OHA outlines HR1 Rural Health plan, budgets $200M assumption and readies partner engagement

Claire Pierce Grobel, director of the Health Policy and Analytics Division at the Oregon Health Authority, told the Interim Committee on Health Care on Nov. 18 that Oregon has submitted an application to the Centers for Medicare & Medicaid Services for the HR1 Rural Health Transformation Program, a five'year cooperative agreement that depends on annual performance reporting to CMS.

Grobel said the federal notice of funding opportunity allotted $50 billion across states, with half of that split equally among approved states and a second portion allocated for workload. OHA said the application followed CMS'requested assumptions that would have yielded a baseline of roughly $100 million per state per year and that Oregon budgeted the application using a $200 million annual framework as the equal'split illustrative figure, while cautioning the final award would likely be lower after technical scoring and negotiations.

The agency proposed five initiative areas validated through public engagement: (1) regional partnerships and system transformation, including hub'and'spoke infrastructure and EMS modernization; (2) healthy communities and prevention that would expand primary care access, school nursing, telehealth and home visiting; (3) workforce capacity and resilience, including rural residency programs and provider'to'provider consults; (4) technology and data modernization such as EHR improvements and cybersecurity; and (5) a tribal set'aside for Oregon's nine federally recognized tribes.

Grobel said HR1 awards will be administered as cooperative agreements, which will require robust quarterly and annual reporting on outcomes, metrics and milestones. She warned there is a risk of funding adjustments or clawbacks in subsequent budget periods if states do not demonstrate progress against their milestones. The application required states to list at least four outcomes and accompanying metrics per initiative, Grobel added.

Committee members asked how Oregon would allocate funds across rural and frontier areas. Grobel said CMS does not prescribe a single state allocation formula; OHA plans to align definitions with its Office of Rural Health and expects to define allocation mechanisms once the award amount and federal terms are known. She also said certain expenses are unallowable under HR1 (for example, CMS guidance has indicated individual loan'repayment is not eligible) and that workforce investments tied to the award would include commitments such as multi'year rural practice requirements.

OHA said it engaged stakeholders through surveys and public forums during the six'week application window and will follow up with requests for information and requests for proposals to identify ready'to'launch projects if the state receives an award. Grobel said OHA plans a phased approach that prioritizes catalyst awards for early projects and later supports regional sustainability consortia for initiatives demonstrating early success.

OHA expects to learn whether the state receives an award by Dec. 31 and noted that the first federal budget period would make initial-year funding available January'September 2026, shortening the initial project window. Grobel said OHA will bring more specifics to the committee as federal terms and the award amount are finalized.

The committee did not take a formal vote; members asked OHA to provide lists of unallowable expenses and to consult the committee on allocation parameters once the award terms are available.