NC Health News – North Carolina is seeking $1 billion from the federal government for a wide-ranging plan that could reshape rural health care across the state.
The N.C. Department of Health and Human Services hopes to secure the funding through the Rural Health Transformation Program, an initiative created under the One Big Beautiful Bill Act signed by President Donald Trump in July. The program allows states to compete for a share of a $50 billion pool aimed at improving health outcomes in rural communities.
Devdutta Sangvai, secretary of NC DHHS, submitted the state’s 61-page proposal to the federal Centers for Medicare and Medicaid Services on Nov. 3, ahead of a Nov. 6 deadline. Developed with input from more than 400 stakeholders, the state’s plan lays out a broad framework for overhauling rural health delivery through six regional hubs that would coordinate services across North Carolina’s 85 rural counties.
It also calls for major investments in the state’s rural health workforce and introduces payment models designed to stabilize financially distressed hospitals and clinics. Other elements focus on nonmedical factors like food access and transportation — priorities that were central to the state’s promising but now defunct Healthy Opportunities Pilot.
“Our plan reflects North Carolina’s commitment to ensuring that every North Carolinian, no matter where they live, has access to high-quality health care,” Gov. Josh Stein said in a statement. “North Carolina is on the cutting edge of technology and innovation, and our application for the Rural Health Transformation Program shows that we’re ready to continue our leadership in rural health care.”
If CMS approves the application, the state could begin receiving funds as early as this month. The $1 billion would be distributed in annual payments of $200 million over five years.
Debra Farrington, the department’s deputy secretary of health, said she is optimistic about the outcome.
“I think North Carolina, being where we are with having the second-largest rural population in the country and way more facilities than some other states, and also having the infrastructure and innovation in place, we feel like we’re deserving of a higher percentage of the dollars compared to some other states,” she said.
New model for coordinating care
The plan’s centerpiece is the creation of six so-called ROOTS hubs. Short for Regional Organizing and Operational Transformation Support, these locally governed networks would be intended to coordinate the major components of the state’s rural health strategy.
Each hub would unite hospitals, primary care practices, behavioral health providers, EMS agencies, local health departments and other partners under a shared regional structure. The goal is to replace the fragmented patchwork of services that rural residents often navigate with a system better able to respond to local needs.
Under the proposal, the hubs would oversee care coordination, data sharing, prevention programs, crisis response and workforce recruitment. They would also help communities secure grant funding, deploy mobile services and build stronger referral pathways between medical providers and social supports like transportation, housing and food assistance.
State officials say the hubs would give rural regions the infrastructure needed to tackle long-standing challenges like provider shortages and high percentages of uninsured residents — and ensure that improvements made with federal dollars endure after the program’s five-year funding window closes.
“We’re hoping that the funding will complement existing funding sources, which is important because this is a time-limited program for only five years,” Farrington said. “We wanted to be careful not to set up something that was not sustainable. These dollars can complement and pay for initiative activities that are not currently covered in existing programs but allow us to expand the capacity of those programs, and that’s certainly our intent.”
The six hub regions will be selected through a competitive process open to partnerships that have demonstrated experience in getting many service providers to collaborate. DHHS will weigh regional health needs, existing service gaps and applicants’ ability to maintain the work after federal funding ends. The agency expects to finalize the hub regions after conducting readiness assessments in early 2026.
Farrington said some of the hubs could begin operating as early as January.
“One of the reasons that that’s possible is because we want to leverage existing entities that already are in place to be able to start the ROOTS hubs,” she said. “That would allow us to start fast while we implement a procurement process that is more competitive and would allow us to include more representatives from the community. But we have existing entities that could start right away, and we want to begin there as a way to show early wins and get some early successes.”
