fitness equipment.
• Alaska, which has historically relied on sled dog teams to deliver medications to remote areas, is seeking to test the use of “unmanned aerial systems” to speed pharmaceutical deliveries to those communities.
• Tennessee wants to increase access to healthy activities by spending money on parks, trails and farmers markets.
• Maryland wants to open mobile markets and install refrigerators and freezers to improve access to fresh, healthy foods that often spoil in rural areas where there are few grocery stores.

State Sen. Stephen Meredith, a Republican who represents part of western Kentucky, said he still expects rural hospitals to close despite his state’s rural health transformation agenda.

“I think we’re treating the symptoms without curing the disease,” he said after listening to a presentation on Kentucky’s proposal at a state committee meeting.

Morgan, whose organization represents rural hospitals at risk of closing, said the state’s ideas might sound good.

“You can create a narrative that sounds wonderful,” he said. “But then translating the ambitious goals into a functional program? It’s difficult.”

KFF Health News staff members Phil Galewitz, Katheryn Houghton, Tony Leys, Jazmin Orozco Rodriguez, Maia Rosenfeld, Bram Sable-Smith and Lauren Sausser contributed to this report.