LFC review of Rural Health Care Delivery Fund finds wide variation in goals and weak statewide metrics

LFC program evaluators briefed the committee on the Rural Health Care Delivery Fund (RHCDF), telling members that the fund has provided approximately $196 million since 2023 to support operating losses and expand rural and underserved services. The fund supports a broad set of Medicaid-enrolled providers and service types, with behavioral health representing the largest share of awards.

"Because this is time-limited funding intended to help start or expand services that should be sustained over time, two questions we hope to address are whether investments are reaching areas of greatest need and whether those services are likely to remain in place once grant funding winds down," Drew Weaver, an LFC program evaluator, told the committee.

The LFC health note found most recipients used awards to scale existing services (about 60%), and that staffing accounted for roughly 59% of reported expenditures. Contracted spending patterns vary: some projects front-load funds for startup costs while others ramp up more slowly. Presenters warned that provider-reported hires and encounter counts are self-reported and not consistently verified, making statewide impact and sustainability difficult to assess.

Danielle Savias, another LFC evaluator, said the program lacks standardized statewide goals and consistent reporting definitions; work plans are negotiated with HCA and vary by provider. "The program lacks standardized program-level goals and metrics, which limits HCA’s ability to measure impact statewide," she said. The note recommends HCA adopt short-, mid-, and long-term outcome measures, standardize definitions, and improve reconciliation and auditing of expenditures to better target future awards.

Committee members raised questions about geographic targeting, duplication of services, oversight of contractors assisting HCA administration, and how federal Bridal Health Transformation Program funds intersect with the state fund. Presenters said HCA has taken steps to improve internal reconciliation and has issued a request for proposals for an independent audit to better validate provider-reported costs and outcomes.

What happens next: LFC recommended HCA set statewide targets, standardize reporting, and reconcile awards to audited operating losses. The committee indicated interest in closer oversight and in coordinating state and federal funds to avoid supplanting or duplication.