Sarah Aker, executive director of the Division of Medical Services at the North Dakota Department of Health and Human Services, told the Rural Health Transformation Committee the department submitted a draft plan for federal rural health transformation funding that prioritizes workforce, infrastructure and technology.

Aker said the state’s framework groups investments into four strategic priorities — strengthen and stabilize the rural health workforce; bring high‑quality health care closer to home; make North Dakota healthy again (prevention and community health); and connect technology, data and providers — and that the budget numbers are illustrative while the final federal award amount is still unknown. “We are going to receive at least $100,000,000 a year, or $500,000,000 over the first five years,” Aker said; CMS asked states also to submit a hypothetical $200,000,000‑per‑year budget (a $1,000,000,000 five‑year scenario).

Why it matters: the committee’s endorsement clears the department to finish its final application and move toward implementation planning once CMS announces awards. Committee members pressed DHHS on how funds will be distributed, monitored and sustained, and on specific allowable uses under CMS guidance.

Budget outline and allowable uses

Aker described preliminary allocation percentages (subject to change with the final award): roughly 16.2% for workforce strategies, about 58.4% for “bringing high quality care closer to home” (the largest share, driven by infrastructure and facility reconfiguration), 8.6% to prevention and community health, and about 16.8% for technology and data. She emphasized that the department is asking committee members to focus on percentages because the final dollar totals will depend on CMS’s award.

On allowable uses, Aker summarized guidance DHHS has received from CMS: states may not provide advance grant payments (most awards must be reimbursable), and certain construction costs and “loaner payment” structures are disallowed. Vehicle purchases such as helicopters or fixed‑wing aircraft are expressly reviewable on a case‑by‑case basis and not guaranteed. She said the department will still propose requests for ambulance or air medical support but warned approval is not certain.

Workforce, recruitment and EMR questions

Committee members asked several detailed questions about recruitment incentives, scholarship and loan repayment structures, and electronic health records. Aker explained CMS accepts training programs tied to service commitments (with limitations) and has allowed states to propose scholarships with a five‑year service expectation, noting CMS reserves the right to recoup funds not used for qualifying educational requirements.

On recruitment incentives, Aker said DHHS will offer relocation and recruitment grants and could structure payments as either lump sums or multi‑year installments but must meet CMS liquidation deadlines for each award year. She described two approaches the state may use: (1) grants paid to all qualifying applicants in a category, or (2) competitive awards scored and prioritized when requests exceed available funds.

Senator Hogan asked whether converting a rural provider to a certified EHR (for example, Epic) is allowable; Aker said electronic medical record purchases are included in the department’s framework but noted a CMS cap (a 5% limit) applies when replacing an existing certified EHR. She also said the department plans cooperative purchasing to reduce per‑provider costs.

Telehealth, remote monitoring and facility changes

Aker said “clinics without walls” — telehealth hubs, mobile units and remote monitoring — are a core strategy inside the care‑closer‑to‑home priority. The department will invest in telehealth infrastructure, remote monitoring devices (including ventilators with remote telemetry), and cooperative purchasing for cybersecurity and billing software. She warned that CMS guidance treats some large equipment purchases cautiously and that states should anticipate federal review of certain vehicle and aircraft requests.

Awards, procurement and monitoring

DHHS plans a mix of grant and procurement mechanisms: many awards will be grants (either open to all qualifying applicants or limited by scoring), while technology procurements may use requests for proposals to identify the best solutions. Aker said all awards will include reporting, monitoring and a contract with DHHS to ensure federal compliance and allow subrecipient monitoring.

Donna Auckland, the department’s chief financial officer, told the panel that internal staff time for subrecipient monitoring can be charged to the 10% administrative allowance included in the draft budget; state or federal single audits would generally occur after the grant period and not be charged to the award.

Timeline and legislative role

Aker said DHHS planned to submit the application by the November 5 deadline and expects CMS to notify states before the end of the year. If awarded, the department will move into implementation planning immediately and seek to prioritize projects that can obligate funds under CMS deadlines.

Committee members pressed how the legislature will participate after award. Aker and several legislators agreed the special session likely would be required to appropriate federal funds to the department; members said that once the state’s plan is approved by CMS, changes would be limited and CMS expects states to execute what they described in their application. Chairman Beckettall and others said the committee will continue to review implementation and called for follow‑up reporting to legislative committees.

Tribal participation and distribution questions

Multiple tribal leaders and several committee members raised the question of a tribal set‑aside. Aker said tribes and tribal health systems were explicitly included throughout the application as priority partners and that CMS directed states to work with tribal stakeholders. She reported DHHS had discussed tribal needs at the department’s tribal consultation and intends to track awards to tribal entities; she also said CMS told DHHS block grants to tribes — in the sense of an unrestricted lump sum — would not meet CMS requirements, because awards must be tied to allowable activities and reporting.

Several committee members proposed administrative ways to prioritize tribal applicants, including weighted scoring in competitive awards. Aker said the department will explore prioritization and weighting mechanisms to ensure tribal communities are prioritized, and that tracking of funds directed to tribal health systems is possible in DHHS’s monitoring setup.

Committee action

The Rural Health Transformation Committee voted to endorse the department’s plan to submit the application to CMS and separately voted to forward four legislative bill drafts discussed later in the afternoon to Legislative Management for consideration. (The committee’s endorsement of the application is a legislative support motion; final appropriation of any award would still require subsequent legislative action.)

What’s next

DHHS said it will finalize its budget narrative and application and return to the committee with the submitted application at a tentative Dec. 4 meeting. Committee members and DHHS staff said they expect additional sessions before any special session to refine appropriation language, scoring/award criteria and monitoring approaches.

Quotes

"Workforce rose to the top," Sarah Aker said when summarizing feedback from listening sessions and why workforce strategies figure prominently in the draft budget.

"We are going to receive at least $100,000,000 a year," Aker said, as an illustration of the minimum baseline funding the state expects under CMS rules; she cautioned the final award depends on CMS scoring and other states’ applications.

Ending

DHHS officials and legislators said they will press for an application and award process that prioritizes rural and tribal needs, emphasizes rapid obligations for projects ready to launch, and includes robust reporting and monitoring to ensure compliance with federal rules.