>> Sean Slone: So Rural Health Transformation, H.R.1 included a $50.05-year initiative called the Rural Health Transformation Program intended to offset the cuts to Medicaid which many fear would financially definite state hospitals and safety net providers already operating on raiser thin margins. Every state applied for and received money from the policeman that will help them implement and provide innovative initiatives to revitalize healthcare delivery but concerns remain about the limitations states had to navigate on what the funds could be used for and whether the program can insulate rural health facilities from the challenges they have faced in recent years, as well as the Medicaid cuts H.R.1 will bring over the course of the next decade. We have a couple of guests joining us virtually this afternoon, Dr. Cody Mullen, is a clinical professor of public health and professor of graduate studies at Purdue University in Indiana. And Eliza Lake is the director of health policy at the Executive Office of Health and Human Services. She serves as the project director for the Commonwealth's Rural Health Transformation Program.
She's a native of Western Mass where she manages her family farm, so I guess it's safe to assume that she knows what rural looks like from a Massachusetts perspective.
Dr. Mullen I think is going to go first and provide a national perspective on rural health and the program. Then Eliza will talk about how the RHT will be beneficial to the bay state and how the implementation of the RHTP initiatives are going here. Following their remarks we'll bring back Andrew, as well as his colleague, Kate Schedel, who is a healthcare management consultant and we'll continue the conversation.
Dr. Mullen, take it away.
>> Dr. Cody Mullen: Wonderful. Audio check. Can you guys hear me okay?
>> Sean Slone: Yes.
>> Dr. Cody Mullen: Perfect. Well, good afternoon and thank you for letting me come in virtually. It feels a little like COVID all over again. But it is a pleasure to be with you all virtually, whoever may be in the room and the 60 some odd participants online. Thank you for the invite.
My goal today is to give some high-level remarks about how we got where we are in rural health and how RHTP fits into that and let Eliza really give a detailed analysis of what's going on there in Massachusetts.
So next slide, please. So, my agenda is where are we? What is the data saying about rural health and rural healthcare delivery? And the delivery of that? And where do we go and how does RHTP fit into that and other aspects of H.R.1. Next slide, please.
So where are we? Next slide. So it's important as I tell my students for pretty much every presentation that I give that we first stop and pause and say where are we as an industry? When we think of healthcare, we all don't think today is a good day to go to the ER. We don't think of healthcare necessarily on the cheeriest of days, but it's at the time we're at the lows of our lows, really low, lows that we go into healthcare, emergency department, urgent care, we get a diagnosis we weren't expecting or a family members or close friends does and the journey with the healthcare system becomes more in tune to what the feature is. And healthcare is expensive.
I know you all are experts in that as well. You all see the expenses that it has, not only as a state legislator and what it costs your state in delivery of the healthcare and the Medicaid system, but just what it is for each of us to go see a doctor on a daily basis. And we look at how that spending is going as a percentage of gross semester product, or GDP, we recognize we are spending more in healthcare each and every year. We saw a spike that occurred during the 2020 pandemic. This is a two-factor because we saw a decrease in GDP because we weren't going out to eat, we weren't traveling as much, but also an increase in healthcare utilization. That returned to normal in 2022, where what was normal. Up until 2024, which is the most recent data we have, we've seen a linear increase now encroaching at 18%. Economists will tell us 20% alarm bells will be more than ringing in our economy and that's something we need to address.
Next slide. If we look at where is that spending coming from, and where does that come into, when we think of rural health and rural healthcare delivery, we have a factor of four main populations that utilize that. Individuals with private health insurance, light gold bar. We have the Medicare population, generally those are 65 and older or diseases, long-term disability which is kind of blue or dark gray bar, we have the Medicaid population, that darker brown bar, and then that bar that seesaws below 0 percent and up is uninsured population. We see in 2024 that all of our populations had growth and expenditures, but primarily it was our private health insurance population and it was our uninsured population that saw the highest growth associated with that.
When we look at rural health disproportionately we're going to see higher rates of uninsured, higher rates of Medicare and Medicaid, so we're seeing that growth and that utilization moving forward in that population.
Next slide, please. So we forecast this out, this is work that was done and published in the Health Affairs Journal about 2 years ago, in 2024, forecasting out at the time 2022 data was the most current data we had. 2023, the projection was spot on. 2024, they're actually underprojected at 17. 7% of GDP, we were actually at 18.1, and fast forward to 2032, which is the end of when Rural Health Transformation funds will be utilized and no cost extensions may expire, we anticipate being right at 20% ratio.
Again, this is before the changes of RHTP and H.R.1, but we're hitting that danger mark moving forward.
Next slide. We also need to recognize as consumers and we probably all do, that everything that we spend is getting more expensive. I am not an economist, I'm a health policy expert. But we recognize that things that we spend are more, but healthcare is growing at rates quicker than we see and overall CPI, Consumer Price Index, nearing over a hundred percent by 2024.
Next slide. We're also seeing did he ductables are greatly increasing, 2006 the average family did he ductable was about $600, by 2024 that average deductible was about $1800. We recognize and know that in rural health the deductibles tend to be met at those rural healthcare facilities. If a patient needs to be transferred into an urban center for continuity of care or specialty care, that deductible has probably already been met in the rural setting and now it's co-insurance or no consumer payment required at that more urban setting.
So, we spin that higher rates of Medicare, higher rates of Medicaid in rural. We now recognize higher rates of deductible for private insured or Medicare and Medicare. The potential to increase on rural facilities is increasing as well. Next slide.
This is also affecting our employer population, so employers are trying to keep up with the increase in premiums. Their contribution has almost quadrupled from 5,000 in 2000 to nearly 20,000 in 2024. The worker contribution has also increased substantially. So all these things are swirling around, recognizing that when patients go to the emergency room or emergency department, by and all they are going to be stabilized as well.
Sorry. They will be stabilized and then transferred. So we recognize in rural communities that the bad debt or the amount the consumer payment necessary will be supported there as well.
Next slide, please. Not surprisingly, when we look at all of this and we survey, so Kaiser Family Foundation early part of this year surveyed people and said what is worry some about your expenses right now? Healthcare was by far the highest. The system in January before the gas and other transportation costs that we've seen have increased since late February, early March. But healthcare was number one. Food and groceries was number two. Rent and mortgage was number three. And monthly utilities is number four. And in public health we say those are your top four social determinants or social drivers of health and those are the things that worrying people are greater than 50% moving forward.
Next slide. I know we have elected officials from all around the country either in the room or on the call today. So I do want to provide some national data. Where's our spending? So darker the color, the higher the spend is. I wouldn't say worse or better, but darker the more the spend is. The purple map at the top is the overall spend for all of healthcare. So we recognize that the northeast tends to have higher spend. Some of the delta and South have higher spend. And the plains have higher spend.
We then break that out based on the payer source, so the blue chart is Medicare. The green chart is Medicaid. The yellow is private health insurance. And the reds is out-of-patient spend. So as you think about your state, where are you comparatively nationally? Is it consistent across all the payer sources or is there specific payer source where that spend tends to be higher rate?
If the spend is towards one payer source, Medicare, Medicaid, or private insurance, it is important for us then to recognize that changes in those systems could destabilize the healthcare system as a rapid change in their reimbursement, changing the sources of care that may be available moving forward.
Next slide. Prior to H.R.1, and the discussions there, we in rural health have been spending the past several years talking about the hospital closure crisis. The first crisis really occurred in the 1990s when we saw rapid closure of Hell burton facilities and at that time the ends of the 90s, the critical access hospitals was introduced and stabilized the system. Since 2010 we have seen a rapid closure of facilities moving forward. We recognize some of those states tend to be where the closures are highest tend to be in the South. They also tend to be states that have not extended Medicaid, though that's not a one-to-one correlation.
We also know that some hospitals -- or some states, pardon me, rural hospitals are set up differently. So in Indiana where I live, many of our rural facilities are system-owned, so we've not seen the closure at the same speed, but we've seen the change in services being offered at those facilities.
This also, this data excludes patient -- or facilities that have transitioned to -- sorry, includes facilities that have transitioned into the rural emergency hospital or the REM model, where they've shut down their inpatient care facilities but they still have an emergency department, outpatient care and skilled nursing facilities available.
Next slide. If we use the data of the facilities that have closed, and this is work that's been sponsored by the National Rural Health Association and we project out what other facilities we anticipate will close or have similar markers of the hospitals that have closed thus far, again, we see the delta region tends to have high rates of closure. Tennessee, though, 61% of the rural hospitals are at risk of closure imminently. Arkansas is 55%. Florida is 52%. This analysis was done prior to analyzing or projecting out the effects of H.R.1, which involves reduction to Medicaid reimbursement and other changes to the Medicare system that will destabilize the healthcare system and change the healthcare system significantly.
Next slide. We also, as I've mentioned, closure of a hospital does not necessarily mean the only indicator that we need to look for. We also need to pay attention to changes in services being offered. One, and I have several charts I could have shown, but one I want to demonstrate was the closure of infusion centers in rural, primarily the access to chemotherapy. I've never experienced chemo, but family members I have is it is not a fun process, to say the least, literally killing cells in your body to make sure you live, and transportation to those facilities is vitally important. We've seen that 22% of rural hospitals since 2014 that were offering chemo services have since closed.
