The federal government pledged to give North Carolina $1 billion over the next five years to “transform” rural health care. Now, the NC Department of Health and Human Services must devise a plan to maximize the return on that investment.

The federal Centers for Medicare and Medicaid Services announced in December that it was awarding North Carolina $213 million for the first year of the program. That funding originated from the One Big Beautiful Bill Act passed by Congress last year, which committed $50 billion to rural health initiatives in all 50 US states.

Rural communities face unique health challenges requiring an approach different from urban areas, said Debra Farrington, DHHS Deputy Secretary for Health, whose many roles include overseeing the agency’s Office of Rural Health.

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North Carolina boasts the second-largest rural population among U.S. states, behind only Texas. Nearly one-third of the state, more than 3.5 million people, live in rural areas as defined by the US Census Bureau.

People living in rural areas experience higher rates of diabetes compared to their urban counterparts. Mothers are more likely to die from pregnancy-related complications, and medical professionals of all types tend to be few and far between in these places, from primary care physicians to mental health workers to dentists.

In many ways, it’s an economic story.

Rural hospitals are facing significant financial stressors, Farrington said. Since 2006, 12 rural hospitals across the state have closed or been forced to change their operating models because of shortfalls caused by low patient volumes and inadequate reimbursements from insurers.

Meanwhile, many of the graduates coming out of the state’s medical schools are going to where they’ll make the most money: places like the Triangle or Charlotte metros.

North Carolina is betting that this new tranche of federal dollars will attract more medical service providers to underserved communities.

“This plan enables us to be able to directly place resources toward efforts to address the gaps and shortages that we see in workforce,” Farrington said.

“Specifically, we want to build on some existing efforts that are already ongoing in our state: to expand rural training centers, to expand rural fellowship programs and certification programs and rural residency incentives.”

For Nicole Barnes, the director of the Martin-Tyrrell-Washington District Health Department, a true transformation of rural health care would mean equity.

“Rural residents should have the same opportunities for health as someone living in an urban area,” she told Carolina Public Press.

“A transformed system would look like no one delaying care because of distance or cost, reliable access to primary and maternal health services locally, strong telehealth connectivity throughout our region, a stable healthcare workforce and preventative services that reach families early rather than reacting to a crisis.”

Barnes said her public health district — as well as partners including county governments, local health care providers and nonprofits — has been actively engaged in conversations with DHHS regarding the federal funding.

“Our goal is to maximize every dollar through coordinated planning to ensure greatest impact,” she said.

The specifics of how North Carolina will implement its Rural Health Transformation Program have yet to be solidified. DHHS is awaiting approval of its first-year plan by CMS before it opens applications for subgrants later this year.

The primary goal of year one is to broaden the scope of existing state programs aimed at improving health outcomes, Farrington said. According to the state’s plan, that means expanding behavioral health clinics, crisis services, mobile outreach, school-based care, and access to opioid treatment and mental health services.

Meeting rural residents where they’re at, rather than making them go out of their way to receive care, is the philosophy which undergirds the initiative.

The state has already identified two future subgrantees: the Cecil G. Sheps Center for Health Services Research at UNC Chapel Hill and the Duke-Margolis Institute for Health Policy. Both research centers confirmed to CPP that they’ve already made plans with DHHS to help with implementation of the program.

“Duke-Margolis can help the state with coordination across multiple initiatives supported by Rural Health Transformation Program funds, as well as other ongoing state and federal programs, to advance the impact and sustainability of the state’s investments in improving rural health,” Rebecca Whitaker, a research director with Duke-Margolis said in an emailed statement.

Two other educational institutions which are perhaps better positioned, at least geographically, to contribute to rural healthcare initiatives preferred to stay quiet on their potential involvement.

ECU Health, whose stated goal is to be a “national model for rural health and wellness,” declined to be interviewed for the story.

The health system launched a bid last year to revive Martin General Hospital as a “rural emergency hospital,” a plan which has since stalled because of cuts to Medicaid which were included in the same bill that created the Rural Health Transformation Program.

DHHS, through spokesperson James Werner, stopped short of saying that the federal funding would help Martin General to reopen.

“While the program prioritizes rural emergency hospitals as part of its broader goals, NCRHTP resources will focus on creating conditions that make rural hospitals more viable long-term, such as improving care coordination, expanding telehealth, and supporting value-based payment models,” he said in an email.

Campbell University’s School of Osteopathic Medicine also didn’t respond to several requests for comment before the publication of this story.

Osteopathic medicine is a practice unique for its holistic approach which emphasizes preventative care and treating the root causes of health problems. Osteopathic doctors are licensed by the North Carolina Medicine Board and prescribe medicine and perform surgery just as MDs can.

Osteopathic physicians “fill a critical need by practicing in rural and medically underserved communities,” Campbell’s website states.

DHHS currently runs an incentive program which helps with student loan repayment for allopathic and osteopathic physicians who operate private practices in rural and underserved areas of the state. Whether that program specifically will receive increased funding is unclear.

Health care partners of all types, from large health systems to community-based groups, will be brought to the table to execute the state’s plan, Farrington said. It involves lots of moving parts and the meshing of old systems with new ideas, some of which aren’t fully fleshed out yet.

Barnes, who oversees public health in some of the state’s least populated counties, said she’s excited about the effort but emphasized the need to simplify its implementation as much as possible.

“For us, transformation isn’t about building more systems on top of what we already have,” she said.

“It’s about making care simpler, closer and more connected for those we serve.”