New Mexico aiming for $1 billion slice of federal rural health care fund

SANTA FE — New Mexico expects to find out by the end of this year whether its application for $1 billion in federal funds to expand health care access in rural areas over the next five years is approved.

But top state officials say the funding, even if it’s secured, won’t make up for an estimated $8.5 billion in decreased federal funding for food assistance, Medicaid and other programs over the next 10 years.

The state Health Care Authority submitted its application for a slice of the $50 billion rural health care fund in advance of a Nov. 5 deadline to do so. It hired the Virginia-based company Guidehouse to help craft its application.

Specifically, the state’s application calls for received funding to be spent on expanding New Mexico’s rural health care workforce, improving access to care for rural patients and supporting the financial sustainability of rural health care providers.

The $50 billion rural health fund was included in a federal budget bill signed by President Donald Trump in July. Half of the total amount will be distributed equally to all states with an approved application, with the remaining $25 billion set to be distributed at the discretion of the federal Centers for Medicare and Medicaid Services.

While Democrats criticized the rural health care fund as a “slush fund” intended to win the votes of Senate Republicans, the CMS said this month all 50 states submitted applications for funding.

“When every state steps up to strengthen rural health, it shows the true character of our nation,” said U.S. Health and Human Services Secretary Robert F. Kennedy Jr. “Rural families have been left behind — driving hours for care or going without it entirely. This program restores fairness and brings quality health care back to every American community.”

However, Gov. Michelle Lujan Grisham’s administration has warned that six to eight rural hospitals in New Mexico could close over the next several years due to other provisions in the federal budget bill, particularly those affecting Medicaid.

State health officials have also predicted nearly 90,000 state residents could lose health care coverage, while more than 250,000 residents could face new co-pays and increased administrative hurdles to remain enrolled.

Given that backdrop, state Health Care Authority Secretary Kari Armijo told legislators that any money received from the rural health care fund will only partially offset what the state is preparing to have to absorb.

“It will not replace the amount of federal funding that will be lost through those other changes,” Armijo told members of the Legislative Finance Committee during a recent meeting.

New Mexico has struggled for years with a health care provider shortage, especially in rural parts of the state.

The state is projected to have a doctor shortage of more than 2,100 physicians by 2030 and all but one of the state’s counties — Los Alamos County is the lone exception — are considered to be health professional shortage areas, according to the nonpartisan Cicero Institute.

While final funding amounts from the rural health care fund are expected to be announced after Dec. 31, New Mexico’s application could be hampered by the state’s approach to interstate medical compacts.

That’s because one of the criteria the federal government will use to score states’ applications is whether states are members of interstate medical compacts for doctors, nurses, psychologists, physician assistants and emergency responders.

New Mexico is currently only a member of one such compact — the one for nurses — and legislation approving the state’s membership in other compacts stalled in the state Senate during the final days of this year’s 60-day legislative session.

Legislation dealing with the interstate medical compacts was left off the agenda of two special sessions called by Lujan Grisham this fall, but is expected to be included on the governor’s to-do list for the 30-day session that begins in January.