Rural health providers worry about losing money race

• But many are concerned they could get outhustled, with large academic medical centers, private equity-backed providers, technology companies and startups also pitching states for ways to use the money.
• "I was surprised by how many people have come to the table wanting a piece of the pie," said Terry Scoggin, interim CEO of the Texas Organization of Rural and Community Hospitals — including some "that have not been rural stakeholders in the past."

How it works: Congress laid out a two-step process for awarding the funds. The Centers for Medicare and Medicaid Services will distribute half of the $50 billion equally to states that apply.

• But states have to compete for slices of the other half. Their applications are due Wednesday.
• CMS will distribute those funds based on factors including how many rural residents the states have and how financially healthy their rural hospitals are.

Writing the applications is just the first part of the funding process. Once states get the money from CMS, they'll have to figure out how to distribute it to providers and organizations.

• Scoggin said he's been impressed with how Texas has worked with rural providers so far to get feedback for the application. But he worries the next step could be where rural providers get left behind.
• "Rural hospitals don't need competitive grants. We don't have money for grant writers and vendors," he said. "We need to make it simple and not who can make the prettiest PowerPoint gets the money."
• "I think the state heard that," he added.

What they're saying: The state applications come first. Geisinger Health, which serves 1.2 million people across largely rural areas of Pennsylvania, told Axios that it wanted more of a say in how the state writes it.

• "We want to help ensure that it's represented in a way that allows Pennsylvania ... the best chance possible to get those dollars," CEO Terry Gilliland said at the HLTH Conference last month. "We literally are rural health care."
• Toniann Richard, CEO of a group of rural health clinics in Missouri called HCC Network, said her state has mostly engaged the staff of provider associations for feedback, rather than individual providers.
• "That does create some anxiety around ... what is actually going to go in the final application? What are the expectations?" she said.

Others feel more confident that states have taken their thoughts into account.

• Sanford Health, the country's largest rural health system, has had a "really positive experience" talking about the application process with each state they work in, said CEO Bill Gassen.

There's no formal requirement that rural providers be involved in shaping state applications, and every state has collected public feedback differently, said Alexa McKinley Abel, director of government affairs and policy at the National Rural Health Association.

• The association has advised members to get in touch with officials in their states to talk about their priorities, Abel said.
• "But in some cases, they may only have the opportunity to weigh in through [information requests] that states have put out."

Zoom out: Hopscotch Primary Care, a venture capital-backed group of clinics serving rural seniors, is one of the newer rural health players pitching states on ideas to include in their funding applications. The clinics opened in western North Carolina in 2021 and are looking to expand.

• "This isn't something where we should throw away money on business as usual," CEO Tim Gronniger told Axios.
• "There's a lot of people looking for funding here. But we're trying to do something that's pretty hard and it's pretty needed."

The bottom line: Hearing everyone out is a "balancing act for many states right now," since there's a lot of demand for the funds and not a lot of time, said Susan Kansagra, chief medical officer of the Association of State and Territorial Health Officials.