There is a clear delineation between the southern part of the country and the northern part of the country, National Health Association is doing more analysis into that. But 448 hospitals have closed those facilities and we can discuss in Q&A more about that.
Next slide, please. So where do we go from here? What are the changes coming and how does Rural Health Transformation really play a factor into some of these changes? So next slide.
So, as I'm sure has been discussed throughout your day, a year ago here in a few weeks, on July 4, 2025, President Trump signed the One Big Beautiful Bill, now known as the Working Family Tax Reduction Act. This piece of legislation had wide changes to the way we deliver healthcare, specifically the way we finance healthcare in our country, with significant reductions in reimbursements on the Medicaid system, changes to the Medicare system, changes to the Medicare Advantage system. Some of those changes have initiated already in January 2026, Rural Health Transformation fund program, applications were due at the end of 2025 and have already been awarded and work is starting to occur.
And then I listened to the last panel, work requirement to other changes, we recognize and acknowledge that these changes are going to be phased in over the next two to 4 years, a major change coming January 1, 2027, and so on and so forth.
Next slide. So some of the changes significant changes involve Medicaid. So analysis being done is roughly $2 trillion reduction over the next 2 years of Medicaid reimbursement due to policy changes in H.R.1 will be coming. Analyses, and there's been three or four that I've looked at that are very similar in their findings, roughly 200 rural hospitals have increased their risk of closure due to changes in their Medicaid reimbursement.
But I want you to look at, depending on what state you are from, darker is the more spend, so this is the amount of money spent per beneficiary in each state. So the largest color is more than $9,000 in 2023, which is the most current data we have, all the way down to that lightest green color is less than 6,000. If you're in a state that has a high spend for beneficiary, Indiana, Massachusetts, Mississippi, these changes to Medicaid may destabilize or change your healthcare system in greater ways moving forward.
Next slide, please. So we look at spend then overtime, so we look at both what is our overall spend, how does that change with enrollment. I appreciate Kaiser family foundation going way back from before the pandemic when we saw a spike in spend and enrollment, except for at the passage of the ACA and the introductions of the expansion -- or the exchange, pardon me, in 2012, we have seen a growth in Medicaid spend pretty much every year. That changes have differed but enrollment also has increased every year, except for a dip in 2018. We've now seen great reduction post the pandemic as people have rejoined the work industry. And then we project in 2026 this to be level and really no one is predicting out 2027 quite yet as those workforce requirements are being implemented.
Next slide. We're seeing in OB3 some other Medicare changes. So we talked a lot about Medicaid and RHTP and the factors there. But in the Medicare side there were a lot of changes about limiting coverages of certain individuals, changing eligibility requirements, changing the physician fee schedule significantly. This has changed every year, but the changes that facilities are addressing, especially in rural for 2026, is significant. 2027 is currently out for comment, fiscal year '27. Changes in some pharmacy and drug policy, significant changes to the rural emergency hospital model and some facilities are starting to really look at that model as avenue. This is closing their acute care beds, so destabilizing the healthcare system and changing that.
Nursing home rules, significant changes are proposed right post the pandemic and early days of the Biden Administration, some of those changes were walked back, not to have some of the nursing home requirements that are associated there. We also I've seen some payment model changes in OB3 from the Centers for Disease Control Innovation, MAHA elevate is currently being scored right now, which will change the way that we address some of the MAHA movements around nutrition and chronic disease management and the way we reimburse that. And then thes Trump RX and negotiations have been in the news quite a bit.
Next slide. Medicaid changes above and beyond OB3, I'm sorry, RHTP, there are significant changes looking at your agenda for today, I wish I could have attended all day but have been in trainings with my students most of the day. But really looking at enrollment and eligibility, the work requirement has been significant. And then the Rural Health Transformation Program, RHT P, that $50 billion investment.
Next slide. Before we really dive into that, the last thing I want to share before we do a deep dive from my federal lens on that and I'll hand it over to Massachusetts and do a really detailed analysis of what they're doing, so back in February, so not the most recent government shutdown but a recent government shutdown when the full government shut for a long period of time, we saw one of the major debating points between the republicans and democrats that we saw was really around the tax credits for ACA expansion or the exchanges, pardon me, so many E words in healthcare right now, the exchanges. We saw that a lot of those tax subsidies that were expanded during the COVID pandemic expired at the ends of 2025, calendar year 2025. So again, we're starting to see an early analysis, I'm not ready to share the data, but my team has been looking at the cost analysis, the rate of bad debts, individuals going to healthcare who are uninsured or underinsured or have significant deductibles they're not able to cover has greatly increased, which is destabilizing the healthcare system.
Next slide. So that's where the Rural Health Transformation funds come in, this is added towards the ends of the discussion of OB3. Really I guess this time last year this wasn't a thing we even knew was going to be part of our lives and now I know for many of us who are working in this space feel like this is all we talk about anymore. But $50 billion incentive program that aloud for states, allowed for the state Medicaid agency is the primary applicant, then they can share that, the government will share that however they saw fit. In Indiana a majority of funds have been transferred to the Department of Health and their facilitation of that. But $50 billion that states could apply for. $25 billion, or half the funds were guaranteed as a base. Every state got about half a billion of those funds over 5 years to about $100 million per year for 5 years. And then the other $25 billion were up for competitive competition for that moving forward.
This is a chart of a JAMA article that was released in February that did the analysis. So on the right side of the chart, so the blue is consistent for all states because every state who applied got their $100 million for their first year of those guaranteed funds, all 50 states did submit an application. At one point it was unclear if all states were going to, but all states did. And the orange bar, left side of that, is the at-large or competition. Al Alaska and Texas received significant funds, Rhode Island and New Jersey, Connecticut received the least amount of funds of those competitions.
Then if we set that precedent, so what is that ratio, how much funds per resident were received both of the baseline funds and the discretionary funds? Rhode Island is at the bottom having the smallest rural population receiving a little over $1200 per person of the consistent funds, about $800 for the competitive funds, all the way up to Texas at the top that received about I think it was about $20, if I remember correctly, per rural resident of baseline funds and about $35, I believe, of the variable funds, so I encourage you to find your state moving that forward.
Next slide. So every state has been implementing this, like I said. A year ago on this time, all those working in our RHTP space did not know it was a thing that was coming and they have quickly adjusted the notice of funding opportunity was released, I believe, in September. Applications were due in November. Funding was awarded right before the end of the calendar year to start January 1st, and it has been beyond -- to stand these programs up.
These are head lined from Kaiser Family Foundation, they have a rural health pay out. The timeline, I'm not sure of the name but they have stories they're doing looking at those things, some positive, some not so positive stories. States are looking at how do they get these funds out to the rural community and how do they intersect with state legislators like yourselves who controls that. And then what is the role there, and each state is different.
So, next slide. So with that I want to spend about 20 minutes to share that. I want Eliza in Massachusetts, which I know the majority of you on this call are from, to share a deep dive into what Massachusetts is doing and then we'll have a discussion and question and answers at the end and happy to answer any questions. My e-mail is on here, if there's any information I can provide or do a deeper discussion. I know Zoom is difficult, but happy to do one-on-one discussions as well. With that, I'll turn it over to Eliza for her presentation.
>> Eliza Lake: Great. Thank you, Cody. I'll do a sound check as well. Can you hear me? So I am very sorry not to be with you in Boston, as you can see at least I carry it behind me on my screen. I am actually at a national conference in DC on RHTP, and so I am calling in from a very oddly lit business center so I apologize if it looks like I'm sort of lurking in the shadows. But I'm very happy to be here to talk about what we've been doing in Massachusetts and how we are implementing our funding and our sort of blueprint for how we're going to improve rural health in Massachusetts.
Next slide. So first I want to note that this presentation is supported by CMS, the DHHS, federal agency, as part of a financial assistance award totaling 162,005,238. 13, a hundred percent funded by CMS/HHS. The contents of these are mine and do not necessarily represent the official views of nor enforced by CMS, HHS or the U.S. Government. Next slide. Next slide.
Great. So I, too, am sorry I haven't been able to listen in all day because I've been in this conference and certainly you just heard from Cody, but this is clearly a five-year program that was part of H.R.1 to focus on states improving healthcare access, quality and outcomes, by transforming healthcare in rural communities across the country.
And in our applications in the fall, every state was required to apply for a billion dollar over 5 years and we were to focus on promoting innovation, strategic partnerships, infrastructure and workforce.
So, we had 53 days to write the application for a billion dollars. And we did receive our notice of award on December 29th, for immediate implementation. It's important to note that every year our progress and a number of other metrics will be reevaluated and we will be rescored, so that amount may change year-to-year. It is a, you know, one pot of money that all 50 states are working on, and so as some states make progress and others don't, those numbers will go up and down.
