Summary of Alabama’s Application for Federal Funds to Improve Rural Health

By: Angie Cameron Smith

Federal Grant Background

As part of the One Big Beautiful Bill Act, Congress established a $50 billion grant program, to be administered by the Centers for Medicare and Medicaid Services (“CMS”), to improve access, quality and outcomes in rural health. Beginning in 2026, $10 billion in funding is available each fiscal year through the end of fiscal year 2030. Fifty-percent of those funds will be distributed equally among all approved states, and 50 percent allocated by CMS based on certain factors including rural population, the number of rural health facilities and location of hospitals. Under the program, the funds must be used on specific approved uses as outlined in the Act, and states must apply outlining how it intends to meet the requirements of the grant. All 50 U.S. states are eligible, and the award decision is expected at the end of December 2025. 

Alabama’s Submission

Alabama’s grant application, developed by the Alabama Department of Economic and Community Affairs (“ADECA”), the Governor’s office, and the State Health Planning and Development Agency (“SHPDA”), among others, focuses on legislative and regulatory reforms to improve the delivery of rural  healthcare. According to the Alabama Rural Health Transformation Program (“ARHTP” or “Program”) 58 of Alabama’s 67 counties are rural or partially rural under the HRSA definition of “rural,” and the Program would improve access to health care and outcomes for more than 1.6 million Alabamians. Some of the challenges identified in the ARHTP were rural healthcare facilities closing, loss of specialty services and the inability to recruit and retain physicians and other healthcare professionals in rural areas of the state. The plan prioritizes telehealth expansion, regional networks, workforce pipelines, and modernized data infrastructure so care can be delivered as close to home as possible. 

ADECA will administer the program, with enabling legislation in the 2026 legislative session, followed by initiativespecific Request for Proposals in late FY2026, and the creation of an advisory group by executive order to coordinate policy changes in the areas of telehealth, EMS reimbursement, crossfacility credentialing, and datasharing standards.

ARHTP lists three primary principles – transformation, sustainability and accountability. 

Proposed Initiatives

Digital infrastructure. The application provides for a “Collaborative EHR, IT, and Cybersecurity Initiative” that will create regional hubs,  for integrating electronic health records, connecting providers to “Alabama One Health Record,” and delivering shared cybersecurity monitoring and incident response for rural providers. The concept provides for lower unit costs for providers and interoperability. The target is five hubs, 50 providers connected, and 40–60 EHR upgrades tied into a statewide Health Information Exchange operated by the Alabama Medicaid Agency.

Telehealth. A Rural Health Initiative will expand access to emergent and specialty care through telehealth hubs with services such as “tele‑stroke,” “tele‑ICU,” “tele‑behavioral health,” and remote patient monitoring. The focus will be on EMS, FQHCs, rural health clinics, rural hospitals, and critical access hospitals. This initiative also includes the development of a Rural Health Network that is a shared services model for services such as billing, linen, waste, and laboratory. 

Maternal and fetal health.
Due to the closure of multiple labor and delivery units in rural facilities across the state, the ARHTP proposes a Maternal and Fetal Health Initiative. Using a digital platform, rural providers will be connected to regional care hubs that can provide services using tele-robotic ultrasound devices. Additionally, the initiative seeks to expand a current pilot program providing L&D stabilization carts to rural healthcare facilities that provide lifesaving care and stabilization for mothers and newborns until they can reach an appropriate hospital setting.

Workforce. A Rural Workforce Initiative is intended to increase the number of healthcare providers in rural Alabama. According to the application, 61 of Alabama’s 67 counties are designated as primary care professional shortage areas, and all but one is a mental health professional shortage area. The workforce initiative will provide funding to the Alabama School of Healthcare Sciences for the development of curriculum and purchasing of training equipment. The school was established in 2025, and its first students will begin classes in 2026. It is a free, state-supported residential high school in Demopolis focusing on educating students for future healthcare focused jobs. Additionally, the proposal provides for the development of a partnership program between K-12, community colleges, institutions of higher education, the Alabama Department of Workforce and rurally-located healthcare providers to create a workforce pipeline through accelerated training programs.

Preventative Care and Emergency Response. A Cancer Digital Regionalization Initiative, Simulation Training Initiative, Statewide EMS Trauma and Stroke Initiative, and EMS Treat-in-Place Initiative are also part of the ARHTP. These programs are intended to advance preventative care and improve emergency response capacity.

Mental Health. This initiative has two phases intended to improve access to mental health.  The first is a school-based tele-mental health program providing access to mental health services to students and their families. The second phase is aimed at increasing the number of Certified Community Behavioral Health Clinics (“CCBH”).  A few CCBHs currently exist in Alabama and provide behavioral health care to anyone who requests care for mental health or substance use disorder, regardless of ability to pay. The initiative will provide funding to allow current Community Mental Health Centers to convert to a CCBH.

ADECA will serve as the agency responsible for oversight of the program, and there will be an RFP process for selecting recipients of the funds should Alabama’s application be approved.  According to the proposal, ADECA will conduct “duplication assessments” to ensure that funds are not duplicating programs already in place through state, local or federal efforts. 

Alabama’s application can be found at the following link: https://adeca.alabama.gov/wp-content/uploads/ARHTP-Project-Narrative.pdf and information regarding the federal program can be found at https://www.cms.gov/priorities/rural-health-transformation-rht-program/overview.

Angie Cameron Smith is a Partner at Burr & Forman LLP practicing exclusively in the firm’s Health Care Practice Group. Angie may be reached at (205) 458-5209 or acsmith@burr.com.