Rural hospitals urge Michigan panel to send RHTP dollars directly to frontline providers
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Summary
Hospital leaders told the House Appropriations Committee that Michigan’s Rural Health Transformation Program should prioritize direct, flexible funding to rural hospitals, reduce administrative barriers from competitive grants, and focus on workforce, EMS, behavioral health and telehealth to prevent service losses.
LANSING — Hospital and rural health leaders urged the House Appropriations Committee on Jan. 27 to ensure Michigan’s Rural Health Transformation Program (RHTP) channels federal dollars quickly and directly to rural hospitals rather than routing funds through multiple intermediaries.
"The RHTP represents a once in a generation opportunity to stabilize and transform rural health," Andrew Raymond, CEO of Kalkaska Memorial Health Center, told the committee, adding that funds must "flow directly to rural hospitals with minimal administrative burden." Raymond warned that complex grant applications, layered intermediaries and duplicative reporting are barriers for independent hospitals that lack grant-writing or compliance teams.
Why it matters: Witnesses said administrative complexity could slow implementation and risk losing future federal dollars if hospitals cannot participate promptly. Committee members repeatedly asked whether the roughly $173,000,000 appropriated for RHTP this fiscal year will be sufficient; witnesses responded that the $173 million is targeted for RHTP activities but broader Medicaid and health-system changes are separate and larger funding needs.
Munson Health officials and others recommended practical steps to reduce friction. Gabe Schneider, director of government relations for Munson Healthcare, said his system expects multiple grant application streams and emphasized the need to align internal strategic priorities with the department’s requirements while avoiding obligations that create costs beyond the grant period.
Witnesses repeatedly urged the state to consider options for letting the Michigan Health and Hospital Association or similar organizations help manage administrative and reporting requirements on behalf of small rural hospitals so local providers can focus on care delivery. Tanya Darner, market CEO of UP Health System Marquette, said the Upper Peninsula already delivers many RHTP services and needs flexible funding because of sparse population and long travel distances.
Committee next steps: Legislators indicated subcommittees will examine implementation details and eligibility definitions (HRSA, state maps and hospital designations such as critical access or sole community hospital) to ensure funding reaches truly remote communities without reinforcing existing access inequities.
The committee adjourned after approving routine minutes and excusing absent members.