State selects 136 projects to receive $97 million in rural health care funds

State selects 136 projects to receive $97 million in rural health care funds A federal program adopted by Congress to offset the impact of deep health care cuts underway aims to foster creative approaches Joanne Zuhl Tue, 07/07/2026 - 13:57 State officials have selected 136 projects to receive nearly $97 million in federal funds to support the health of rural Oregonians. The funding is the latest round of awards from Oregon’s portion of a five-year, $50 billion rural health care funding program Congress created to offset the impacts of nearly $1 trillion in Medicaid spending cuts nationwide over the next 10 years as well as policy changes expected to cause millions of Americans to become uninsured. All 50 states were approved for $1 billion of that funding, and Oregon received just under $200 million in its first tranche for 2026. Future payouts will depend on what federal officials think of states’ investments. The bulk of the latest distribution from the state — about $80 million — involved a competitive selection process that began with more than 350 applicants, according to the Oregon Health Authority, which made the awards. The selection criteria focused on maternal and child health, aging in place, chronic illness, behavioral health conditions, fostering regional health partnerships, and operating programs to improve rural health. “Overwhelming interest in this program demonstrates the need across Oregon," said Gov. Tina Kotek in a prepared statement that praised “innovative projects that further the state's goals to support maternal and child health, bolster the behavioral health workforce, and sustain safety net providers." Projects in each of Oregon’s 36 counties received funding, with Klamath and Douglas counties having the most projects awarded. Another 16 grant applications were approved that are intended to have statewide impact. The grant awards included: ​Oregon Health & Science University was awarded just over $3 million for multiple projects, including perinatal, disability, and addiction services. Klamath Child and Family Treatment Center received $4.8 million for behavioral health services. La Clinica del Valle Family Health Care Center in Jackson County received $3.5 million. Grand Ronde Hospital, the only hospital in Union County, was awarded $3.2 million. Native American Rehabilitation Association of the Northwest, a nonprofit that offers education, social services and also physical, dental and mental health services to American Indians and Alaska Natives, will receive a total of about $2.1 million. Providence Hood River Memorial Hospital , a 25-bed critical access hospital in Hood River County, will receive nearly $2.3 million. The state has also distributed $17 million in non-competitive, immediate funding to 33 new projects, according to today’s announcement. Projects selected previously include expanding mobile health units, creating a new family medicine residency training program, and connecting patients with nutritious food to address diet-related conditions. State officials say they have awarded $175.3 million so far under the program. That includes $50 million to rural hospitals, rural clinics and public health agencies, and $21.7 million distributed to the state’s nine federally recognized tribes. One-time funds won’t fill the federal hole​ Even if Oregon receives the full $1 billion in rural funds it has requested, the money won’t come close to offsetting the substantial financial losses Oregon’s hospitals and clinics can expect to see in the coming years, particularly in rural areas. State health officials say Oregon can expect to lose $11 billion in federal revenue over the next five years due to Medicaid cuts and related changes as a result of the spending package H.R. 1, spearheaded by Congressional Republicans in 2025. That is on top of the financial challenges Oregon’s health care systems are already struggling to deal with as costs continue to rise, Medicaid reimbursements remain flat, and operating margins grow thinner. One out of three Oregonians rely on the Medicaid-funded Oregon Health Plan for health care. Federal guidelines prohibit the rural monies from being used to replace existing funding for ongoing operations, staffing or services, or services reimbursed by other payers, such as Medicaid. Nor can funds be used for new construction or major structural expansions and renovations. ​The Oregon Office of Rural Health defines “rural” as areas greater than 10 miles away from a population center of 40,000 or more people. News source The Lund Report