$50B Rural Health Transformation Program Needs More Transparency, Groups Say

One year after its inception, a $50 billion federal initiative designed to enhance rural healthcare remains lacking in transparency. This lack of transparency could complicate efforts to prevent fraud, recognize successful projects, and guarantee the program fulfills its objective of transforming rural healthcare. Maya Sandalow, director of health policy at the Bipartisan Policy Center, emphasized the importance of transparency in maintaining the program's integrity and ensuring funds reach the intended communities.

While public records laws obligate the federal government and states to share documents upon request, the process can take months, leaving little time for effective oversight as states rush to spend their allotted funds under tight federal deadlines. The Centers for Medicare & Medicaid Services (CMS), which oversees the program, and some states are not actively sharing information about the allocation and utilization of the funding.

CMS spokesperson Timothy Foster indicated that the agency will release an annual report on state progress, but it won't proactively distribute individual state reports. Instead, states must request these reports. Furthermore, CMS hasn't committed to sharing examples of projects succeeding or failing, nor has it indicated a plan to create a funding recipient tracker, despite repeated requests from health and government transparency advocates.

Transparency efforts thus far have largely been left to individual states, with varying levels of detail shared. Some states actively communicate with lawmakers, hold public meetings, and disclose plans for funding distribution, while others remain secretive, declining to release public records. Mississippi's governor vetoed a transparency bill, West Virginia conducts closed-door advisory meetings, and South Dakota officials expressed a preference for keeping the application process confidential.

Critics argue that this secrecy is unwarranted, questioning why the process must remain hidden unless something is amiss. The Rural Health Transformation Program, created by congressional Republicans last summer, aims to address rural communities' potential losses from the broader One Big Beautiful Bill Act, which is projected to decrease Medicaid spending by over $900 billion over a decade.

Despite the program's creation, states have struggled to share information due to the urgency of hiring staff and meeting strict deadlines, including an Aug. 31 deadline for an annual report. Media outlets, nonprofits, and businesses are stepping in to assist the public in tracking the rural health program, with KFF Health News collecting application materials and approved plans from states.

Several health nonprofits and companies have also developed trackers to describe rural health initiatives, funding opportunities, and award recipients. However, many of these resources are accessible only through paid services, primarily aimed at businesses seeking funding. Sandalow noted that past federal programs have often garnered attention for their transparency gaps rather than their successful execution, citing examples like the CARES Act and other COVID-19 relief programs marred by fraud and improper payments.

In March, CMS proposed quarterly and annual state reporting requirements and sought public comments. Several groups responded with letters urging CMS to enhance transparency by sharing progress reports, funding recipients, and plans for award utilization, particularly for organizations that will redistribute funds to other entities.