While health authority officials updated state lawmakers on Tuesday on how the state will use $180 million in federal rural hospital funding provided by the One Big Beautiful Bill, they’re also trying to gauge how the allocation compares to the projected loss in funds rural Nevada will face due to pending Medicaid cuts scheduled go into effect in in less than a year.
President Donald Trump’s massive spending and tax cut bill passed last year included a $50 billion Rural Health Transformation Program to offset part of the bill’s substantial cuts to Medicaid. Half of the rural health money will be distributed equally among each state between fiscal years 2026 and 2030, according to the Centers for Medicare and Medicaid Services.
The remaining $25 billion is being allocated to states based on several factors, such as steps states are taking to improve access to care in rural communities.
The administration unveiled the breakdown of initial state funding last week, which showed the amount of funding Nevada receives from the Trump administration program will rank among the lowest 10 of the 50 states.
Nationally, the rural funding program would only offset a little more than one-third of the bill’s estimated $137 billion cuts to federal Medicaid spending in rural areas over the next decade, according to an analysis from the nonpartisan health research organization KFF.
Nevada could lose an estimated $553 million according to that analysis.
The state’s Medicaid office is waiting for federal guidance on changes affecting one substantial funding stream, the state’s hospital provider tax program, which provides “significant funding to roughly 45 private hospitals” including six private rural hospitals, said Allison Genco Herzik, the chief of staff with Nevada Health Authority, in an email Tuesday.
“Early estimates of the impact of these changes show … $600-$800 million a year in reduced provider tax related payments to hospitals by the end of 2028,” she said in an email. “Based on the current distribution of provider tax funds in Nevada, the impact of these losses will fall primarily on the state’s urban acute hospitals, and not rural hospitals.”
Officials with the Nevada Health Authority gave members of the legislative Interim Committee on Health and Human Services a general overview of how the $179.9 million federal grant funding will be prioritized Tuesday.
The federal funding is expected to support four initiatives with the largest portion, roughly 40%, targeted at attracting health care providers to rural parts of the state, said Stacie Weeks, director of the Nevada Health Authority.
However, one idea the state initially proposed was rejected by the Centers for Medicare & Medicaid Services and its administrator, physician and former media celebrity Mehmet Oz.
“We wanted to do a loan repayment program, a very large one,” Weeks said. “We heard very loud and clear from Dr. Oz and others — they were not interested in that.”
The plan, instead, proposes using funds to for incentives such as signing bonuses or housing assistance to entice health care providers to move to rural areas.
Other initiatives prioritized by Nevada health officials include a “rural health outcomes accelerator” to address root causes of chronic diseases, and a rural health care “flex fund.”
“We heard a lot from our rural hospitals that can’t afford to buy an ambulance or can’t afford the new x-ray machine or mammogram, all the things they need to support their community,” Weeks said. “This flex fund is to support those one-time infrastructure needs.”
Trump’s One Big Beautiful Bill also directs 15% of the rural health funding program toward health innovation and technology, which Weeks said “was something CMS really wanted to see in our applications.” The idea would be to fund new technologies around telehealth or “artificial intelligence” tools in health care.
“We had multiple vendors wanting this money, and that is not always bad,” Weeks said. “I want to be mindful that this money is sustainable for communities and actually is going to improve health care. We want to be careful it’s not just a slush fund for every new idea, and that these are meaningful and evidence-based solutions.”