USDA is providing $43 million in new funds to rural healthcare providers, many of whom have earmarked the funds to implement and support telehealth services.

By Anuja Vaidya

April 19, 2022 – The U.S. Department of Agriculture is awarding $43 million to support rural healthcare providers amid the ongoing COVID-19 pandemic, and many plan to use the funds to expand telehealth capabilities.

The Emergency Rural Health Care Grants were made available through the American Rescue Plan Act. In total, $475 million in grants have been earmarked to support rural hospitals and providers. In this round of funding, $43 million will be provided to 93 rural healthcare organizations and community groups across 22 states.

“USDA used an all-hands-on-deck approach to create the Emergency Rural Health Care Grants program to address a variety of immediate healthcare needs and services in rural communities,” said USDA Secretary Tom Vilsack in the press release.

Several grant awardees plan to use the funds to implement and enhance telehealth services. For example, Neosho Memorial Regional Medical Center in Chanute, Kansas, which is receiving $434,300, plans to use some of the funds to purchase and install telehealth infrastructure and upgrade information systems.

Another provider organization, Appleton Area Health in Minnesota, is planning to use part of its $174,300 grant to upgrade its telemedicine capabilities and replace hospital equipment. It also plans to install 28 flat-panel television monitors with cameras in clinic exam rooms and patient rooms.

McAlester Regional Healthcare Authority in Oklahoma, which is slated to receive $71,300, will use part of the money to implement a telehealth program at McAlester Regional Hospital. The organization plans to purchase 127 computers and hire a trainer/coordinator.

In addition to telehealth, rural providers will use the funds to increase staffing to administer COVID-19 vaccines and testing, establish nutrition assistance programs, and build or renovate facilities.

The next round of Emergency Rural Health Care Grants funding will be announced later this year.

Research shows that people living in rural areas were less likely to use telehealth during the COVID-19 pandemic, with some reporting lower telehealth availability than those who lived in urban areas.

One likely reason for this is the lack of access to broadband in many parts of the US. One estimate shows that at least 42 million Americans lacked access to terrestrial broadband internet in 2021.

Another probable reason for the lack of telehealth availability is that rural healthcare providers are in a precarious position, operationally and financially. Since the COVID-19 pandemic hit, 21 hospitals have closed in the US, and 40 percent of rural hospital operating margins are in the red, according to The Chartis Center for Rural Health.

A viewpoint article published in JAMA Health Forum last year pointed out some hurdles to telehealth adoption among rural providers. The authors cited lack of adequate cash flow, low patient volumes, and the telehealth reimbursement structure among the barriers.

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UNITED STATES — The United States Department of Agriculture is making up to $500 million available in grants to help rural healthcare facilities, tribes and communities expand access to COVID-19 vaccines, healthcare services and nutrition assistance.

President Biden’s comprehensive plan to recover the economy and deliver relief to the American people is changing the course of the pandemic and providing immediate relief to millions of households, growing the economy and addressing the stark, intergenerational inequities that have worsened in the wake of COVID-19.

“Under the leadership of President Biden and Vice President Harris, USDA is playing a critical role to help rural America build back better and equitably as the nation continues to respond to the pandemic,” Agriculture Secretary Tom Vilsack said. “Through the Emergency Rural Health Care Grants, USDA will help rural hospitals and local communities increase access to COVID-19 vaccines and testing, medical supplies, telehealth, and food assistance, and support the construction or renovation of rural healthcare facilities. These investments will also help improve the long-term viability of rural healthcare providers across the nation.”

Applicants may apply for two types of assistance: Recovery Grants and Impact Grants.

The Biden-Harris administration is making Recovery Grants available to help public bodies, nonprofit organizations and tribes provide immediate COVID-19 relief to support rural hospitals, healthcare clinics and local communities.

These funds may be used to increase COVID-19 vaccine distribution and telehealth capabilities; purchase medical supplies; replace revenue lost during the pandemic; build and rehabilitate temporary or permanent structures for healthcare services; support staffing needs for vaccine administration and testing; and support facility and operations expenses associated with food banks and food distribution facilities.

Recovery Grant applications will be accepted on a continual basis until funds are expended.  

The administration is also making Impact Grants available to help regional partnerships, public bodies, nonprofits and tribes solve regional rural healthcare problems and build a stronger, more sustainable rural healthcare system in response to the pandemic.

