I grew up in North Carolina and often split my time between the urban center of the state and some of its most beautiful and rural areas on the back sounds “Down East.” This part of NC is so rural and was isolated for so long, generations of residents still speak with a distinctive Elizabethan English “Hoi Toider” accent. And while some Down Easters may not share a way of speaking with more urban city-dwellers, North Carolinians, we know whether Down East or in the state capitol of Raleigh, share many common values, including a desire for children and families to have access to quality, affordable health care.
Like rural residents across America, Down Easters often must travel long distances for specialty care to more urban areas and find local rural hospital financing and availability of primary care providers are always a strain. Medicaid also plays a larger role in providing health coverage to people for children and non-elderly adults living in small towns and rural communities than in metropolitan areas, especially for maternal and infant health – as documented in our latest CCF report on Medicaid’s reach in rural America. CCF has looked extensively at how Medicaid works for rural health for years, including showing how cuts to Medicaid are especially harmful to rural communities.
This is the context surrounding the Rural Health Transformation Fund (RHTF), a part of the budget reconciliation law signed into law by President Trump (HR1), which came into existence as an attempt to counter criticism of the budget reconciliation law’s nearly $1 trillion in cuts to Medicaid/CHIP spending over ten years. Independent estimates from KFF find that federal Medicaid spending will be cut in rural areas alone by $137 billion over ten years (not including any cuts to state spending). The huge cuts to Medicaid clearly show the $50 billion (for more detail on how the fund is allocated – ½ equally to states with approved applications and the other ½ at the discretion of CMS – see my earlier blog here) RHTF is highly inadequate even if all of these funds will be invested in rural health care. Moreover, the fund is temporary – available for only five years – while the budget reconciliation Medicaid cuts are permanent. There is no explicit requirement that the funds actually go to support rural health care. The fund is therefore nowhere near comparable to the hit rural communities are going to take from Medicaid funding cuts in the budget reconciliation law.
So, while any attempt to help fund more and better rural health care is welcome and clearly needed, the devil, as always, is in the details. And just because the RHTF won’t be enough to replace the tens of billions in cuts to rural health care in H.R. 1 doesn’t mean the funding won’t be welcome in rural areas and has the potential to do some good, at least in the short term. But seeing how the funding is distributed and under what conditions will be critical to ensuring the RHTF is a real rural health improvement program and not just political cover for the federal government’s recently enacted largest cuts to Medicaid in the program’s history.
The details of how the rural fund may be distributed became clearer this week when CMS put out a “Notice of Funding Opportunity” for the 50 states (Washington, DC and the territories are excluded under the budget reconciliation law) to apply for a portion of the fund. With a November 5 deadline, states are already moving quickly to gather information and submit applications.
Extremely wide latitude is given to the CMS administrator who has non-reviewable approval authority for state applications and the ability to require states to return funding if CMS deems a state out of compliance with the many requirements it has established for the RHTF. This is a sharp departure from decades of more collaborative federal/state partnerships to improve health care.
Overall, the RHTF’s suggestions about improving health innovation, preventive health and access in rural America as described in the funding application are laudable. Many problems the RHTF application identifies as appropriate to address in rural health – like getting doctors and other health providers to live and practice in rural areas – are critical to improving rural health care. And even with just a few weeks to submit an application, many states will no doubt make good-faith efforts to develop thoughtful plans to use the RHTF funding.
But, as always, with state and federal health efforts, these plans are a two-way street. Will the federal government efficiently and fairly distribute the $50 billion in the rural health fund to address rural health issues, or will political considerations play a primary role? We will know more as CMS accepts and approves or denies applications, but a look at the CMS application process itself is informative.
Provisions pointing to a fund more about political considerations than improving rural health.
For an administration that has championed deregulation, federal workforce reduction, and reducing government overreach, the RHTF contains many provisions that reach deep into county and small town rural health operations, attempt to push states to pass various state laws apparently favored by the Trump Administration that have little or nothing to do with rural health care, and also expand oversight authority for the federal government over state efforts now and in future years. There are significant limitations on how funds can be spent as well. A few examples from the federal funding instructions:
A. The leading example goes far beyond what was laid out in the statute creating the RHTF that was passed by Congress and signed into law. CMS is requiring that funding for provider payments, including but not limited to rural hospitals, cannot exceed 15% of funding awarded to states (p. 19). Members of Congress characterizing this fund as a “rural hospital fund” aimed at helping rural hospitals fill the Medicaid cuts created by H.R. 1 clearly need to rethink that characterization. And Members of Congress hoping the RHTF would replace more generally or at least a portion of the $990 billion cut in Medicaid, much of which is simply a cut to funding that is paid to providers other than hospitals to deliver health care services, will be disappointed in this limitation as well.
