Rural AZ will be facing the hardest effects of the federal Medicaid cuts included in H.R. 1. Over the next few years.
The new law will make it harder for many people to stay enrolled in Medicaid. Starting in January about 500,000 people in the “Medicaid expansion” population will need to prove they’re meeting work or community-engagement requirements.
Expansion members will also need to renew their eligibility every six months instead of once a year. On top of that, changes to provider assessments and state-directed payments will reduce the money Arizona can use to support its Medicaid system in coming years.
Medicaid plays a much larger role in rural communities than in metro Phoenix and Tucson. Rural hospitals, clinics, nursing facilities, behavioral health providers, ambulance services, and maternity care programs depend heavily on Medicaid revenue.
In some parts of rural Arizona more than 40% of residents are covered by AHCCCS. Rural hospitals often have fewer privately insured patients to help make up for Medicaid losses.
That matters because rural health care is already under strain. Rural residents often live far from hospitals, specialists, labor and delivery services, and behavioral health providers. Nearly half of rural Arizona women must travel more than 30 minutes for maternal care. Some rural areas have only one behavioral health provider for every 50,000 residents.
Congress created the Rural Health Transformation Program partly because they knew their Medicaid cuts will hurt rural communities (often their ‘base’ supporters). So, they created the Rural Health Transformation Program to distribute $50M over the next 5 years for rural healthcare ‘transformation’.
Arizona got $167M for this first year. It’s supposed to help rural communities strengthen their health care systems, workforce, technology, and access to care.
Arizona’s program is being administered by AHCCCS, collaborating with the Governor’s Office of Economic Opportunity and the Arizona Department of Health Services to a lesser extent.
Workforce Development
About $43M per year is planned for rural workforce development. This includes rural education and training, residency support, financial incentives for health professionals who work in rural areas, and stronger pipelines beginning in high school and continuing through colleges, universities, and clinical training programs.
Health Initiatives
About $31M per year is planned for priority health initiatives like behavioral health and substance-use services, maternal and fetal health, chronic disease prevention, community health workers, community health representatives, and rural EMS workforce development.
ADHS has identified maternal emergency readiness, perinatal mental health, congenital syphilis prevention, rural chronic disease screening, CPR and AED access, and rural EMS training as key priorities.
Health Care Accessibility
$38M per year is planned to make rural health care more accessible via telehealth hubs, remote patient monitoring, mobile clinics, satellite care sites, digital infrastructure, and better care coordination. T
Health Care Systems
About $38 million per year is planned for medical equipment, technology upgrades, electronic health records, data sharing, shared-service models, and technical help for rural providers trying to improve their operations and financial stability.
Getting the Money in the Field
Earlier timelines suggested that funding opportunities would begin in April or May. In early June, AHCCCS issued an updated timeline saying funding opportunities would begin in June and continue through the fall.
Awards are supposed to begin on a rolling basis. All first-year money must be obligated by October 30, 2026, and awardees will have until September 30, 2027, to spend it.
As I write this on June 25 the state’s public RHTP websites still don’t list the expected notices of funding opportunity or requests for proposals. The sites continue to say grant opportunities are coming in spring, and awards will be finalized by summer.
AHCCCS AZ Rural Health Transformation Program (RHTP)
Gov’s Office of Economic Opportunity (general website – no RHTP web page is available
The state has a lot of work to do before it can responsibly distribute that much money – and getting it right is more important that doing it fast.
Nevertheless, tribal health programs, community health centers, local health departments, colleges, universities, nonprofits, and other community partners are all chomping at the bit to get more info so they can plan for their responses to the grant notices.
Will the awards and notices come out next week as promised?
