North Dakota is preparing an application to the Centers for Medicare & Medicaid Services that would allocate the state's share of federal "rural health transformation" funding under H.R.1, state officials told the Legislative interim committee.

Sarah Aker, Executive Director of the Division of Medical Services, said CMS released application guidance that requires a single project narrative for all five years of funding and sets scoring criteria that will affect additional "workload" funding. "The top concern we heard in our 1,200-response survey was workforce," Aker said. The two next-highest priorities were helping rural communities "right size" their health delivery systems and promoting prevention and chronic-disease management.

Aker said the state will hold listening sessions Oct. 3, Oct. 7 and Oct. 9 and that the formal application is due Nov. 5. The application must include goals and strategies, specific initiatives, timelines, evaluation metrics and a sustainability plan. CMS guidance gives states broad latitude but lists unallowable costs (for example, new construction is limited and cannot exceed 20% of total funding for alterations nor be cosmetic) and emphasizes measurable impacts for rural populations.

Why it matters: the program provides an estimated $100 million a year to each state under H.R.1 (the federal rural health funding created in recent legislation). Roughly half the scoring for supplemental workload funds depends on demographic measures (state rural population share and land area); the other half depends on policy factors in a state's proposed plan. Aker emphasized the need to align initiatives that can demonstrate measurable access or outcome improvements and to maximize the state's competitiveness for additional funding.

What is being considered: Aker outlined example initiatives under consideration: workforce recruitment and retention incentives, retention bonuses, remote monitoring and telehealth technology investments, mobile service units, support for EMS and nonemergency transportation, training and certification programs (including tribal residency efforts), alternative payment models and cooperative purchasing/technology-sharing to reduce provider costs. Officials said they are focused on solutions that are sustainable after federal funding ends.

Next steps and legislative role: State officials asked for legislative engagement in refining priorities and said they will bring draft initiatives to interim committee meetings for feedback. Aker said the application will be drafted to preserve flexibility for later operational decisions but to be concrete enough to score well against CMS criteria.

Quote: "We want to make sure that we're having a measurable impact on access or health outcomes for rural North Dakotans," Aker told the committee.

Background: The application must be submitted to CMS for the full five-year funding period; some funds will be awarded based on a state's demographic profile and plan alignment with CMS policy priorities. Officials warned that sustainability after a five-year term and avoiding the creation of structural funding gaps will be a central challenge.