Appropriations subcommittee directs draft for Rural Health Transformation perpetuity fund, approves guardrails and reporting

A legislative appropriations subcommittee on rural health transformation on Jan. 1 directed staff to prepare a bill draft that would create a perpetuity fund for federal RHT (Rural Health Transformation) dollars, set a 4% baseline annual payout, and authorize the Department of Health to implement detailed program rules while reserving legislative oversight on large awards.

The committee, led by the chair (Speaker 1), agreed by show of hands to establish the perpetuity fund and to deposit a larger share of the first-allocation-year funds (staff framed 80% for the first year and 69.5% thereafter as an option). LSO staff asked the panel whether payouts should be based on a 4% baseline; the committee supported 4% as a starting point for the draft. Stefan Johansen of the Department of Health, identified himself in the hearing, warned that strict statutory percentages could hamper flexibility during interim years when application volumes are uncertain and suggested combining statutory goals with rulemaking to avoid unintentionally forfeiting federal funds.

The subcommittee authorized four broad program categories proposed in the department’s application—critical access hospital basic…