AHCA briefs Florida House on $50 billion federal rural health grant and confirms state application

TALLAHASSEE — The Florida Agency for Healthcare Administration submitted its application to the federal Rural Health Transformation Program (RHTP) on Nov. 3, AHCA Deputy Medicaid Secretary Brian Meyer told the House Health and Human Services Committee on Nov. 4, and he described how the U.S. Centers for Medicare & Medicaid Services (CMS) will allocate the $50 billion program over five years.

"This program represents the largest federal investment in rural health since the Medicare Modernization Act of 2003," Meyer said, summarizing the notice of funding opportunity that splits $50 billion into two $25 billion tranches. He said Tranche 1 is baseline funding distributed evenly to eligible states that apply, and Tranche 2 (the "workload" funding) is competitive: 50% of its score is based on CMS-calculated rural metrics and 50% on a qualitative review of state initiatives and state policy actions.

Why it matters: states that apply must pick at least three strategic focus areas from CMS'listed priorities (workforce development, access to primary and specialty care, technology, partnerships, prevention and financial solvency). Awards could provide states with major new resources to shore up rural providers and services, but Meyer cautioned that much of Tranche 2 is scored by CMS using external data sources and subjective review, and states cannot amend their applications after submission.

Meyer reviewed allowable uses and caps from the NOFO, including examples of investments CMS will allow (provider payments that do not duplicate Medicaid or other funding, training, telehealth, minor facility renovations) and program limits set in the federal guidance: provider payments that are not otherwise reimbursable are capped at 15% of total grant funding; EMR modernization is capped at 5% of total funding; administrative costs are capped at 10%; and technology catalyst funds are limited to the lesser of 10% or $20 million per award period.

Members pressed AHCA on several practical concerns during a lengthy question-and-answer session. Representative Rosenwald asked about SNAP shortfalls; Meyer said AHCA does not administer SNAP and had no update. Representative Hart asked whether funds would still be usable if the Legislature took action after the application was submitted; Meyer said the timing is constrained by the application deadline and that states must secure state budget authority before issuing funds. Representative Andrade asked when AHCA will seek spending authority for the expected Tranche 1 amount; Meyer said AHCA will coordinate with legislative budget processes (for example, LEHI or LBC) to obtain authority if Florida is awarded.

Representative Bartleman raised a broader budget concern, noting the state will face other federal payment changes next year and asking whether CMS had been asked to reconsider its ruralness metrics; Meyer said CMS has not indicated those metrics will change and that the ruralness component of the workload score will be based on CMS data sources (the Goldsmith modification of census tracts). "CMS has made it clear that the timeline will not change," Meyer said when asked whether a federal shutdown would delay scoring.

On scoring sources, Meyer said CMS will rely on external analyses for several policy-action factors: the Cicero Institute report for Certificate of Need scoring, the American Academy of Physician Assistants for PAs, the American Association of Nurse Practitioners for NPs, and the Oral Health Workforce Research Center for dental hygienists. Meyer also said Florida received full points for its SNAP waiver because the state obtained full approval on Aug. 4.

Members asked how providers will apply for funds if Florida wins an award; Meyer said AHCA plans to issue a request for applications and anticipates encouraging collaborative, regional proposals and partnerships rather than only single-provider bids. He emphasized states may define "rural" differently when distributing funds locally, even though CMS will use its own definition for scoring.

On workforce, Meyer said the NOFO includes requirements for workforce recruitment initiatives, including commitments from individuals benefiting from recruitment incentives to remain in community placements for up to five years as part of many proposals. On provider payment concerns, AHCA noted the 15% cap on nonreimbursable provider payments is a CMS restriction in the NOFO.

Meyer said Florida's application included a 60-page project narrative and a 20-page budget narrative, duplication and sustainability assessments, and the required governor's letter. He told members the agency can provide the application materials to the committee for review.

The committee concluded after members requested the application documents, and Representative Bussada moved to adjourn; "without objection, the meeting is adjourned," Chair Tomko said.

Next steps: CMS intends to announce awards on or by Dec. 31, 2025; states that receive awards will need state budget authority to issue funds and will be reassessed annually based on the progress measures spelled out in their applications.