Next slide. So, rural in Massachusetts, and I have to say, Cody's data I think uses, there are many different definitions and so this is the state of the Massachusetts state definition of what rural means. And under our definition, 160 of the states 351 towns are designated as rural. We have two levels, we have rural level one that have more population and are closer to urban core areas, and we have rural two which are less populated, more remote and isolated. You can see from the map that's large parts of Western Massachusetts and North central, a little on the North Shore, South of Boston and then the Cape and the Islands. This definition was developed, what is that, 14 years ago with a lot of input from rural communities and leaders, and then every 10 years through the census we can update that and can ensure that we're continuing to have the right towns listed.
And so, overall this is about 57% of the state land mass, and 10% of residents, so about 700,000 people.
Next slide. So Cody gave us some data about the spending and the -- across the country and this is what the status is for overall rural. Here is some context on overall health needs. So, compared to the rest of the state rural communities in Massachusetts are older. They are more likely to be individual households. And they have lower annual incomes, about $23,000 lower. They also have greater prevalence of chronic conditions and higher mortality, so as you can see here this is a breakdown between nonrural communities and then rural one and rural two. Rural one is doing better than it might have been a few years ago, partly because of during COVID people were able to move out into those communities that are between the most remote and more urban areas, and so that did improve their health outcomes a little bit. But as you can see, rural two much higher rates of heart disease, hypertension, diabetes, and stroke.
And in terms of healthcare access, obviously, transportation is an issue and the levels of isolation. But the number of hospital access points are decreasing and so, again, it's a definitional question from what Cody just showed us, but in fact there were 11 designated rural hospitals in 2
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>> Eliza Lake: And, there are 25 pharmacies to serve all 160 rural communities and for specialty care wake times can be well over a year. In terms of insurance, a higher share as Cody said, rural residents of public insurance. 41% of rural residents with poor health insurance and affordability issues. In terms of providers, recruitment, retention and competition are huge.
I know -- I ran a rural FQHC for many years and often felt that, you know, you would train local folks and they would be moved elsewhere into less rural areas to - for higher paying jobs so it is very hard to compete and hard to compete in recruitment as well. The long-term care facilities have limited capacity and limited behavioral health resources and as I said earlier, the specialized care are longer waits. And so, therefore, people have longer experience boarding in EDs than hospitals.
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>> Eliza Lake: So in designing HCP last year, we are looking at the entire system. That's not your traditional hospitals and health center and primary care sites. Really looking at the full complex of folks who are ensuring the health and well become of our rural communities so that including behavioral health municipalities and social services, skilled nursing and schools are a big piece of this pharmacy and community-based organizations can address the social determinants of health that can have such a large impact on people's well-being. So in deciding the application, we want to engage with all these groups and whatever we propose did include all of these elements so that we could have a more transformative impact on health in rural Massachusetts. Next slide.
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>> Eliza Lake: So, there is a lot of information on this. Just to give you a sense of the application, we did have from mid-September, we started preparing in August. Mid-September when the opportunity dropped from CMS until November when he had to submit. So, we did a lot of external engagement. We got 200 inputs and we engaged with specific bodies that we knew existed inside the states that were engaged in rural health. I would say and what's not necessarily on here is that the state office of rural health based in our Department of Public Health have been working in rural communities for decades and had incredible insights into the needs of the community and what they have been hearing about and working on for a long time. So, we were able to structure our application and, you know, hit the ground running with it very quickly and then feed into the process. In general, we had already known as a result of behavioral health work what the issues were and what we wanted to address. We obviously have wealth of data as well and certainly by having that rural definition from 10 or 15 years ago had a lot of data, such as what I shared with you that showed us the needs and to make our case.
We - that community engagement piece is a critical part of how we are implementing RHTP so we'll be naming a community advisory council shortly with representation of all the sectors and geographies of Massachusetts. We have initiatives group and I will be talking about them in a second, they'll engage the folks in the community that are closest to that work and can provide with that input. We'll be having public information sessions and then there are existing rural advisory bodies like the rural policy advisory council and Massachusetts' rural council on health and so we'll continue to engage with them and they'll have seats in the community advisory council.
I will say that, you know, this and I will talk about timeline at the end, the initiative workgroups in particular, we are really relying upon the expertise of the communities to tell us how to design all of the procurements we need to do. How we are going to get this money out and ensure that we are designing it in a way that small organizations and rural communities with limited capacity and grant-writing, IT or in general, we are not creating additional burden or making, creating barriers to accessing these funds through our procurement. We are asking general questions last week and this week about how best we can design this and how we can bundle procurements and make sure we are contracting in a way that makes this money as most accessible to those folks who will be needing it and need it and we'll be using it to change the system.
Next slide.
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>> Eliza Lake: Here is our vision and goals. We are envisionings a Commonwealth with thriving rural communities. Residents access healthcare services and generating the opportunities to improve the health of rural residents and scaling investments to meet with unique needs of the rural communities. That's the piece we are talk about that we are not creating a prom that's in-accessible. Under that is specific strategies are reflective of how we design the initiatives.
These are the seven initiatives. I will go through one by one. They are focused on population health advancement, training and health rural communities, EMS service integration, enhancing technology, and modernization and reuse. This is a summary but I will go into each individually. Next slide.
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>> Eliza Lake: This is focusing on the clinical infrastructure in rural communities, so creating better networks around chronic disease management and networks between clinical providers and organizations and community, based organizations. Creating better system and innovation and effectiveness is youth with high needs and how we are understanding of contexts and creating access for rural communities for those youths. Expanding remote patient monitoring, home visiting, hospital at-home and all the clinical services and how we can expand access to them in rural communities. That includes school based and TELE-behavioral health. The focus is on disease management and decrease preterm births and increase Geriatric care. Next slide.
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>> Eliza Lake: Innovation in Rural Care Models Initiative. So, mobile health or technical or how we can get people more access to specialists and more telehealth and rural digital health sandbox program. Can we create a competition where people are coming up with new ideas of how to use technology to best increase access to care in rural communities. Supporting FQHCs in their technology with emerging health tech and then maternal health and opioid programs. So, this is really looking at how can we increase capacity and how can we in some cases promote existing models that do not - that rural communities do not have access to increase their general health and well-being. Next slide.
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>> Eliza Lake: Thrive which is training for healthcare, excellence is our workforce initiative. Looking at how are we getting kids really interested in healthcare from kids of rural communities. Research shows people stay where they train so we want to have people growing your own models in rural communities or having people trained in rural communities because they are likely to stay there. That includes pipeline programs between Community Colleges and local providers creating a nurse practitioner residency program, support for housing for those communities that have really high housing costs because they are touristy. They're giving the islands other areas where there tends to be low housing stocks and providers have a hard time recruiting workers to live there. The program existed but we are expanding a focus in the rural areas which is incentives for field placements. There are various placements of social work, which is usually unpaid. How can we pay those folks and how are we paying provider organizations to supervise those students, which is something they would lose income if they have their staff doing that supervision. Then, supporting small local providers, developing recruitment and retention plan. It is the kind of investment that many of these providers are unable to make and so we would be supporting that as well.
And one notice this is support for allied professionals so medical assistance and nutrition and mid wives and paramedics not usually what we think of as clinical staff which is doctors, nurses and nurse practitioners. Next slide.
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>> Eliza Lake: The Healthy Rural Communities Initiative is looking at the community-based. How we are working with local public health and connecting them through shared service agreements and specific populations like older adults, tribal communities and what are programs we are putting in place to support that.
Next Slide.
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>> Eliza Lake: As anyone working in rural Massachusetts knows that EMS is a sector that's really struggling in rural communities, given the distances and what they can and cannot be reimbursed for. We want to support them through in implementing a reimbursement program for the transport they are providing or the visits they are making without taking someone to the hospital which is when they could bill and supporting those to show the efficacy in terms of reducing overall costs and supporting and ensuring strong EMS in rural communities. Also, supporting community medicines which we are using EMS to do work in the community that does not involve the hospitals and then some support for them in terms of various specific care that could be provided before they get to the hospital. Next slide.
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>> Eliza Lake: Technology And Connectivity, we are making sure we are thinking in different ways, expanding rural providers in our health information exchange and making sure that EMS and hospitals linked through technology and can communicate about their patients they are interacting around. Creating electronic record system for local public health and local boards of health and providing cyber security support for a rural providers. This last one could be applied across the board and certainly for the next year, this is our big focus is what is the technical assistance and support that all of our rural providers and organizations need in order to do this work? So, we do not want to set up our communities for failure by giving them a ton of money for five years and it goes away and they don't even have the capacity to spend the money. So, we are going to spend a lot of time in support and -- helping build the systems that need to exists in order to make this project successful.
Last but no least, next slide.
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>> Eliza Lake: The facility could not expand their footprint or open a new site, they can use funds foreign vaccinating existing space, replacing systems that are needed and considered capital like HVAC or technology systems. And so we are going to be spending and we have maximized the amount of money we can spend in this particular initiative and so we'll fund critical updates for rural hospitals and health centers and nursing facilities and then specifically for nursing facilities to create a Behavioral Health and Substance Used Disorder Unit within their facility. While we could not supply any state's spending, we can support our providers in ensuring their facilities are able to meet the needs of their communities going forward. Those are seven initiatives and 37 activities. I want to give you a quick sense. Next slide, sorry.
