Appropriations Committee opens hearing on HB 2555 requiring reporting on rural health transformation grants

The House Appropriations Committee opened a hearing on House Bill 2,555, which would require that grant applications, expenditure reports and other documentation related to the Rural Health Transformation Program be presented in a public meeting of the State Finance Council and provided to legislative budget committees.

Jill Walters, first assistant reviser from the Office of the Revisor of Statutes, briefed the committee and described the bill’s mechanics: materials that Kansas submits to the Centers for Medicare & Medicaid Services (CMS) and that CMS requires would also be presented to the State Finance Council during a public meeting and shared with the House Appropriations Committee and the Senate Committee on Ways and Means while the legislature is in session, and with the Legislative Budget Committee when it is not in session. Walters emphasized the bill’s requirement that reports be provided in a meeting so council members have an opportunity to ask questions rather than merely receive materials.

Kansas Department of Health and Environment Secretary Janet Stanek, identified KDHE as the lead agency for administering the grant, told the committee KDHE supports reporting and legislative engagement. Stanek said federal reporting to CMS is already rigorous and frequent and that KDHE will have those reports available: “We don’t have the money awarded. We don’t have it accessible yet because our budget hasn’t been fully approved yet,” she said, adding the department is working on budget revisions per federal requirements.

Vice Chair Williams pressed Stanek for a specific citation showing CMS requires Kansas to encumber the first $221 million by October 2026 and asked whether the federal application forbids subsequent legislative approval of individual expenditures. Stanek said she would supply the federal citation and described CMS’s practical expectations: she reported verbal feedback from Kansas’s CMS project manager that CMS will engage with the administering agency and not with the legislature or governor’s office, and warned that negotiating individual project obligations with CMS under a tight timeline could put state funds at risk. Williams summarized the concern: committee members were told the application was submitted and that acting beyond reporting could jeopardize Kansas’s award.

Committee members also pressed on program priorities and long‑term sustainability. Williams and others raised concerns about behavioral‑health bed capacity and the financial viability of rural critical access hospitals; Stanek said behavioral health is a major component of the transformation plan and described several implementation tools — telehealth expansion, Certified Community Behavioral Health Clinic (CCBHC) expansion, conversion pathways to rural emergency hospitals (REHs), and value‑based purchasing or ACO models — intended to improve long‑term sustainability, while noting the $221 million is not guaranteed annually and future tranches will depend on demonstrated execution.

Chair comments and sponsor remarks explained the bill was drafted in consultation with the governor’s office after Kansas’s application was approved by CMS in December; the sponsor and Chair framed HB 2555 as a mechanism for legislative oversight that would not, in their view, jeopardize the approved five‑year plan because the bill is structured as reporting rather than as a veto of CMS‑approved uses.

Proponent testimony was noted from Tara Mays of the Kansas Hospital Association; written opponent testimony came from Beth Oller, president of the Kansas Academy of Family Physicians. The Chair closed the hearing without a committee vote and moved the agenda to budget report‑outs.