The federal government has approved Wyoming’s plan to use about $205 million to transform rural healthcare. It’s the state’s take for the first year of funding from the five-year Rural Health Transformation Program.
Wyoming Public Radio’s Hanna Merzbach sat down with state health department Director Stefan Johannson to hear about what the feds okay’d and the sticking point that held up negotiations.
Editor’s Note: This interview has been edited for clarity and brevity.
Hanna Merzbach: I want to get into some of those details about what the program will do, but first, I want to dig into why it took a while to get approved. From my understanding, Wyoming was trying to do things a bit differently than other states and create this perpetuity fund. Remind us what that would've been.
Stefan Johansson: Essentially, what that would do would allow us to take the funding that we had proposed for our rural and frontier hospitals, for our EMS [emergency medical service] providers and for our workforce development programs, and put it into the perpetuity fund, which essentially allows us to spend less money upfront year to year. So a smaller investment upfront, but stretch those benefits out 10, 20, 30 years or more.
HM: Just to clarify, the majority of the money coming from the Rural Health Transformation Program would have gone into this perpetuity fund if it was approved. According to the law passed by our Legislature earlier this year, 80% of all the money we would have gotten this first year would have gone into that fund. It'd be about 70% for the next four years. Is that right?
SJ: That's correct. Ultimately, in the winter, through our negotiations with the federal government, it became clear that they didn't believe we could get approval to use the Rural Health Transformation Funds to deposit into our newly created perpetuity fund.
HM: And you told lawmakers that the federal government didn't want Wyoming to start up this perpetuity fund because of "esoteric federal regulations." Tell me more about what you meant by that.
SJ: CMS [Center for Medicare and Medicaid] is the federal entity that's overseeing this program. CMS said states cannot implement trust funds or endowments. We looked at that with my office, with our governor's office, and believed that our perpetuity fund did not exactly meet those definitions of trust funds and endowments.
It's also a really creative concept in a state like Wyoming that has a huge geography and a small population to potentially long-term help sustain some of these more basic services, like emergency departments, OB-GYN services, that we know we really struggle with in Wyoming, rural and frontier EMS or ambulance services. What we were really trying to do is balance that immediate need with trying to solve for some of these longer-term structural issues in the economics of healthcare in a state like Wyoming.
But ultimately, through our negotiations over the past two months, it just didn't seem like we had a path in this first year.
While we're still somewhat disappointed that we couldn't get to the finish line on the perpetuity fund, we should see some really substantial financial improvements in some of these safety net providers in our rural communities. That will absolutely generate lasting change. [It] will basically scale up the investments because we're now operating in a more time-limited five-year environment.
HM: I want to get into the nitty-gritty of where this money is going to go. There are four categories. Can we go through them, and will you just give me a brief overview of what each of those entails?
SJ: The first is access to basic emergency care. That's our first big initiative, and that includes investments and incentives for our critical access hospitals, as well as investments and incentives for our EMS or ambulance providers.
The second category is rural workforce supply. That initiative includes individual education support for the nursing industry, but also areas of investment in the individual education for behavioral health, for EMTs and also to expand slots, if possible, for post-graduate medical education for physicians, as an example.
The third category is health technology transformation. The big component of that is what we call the technology adoption challenge. Instead of the state, instead of the [health] department picking technologies, we will put a request for applications out for providers, for communities, for organizations that are health and human services related to apply for technology investments. Essentially, what we'll be looking for is partnership, so two or more providers coming together to use that technology.
The fourth and final category of our initiatives is “Make Wyoming Healthy Again.” We're looking to see if we can expand access to primary care, largely through our federally qualified health centers, to coordinate between hospitals and primary care and specialists to provide that care more effectively and, hopefully over time, show potential cost reductions there.
HM: Do you still have concerns about whether this money's going to be sustainable?
SJ: Yes, we always have concerns, regardless of the funding source. This funding, unless reauthorized by Congress, will run out five years from now. As we invest in our critical access hospitals, our EMS providers, our workforce, how do we continue those?
I'd answer that in two ways. One, we need to very strictly monitor the performance of these programs and these investments as they start. But also, are these dollars making a difference? Are we seeing the outcomes that we want in our hospitals, in our EMS services, in our workforce? Are we seeing the development and growth of the volume of nurses, CNAs [certified nursing assistant] and behavioral health providers and EMTs [emergency medical technician] that we have?
When we start getting that information on the success of these programs, we can bring our lawmakers and our policymakers that information to plan very early, prior to the expiration of these funds, what's worth continuing.
I think it's worth mentioning that it's really important that we keep engaged with our policymakers on what sustainability can look like. There's nothing stopping Wyoming from creating or implementing its own rural health transformation perpetuity [fund]. While we're not asking for that yet, it's nice to know that, in partnership with the Legislature, that fund already exists. It doesn't have any money in it but it already exists.
We've now partnered to create a mechanism that could potentially be used if another funding source becomes available, or if the federal government changes their interpretation of how we can use these funds, or Congress authorizes another program, or, quite frankly, if our own state policymakers decide in the future that this program has been so successful that it's worth consideration for keeping it going potentially in a smaller and more targeted way.
HM: Tell me what's next in terms of getting this money on the ground.
SJ: Through these negotiations, we're probably about a month behind our original tentative timeline in implementation. Over the remainder of May and June, we will be developing those applications and those requests for proposals. And then going into July, those applications and those procurements will be announced, and we'll likely have a 30- to 60-day period within those initiatives that folks can submit applications.
We need to obligate these year-one funds by the end of October, but all states have till October of 2027 to fully spend those year-one funds. So definitely a quick timeline, but we're excited to get started and have already begun the implementation process.
