ND HHS outlines $198M rural health transformation plan; CMS must approve projects

North Dakota Health and Human Services officials presented an overview of the state’s Rural Health Transformation Program to a joint policy committee, describing a CMS notice of award and the staff plan for allocating funds, engaging providers and meeting federal requirements.

Deputy Commissioner Emily O’Brien said the department’s application won a CMS award and that the planning materials and award notice are available on the agency website. HHS staff described four funding pillars—strengthening and stabilizing the rural workforce; bringing higher-quality care closer to home (mobile units, telehealth and expanded local services); connecting technology, data and providers; and preventive work summarized as “Make North Dakota healthy again.”

HHS provided dollar and percentage estimates for the five-year award. Emily O’Brien described a figure of $198,900,000 in remarks; later Deputy CFO Courtney Peterson referred to the amount as $198,000,000 in committee testimony. Peterson outlined that approximately $33.4 million is targeted for connect tech and data, about $33.2 million for workforce initiatives (roughly 16.2% of the application), and about $116.2 million for the "care closer to home" category; staff said other categories reflect estimates and provider readiness. HHS emphasized these figures are estimates and that CMS approval is required for each subaward or contract.

Peterson told members the department must have year‑one funds contractually obligated by Oct. 30, 2026, after which there is roughly an 11‑month liquidation (spending) period. She said HHS expects to submit materials to CMS, obtain approvals, and then move quickly on contracting and quarterly federal reporting. "We will have to be working with CMS for their approval," O’Brien said; Peterson cautioned that CMS has identified unallowable costs (including supplanting existing programs and certain new construction) and that some technology spending is constrained.

HHS staff urged legislators to help spread word of subaward opportunities and to sign up at hhs.nd.gov/rural-health-transformation for notices and templates. Krista Framing of HHS’s medical services division said the website has a translation feature and that the agency will use tribal consultation and other stakeholder outreach to reach communities across the state.

The committee also heard that HHS collected stakeholder input through listening sessions—about 1,200 responses—that shaped the plan. Staff said awards and scoring for certain policy actions are estimates pending final CMS scoring guidance; if the state does not pass the committed policy actions, CMS could reduce points and recapture related funds in future years. The committee recessed for lunch before beginning bill-by-bill consideration.

The department will return to the committee with subaward timelines and expects to offer technical assistance and vendor support to help applicants prepare competitive proposals.