Oregon Health Authority secures $97.1M in federal funding for rural health initiatives

SALEM, Ore. (KTVZ) -- The Oregon Health Authority is awarding about $97.1 million in additional federal funding to improve the health and well-being of Oregon's rural communities this year. These grants will support 136 new projects across all counties in the state.

This announcement brings Oregon's total awarded for rural health initiatives to about $175.3 million this year.

The funding originates from the federal Rural Health Transformation Program, which aims to address critical health care needs in rural areas.

Oregon Governor Tina Kotek noted the significant interest in the program, highlighting its role in supporting maternal and child health, bolstering the behavioral health workforce, and sustaining safety net providers.

“Overwhelming interest in this program demonstrates the need across Oregon,” Gov. Kotek said. “At a time when Oregon's health care system is facing significant funding shortfalls due to federal policies, I'm pleased to announce this next step in distributing funding to innovative projects that further the state's goals to support maternal and child health, bolster the behavioral health workforce and sustain safety net providers. Our goal is to move these funds as quickly as possible to these critical partnerships.”

The federal Rural Health Transformation Program, created by U.S. House Resolution 1, a federal tax and spending bill that became law in July 2025, will distribute a total of $50 billion nationwide between 2026 and 2031 through the U.S. Centers for Medicare & Medicaid Services.

OHA Director Dr. Sejal Hathi emphasized the community-driven nature of these awards. “These awards support practical, community-driven efforts to improve access to health in rural Oregon,” Dr. Hathi said. “Rural communities know their needs best and this funding is intended to help them strengthen local services, expand workforce capacity and address barriers that make it harder for people to get care close to home.”

The new grants are offered through two funding pools established by OHA. The largest, competitive Catalyst Award grants, will provide about $80.1 million to 85 organizations, leading 103 projects. These projects will address maternal and child health, co-occurring mental health conditions and substance use disorder, aging in place, or chronic disease in every Oregon county.

Another $17 million will go toward Immediate Impact Awards, funding 33 new projects this year. These direct grants supplement OHA's April announcement of $6.5 million in Immediate Impact Awards for 12 other projects. New Immediate Impact Award projects include expanding mobile health units, creating a new family medicine residency training program and connecting patients with nutritious food.

Clare Pierce-Wrobel, OHA Health Policy & Analytics Director, highlighted the swift distribution of funds. “OHA is quickly distributing grants through this unique federal funding source and looks forward to supporting Oregon's rural communities as they improve their own health for years to come,” Pierce-Wrobel said. “While the total funding Oregon is receiving through the Rural Health Transformation Program is relatively small when you consider the full impact of recent federal Medicaid cuts, these awards can make a huge difference for individual organizations that are doing much-needed work in rural Oregon.”

Oregon is receiving a total of $197.3 million in 2026 and could receive more in the following four years, potentially totaling an estimated $1 billion through the program. Earlier rural health awards from Oregon included $35 million in direct funding for rural hospitals, $21.7 million for the Tribal Initiative, $10 million for rural health clinics and $5 million for local public health authorities.

Exact grant amounts and other details for the newly announced awards will be finalized when award negotiations are completed this summer. Oregon's first annual progress report is due to the federal government by the end of August. The federal government will determine 2027 funding after reviewing Oregon's first annual progress report.