Rural providers are getting $7.5 billion in American Rescue Plan funds

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Rural providers who serve Medicaid and Medicare beneficiaries are getting $7.5 billion in American Rescue Plan Rural payments. The money will go to providers and suppliers who serve rural Medicaid, Children’s Health Insurance Program (CHIP) and Medicare beneficiaries. 

The average payment is approximately $170,700, with some ranging from $500 to $43 million. More than 40,000 providers in all 50 states, Washington, and six territories will receive ARP Rural payments.


Rural providers serve a disproportionate number of Medicaid and CHIP patients, who often have more complex medical needs.

They typically operate on thin margins. An estimated 47% of rural providers were operating in the red pre-pandemic. They have said that the pandemic has worsened this reality and that they have been challenged financially by the coronavirus pandemic, according to the Department of Health and Human Services, which is distributing the funds through the Health Resources and Services Administration.

The funding will help healthcare providers keep their doors open, address workforce challenges, and make up for the lost revenues and increased expenses caused by the pandemic, HHS said. 

Specifically, providers can use these funds for salaries, recruitment or retention, supplies such as N95 or surgical masks, equipment like ventilators or improved filtration systems, capital investments, information technology, and other expenses related to prevent, prepare for or respond to COVID-19. 

Many ARP Rural payment recipients will also be eligible for additional funding through the $17 billion Provider Relief Fund (PRF) Phase 4 opportunity made available in the application process that started on September 29 and ended on November 3. Providers could apply for both opportunities through a single application.

In the coming weeks, HHS plans to announce the first wave of PRF Phase 4 payments, and will continue processing the remaining ARP Rural applications, some of which require more extensive review to ensure program integrity.

Also this week, HHS awarded a historically high number of health-workforce loan-repayment and scholarship programs due to a new $1.5 billion investment, including $1 billion in supplemental American Rescue Plan funding and other mandatory and annual appropriations.


In three weeks, HRSA processed nearly 96% of the more than 55,000 ARP Rural applications submitted. 

To streamline the application and payment process as much as possible, ARP Rural payments are based on Medicare, Medicaid and CHIP claims for services to rural beneficiaries from January 1, 2019 through September 30, 2020. This period was chosen because it represents the most recent comprehensive data available to HHS, and because it takes into account both pre-pandemic and pandemic operations. 

To provide equitable relief to these providers, ARP Rural payment calculations were generally based on Medicare reimbursement rates, regardless of whether the service was provided to a Medicare, Medicaid or CHIP patient. Every eligible provider that serves at least one rural Medicare, Medicaid or CHIP beneficiary will receive funding.


“Healthcare providers in rural communities have been hit hard by the COVID-19 pandemic, and they continue to experience significant financial hardships,” said HHS Secretary Xavier Becerra. “The infusion of these funds will be critical to ensuring rural communities maintain access to high-quality health care and addressing urgent needs like workforce recruitment and retention.”
Twitter: @SusanJMorse
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