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>> Eliza Lake: USHS is the lead agency, we have a council that includes members from the three main agencies. We have a governance team that then includes other agencies, the tribal organizations, state office of behavioral health and doing this more day-to-day the leadership o f the project. We have a community adviser council that's providing them with input and then we'll have initiative workgroups as I said that'll be providing input. I am almost done because I just realized how much time we have left. Next slide.
>> [Slide Changed]
>> Eliza Lake: I have talked about this initiative workgroups and Community Advisory Council.. I think we can move on. Next slide. Woops. The timeline this is a very basic timeline. As Cody said, this is very accelerating. We have been moving very quickly and so we have set up the initiative workgroup and we'll be giving procurement this month. Next month will be the vast majority of it and starting with - we need to focus on the most shuffle-ready or quickest thing to get the money out. Under the CMS rules, we have to have all the money by the end of October. The contracts have will be fully ex pended out by the end of September of next year. We'll have annual report as well as an reapplication due by the end of December. We are moving fast and trying to make sure we are doing this in a responsible and organized way while meeting the deadlines that are required. So, I think that's it. Thank you. Our website is being updated. We have to get approval from CMS for all of our updates and so we have just done so. We'll be doing so soon. That's the site and then we do have the e-mail address if people have any questions besides the questions today.
>> Thank you very much. I want to bring back in Andrew Bennardo. Based on your work with states, do you have anything to add about what Cody and Eliza had to tell us about the program.
>> Kate Schedel: Hi, everyone. I had the pleasure working with Andrew and in great company today. I both live in Indiana with Cody and I used to live in western Massachusetts. Great presentation and hard to follow. We are helping multiple states with implementation of the rural health transformation program. I echo a lot of what was already shared is that I came from a state Health Department And, I used to be the director and had grants totalling around $50 million a year every year, right? It is hard spend the money and go through the state's processes and find partners and monitoring the work and make sure what you are putting money towards and making an impact. Take that and times it by four. $200 million give or take with little to no planning andless than two months to write it and figure out your partners and go through procurements and hoping you can get the money out and hope that your partners can spend that. It is a large responsibility. Then, you add in a lot of different caps on budgets and add in the complexity of what you can and cannot do. Some continuously refined rules about a five-year service commitment for the workforce or funding caps on what you can use for electronic health record updates or technology or Broadband view.
It is a balance between we have all these money and we may not be able to spend it as how we are as a state. Andrew and I have been working alongside states and saying how can we help? How can we track what you are doing and prove all of that really well by August of this year and hope that you get the funding for next year.
So, it is an incredibly complex grant program that All States are genuinely glad to have and also just incredibly complex in how we spend money and track the outcomes and hope that it has that intended impact of cuts to Medicaid and does it balance out what your cut in with what you are putting back into the community. So --
>> Cody: I mentioned in my opening remarks that there were a number of states where we have seen these efforts by legislative bodies seeking for some oversights of our spend sort of after the facts. Are there any worries of later oversights in some states, states won't be able to launch some of these in time to be able to show progress and avoid the call back provisions of the bill?
>> Andrew Badaracco: States that have good partnerships are in the best position to be successful because of what we have seen states we work with that really strong coordination between Executive Branch and Legislative Branch and always being kept in the loop on what's happening and how it is happening have had the most streamline alignment across the program. So, I am pleased to see Massachusetts hierarchy and organizational structure of your grant program.
>> Eliza Lake: Yes, I would say we have been in coast communications with many of our rural health leaders in the legislature but we, of course, happy to speak with any legislatures who are interested and welcome an opportunity to come back and talk in more details of our plans. I think we are, you know, one thing CMS obviously has been talking to all the states about their relationship with legislature and one thing that's clear is that we committed an application and that's what the plan -- and while it looks like a lot of details and the slides I just provided, it was a 60-page double spaced application for millions of followers so there is still a lot of details. It will be happening within the framework of our application and actually, I should have mentioned that our website that I posted does have our full application in it. So, if people are interested in reading a 60-page double spaced million dollar proposal is there. You can recommend word searches for specific issues you may be interested in and you are welcome to see what's in there.
>> Cody: We know there were significant limitations of what money can be spent on, limitations on provider payments, administrative expenses, infrastructure capital and systems replacement and the rural tech funds. What are the chances that despite the best intentions of Eliza Lake and her counterpart across the country of what the dollars are spent on. Those initiatives or solutions will sort of miss the problem we have known in rural health for a long time. Would it make a difference if states were allowed to vote for a larger percentage --
>> Andrew Badaracco: Any sort of design changes could have a different impact. The biggest changes and the things we have heard and I am sure Massachusetts say similar things. Broadband works for expansion, you know, parental support, things like that are really in high demand. So, when it came down to states really designing strategies that they hope would be sustainable. Sustainability was one of the biggest -as major component of the grant application and how CMS evaluated those applications.
And so, in talking through that with the providers, it seemed like just - it didn't necessarily come with the sustainability components. Programs like Massachusetts putting out and other states are designed to support providers and infrastructure and growth while also supporting that sustainability piece at the end.
Because I know every state would have loved the money to pay for services out right as a result of reductions of HR1. The need to create a sustainable model is a driver here.
>> Eliza Lake: Yeah, I would say that's exactly right. Our focus is what's the capacity infrastructure that we can build the next five years? At the end of the five years, do our local providers or communities have the capacity? Do they have a seat at the table that they may not have had before in thinking about what directions Massachusetts healthcare system is going so they have a voice in the future that they may not have had in the past. That's our strategy in thinking of the future and how to best use these funds.
>> Kate Schedel: I will add of Sean's statement of the four categories states are applying for workforce and technology and behavioral health sometimes excludes what Dr. Mullen mentions of people thinking of housing and transportation and other things that prevent them from seeking healthcare and so I think trying to balance those social determinants of health needs with the healthcare and rule communities will be an ongoing pass for states.
>> Cody Mullen: The focus is on -- the work that we are doing in Indiana, probably best practice to do the planning. We are planning to do this until September of last year, hey, you will be doing this in the Summer of 2026. A lot of grace year three and four or five of the funding will give a lot of time for - okay, now we have a field of what CMS is going to approve and what other states are doing and now let's go out and be transformative.
>> Eliza Lake: Yes, an explicit example of that in our facility modernization or capital money that we are assuming this first year there will be funding for projects that are absolutely people have on the shelf ready to go and need funding for and as well as supporting that planning piece and what their future needs are and what they'll need for three to five years in order to best become sustainable and stronger. And applying for the funding in years two and three and etc.
>> Moderator: These funds are sort of a drop in the bucket and won't come close to offsetting the cuts from H.R.1, I read across the list some where about -- Texas which receives the largest allocations of $281 million faces a $4 billion decline over the next decade of rural areas. Pennsylvania faced like $20 billion loss. So, I mean where do you square that math?
>> Andrew Badaracco: You can look at ways where you can best invest in your programs and just move ahead. You are creating the next generation of community health workers, the next generation of nurses and physicians. And you hope that, you know, the hope that was referenced earlier today that the idea that, you know, there is a brighter day tomorrow, right? So, you are creating that day today with this fund. I think it is hard to imagine and I know congressional negotiations can go. It was not intended as a give in that sense. The states we work with seeing we are building for the future and they are doing the best they can.
>> Moderator: Did we have any questions in the room or online?
>> No one.
>> Moderator: I think we are about out of time this afternoon. I got to do a little bit here at the end to talk about our Medicaid Policy Academies. We want to thank this great panel and thank you to Cody and Eliza and Andrew and Kate and everyone here attending online and at the State House. I want to put in another plug for our Medicaid policy. I hope we can get some participation this year from Massachusetts legislatures and folks in other states who may be joining us on Zoom.
If we can bring up our next slides there. Next slide.
>> [Slide Changed]
>> These are some highlights last year which took place during the government shutdown when our speaker at CMS didn't make it, we ended up pivoting with many directors in Illinois, Nevada, and Virginia and talking about what it has been like working with CMS through this period and great inside stories there. We heard folks like Allison, the former administrator is now at TW.
>> We heard about her this morning as well. Next slide.
>> [Slide Changed]
>> This is the list of some of the organizations we turn to on their Medicaid and policies. It is a list that grows every year. It includes KFF. They prefer not to go by Kaiser family. They have an association with Kaiser Permanente. They are still family and they don't hand out money so they are KFF now. The National Academy For State Health Policy. With the Medicaid consultants and Andrew and West are going to join us. Our Medicaid Policy Academies are happening August 10th through 12th. Policymakers who are leading committee or agency. Never theless having an interest in learning more about Medicaid and how it impacts the state's budget and how they can influence the trajectory of the program. August 12th-14th, Medicaid Leadership Academy. Each academy is going to tackle many themes we have heard today. The medication Foundations Academy focusing on oversights and the Medicaid Leadership Academy will include Q and A with officials from CMS this year. Next slide, please. If you would like to receive updates on the academies or invitations. Reach out to me and the e-mail address. Contact, Sean Slone. I will let you know when the Medicaid I am writing will be available for you to read. Thank you everybody at the state house joining us and the last thing I want to show you is a short CSU produced video with some of our attendees from the 2025 CSU academy. Have a great evening, everybody.