B. CMS will “review and approve all key personnel.” (p. 17). The federal government is apparently going to spend year after year assessing the credentials (and perhaps social media feeds) of state and local health providers and administrators who are directing programs funded with RHTF.
C. The federal government may cut states from further funding if CMS decides the state isn’t making “satisfactory progress” and does not feel that continuing funding “…is in the [Federal] government’s best interest” (p. 21). – even if the state is making satisfactory progress in meeting the objectives of its project. Continued funding for states is entirely contingent on CMS approval and can be withdrawn at any time – no judicial or administrative review required. CMS does not indicate any other criteria for determining whether a state is not meeting the requirements for the RHTF.
D. States are also more likely to get funded if their legislatures pass certain ideologically driven laws or make other state policy changes, which have long been partisan priorities: (Note that none of these priorities are found in the statute authorizing the RHTF)
- A state passes legislation eliminating or limiting provider approval laws (Certificate of Need or CON) according to a schedule developed by a conservative think-tank in Texas (Think-tank chart, link and description on p. 80). While CON laws were developed originally in part as an attempt to ensure rural health facility access, in most states debates have largely devolved into competing blocks of health care industry players arguing over how to modify the laws in order to maximize payments to their section of the health industry. The current debate has little to do with rural health care and a lot to do with who is making money in the health system.
- A state blocks families from purchasing certain items with SNAP (food stamp) benefits that the federal government deems “non-nutritious,” like “fruit and vegetable drinks with less than 50% natural juice”. (p. 76).
- A state allows more “short-term limited insurance health plans” that provide much more limited coverage than a standard health plan that do not comply with the requirements of the Affordable Care Act (p. 92). For example, these plans often don’t cover basics like prescription drugs, maternity care, and mental health care and contain pre-existing condition exclusions prohibited in other health plans for conditions like cancer. States ban or restrict the operation of these plans for just these reasons.
Provisions pointing to a fund more about improving rural health than political considerations
Despite the political provisions above, there are plenty of great ideas for improving rural health care in the state application document that are more likely to enjoy broad support. Elements like encouraging nutrition education for providers, encouraging health and lifestyle changes in rural communities, licensure changes to improve provider access, improving access to EMS and building up systems of preventive care are all sound ideas that many states have been trying for years (pp 73, 74, 77, 79, 83). New funding opportunities will be welcomed by states and may complement existing efforts.
A particularly strong part of the application that highlights rural health improvement rather than politics are the illustrative examples of state initiatives possible under the fund (pp 97-118). Starting with a comprehensive description of a population health infrastructure initiative that is aimed at increasing access to primary care, preventive care, and behavioral health services, the examples are wide-ranging and include links to already-existing state initiatives that are working well. Other examples include a quality-of-care initiative to enable rural residents to easily access high quality, appropriate care at more regional centers and a comprehensive plan to recruit and retain multiple types of health care workers in rural areas. These are all positive signs. How viable such funded efforts will be over the long run will be the key question as the massive Medicaid cuts under H.R. 1 are fully implemented.
As a part of Georgetown University, an institution founded by the Jesuits, in debates we often strive to reflect “the Ignatian Presupposition”, the idea that we must always begin with the assumption that others are acting with goodwill in their presentation of ideas and proposals. So let us follow Saint Ignatius here and assume that the rural health fund is exactly that – a fund that will be used for the greater good across America to improve health care in our rural and underserved areas without undue political influence. However, our values also include the Jesuit precept of being “people for and with others”, or in other words a commitment to serving humanity and in particular those marginalized from the mainstream. Rural areas in America, like Down East North Carolina, have proud traditions of hard work and community resilience and deserve the same access and opportunity for quality health care as any other more urban areas in our country. What people in these communities don’t deserve is not only a historically large cut to Medicaid funding, but also a “Rural Health Transformation Fund” that is more about political expediency than rural health improvement.
We’ll be following the implementation of the RHTF to see how the rubber meets the (rural) road.