This week, the state submitted its application for California’s share of $50 billion in funding available through the new federal Rural Health Transformation Program.
The state’s application attempts to address critical concerns that CHA has been flagging for years about the vulnerability of hospital care in rural areas. From a summary of the submission:
“For families and older adults in rural and frontier California, a routine prenatal visit, chronic disease follow-up, or advanced imaging appointment can require hours of travel. When hospitals close labor and delivery (L&D), pediatric, or geriatric units, subsequent births, children’s care, and elder services move farther away leaving chronic conditions unmanaged and increasing avoidable hospitalizations … This coordinated approach enhances birth safety, timely diagnosis, strengthens chronic disease management, supports aging in place, and promotes long-term financial stability for rural hospitals.”
The Centers for Medicare & Medicaid Services must make decisions about the applications by the end of the year, with funding allocations to be determined by Jan. 1, 2026, for all five years of the program (if California’s application is approved, the state would receive as much as $500 million; no state is guaranteed any of the $25 billion in discretionary funding available). CHA, along with all of its partner associations representing special groups of California hospitals, submitted a letter in support of the state’s efforts.
As soon as the full application is available from the state, and as additional information becomes available, we will share that with you.
As we wait for the full content of the application to become public, the state’s summary offers some detail about how these funds can be deployed to support rural health transformation in California, including:
- Development of new care delivery models, such as hub-and-spoke networks that can help maintain essential services
- Stabilization of rural providers as a means to maintain anchor institutions where transformation can take place, including “sustainability payments”
- Expansion of rural workforce capacity
- Regional telehealth networks that enable real-time specialty access and patient monitoring
Additional details are available in this presentation from the Department of Health Care Access and Information.
While this program is designed to support rural health care at a time when providers are in extreme financial distress, those conditions are not limited to rural hospitals. Struggling hospitals continue to limp along in urban and suburban areas as well, and while these funds are designated for just one type of geography, the interdependence of all California hospitals has never been more apparent.
If any hospital struggles, people in that region will still get sick and they will seek hospital care at the nearest neighboring facility. That’s as true in Modoc County as it is in South Central Los Angeles. By supporting programs that help struggling hospitals — no matter where they are — we are able to inject resources into the overall health care delivery system, a shot in the arm for hospital care across the state.
