ND HHS outlines rural health transformation plan and tight federal deadlines for CMS grant

The Department of Health and Human Services told lawmakers it has secured federal rural health transformation funding and must move quickly to obligate contracts and spend the money on multi‑year projects.

"Speed is of the essence," said Pat Traynor of HHS, urging legislators to help identify local partners and ready projects so grants can be obligated before the federal deadline. Traynor described the award as an opportunity to "repurpose and realign" state health efforts and outlined four investment areas: connectivity and data, care closer to home, workforce development and prevention/ population health initiatives.

HHS Chief Financial Officer Donna Ochlin told the committee that the award year in the agency's letter begins on Dec. 29, 2025, and that HHS is clarifying the liquidation deadline with CMS. "Liquidation is a contractual agreement," Ochlin said. "In order to obligate dollars, I have to have an executed and signed contract in place." She warned that failing to obligate and liquidate funds on the required timeline could trigger clawbacks and reduce future awards.

Officials gave approximate target amounts for the buckets and emphasized they are targets, not guarantees. Traynor and HHS staff cited examples such as remote patient monitoring equipment, technical assistance, training and recruitment or retention incentives for rural providers. Krista Fremming of the medical services division outlined draft grant criteria for recruitment and retention — bonuses, housing assistance, relocation help and training — and said providers receiving financial incentives would generally need to commit to serve for five years, a federal requirement in the notice of funding opportunity.

HHS also previewed four policy proposals submitted with the application that were scored as part of the state's submission: a presidential fitness test (valued in HHS estimates at about $9 million over five years), nutrition continuing medical education (about $17.5 million), a physician assistant compact (about $3.48 million) and expanded pharmacist scope of practice (about $3.9 million). Officials said full points for those policy actions depend on legislative action and CMS review.

Lawmakers pressed HHS on how funding opportunities will reach rural communities and local newspapers; Traynor said a communications plan is budgeted and asked legislators to help connect HHS with community champions. Representative Murphy and others raised concerns about the speed of CMS review and whether North Dakota can avoid delays by using prototype templates and technical assistance; HHS said it will pursue pre‑approved templates and provide on‑the‑ground assistance to prepare applications that meet CMS parameters.

Committee members also asked whether faith‑based organizations can be partners (HHS said yes if they provide services to the whole community and comply with federal rules) and sought clarification about supplanting existing state funds (HHS said the grant cannot be used to replace current state funding).

The committee recessed to hold separate policy and appropriations division meetings, with a full reconvening scheduled the next morning at 8:30 a.m. HHS said it will continue outreach, tribal consultation and public notifications about rolling funding opportunities on its landing page and via a listserv.