>> [ Human Realtime Captioning by HRI CART ]
>> [Video]
>> We have to understand every topic and be knowledgeable of different issues all while building the plane while flying it. We are working on these issues and advancing it in a way that will support the people who live in our states.
>> CSG makes it easy for us with our peers and other experts by bringing it to us and small enough that you get to exchange contact information and look at the data to see what's working.
>> This is where you need to be to really understand what you are doing. You DON'T have a real micro-knowledge of information. And so it is like football, all right? It is the offseason. I feel like what CSG provided is the offseason for us to play the game
>> The ability to spend a few days and digging in important policies and having conversations from both sides of the isles really allowed us to be better prepared and equipped to the work when we go back into sessions and our states.
>> There is no reason to reinvent the wheel every time we go about it. We can collaborate together and come out with perfected policy. I think CSG does a great job putting these events together and giving us the information that we need to be able to make decisions.
>> New legislatures or any legislatures trying to dig into the details and what makes CSG so special is having these kinds of opportunities for individuals to learn. To come and understand what makes policy work at the state level. We are those laboratories of democracy for a reason.
>> [End of Video]
>> That wraps up everything, ladies and gentlemen. For those of you participated in-person and virtually, we want to thank you very much. We want to thank CSG, and all of the staff at the Massachusetts and disabilities council. We want to thank our sponsors in Massachusetts and all the attendees and please visit our website, mass.gov and you will find our resources. Please remember to take our survey. It is very important that we get feedback from everybody. Thank you very much.
>> [ Human Realtime Captioning by HRI CART ]
>> [End of Presentation] for this panel, but gentlemen, thank you very much for lending your expertise this afternoon. And I think they're going to stick around for our next panel as well. The focus of our fourth panel this afternoon is Rural Health Transformation, and I think we've got a couple of online guests who are going to be speaking. So do we need to pause here to bring them up or anything?
>> Yes. We'll bring up the picture here real quick.
>> Sean Slone: Thank you, guys.
>> Sean Slone: So Rural Health Transformation, H.R.1 included a $50.05-year initiative called the Rural Health Transformation Program intended to offset the cuts to Medicaid which many fear would financially definite state hospitals and safety net providers already operating on raiser thin margins. Every state applied for and received money from the policeman that will help them implement and provide innovative initiatives to revitalize healthcare delivery but concerns remain about the limitations states had to navigate on what the funds could be used for and whether the program can insulate rural health facilities from the challenges they have faced in recent years, as well as the Medicaid cuts H.R.1 will bring over the course of the next decade. We have a couple of guests joining us virtually this afternoon, Dr. Cody Mullen, is a clinical professor of public health and professor of graduate studies at Purdue University in Indiana. And Eliza Lake is the director of health policy at the Executive Office of Health and Human Services. She serves as the project director for the Commonwealth's Rural Health Transformation Program.
She's a native of Western Mass where she manages her family farm, so I guess it's safe to assume that she knows what rural looks like from a Massachusetts perspective.
Dr. Mullen I think is going to go first and provide a national perspective on rural health and the program. Then Eliza will talk about how the RHT will be beneficial to the bay state and how the implementation of the RHTP initiatives are going here. Following their remarks we'll bring back Andrew, as well as his colleague, Kate Schedel, who is a healthcare management consultant and we'll continue the conversation.
Dr. Mullen, take it away.
>> Dr. Cody Mullen: Wonderful. Audio check. Can you guys hear me okay?
>> Sean Slone: Yes.
>> Dr. Cody Mullen: Perfect. Well, good afternoon and thank you for letting me come in virtually. It feels a little like COVID all over again. But it is a pleasure to be with you all virtually, whoever may be in the room and the 60 some odd participants online. Thank you for the invite.
My goal today is to give some high-level remarks about how we got where we are in rural health and how RHTP fits into that and let Eliza really give a detailed analysis of what's going on there in Massachusetts.
So next slide, please. So, my agenda is where are we? What is the data saying about rural health and rural healthcare delivery? And the delivery of that? And where do we go and how does RHTP fit into that and other aspects of H.R.1. Next slide, please.
So where are we? Next slide. So it's important as I tell my students for pretty much every presentation that I give that we first stop and pause and say where are we as an industry? When we think of healthcare, we all don't think today is a good day to go to the ER. We don't think of healthcare necessarily on the cheeriest of days, but it's at the time we're at the lows of our lows, really low, lows that we go into healthcare, emergency department, urgent care, we get a diagnosis we weren't expecting or a family members or close friends does and the journey with the healthcare system becomes more in tune to what the feature is. And healthcare is expensive.
I know you all are experts in that as well. You all see the expenses that it has, not only as a state legislator and what it costs your state in delivery of the healthcare and the Medicaid system, but just what it is for each of us to go see a doctor on a daily basis. And we look at how that spending is going as a percentage of gross semester product, or GDP, we recognize we are spending more in healthcare each and every year. We saw a spike that occurred during the 2020 pandemic. This is a two-factor because we saw a decrease in GDP because we weren't going out to eat, we weren't traveling as much, but also an increase in healthcare utilization. That returned to normal in 2022, where what was normal. Up until 2024, which is the most recent data we have, we've seen a linear increase now encroaching at 18%. Economists will tell us 20% alarm bells will be more than ringing in our economy and that's something we need to address.
Next slide. If we look at where is that spending coming from, and where does that come into, when we think of rural health and rural healthcare delivery, we have a factor of four main populations that utilize that. Individuals with private health insurance, light gold bar. We have the Medicare population, generally those are 65 and older or diseases, long-term disability which is kind of blue or dark gray bar, we have the Medicaid population, that darker brown bar, and then that bar that seesaws below 0 percent and up is uninsured population. We see in 2024 that all of our populations had growth and expenditures, but primarily it was our private health insurance population and it was our uninsured population that saw the highest growth associated with that.
When we look at rural health disproportionately we're going to see higher rates of uninsured, higher rates of Medicare and Medicaid, so we're seeing that growth and that utilization moving forward in that population.
Next slide, please. So we forecast this out, this is work that was done and published in the Health Affairs Journal about 2 years ago, in 2024, forecasting out at the time 2022 data was the most current data we had. 2023, the projection was spot on. 2024, they're actually underprojected at 17. 7% of GDP, we were actually at 18.1, and fast forward to 2032, which is the end of when Rural Health Transformation funds will be utilized and no cost extensions may expire, we anticipate being right at 20% ratio.
Again, this is before the changes of RHTP and H.R.1, but we're hitting that danger mark moving forward.
Next slide. We also need to recognize as consumers and we probably all do, that everything that we spend is getting more expensive. I am not an economist, I'm a health policy expert. But we recognize that things that we spend are more, but healthcare is growing at rates quicker than we see and overall CPI, Consumer Price Index, nearing over a hundred percent by 2024.
Next slide. We're also seeing did he ductables are greatly increasing, 2006 the average family did he ductable was about $600, by 2024 that average deductible was about $1800. We recognize and know that in rural health the deductibles tend to be met at those rural healthcare facilities. If a patient needs to be transferred into an urban center for continuity of care or specialty care, that deductible has probably already been met in the rural setting and now it's co-insurance or no consumer payment required at that more urban setting.
So, we spin that higher rates of Medicare, higher rates of Medicaid in rural. We now recognize higher rates of deductible for private insured or Medicare and Medicare. The potential to increase on rural facilities is increasing as well. Next slide.
This is also affecting our employer population, so employers are trying to keep up with the increase in premiums. Their contribution has almost quadrupled from 5,000 in 2000 to nearly 20,000 in 2024. The worker contribution has also increased substantially. So all these things are swirling around, recognizing that when patients go to the emergency room or emergency department, by and all they are going to be stabilized as well.
Sorry. They will be stabilized and then transferred. So we recognize in rural communities that the bad debt or the amount the consumer payment necessary will be supported there as well.
Next slide, please. Not surprisingly, when we look at all of this and we survey, so Kaiser Family Foundation early part of this year surveyed people and said what is worry some about your expenses right now? Healthcare was by far the highest. The system in January before the gas and other transportation costs that we've seen have increased since late February, early March. But healthcare was number one. Food and groceries was number two. Rent and mortgage was number three. And monthly utilities is number four. And in public health we say those are your top four social determinants or social drivers of health and those are the things that worrying people are greater than 50% moving forward.
Next slide. I know we have elected officials from all around the country either in the room or on the call today. So I do want to provide some national data. Where's our spending? So darker the color, the higher the spend is. I wouldn't say worse or better, but darker the more the spend is. The purple map at the top is the overall spend for all of healthcare. So we recognize that the northeast tends to have higher spend. Some of the delta and South have higher spend. And the plains have higher spend.
We then break that out based on the payer source, so the blue chart is Medicare. The green chart is Medicaid. The yellow is private health insurance. And the reds is out-of-patient spend. So as you think about your state, where are you comparatively nationally? Is it consistent across all the payer sources or is there specific payer source where that spend tends to be higher rate?
If the spend is towards one payer source, Medicare, Medicaid, or private insurance, it is important for us then to recognize that changes in those systems could destabilize the healthcare system as a rapid change in their reimbursement, changing the sources of care that may be available moving forward.
