AUSTIN (Nexstar) — Texas Rural Hospitals are in the spotlight after the One Big Beautiful Bill Act (OBBBA) created the Rural Health Transformation (RHT) Program, a national $50 billion fund reserved for rural hospitals. Half of the funds will go towards each state equally, while the other half will be distributed by U.S. Center for Medicare & Medicaid Services (CMS). States requesting extra funds have to have their applications to CMS in early November.
Today at the Texas Health and Human Services Commission (HHSC) held a hearing where Texas healthcare professionals were invited to voice their concerns and priorities that should be considered in the Texas’ application for the RHT.
Before the hearing, HHSC emphasized the importance of direct and local control of the funds.
“These funds, if we get them, are yours,” Director of Provider Finance at HHSC Victoria Grady said to open the hearing. “They belong to rural Texans, and we want to prioritize local control as much as possible. We want to get as much of the $50 billion for Texas as we can.”
KXAN spoke to two medical professionals after the hearing, Paula Grahmann, an independent pharmacy owner and pharmacist, and Terry Scoggin, the interim CEO for the Texas Organization of Rural and Community Hospitals (TORCH).
Scoggin said that one of the issues plaguing rural hospitals is their inability to negotiate with large insurance payers, often resulting in significantly diminished reimbursements for rural hospitals.
“Let’s be clear: rural hospitals are in trouble across the state of Texas,” he said. “We get reimbursed almost 1/3 of what your urban hospitals get. Ninety-one of these 156 [rural] hospitals are independent hospitals. So, when they negotiate insurance contracts, they’re negotiating independent contracts. I’ve been a rural CEO for the last 15 years, it’s hard to negotiate with large insurance payers, so you get paid two and three, sometimes four times less than the urban cost.”
Scoggin is also concerned with the financial viability of rural hospitals in the modern era. According to a recent report from the Center for Healthcare Quality & Payment Reform, 84 of Texas’s 156 rural hospitals are at risk of closing. Twenty-one are at immediate risk.
“Over the last few weeks, we have received phone calls on a weekly basis for hospitals needing a lifeline. Payroll coming up, and they don’t have the funds,” Scoggin said. “This opportunity is huge for the rural hospitals in Texas.”
While the OBBBA creates the RHT, the law isn’t wholly positive for rural healthcare. With cuts to Medicaid, Scoggin estimates rural Texas hospitals will see a spike of 3-6% more uninsured clients, which cost hospitals the most.
“If you come in the emergency department, we have to treat you,” Scoggin said. He said the cuts will be less drastic in Texas than in other states because Texas had already “controlled Medicaid,” but mentioned the Medicaid control has left them behind. “We’re behind on just our infrastructure, our building’s infrastructure, our equipment infrastructure and just workforce.”
Grahmann would like to see the a Texas approach which uses pharmacists past their role dispensing medicine, saying they’re “taken a little bit more for granted in the (medical) community,” and see the RHT as an “amazing opportunity.”
“They’re saying, ‘Okay, we’re going to give this money to all of these states who can come up with a great plan, and we want to be a part of that solution.’ We’re raising our hand to say, put us to work. We’ve been here. We’re rooted, and we know our people,” she said.
Speaking further about how pharmacists may be taken for granted, she said that due to not being recognized by Medicare as providers, pharmacists are limited.
“We’re not in some big hospital clinic where we can do collaborative practice and be paid for our services. So in a rural setting, we’re limited, because Medicare mostly will not recognize us as a provider. So if we take a patient aside, and we do, let’s say diabetes education or we reconcile their medications, we might spend 50 minutes with a patient. We won’t be paid for any of that. We have no mechanism or avenue to be paid,” Grahmann said.
According to the CMS website, the RHT grants will be announced by the end of the year.
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