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Less than two months after Arkansas finished parceling out its first round of funding from a federal healthcare program established under the One Big Beautiful Bill Act, the state was awarded its second, $207.7 million installment.

Arkansas' latest award from the five-year, $50 million Rural Health Transformation Program was down marginally, by about 0.5%, from the $208.8 million award it received in the initiative's first year.

Gov. Sarah Huckabee Sanders did not answer a question from the Arkansas Democrat-Gazette on whether the amount aligned with what she anticipated, but she cheered the latest funding in an emailed statement.

"The second year of the RHTP program reaffirms President Trump's commitment to investing in rural healthcare in Arkansas and across the nation," Sanders said.

The grants for the federal fiscal year that began Oct. 1 were announced by the U.S. Department of Health and Human Services Monday.

In each year of the program, every U.S. state receives $100 million, while the other half of the funding is determined on a state-by-state basis, depending on factors such as rural populations and rural healthcare facility density. Sanders has said she expects Arkansas' funding over five years to total $1 billion.

In the latest round, Texas received the most funding, about $282 million, working out to about $8.89 per resident, while New Jersey received the least, about $142 million, or $14.90 per resident.

Due to Arkansas' smaller population, the state's award amounts to far more -- about $66.70 per resident.

"We are appreciative that Arkansas received another major infusion of resources this year, and look forward to working with stakeholders around the state to invest in programs that support rural communities, build up the healthcare workforce, and promote healthier lifestyles," Sanders said.

The state plans to release a notice of funding opportunity for the second-year grants in early January, Scott Hardin, communications director for the state Department of Finance and Administration, said.

"A full timeline containing application deadline and award announcements is not available for release at this time, but we anticipate releasing it in the near future," Hardin said in an email.

The second-year distribution was finalized a few months after Sanders announced in August nearly $150 million worth of grants from the first round of funding. The remaining funds from that installment were awarded in September.

Projects were selected by a steering committee, consisting of leaders of several state departments, that evaluated how each project addresses rural needs and promotes sustainability.

The first round of grant funding is going to a wide range of projects, including a $10 million plan to upgrade Arkansas' ambulances and a nearly $3 million contribution to a new family medicine residency program aiming to bring more doctors to northeast Arkansas.

Several grants are focused on expanding telehealth access or upgrading rural hospitals. For example, Mississippi County Hospital System received roughly $9.6 million to improve its facilities in Blytheville and Osceola.

Lacey Carter, the healthcare system's CEO, told the Democrat-Gazette last week a large portion of that funding will be used to bring back cancer infusion care, such as chemotherapy, at Great River Medical Center. She said cancer patients in Mississippi County currently have to drive an hour, often to Memphis or Jonesboro, to receive advanced treatment.

Awardees of the first-year grants have until the end of September to spend the funds, Hardin said. Carter said the hospital system in Mississippi County is working with the state and vendors on its procurement process.

"We've been very open with all our vendors saying, 'Hey, this is a hurry-up. We need the quotes, and then we wait,'" Carter said. "Then, we're going to have to hurry up again, because we have to spend it (within) a certain amount of time."

Many grant applications submitted for the first year of funding outline how the projects will continue with additional funding, but the projects awarded for the first year must still apply for funding in subsequent years.

"We do hope that Budget Year One awardees apply for funding for Year Two, but receiving an award in year one does not guarantee funding for year two," Hardin said.

States are required to submit quarterly reports detailing the status of their grant programs starting this month. Hardin said Arkansas has not yet submitted its quarterly progress report, but plans to by the Nov. 30 deadline.

While providers have welcomed the funding, some health policy experts have noted the federal funds will offset only a fraction of Medicaid cuts approved through the One Big Beautiful Bill Act. Work requirements and other provisions in the bill are expected to significantly reduce Medicaid enrollment in the coming years.

KFF, a health policy research organization, has estimated the grants could offset slightly over a third, or 37%, of projected cuts to federal Medicaid spending in rural areas.

However, funding from the Rural Health Transformation Program cannot be used to backfill operating expenses at struggling hospitals. Those restrictions were established through rules from the Centers for Medicare and Medicaid Services.

"CMS could change that on a dime if they wanted to," Harold Miller, CEO and president of the Center for Healthcare Quality and Payment Reform, a national policy center, said in an interview. "That would suddenly open up literally millions of dollars that could be given to rural hospitals."

Miller was skeptical of the amount of money from the program being used to expand telehealth through technology firms and consultants.

"To me, you can't deliver a baby by telehealth, and you can't stitch a wound and you can't fix a broken bone with telehealth," Miller said. "What you need is a hospital ... paid adequately to do that, but the Rural Health Transformation Program doesn't allow that."

The program's funding "is not just to subsidize and keep services afloat for five years," Miller said.

"It is to transform," Miller said. "We will see how much transformation actually happens."

Tom Coulter is a rural health reporter for the Arkansas Democrat-Gazette's Health Beat Lab , a statewide initiative covering Arkansas' most pressing health challenges. We can't solve problems our communities don't fully see or understand. By keeping Arkansans informed, the Health Beat Lab helps people make better decisions and build stronger systems. This work is supported by the ADG Community Journalism Project.

Tom Coulter is a rural health reporter for the ADG's Health Beat Lab, a statewide initiative covering Arkansas’ most pressing health challenges.

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