Next slide. Prior to H.R.1, and the discussions there, we in rural health have been spending the past several years talking about the hospital closure crisis. The first crisis really occurred in the 1990s when we saw rapid closure of Hell burton facilities and at that time the ends of the 90s, the critical access hospitals was introduced and stabilized the system. Since 2010 we have seen a rapid closure of facilities moving forward. We recognize some of those states tend to be where the closures are highest tend to be in the South. They also tend to be states that have not extended Medicaid, though that's not a one-to-one correlation.
We also know that some hospitals -- or some states, pardon me, rural hospitals are set up differently. So in Indiana where I live, many of our rural facilities are system-owned, so we've not seen the closure at the same speed, but we've seen the change in services being offered at those facilities.
This also, this data excludes patient -- or facilities that have transitioned to -- sorry, includes facilities that have transitioned into the rural emergency hospital or the REM model, where they've shut down their inpatient care facilities but they still have an emergency department, outpatient care and skilled nursing facilities available.
Next slide. If we use the data of the facilities that have closed, and this is work that's been sponsored by the National Rural Health Association and we project out what other facilities we anticipate will close or have similar markers of the hospitals that have closed thus far, again, we see the delta region tends to have high rates of closure. Tennessee, though, 61% of the rural hospitals are at risk of closure imminently. Arkansas is 55%. Florida is 52%. This analysis was done prior to analyzing or projecting out the effects of H.R.1, which involves reduction to Medicaid reimbursement and other changes to the Medicare system that will destabilize the healthcare system and change the healthcare system significantly.
Next slide. We also, as I've mentioned, closure of a hospital does not necessarily mean the only indicator that we need to look for. We also need to pay attention to changes in services being offered. One, and I have several charts I could have shown, but one I want to demonstrate was the closure of infusion centers in rural, primarily the access to chemotherapy. I've never experienced chemo, but family members I have is it is not a fun process, to say the least, literally killing cells in your body to make sure you live, and transportation to those facilities is vitally important. We've seen that 22% of rural hospitals since 2014 that were offering chemo services have since closed.
There is a clear delineation between the southern part of the country and the northern part of the country, National Health Association is doing more analysis into that. But 448 hospitals have closed those facilities and we can discuss in Q&A more about that.
Next slide, please. So where do we go from here? What are the changes coming and how does Rural Health Transformation really play a factor into some of these changes? So next slide.
So, as I'm sure has been discussed throughout your day, a year ago here in a few weeks, on July 4, 2025, President Trump signed the One Big Beautiful Bill, now known as the Working Family Tax Reduction Act. This piece of legislation had wide changes to the way we deliver healthcare, specifically the way we finance healthcare in our country, with significant reductions in reimbursements on the Medicaid system, changes to the Medicare system, changes to the Medicare Advantage system. Some of those changes have initiated already in January 2026, Rural Health Transformation fund program, applications were due at the end of 2025 and have already been awarded and work is starting to occur.
And then I listened to the last panel, work requirement to other changes, we recognize and acknowledge that these changes are going to be phased in over the next two to 4 years, a major change coming January 1, 2027, and so on and so forth.
Next slide. So some of the changes significant changes involve Medicaid. So analysis being done is roughly $2 trillion reduction over the next 2 years of Medicaid reimbursement due to policy changes in H.R.1 will be coming. Analyses, and there's been three or four that I've looked at that are very similar in their findings, roughly 200 rural hospitals have increased their risk of closure due to changes in their Medicaid reimbursement.
But I want you to look at, depending on what state you are from, darker is the more spend, so this is the amount of money spent per beneficiary in each state. So the largest color is more than $9,000 in 2023, which is the most current data we have, all the way down to that lightest green color is less than 6,000. If you're in a state that has a high spend for beneficiary, Indiana, Massachusetts, Mississippi, these changes to Medicaid may destabilize or change your healthcare system in greater ways moving forward.
Next slide, please. So we look at spend then overtime, so we look at both what is our overall spend, how does that change with enrollment. I appreciate Kaiser family foundation going way back from before the pandemic when we saw a spike in spend and enrollment, except for at the passage of the ACA and the introductions of the expansion -- or the exchange, pardon me, in 2012, we have seen a growth in Medicaid spend pretty much every year. That changes have differed but enrollment also has increased every year, except for a dip in 2018. We've now seen great reduction post the pandemic as people have rejoined the work industry. And then we project in 2026 this to be level and really no one is predicting out 2027 quite yet as those workforce requirements are being implemented.
Next slide. We're seeing in OB3 some other Medicare changes. So we talked a lot about Medicaid and RHTP and the factors there. But in the Medicare side there were a lot of changes about limiting coverages of certain individuals, changing eligibility requirements, changing the physician fee schedule significantly. This has changed every year, but the changes that facilities are addressing, especially in rural for 2026, is significant. 2027 is currently out for comment, fiscal year '27. Changes in some pharmacy and drug policy, significant changes to the rural emergency hospital model and some facilities are starting to really look at that model as avenue. This is closing their acute care beds, so destabilizing the healthcare system and changing that.
Nursing home rules, significant changes are proposed right post the pandemic and early days of the Biden Administration, some of those changes were walked back, not to have some of the nursing home requirements that are associated there. We also I've seen some payment model changes in OB3 from the Centers for Disease Control Innovation, MAHA elevate is currently being scored right now, which will change the way that we address some of the MAHA movements around nutrition and chronic disease management and the way we reimburse that. And then thes Trump RX and negotiations have been in the news quite a bit.
Next slide. Medicaid changes above and beyond OB3, I'm sorry, RHTP, there are significant changes looking at your agenda for today, I wish I could have attended all day but have been in trainings with my students most of the day. But really looking at enrollment and eligibility, the work requirement has been significant. And then the Rural Health Transformation Program, RHT P, that $50 billion investment.
Next slide. Before we really dive into that, the last thing I want to share before we do a deep dive from my federal lens on that and I'll hand it over to Massachusetts and do a really detailed analysis of what they're doing, so back in February, so not the most recent government shutdown but a recent government shutdown when the full government shut for a long period of time, we saw one of the major debating points between the republicans and democrats that we saw was really around the tax credits for ACA expansion or the exchanges, pardon me, so many E words in healthcare right now, the exchanges. We saw that a lot of those tax subsidies that were expanded during the COVID pandemic expired at the ends of 2025, calendar year 2025. So again, we're starting to see an early analysis, I'm not ready to share the data, but my team has been looking at the cost analysis, the rate of bad debts, individuals going to healthcare who are uninsured or underinsured or have significant deductibles they're not able to cover has greatly increased, which is destabilizing the healthcare system.
Next slide. So that's where the Rural Health Transformation funds come in, this is added towards the ends of the discussion of OB3. Really I guess this time last year this wasn't a thing we even knew was going to be part of our lives and now I know for many of us who are working in this space feel like this is all we talk about anymore. But $50 billion incentive program that aloud for states, allowed for the state Medicaid agency is the primary applicant, then they can share that, the government will share that however they saw fit. In Indiana a majority of funds have been transferred to the Department of Health and their facilitation of that. But $50 billion that states could apply for. $25 billion, or half the funds were guaranteed as a base. Every state got about half a billion of those funds over 5 years to about $100 million per year for 5 years. And then the other $25 billion were up for competitive competition for that moving forward.
This is a chart of a JAMA article that was released in February that did the analysis. So on the right side of the chart, so the blue is consistent for all states because every state who applied got their $100 million for their first year of those guaranteed funds, all 50 states did submit an application. At one point it was unclear if all states were going to, but all states did. And the orange bar, left side of that, is the at-large or competition. Al Alaska and Texas received significant funds, Rhode Island and New Jersey, Connecticut received the least amount of funds of those competitions.
Then if we set that precedent, so what is that ratio, how much funds per resident were received both of the baseline funds and the discretionary funds? Rhode Island is at the bottom having the smallest rural population receiving a little over $1200 per person of the consistent funds, about $800 for the competitive funds, all the way up to Texas at the top that received about I think it was about $20, if I remember correctly, per rural resident of baseline funds and about $35, I believe, of the variable funds, so I encourage you to find your state moving that forward.
Next slide. So every state has been implementing this, like I said. A year ago on this time, all those working in our RHTP space did not know it was a thing that was coming and they have quickly adjusted the notice of funding opportunity was released, I believe, in September. Applications were due in November. Funding was awarded right before the end of the calendar year to start January 1st, and it has been beyond -- to stand these programs up.
These are head lined from Kaiser Family Foundation, they have a rural health pay out. The timeline, I'm not sure of the name but they have stories they're doing looking at those things, some positive, some not so positive stories. States are looking at how do they get these funds out to the rural community and how do they intersect with state legislators like yourselves who controls that. And then what is the role there, and each state is different.
So, next slide. So with that I want to spend about 20 minutes to share that. I want Eliza in Massachusetts, which I know the majority of you on this call are from, to share a deep dive into what Massachusetts is doing and then we'll have a discussion and question and answers at the end and happy to answer any questions. My e-mail is on here, if there's any information I can provide or do a deeper discussion. I know Zoom is difficult, but happy to do one-on-one discussions as well. With that, I'll turn it over to Eliza for her presentation.
