BURLINGTON — Agency of Human Services officials briefed the House Appropriations Committee on Thursday on plans to deploy a $195,000,000, five-year Rural Health Transformation Grant awarded by the Centers for Medicare & Medicaid Services (CMS).

Jill Mazel Olsen, the agency's newly appointed Medicaid and health systems director, told the committee the state’s application was competitive and the award reflects a credible plan, but that many implementation details remain unresolved. "We did well, and the only metric we had to do well on was the application itself,” Mazel Olsen said, adding that the state received its notice of award on Dec. 29 and must submit a revised budget to CMS by Jan. 30.

The fund is intended for system redesign rather than direct premium subsidies or permanent base-state spending. "We can't use these dollars for the purpose of the premiums, for the purpose of state match. It is not allowable for those purposes," Mazel Olsen said, summarizing CMS restrictions. The agency emphasized the grant is essentially one-time funding over five years and will be used to launch and scale initiatives rather than to supplant existing state obligations.

Staff outlined priority project areas the agency plans to pursue, including workforce supports, stronger rural health networks, improved transfer systems between hospitals and providers, expanded in-home and mobile services, and technology investments. On workforce, Mazel Olsen described tuition-assistance programs and a plan to revive the critical-occupations program previously run at Vermont Tech, expanding eligibility beyond nursing to other high-need roles. Tuition assistance would carry a five-year service requirement tied to forgivable loan language.

Technology and data-sharing investments under consideration include shared electronic health records for participating hospitals and AI transcription tools for small providers. The agency also described pilot and planning funds for regional transformation work already begun under Act 167 and Act 68 of the prior year.

Emergency medical services (EMS) drew sustained member interest. Committee members raised operational concerns about ambulances being taken out of service for new in-home services and the challenge of response times in remote areas. Mazel Olsen acknowledged those trade-offs and pointed to existing state EMS office resources and local models — such as Brattleboro — to inform design.

Members pressed the administration about eligibility questions, especially whether providers in Chittenden County would qualify under the grant’s rural metrics. Mazel Olsen said "the only question is about whether or not providers in Chittenden County in particular ... [that] is where the question is lying," and that the agency is working with New England partners and CMS to clarify how larger, less-rural providers fit the award's criteria; she characterized that item as unresolved.

On projects that may require startup support, staff said general fund dollars could be used initially where non-supplantation rules apply and RHT (Rural Health Transformation) money could later expand or finish build-out. Members noted the Maple Mountain residency appears on the project list and asked about state start-up contributions; agency staff confirmed the initial use of state general funds in at least one instance as part of the plan.

The agency reported it has posted a project spreadsheet and application materials on a public webpage and is building a 30/60/90-day project plan that will prioritize workforce work because it can move quickest. Mazel Olsen also confirmed the agency has hired a project manager and is coordinating with the joint fiscal team to expedite financial onboarding and necessary hires allowed under the grant.

Next steps: the agency must deliver a revised budget to CMS by Jan. 30 and will respond to any follow-up questions from CMS during the subsequent review period. Committee members asked for progress reports and additional detail on budget allocations and eligibility clarifications before the deadline. The committee then paused business to hear an Agency of Transportation briefing on EV chargers and the T fund.

(Reporting by the House Appropriations Committee proceedings; quotes and details drawn from committee testimony.)