Arkansas officials outline Rural Health Transformation Program, warn of tight spending deadlines
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Summary
Department of Finance and Administration officials told a legislative committee Arkansas received a large CMS award for a five‑year Rural Health Transformation Program and must obligate year‑one funds quickly; officials outlined four initiatives and said NOFOs will open in May–June.
Secretary Jim Hudson and Brad Nye presented details of Arkansas’ Rural Health Transformation Program to a legislative committee, describing a federally funded, five‑year effort the state must move quickly to implement.
Hudson, secretary of the Department of Finance and Administration, said the program arose from HR 1 and that Arkansas submitted a state plan to CMS. "We're gonna tell stakeholders all throughout the state what money we're getting ready to release, what that money is for, and how you access the money," he said, stressing transparency and local control.
Brad Nye, director of the Rural Health Transformation Program, said Arkansas received about $209,000,000 for year one and outlined four initiatives the state will pursue: HEART (prevention and community health), PACT (hospital and clinic support and coordination), RISE (workforce training and pipelines) and THRIVE (technology, telehealth and remote monitoring). "Our vision can really be summed up as healthy, connected, local," Nye said.
Nye and Hudson described limits set by CMS: the funds are not intended for working capital or routine, ongoing facility maintenance, and states cannot use them for new construction or to supplant existing funding. They said targeted renovations and investments that promote long‑term sustainability and population health are allowable.
Officials described a compressed timeline. Nye said budget period one began Dec. 31, 2025, and that Arkansas must obligate year‑one funds by Oct. 30 of this year and spend those dollars by October 2027. To move projects quickly, the state plans a series of NOFOs (notice of funding opportunities), with the first (Thrive) expected to open around late April or early May and the rest live by June. The program will be largely reimbursement‑based: applicants perform work, invoice the state and receive drawdowns from CMS.
The administration plans an online application portal, additional technical assistance for applicants and a competitive, but collaborative, review process. Officials said they will pursue a supplemental state appropriation of $500,000,000 during the next fiscal session to accommodate cross‑fiscal‑year timing and that they have engaged a contracted administrator (BDO, formerly Horne) to help operate the grant process.
Committee members asked how the program will avoid "cannibalizing" local providers through outside mobile services or vendors; Hudson said the state will seek proposals that augment and regionally coordinate existing services rather than supplant them. Representatives also asked whether larger hospitals that serve rural populations (for example, hospitals in Fort Smith) can apply; presenters said eligibility follows HRSA/CMS rural definitions and that applicants should demonstrate benefit to rural residents.
Nye and Hudson emphasized partnership with local stakeholders and urged applicants to read the state plan and coordinate regionally. The administration plans to provide technical assistance, seek wide applicant partnerships and prioritize projects that show sustainability beyond the five‑year funding window.
Next steps: the state will post NOFOs in the coming weeks, accept applications through the portal and begin obligating funds once CMS technical issues are resolved and funding is received. The committee moved from the presentation to a question‑and‑answer session; officials said they would remain available for follow‑up.