>> Eliza Lake: Great. Thank you, Cody. I'll do a sound check as well. Can you hear me? So I am very sorry not to be with you in Boston, as you can see at least I carry it behind me on my screen. I am actually at a national conference in DC on RHTP, and so I am calling in from a very oddly lit business center so I apologize if it looks like I'm sort of lurking in the shadows. But I'm very happy to be here to talk about what we've been doing in Massachusetts and how we are implementing our funding and our sort of blueprint for how we're going to improve rural health in Massachusetts.
Next slide. So first I want to note that this presentation is supported by CMS, the DHHS, federal agency, as part of a financial assistance award totaling 162,005,238. 13, a hundred percent funded by CMS/HHS. The contents of these are mine and do not necessarily represent the official views of nor enforced by CMS, HHS or the U.S. Government. Next slide. Next slide.
Great. So I, too, am sorry I haven't been able to listen in all day because I've been in this conference and certainly you just heard from Cody, but this is clearly a five-year program that was part of H.R.1 to focus on states improving healthcare access, quality and outcomes, by transforming healthcare in rural communities across the country.
And in our applications in the fall, every state was required to apply for a billion dollar over 5 years and we were to focus on promoting innovation, strategic partnerships, infrastructure and workforce.
So, we had 53 days to write the application for a billion dollars. And we did receive our notice of award on December 29th, for immediate implementation. It's important to note that every year our progress and a number of other metrics will be reevaluated and we will be rescored, so that amount may change year-to-year. It is a, you know, one pot of money that all 50 states are working on, and so as some states make progress and others don't, those numbers will go up and down.
Next slide. So, rural in Massachusetts, and I have to say, Cody's data I think uses, there are many different definitions and so this is the state of the Massachusetts state definition of what rural means. And under our definition, 160 of the states 351 towns are designated as rural. We have two levels, we have rural level one that have more population and are closer to urban core areas, and we have rural two which are less populated, more remote and isolated. You can see from the map that's large parts of Western Massachusetts and North central, a little on the North Shore, South of Boston and then the Cape and the Islands. This definition was developed, what is that, 14 years ago with a lot of input from rural communities and leaders, and then every 10 years through the census we can update that and can ensure that we're continuing to have the right towns listed.
And so, overall this is about 57% of the state land mass, and 10% of residents, so about 700,000 people.
Next slide. So Cody gave us some data about the spending and the -- across the country and this is what the status is for overall rural. Here is some context on overall health needs. So, compared to the rest of the state rural communities in Massachusetts are older. They are more likely to be individual households. And they have lower annual incomes, about $23,000 lower. They also have greater prevalence of chronic conditions and higher mortality, so as you can see here this is a breakdown between nonrural communities and then rural one and rural two. Rural one is doing better than it might have been a few years ago, partly because of during COVID people were able to move out into those communities that are between the most remote and more urban areas, and so that did improve their health outcomes a little bit. But as you can see, rural two much higher rates of heart disease, hypertension, diabetes, and stroke.
And in terms of healthcare access, obviously, transportation is an issue and the levels of isolation. But the number of hospital access points are decreasing and so, again, it's a definitional question from what Cody just showed us, but in fact there were 11 designated rural hospitals in 2
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>> Eliza Lake: And, there are 25 pharmacies to serve all 160 rural communities and for specialty care wake times can be well over a year. In terms of insurance, a higher share as Cody said, rural residents of public insurance. 41% of rural residents with poor health insurance and affordability issues. In terms of providers, recruitment, retention and competition are huge.
I know -- I ran a rural FQHC for many years and often felt that, you know, you would train local folks and they would be moved elsewhere into less rural areas to - for higher paying jobs so it is very hard to compete and hard to compete in recruitment as well. The long-term care facilities have limited capacity and limited behavioral health resources and as I said earlier, the specialized care are longer waits. And so, therefore, people have longer experience boarding in EDs than hospitals.
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>> Eliza Lake: So in designing HCP last year, we are looking at the entire system. That's not your traditional hospitals and health center and primary care sites. Really looking at the full complex of folks who are ensuring the health and well become of our rural communities so that including behavioral health municipalities and social services, skilled nursing and schools are a big piece of this pharmacy and community-based organizations can address the social determinants of health that can have such a large impact on people's well-being. So in deciding the application, we want to engage with all these groups and whatever we propose did include all of these elements so that we could have a more transformative impact on health in rural Massachusetts. Next slide.
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>> Eliza Lake: So, there is a lot of information on this. Just to give you a sense of the application, we did have from mid-September, we started preparing in August. Mid-September when the opportunity dropped from CMS until November when he had to submit. So, we did a lot of external engagement. We got 200 inputs and we engaged with specific bodies that we knew existed inside the states that were engaged in rural health. I would say and what's not necessarily on here is that the state office of rural health based in our Department of Public Health have been working in rural communities for decades and had incredible insights into the needs of the community and what they have been hearing about and working on for a long time. So, we were able to structure our application and, you know, hit the ground running with it very quickly and then feed into the process. In general, we had already known as a result of behavioral health work what the issues were and what we wanted to address. We obviously have wealth of data as well and certainly by having that rural definition from 10 or 15 years ago had a lot of data, such as what I shared with you that showed us the needs and to make our case.
We - that community engagement piece is a critical part of how we are implementing RHTP so we'll be naming a community advisory council shortly with representation of all the sectors and geographies of Massachusetts. We have initiatives group and I will be talking about them in a second, they'll engage the folks in the community that are closest to that work and can provide with that input. We'll be having public information sessions and then there are existing rural advisory bodies like the rural policy advisory council and Massachusetts' rural council on health and so we'll continue to engage with them and they'll have seats in the community advisory council.
I will say that, you know, this and I will talk about timeline at the end, the initiative workgroups in particular, we are really relying upon the expertise of the communities to tell us how to design all of the procurements we need to do. How we are going to get this money out and ensure that we are designing it in a way that small organizations and rural communities with limited capacity and grant-writing, IT or in general, we are not creating additional burden or making, creating barriers to accessing these funds through our procurement. We are asking general questions last week and this week about how best we can design this and how we can bundle procurements and make sure we are contracting in a way that makes this money as most accessible to those folks who will be needing it and need it and we'll be using it to change the system.
Next slide.
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>> Eliza Lake: Here is our vision and goals. We are envisionings a Commonwealth with thriving rural communities. Residents access healthcare services and generating the opportunities to improve the health of rural residents and scaling investments to meet with unique needs of the rural communities. That's the piece we are talk about that we are not creating a prom that's in-accessible. Under that is specific strategies are reflective of how we design the initiatives.
These are the seven initiatives. I will go through one by one. They are focused on population health advancement, training and health rural communities, EMS service integration, enhancing technology, and modernization and reuse. This is a summary but I will go into each individually. Next slide.
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>> Eliza Lake: This is focusing on the clinical infrastructure in rural communities, so creating better networks around chronic disease management and networks between clinical providers and organizations and community, based organizations. Creating better system and innovation and effectiveness is youth with high needs and how we are understanding of contexts and creating access for rural communities for those youths. Expanding remote patient monitoring, home visiting, hospital at-home and all the clinical services and how we can expand access to them in rural communities. That includes school based and TELE-behavioral health. The focus is on disease management and decrease preterm births and increase Geriatric care. Next slide.
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>> Eliza Lake: Innovation in Rural Care Models Initiative. So, mobile health or technical or how we can get people more access to specialists and more telehealth and rural digital health sandbox program. Can we create a competition where people are coming up with new ideas of how to use technology to best increase access to care in rural communities. Supporting FQHCs in their technology with emerging health tech and then maternal health and opioid programs. So, this is really looking at how can we increase capacity and how can we in some cases promote existing models that do not - that rural communities do not have access to increase their general health and well-being. Next slide.
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>> Eliza Lake: Thrive which is training for healthcare, excellence is our workforce initiative. Looking at how are we getting kids really interested in healthcare from kids of rural communities. Research shows people stay where they train so we want to have people growing your own models in rural communities or having people trained in rural communities because they are likely to stay there. That includes pipeline programs between Community Colleges and local providers creating a nurse practitioner residency program, support for housing for those communities that have really high housing costs because they are touristy. They're giving the islands other areas where there tends to be low housing stocks and providers have a hard time recruiting workers to live there. The program existed but we are expanding a focus in the rural areas which is incentives for field placements. There are various placements of social work, which is usually unpaid. How can we pay those folks and how are we paying provider organizations to supervise those students, which is something they would lose income if they have their staff doing that supervision. Then, supporting small local providers, developing recruitment and retention plan. It is the kind of investment that many of these providers are unable to make and so we would be supporting that as well.
And one notice this is support for allied professionals so medical assistance and nutrition and mid wives and paramedics not usually what we think of as clinical staff which is doctors, nurses and nurse practitioners. Next slide.
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>> Eliza Lake: The Healthy Rural Communities Initiative is looking at the community-based. How we are working with local public health and connecting them through shared service agreements and specific populations like older adults, tribal communities and what are programs we are putting in place to support that.
Next Slide.
