Nebraska’s Rural Healthcare Gamble: Billions in Federal Funds, But Will It Be Enough?
Nebraska is poised to receive a substantial influx of federal funding – nearly $1.1 billion through 2030, starting with $218 million in 2026 – aimed at bolstering rural healthcare. This comes via the Rural Health Transformation Program (RHTP), a $50 billion national initiative. However, a closer look reveals a complex situation where potential benefits are shadowed by coinciding federal Medicaid cuts, raising concerns about whether these funds will truly “Make Rural Nebraska Healthy Again,” as the state’s DHHS hopes.
The Funding Landscape: A Double-Edged Sword
The RHTP represents a significant opportunity for a state where 95% of counties are classified as rural or frontier. These communities often face limited access to specialty care, long travel times to emergency rooms, and financially struggling hospitals. Yet, the very legislation that created the RHTP also enacted substantial cuts to Medicaid – nearly $1 trillion nationally between 2025 and 2034.
A KFF analysis indicates that these Medicaid cuts will pull $137 billion in federal spending away from rural areas, creating an $87 billion deficit even with the RHTP funds. For Nebraska specifically, Medicaid spending is projected to decrease between $2 billion and $4 billion over the next decade. This creates a critical challenge: RHTP funds cannot be used to offset these Medicaid reductions.
Nebraska’s Plan: Seven Key Initiatives
The Nebraska Department of Health and Human Services (DHHS) has outlined seven core initiatives to guide the allocation of RHTP funds:
- Lowering obesity risk and promoting access to whole foods
- Developing regional healthcare partnerships
- Strengthening the healthcare workforce
- Implementing remote and mobile care solutions
- Expanding access to behavioral healthcare
- Improving services for Nebraskans with disabilities
- Enhancing the financial sustainability of rural healthcare providers
The state’s initial budget proposal detailed 35 projects totaling $885 million over five years. Significant investments are planned for initiatives like a NETECH fund – a venture capital fund for rural healthcare startups – and reimbursement coverage for behavioral health and memory care in assisted-living facilities.
Concerns and Criticisms: A Lack of Transparency and Prioritization?
The rollout hasn’t been without controversy. Nebraska DHHS initially resisted releasing the full RHTP application to the public, citing concerns about “proprietary or commercial information.” The complete 150-page document was ultimately obtained by Nebraska Public Media News through a public records request.
Jeremy Nordquist, president of the Nebraska Hospital Association, expressed concerns that the budget doesn’t adequately address the most pressing needs of rural hospitals. He noted a perceived imbalance between funding allocated to venture capital startups ($20 million annually) and direct support for hospitals ($10 million annually). He also highlighted a lack of investment in upgrading outdated electronic medical record systems and addressing the critical shortage of healthcare professionals in rural areas.
Pro Tip: Rural hospitals often operate on tight margins. Delayed or restricted funding can exacerbate financial instability and potentially lead to service reductions or closures.
The CMS Factor: Budget Revisions and Restrictions
While Nebraska initially proposed a budget of $200 million per year, the Centers for Medicare & Medicaid Services (CMS) required a revision to reflect the full $218.5 million annual allocation. CMS has also placed restrictions on certain funding areas, particularly regarding the NETECH fund, requiring more detailed information before releasing funds. CMS has capped direct payments to rural health providers at 15%, with Nebraska allocating 9.7% of its yearly budget to this purpose.
Looking Ahead: Challenges and Opportunities
Nebraska faces a tight timeline to effectively deploy the first-year funds by this fall. DHHS CEO Steve Corsi acknowledged the challenge, stating the need to spend the funds “well” to ensure continued access to future funding. The success of the RHTP in Nebraska will depend on strategic implementation, transparent communication, and a willingness to adapt to evolving needs and CMS guidelines.
Did you realize? States can have funds withheld if they are found to be misusing them or failing to meet the goals outlined in their application.
FAQ: Rural Health Transformation Program in Nebraska
- What is the RHTP? A $50 billion federal program designed to improve healthcare in rural areas across the United States.
- How much funding will Nebraska receive? Approximately $1.1 billion through 2030, with $218.5 million allocated for 2026.
- Can RHTP funds be used to offset Medicaid cuts? No, RHTP funds are specifically restricted from covering services provided by Medicaid.
- What are Nebraska’s key priorities for RHTP funding? Focus areas include workforce development, remote care, behavioral health, and financial sustainability for rural providers.
- Is the RHTP application publicly available? Yes, it was obtained through a public records request and is available from Nebraska Public Media News.
Explore Further: Learn more about rural healthcare challenges and solutions at the Nebraska DHHS Rural Health page.
What are your thoughts on Nebraska’s plan? Share your comments below and let’s discuss the future of rural healthcare!