USDA encourages applicants to plan and implement strategies to: develop healthcare systems that offer a blend of behavioral care, primary care and other medical services; support healthcare as an anchor institution in small communities; and expand telehealth, electronic health data sharing, workforce development, transportation, paramedicine, obstetrics, behavioral health, farmworker healthcare and cooperative home care.

For Montana, Impact Grant applications must be submitted to the Montana USDA Rural Development State Office by 4 p.m. MDT on Oct. 12.

 USDA encourages potential applicants to review the application guide at www.rd.usda.gov/erhc. USDA Rural Development is prioritizing projects that will support key priorities under the Biden-Harris administration to help rural America build back better and stronger. Key priorities include combatting the COVID-19 pandemic; addressing the impacts of climate change; and advancing equity in rural America. For more information, visit www.rd.usda.gov/priority-points.

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Track Two: Impact Grants

Track Two: Impact Grant funds must be used in relation to the COVID-19 pandemic and to advance ideas and solutions to solve regional rural health care problems to support the long-term sustainability of rural health care. Long-term sustainability is defined as “improved health outcomes, improved access to quality health care, and creating and maintaining sustainable economic development for small communities.”

Grants range from $5 million – $10 million. Grant funds are limited to an applicable percentage of eligible project costs (up to 75 percent) based on population and the median household income of the population served.

USDA anticipates providing up to $125 million in Track Two: Impact funding.

Applicants may request assistance for one or more purposes below for expenses incurred during a three-year award period:

• Establish or scale a regional partnership or consortium of community leaders and health care partners to plan, implement, and evaluate a model(s) to support solving regional health care problems and promote the long-term sustainability of rural health care.
• Establish or scale an evidence-based model and disseminate lessons learned for possible replication in other small communities and regions.
• Identify a health-related problem within the applicant’s region, develop and implement a method and solution to overcome the problem, and conduct a program evaluation to examine health related outcomes, long-term sustainability, and replicability
• Establish a methodology to calculate summary impact measures or an estimated return on investment for the grant funds requested
• Cover the cost of technical assistance to assist with one or more aspects of project implementation, project evaluation, data sharing, and reporting requirements
• Cover indirect costs in an amount up to a federally-negotiated indirect cost rate

USDA encourages applicants to consider projects in the following high need areas: developing health care services that offer a blend of behavioral care with other medical services, encouraging rural residents to seek care at their nearest hospitals, supporting health care as an anchor institution in small communities, and expanding access to telehealth, electronic health data sharing, workforce development, transportation, paramedicine, obstetrics, behavioral health, farmworker health care, and cooperative home care.

To Apply:

Contact your local Rural Development office (a list is available at this link: https://www.rd.usda.gov/about-rd/state-offices) to discuss and submit your application.

Track Two: Impact applications must be received by the applicable Rural Development Office by 4 p.m. local time on October 12, 2021. Track Two: Impact applications received after October 12, 2021 will not be considered.

Resources

• Track Two Application Guide
• Track Two Checklist

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Track One: Recovery Grants

Track One: Recovery funds must be used in correlation with the COVID-19 pandemic, and to support immediate health care needs, to help prepare for a future pandemic event, to increase access to quality health care services, or to support food assistance through food banks and food distribution facilities.

Grants range from $25,000 – $1 million. Grant funds are limited to an applicable percentage of eligible project costs (up to 75 percent) based on population and the median household income of the population served.

USDA anticipates providing about $350 million in Track One: Recovery funding.

Applicants may request assistance for one or more of the categories below for expenses incurred on or after March 13, 2020. Funds must be used to:

• Increase capacity for vaccine distribution
• Provide medical supplies and equipment to increase medical surge capacity
• Reimburse for health care-related lost revenue used to maintain capacity during the coronavirus pandemic
• Increase telehealth capabilities, including underlying healthcare information systems
• Construct temporary or permanent structures to provide health care services
• Support staffing needs for testing or vaccine administration
• Support facilities, equipment, and operating expenses associated with food banks and food distribution facilities.

To Apply:

Contact your local Rural Development office (a list is available at this link: https://www.rd.usda.gov/about-rd/state-offices) to discuss and submit your application.

Each Rural Development state office will conduct a review, rating, and selection from complete applications received by 4 p.m. local time on October 12, 2021. USDA will continue to accept Track One: Recovery Grant applications on a continual basis after October 12, 2021 until all funds are exhausted.

Resources

• Track One Application Guide
• Track One Checklist

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