Vermont has assigned its $195 million in federal rural health dollars. Here’s where it’s going.

Right before its deadline, Vermont has allocated all $195 million of federal Rural Health Transformation funding it received last December.

In the 10 months since receiving the Centers for Medicare and Medicaid dollars, the state has built out a team to manage the project, issued dozens of funding notices, fielded hundreds of applications and inked more than 200 individual contracts.  

Now begins implementation.

“When I look at year one, I feel really excited about how much money is directly going to the field,” said Jill Mazza Olson, the state’s Medicaid and health systems director, who is shepherding the five-year project. Other states, she said, have instead prioritized spending money on analysts and consultants. 

With the first year of funding obligated, the state now moves into the second year of the five-year program.

The work comes as Vermont’s hospitals face steep challenges to keep charges low while still meeting their bottom line. At the same time, they are preparing for Medicaid payments to drop off as changes in the same federal law that created the rural health fund take shape in 2027. In light of those dueling pressures, the state is trying to keep care available and affordable by reshaping how rural hospitals provide and share services. 

“I always say this is a tool to support the broader transformation efforts,” Mazza Olson said. The funds themselves are not, she added, a substitute for the needed redesign plans.

The Agency of Human Services divided the nearly 250 projects into four main categories. They include efforts to bolster the healthcare workforce, strengthen primary care, broaden the kind of settings where patients can receive care and invest in physical healthcare infrastructure, which the state labeled “regionalization” work.

Mazza Olson sees the categories as all in service of the state’s mission to change how rural communities reach — and afford— healthcare by regionalizing and consolidating specialty care. 

Regionalization

The state has put more than $88 million of the federal funds toward the regionalization work, making it the largest of the four priority areas. Of that, the state awarded more than $32.3 million for facility upgrades at clinics, rehab centers and nearly every hospital.

The state also put money into expanding urgent care centers for mental health and substance use disorders and toward building out mobile units to provide primary care. 

The broad funding category incorporates a wide array of support that hospitals and healthcare providers might need to meet the state’s push for rethinking how it organizes hospital care, Samantha Hefferon, the director of Rural Health Transformation for the state, said. For instance, Northwestern Medical Center in St. Albans received $2 million to facilitate its transfer of obstetrics to an independent contractor, Maitri Health Care. Brattleboro Memorial Hospital, on the other hand, has received funding under the same umbrella to develop a plan to keep birthing services in Windham County.

Much of the remaining funds go toward consultant work to supplement the state’s healthcare system redesign. The consulting group McKinsey received $5.1 million for “analytics and support.” McKinsey’s grant is one of the largest awards Vermont gave an individual organization.

Shared services

Efforts to better coordinate care across hospitals dovetails with the state’s efforts to regionalize.

The state awarded $34.2 million under the umbrella of shared service efforts to facilitate access to specialist care in rural areas and make care coordination smoother. 

“Really big picture, we are trying to get people to the best possible place to get the services they need,” Mazza Olson said. That’s not always the hospital, she added. Sometimes it’s a mental health urgent care or their own home, where a patient can have their vitals remotely monitored. 

The funding includes more than $10 million for providers to adopt telehealth technology and for remote patient monitoring.

The University of Vermont Health received almost $3 million to guide transfers between healthcare facilities. A collection of Vermont hospitals have received funding to work on unifying an electronic medical record platform.

Twenty-five smaller clinics and healthcare facilities have received a combined $5 million in grants to adopt AI technology to transcribe notes, which many healthcare professionals have described as radical in reducing administrative burden.

Primary care and workforce

The state is putting more than $40 million into bolstering primary care. 

That includes investments in data analytics and expanding substance use disorder recovery housing. The state funded awards meant to integrate more mental health, community support and “team-based” care. 

The state also put $26.6 million into workforce development. Though the grant did not include any payments to educational institutions, which Mazza Olson said may change next year, it did include investments in training programs, tuition assistance and mentorship projects. 

In this umbrella, $571,900 went to efforts to establish the Maple Mountain Consortium Family Medicine Residency Program that aims to train doctors in Vermont’s rural primary care settings. 

Another $8 million went to Kinney Drugs to help the pharmacy chain develop its test-to-treat work, which would allow pharmacists to test and administer treatment for certain common conditions, such as flu and strep throat. That expansion of scope was passed into law this year. 

The state now moves into the second phase of the five-year program, monitoring the obligated  funds and assigning the second year’s awards.The Agency of Human Services expected to learn of its second-year funding on Oct. 30 but has not yet received confirmation from the Centers for Medicare and Medicaid Services about the award, a spokesperson said Monday. 

Read the story on VTDigger here: Vermont has assigned its $195 million in federal rural health dollars. Here’s where it’s going..