Vermont awarded $195 million under CMS Rural Health Transformation grant; RFPs, rural eligibility and procurement next
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Summary
Agency of Human Services told the committee it received a $195 million first‑year Rural Health Transformation award from CMS, will submit a revised budget to reflect the award, and must still work with CMS on eligible uses, procurement (RFPs), and rural eligibility criteria (including how Chittenden County is treated).
Jill Mazza Olsen, AHS Medicaid and Health Systems director, told the Senate Appropriations Committee that Vermont applied for the Centers for Medicare & Medicaid Services’ Rural Health Transformation (RHT) grant and received notice of award on Dec. 29. The state requested $200 million and received a $195 million first‑year award, which the agency called a “terrific award” given the short turnaround and competitive review process.
Mazza Olsen said the award should be treated as largely one‑time funding and that CMS will reimburse approved expenditures; states will have to complete workbooks and meet reporting deadlines. She told senators the first year will effectively be about 20 months for spending because the agency has until September to spend award dollars and must report 60 days before the end of the first year.
Committee members pressed whether Chittenden County is covered under the grant’s rural definitions. Mazza Olsen said CMS and HRSA scoring and definitions tend to exclude Chittenden County in several metrics (for example square miles and facility counts), but she emphasized that providers based in nonrural counties could still apply for projects that demonstrably impact rural communities. Final RFP language will clarify eligibility and the agency said it will follow CMS rules.
The AHS team plans to post the full application and a one‑page summary on its website and to set up a listserv and listening webinars for prospective applicants. Mazza Olsen said the state will roll out RFPs and procurement options, some as grants and some as contracts, and asked stakeholders to watch the agency website for forthcoming notices.
Mazza Olsen cautioned the committee that the second year of awards is not guaranteed: "We're hopeful that it's 5 years," she said, "but the award is 1 year at a time." She also said some elements CMS flagged as ineligible (for example, certain housing capital investments) were removed and the agency resubmitted a revised budget at CMS’s request.
Next steps identified in committee testimony: AHS will submit the revised January 30 budget reflecting the $195 million award; the business office and joint fiscal staff will process acceptance steps needed for the grant; and the agency will post procurement opportunities and engagement materials for providers and vendors.