North Dakota officials outline plan to use federal rural health transformation funding to bolster rural care

State health officials presented the state's application for the federal Rural Health Transformation Program and sketched how the Department of Health and Human Services would distribute and administer funds if North Dakota is awarded a grant.

The presentation to the Rural Health Transformation Committee on Dec. 1 was led by Sarah Aker, executive director of the Division of Medical Services at the North Dakota Department of Health and Human Services, who said the state submitted its application in early November and expects federal award decisions by Dec. 31. "We anticipate our award will be somewhere between $100 million and $200 million," Aker said, while noting the federal guidance asked states to plan for $200 million per year (about $1 billion over five years).

Why it matters: the federal funding is explicitly designed to enable states to invest in service delivery changes, workforce, data and technology with a priority on rural, frontier and tribal communities. Committee members pressed HHS on how quickly money could reach providers and on safeguards that will ensure sustainability after one-time investments.

HHS governance and award approach Aker said HHS will use an internal steering committee overseen by Commissioner Pat Traynor to provide project management and align work with forthcoming CMS guidance. The department plans a mix of direct contracts, grant subawards, requests for information and RFPs: "The bulk of the funding we imagine will go out in grants or grant opportunities to communities, to local providers," she said. Aker added the department will seek to minimize administrative burden for small providers and prioritize applications that demonstrably serve rural and tribal populations.

Program priorities and examples Aker walked the committee through the application's initiative buckets and sample activities: EatWell North Dakota (nutrition education, lactation counseling, farm-to-school or farm-to-senior programs), Make North Dakota Healthy Again (chronic disease prevention and screening), expanding behavioral-health capacity and standardizing follow-up protocols after suicide attempts, stabilizing the rural workforce (rural residencies, career ladders, retention grants), and "clinics without walls" (telehealth networks, mobile clinics, remote monitoring).

Pat Traynor, commissioner of HHS, framed the grant as a prevention-first opportunity: "Exercise is medicine. Food is medicine," he said, urging long-term approaches to reduce chronic disease incidence and downstream costs.

Tribal partnerships and IHS eligibility Committee members asked whether Indian Health Service (IHS) entities can be direct recipients; Aker said federal guidance indicates IHS cannot be a direct recipient of these specific funds, but tribal health organizations or tribal partners could receive awards and HHS will pursue administrative solutions and partnerships to operationalize local projects.

Provider readiness, procurement timing and CMS oversight HHS conducted a provider readiness survey (Nov. 10 ec. 1) that produced 134 responses from clinics, hospitals, long-term care and local public health units. Aker said early sub-award rounds will emphasize projects ready to begin quickly: training, recruitment/retention and filling gaps in care. Several legislators raised concerns that CMS-level review of subawards could be time-consuming and could delay small projects; Aker said the state has had informal federal conversations and expects significant oversight from CMS but will attempt to simplify application processes and provide technical assistance to smaller providers.

Budget and implementation questions Aker said the federal notice asked states to submit a $200 million-per-year plan; the state's expected award could be lower, and HHS intends to apply the plan's percentage allocation to whatever award amount is received, adjusting across years as needed. Committee members also sought clarity on administrative costs and staffing; Aker said HHS is hiring additional FTE (coordinators, project directors, finance and contracts specialists), will consider outside vendors and included some administrative support in the budget submitted to the federal government.

Next steps Aker said HHS will publish sub-award opportunities on a dedicated rural health transformation web page and distribute notices via a project listserv and association channels. The department expects to release initial sub-award opportunities in January if the federal award is received and will hold additional listening sessions and provide regular legislative briefings.

Votes at a glance The committee approved the minutes of the Oct. 21, 2025 meeting by voice vote following a motion from Representative Nelson and a second from Senator Davison.

The committee adjourned and the chair outlined a plan to reconvene in January, with policy and appropriations subgroups meeting before a likely special session to finalize bill text and appropriation language for legislative management.