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>> Eliza Lake: As anyone working in rural Massachusetts knows that EMS is a sector that's really struggling in rural communities, given the distances and what they can and cannot be reimbursed for. We want to support them through in implementing a reimbursement program for the transport they are providing or the visits they are making without taking someone to the hospital which is when they could bill and supporting those to show the efficacy in terms of reducing overall costs and supporting and ensuring strong EMS in rural communities. Also, supporting community medicines which we are using EMS to do work in the community that does not involve the hospitals and then some support for them in terms of various specific care that could be provided before they get to the hospital. Next slide.
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>> Eliza Lake: Technology And Connectivity, we are making sure we are thinking in different ways, expanding rural providers in our health information exchange and making sure that EMS and hospitals linked through technology and can communicate about their patients they are interacting around. Creating electronic record system for local public health and local boards of health and providing cyber security support for a rural providers. This last one could be applied across the board and certainly for the next year, this is our big focus is what is the technical assistance and support that all of our rural providers and organizations need in order to do this work? So, we do not want to set up our communities for failure by giving them a ton of money for five years and it goes away and they don't even have the capacity to spend the money. So, we are going to spend a lot of time in support and -- helping build the systems that need to exists in order to make this project successful.
Last but no least, next slide.
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>> Eliza Lake: The facility could not expand their footprint or open a new site, they can use funds foreign vaccinating existing space, replacing systems that are needed and considered capital like HVAC or technology systems. And so we are going to be spending and we have maximized the amount of money we can spend in this particular initiative and so we'll fund critical updates for rural hospitals and health centers and nursing facilities and then specifically for nursing facilities to create a Behavioral Health and Substance Used Disorder Unit within their facility. While we could not supply any state's spending, we can support our providers in ensuring their facilities are able to meet the needs of their communities going forward. Those are seven initiatives and 37 activities. I want to give you a quick sense. Next slide, sorry.
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>> Eliza Lake: USHS is the lead agency, we have a council that includes members from the three main agencies. We have a governance team that then includes other agencies, the tribal organizations, state office of behavioral health and doing this more day-to-day the leadership o f the project. We have a community adviser council that's providing them with input and then we'll have initiative workgroups as I said that'll be providing input. I am almost done because I just realized how much time we have left. Next slide.
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>> Eliza Lake: I have talked about this initiative workgroups and Community Advisory Council.. I think we can move on. Next slide. Woops. The timeline this is a very basic timeline. As Cody said, this is very accelerating. We have been moving very quickly and so we have set up the initiative workgroup and we'll be giving procurement this month. Next month will be the vast majority of it and starting with - we need to focus on the most shuffle-ready or quickest thing to get the money out. Under the CMS rules, we have to have all the money by the end of October. The contracts have will be fully ex pended out by the end of September of next year. We'll have annual report as well as an reapplication due by the end of December. We are moving fast and trying to make sure we are doing this in a responsible and organized way while meeting the deadlines that are required. So, I think that's it. Thank you. Our website is being updated. We have to get approval from CMS for all of our updates and so we have just done so. We'll be doing so soon. That's the site and then we do have the e-mail address if people have any questions besides the questions today.
>> Thank you very much. I want to bring back in Andrew Bennardo. Based on your work with states, do you have anything to add about what Cody and Eliza had to tell us about the program.
>> Kate Schedel: Hi, everyone. I had the pleasure working with Andrew and in great company today. I both live in Indiana with Cody and I used to live in western Massachusetts. Great presentation and hard to follow. We are helping multiple states with implementation of the rural health transformation program. I echo a lot of what was already shared is that I came from a state Health Department And, I used to be the director and had grants totalling around $50 million a year every year, right? It is hard spend the money and go through the state's processes and find partners and monitoring the work and make sure what you are putting money towards and making an impact. Take that and times it by four. $200 million give or take with little to no planning andless than two months to write it and figure out your partners and go through procurements and hoping you can get the money out and hope that your partners can spend that. It is a large responsibility. Then, you add in a lot of different caps on budgets and add in the complexity of what you can and cannot do. Some continuously refined rules about a five-year service commitment for the workforce or funding caps on what you can use for electronic health record updates or technology or Broadband view.
It is a balance between we have all these money and we may not be able to spend it as how we are as a state. Andrew and I have been working alongside states and saying how can we help? How can we track what you are doing and prove all of that really well by August of this year and hope that you get the funding for next year.
So, it is an incredibly complex grant program that All States are genuinely glad to have and also just incredibly complex in how we spend money and track the outcomes and hope that it has that intended impact of cuts to Medicaid and does it balance out what your cut in with what you are putting back into the community. So --
>> Cody: I mentioned in my opening remarks that there were a number of states where we have seen these efforts by legislative bodies seeking for some oversights of our spend sort of after the facts. Are there any worries of later oversights in some states, states won't be able to launch some of these in time to be able to show progress and avoid the call back provisions of the bill?
>> Andrew Badaracco: States that have good partnerships are in the best position to be successful because of what we have seen states we work with that really strong coordination between Executive Branch and Legislative Branch and always being kept in the loop on what's happening and how it is happening have had the most streamline alignment across the program. So, I am pleased to see Massachusetts hierarchy and organizational structure of your grant program.
>> Eliza Lake: Yes, I would say we have been in coast communications with many of our rural health leaders in the legislature but we, of course, happy to speak with any legislatures who are interested and welcome an opportunity to come back and talk in more details of our plans. I think we are, you know, one thing CMS obviously has been talking to all the states about their relationship with legislature and one thing that's clear is that we committed an application and that's what the plan -- and while it looks like a lot of details and the slides I just provided, it was a 60-page double spaced application for millions of followers so there is still a lot of details. It will be happening within the framework of our application and actually, I should have mentioned that our website that I posted does have our full application in it. So, if people are interested in reading a 60-page double spaced million dollar proposal is there. You can recommend word searches for specific issues you may be interested in and you are welcome to see what's in there.
>> Cody: We know there were significant limitations of what money can be spent on, limitations on provider payments, administrative expenses, infrastructure capital and systems replacement and the rural tech funds. What are the chances that despite the best intentions of Eliza Lake and her counterpart across the country of what the dollars are spent on. Those initiatives or solutions will sort of miss the problem we have known in rural health for a long time. Would it make a difference if states were allowed to vote for a larger percentage --
>> Andrew Badaracco: Any sort of design changes could have a different impact. The biggest changes and the things we have heard and I am sure Massachusetts say similar things. Broadband works for expansion, you know, parental support, things like that are really in high demand. So, when it came down to states really designing strategies that they hope would be sustainable. Sustainability was one of the biggest -as major component of the grant application and how CMS evaluated those applications.
And so, in talking through that with the providers, it seemed like just - it didn't necessarily come with the sustainability components. Programs like Massachusetts putting out and other states are designed to support providers and infrastructure and growth while also supporting that sustainability piece at the end.
Because I know every state would have loved the money to pay for services out right as a result of reductions of HR1. The need to create a sustainable model is a driver here.
>> Eliza Lake: Yeah, I would say that's exactly right. Our focus is what's the capacity infrastructure that we can build the next five years? At the end of the five years, do our local providers or communities have the capacity? Do they have a seat at the table that they may not have had before in thinking about what directions Massachusetts healthcare system is going so they have a voice in the future that they may not have had in the past. That's our strategy in thinking of the future and how to best use these funds.
>> Kate Schedel: I will add of Sean's statement of the four categories states are applying for workforce and technology and behavioral health sometimes excludes what Dr. Mullen mentions of people thinking of housing and transportation and other things that prevent them from seeking healthcare and so I think trying to balance those social determinants of health needs with the healthcare and rule communities will be an ongoing pass for states.
>> Cody Mullen: The focus is on -- the work that we are doing in Indiana, probably best practice to do the planning. We are planning to do this until September of last year, hey, you will be doing this in the Summer of 2026. A lot of grace year three and four or five of the funding will give a lot of time for - okay, now we have a field of what CMS is going to approve and what other states are doing and now let's go out and be transformative.
>> Eliza Lake: Yes, an explicit example of that in our facility modernization or capital money that we are assuming this first year there will be funding for projects that are absolutely people have on the shelf ready to go and need funding for and as well as supporting that planning piece and what their future needs are and what they'll need for three to five years in order to best become sustainable and stronger. And applying for the funding in years two and three and etc.
>> Moderator: These funds are sort of a drop in the bucket and won't come close to offsetting the cuts from H.R.1, I read across the list some where about -- Texas which receives the largest allocations of $281 million faces a $4 billion decline over the next decade of rural areas. Pennsylvania faced like $20 billion loss. So, I mean where do you square that math?
>> Andrew Badaracco: You can look at ways where you can best invest in your programs and just move ahead. You are creating the next generation of community health workers, the next generation of nurses and physicians. And you hope that, you know, the hope that was referenced earlier today that the idea that, you know, there is a brighter day tomorrow, right? So, you are creating that day today with this fund. I think it is hard to imagine and I know congressional negotiations can go. It was not intended as a give in that sense. The states we work with seeing we are building for the future and they are doing the best they can.
>> Moderator: Did we have any questions in the room or online?
>> No one.
>> Moderator: I think we are about out of time this afternoon.
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