Progressive Health of Fayette & Rural Health Care - Part II

To the editor: Texas’ Slice of the $50 billion “Rural Health Transformation Fund” U. S. Senate GOP leadership had to add the $50 billion “Rural Health Transformation Fund” to the 2025 Budget Reconciliation Act (the “One Big Beautiful Bill Act”) to get enough senators to vote for it to get it passed last July. Over the next five years, $25 billion will be distributed equally among the 50 states, meaning each state gets $500 million. The other $25 billion is allocated to the states based on current or proposed state policies that improve access to and quality of care in rural communities and have the greatest potential impact on those communities. On Dec. 29, the Centers for Medicare and Medicaid Services (CMS) announced it had made funding awards for 2026 to all 50 states. Texas was awarded $281,319,361 for 2026. Texas will receive $281 million each year for five years ($1.4 billion).

The National Association of Counties says the RHT Program is supposed to strengthen rural communities through five broad goals: (1) improving health by addressing root causes of disease; (2) ensuring sustainable access through coordination and stronger networks; (3) expanding rural workforce development; (4) advancing innovative care models; and (5) driving technology innovation. (naco.org 11-14-25, www.cms.gov 1229-25) These don’t sound like things that will cut expenses or increase revenue for rural hospitals any time soon.

Dr. Mehmet Oz, head of CMS, said that: “The purpose of this $50 billion investment in rural health care is not to pay off the bills” [of rural hospitals] . . . but “to allow us to right-size the system and to deal with the fundamental hindrances of improvement in rural health care.” If Texas distributed that $1.4 billion equally to each of the 150 or so Texas rural hospitals, each hospital would get about $ 1.8 million per year (or $ 150,000/ month) for the next 5 years. But that’s not what’s going to happen.

Texas Bureaucrats in Control

State agencies (Texas Health and Human Services Commission and State Office of Rural Health (in the Texas Ag Department)) will decide how to fix (“right-size”) rural healthcare and spend the $1.4 billion. A press release from the Governor’s Office on Dec. 29 said: “Local governments, rural hospitals, rural federally qualified health centers (clinics), rural behavioral health providers, and other qualified applicants will be eligible to apply for funding in the spring.” ( hhs.texas.gov/news) State officials, not local hospital administrators, will control RHTF funds.

Grant funding might be helpful for the five years of RHTF funding but doling out money does not directly address the underlying problems of cost of medical insurance, cost of medical care or operating costs. Grants almost always come with “strings attached” – restrictions and requirements for use. Local hospital administrators would probably say “Just give us the money and fix the system. We know how to stretch a dollar, spot fraud and deliver appropriate medical services.”

Rural healthcare is probably pretty much the same thing from one state to another. Congress (Republicans and Democrats) has had since 2010 to “fix” the Affordable Care Act and Medicaid expansion. It now seems that Congress has decided instead to send money (“pass the buck”) to the States so each state can figure out solutions. Progressive Health of Fayette and other rural hospitals will have to try to “pay the bills” until the State and Federal government “right-size the system.”

On Jan. 15, the Trump Administration announced the “Great Healthcare Plan” to lower healthcare costs. It wants Congress to “create and pass” legislation to: (1) require drug companies to lower costs to those of other developed countries, (2) require providers or insurers that accept Medicare or Medicaid to clearly disclose pricing and fees and (3) end taxpayer-funded subsidy payments to insurance companies and send that money to eligible Americans to buy their insurance. It is “unclear how the government plans to directly distribute those funds.” ( foxnews.com 1-15-26) “Without details on implementation, many of its promises remain speculative” and its “many uncertainties” could affect the ultimate impact. ( Forbes.com 1-16-26) The plan doesn’t mention rural hospitals or rural healthcare.

The Way Forward

A local hospital is essential to the economy and the health and welfare of a community. The CEO of Progressive Health Group has said that the La Grange hospital would employ about 75 people full-time and eventually also about that many part-time. (FCR 9-1825) When people can’t easily access preventive care or put off or forego diagnosis and treatment for cost or location reasons, that can easily result in catastrophic outcomes and/ or vastly more expensive treatment later. People can go to a nearby ER for evaluation even if they would not call EMS or when doctors’ offices and clinics are closed.

Fierce Healthcare, a healthcare news organization, says: “There are two kinds of Americans: those who live 12 minutes from an emergency department and those who live 72. You might have the most skilled surgeon in the state ready to operate, the most experienced trauma team standing by—but if you can’t reach them in time, their expertise becomes irrelevant.” ( fiercehealthcare. com 11-24-25) Fayette County EMS is a tremendous asset and is managed and staffed by very skilled and dedicated public servants. Even with FCEMS, Progressive Health Group apparently believes that there is a place for a rural emergency hospital (REH) in the La Grange area. Of the three hospitals that PHG operates in Mississippi, two are REHs so it seems PHG has a track record with REHs. That may help Progressive Health of La Grange survive but it may not be enough.Any added burdens may cause hospitals to fail.

On June 10, 2025, the Sheps Center for Health Services Research at the University of North Carolina produced a list of “at risk” rural hospitals. Texas had 15 hospitals on the list, the nearest being Ascension Seton in Smithville and Memorial Hospital in El Campo. (American Hospital Assn. 6-12-25) Last November, the Center for Healthcare Quality and Payment Reform (CHQPR. org) raised the number of Texas rural hospitals “at immediate risk of closing” to 21 and those “at risk” to 82 and noted that: “The primary reason hundreds of rural hospitals are at risk of closing is that private insurance plans (like Medicare Advantage) are paying them less than what it costs to deliver services to patients. Although the at-risk hospitals are losing money on uninsured patients and Medicaid patients, losses on private insurance patients are the biggest cause of overall losses.”

The Texas Health and Human Services Commission (Provider Finance Dept.) sets reimbursement rates to providers for the Texas Medicaid Program. ( pfd.hhs.texas.gov) The Centers for Medicare & Medicaid Services set rates for services covered by Medicare and Medicare Advantage plans.

Fayette County folks might want to consider calling Senator Kolkhorst, (979) 251-7888 and Rep. Kitzman (979) 8654560 and tell them to obtain input from local officials and rural hospital managers and get the Governor to call a special session of the Legislature on rural healthcare and hospitals. If the U. S. Congress won’t do its job, the Texas Legislature needs to do its job. Sen. Kolkhorst is chair of the Texas Senate Committee on Health and Human Services.

In the 2025 regular session, the Texas Legislature passed House Bill 3000 to fund grants to help rural counties purchase EMS ambulances and House Bill 18 to establish four grant programs to assist rural hospitals to obtain state and federal funding. (Tex. Assn. of Counties) These measures really don’t do much to address the problem of uncompensated care that rural hospitals have (and will have in greater magnitude due to ending of Affordable Care Act premium subsidies and cuts in Medicaid) or the reimbursement policies (rates and timeliness of payment) of private insurance. The $1.4 billion that Texas will receive from the Rural Health Transformation Fund can’t be used to cover these losses. Congress restricted how states can use RHTF funds.

Unless the Governor calls a special session, the Legislature will not meet again until January 12, 2027. That’s enough time for more rural hospitals in Texas to fail if not thrown a substantial financial lifeline that actually offsets costs and raises revenue. The State needs to do something pretty quick. Last July, the Governor called a special session on “hot button” issues: flood preparedness, redistricting, THC regulation, abolishing STAAR tests and banning “taxpayer-funded” lobbying by counties and cities. Rural healthcare is just as important, probably more so – at least for most rural residents.

Russell Friemel Fort Worth & Ellinger