ECU Health says that it will engage in the process to secure funding from the Centers for Medicare & Medicaid Services after the organization on Monday announced a $213 million infusion to the state of North Carolina. 

The state will receive funding from CMS’s Rural Health Transformation Program.

“ECU Health is aware of today’s announcement that the state of North Carolina, which has the second-largest rural population in the country, will receive $213 million from CMS’s Rural Health Transformation Program,” an ECU Health spokesperson said in response to an inquiry from rrspin.com. “We look forward to engaging in the process, once fully established by NCDHHS, to secure funding that supports rural communities across the 29-county region of eastern North Carolina.”

ECU Health said that it appreciates that federal and state partners understand that while the program is intended to address the unique challenges faced by rural communities, these funds will not offset the significant losses rural health systems nationwide will face due to provisions included in the 2025 federal reconciliation bill.

“Eastern North Carolina alone is projected to lose hundreds of millions of dollars in health care and hospital funding over a short period,” ECU Health said. “If not adequately addressed, these reductions mean that some rural hospitals nationwide will close and already vulnerable populations will lose access to care. ECU Health remains committed to advocating for sustainable solutions that address the complex challenges threatening the viability of delivering quality health care to rural Americans."

CMS said the funds will improve health care access for rural North Carolinians. In November, North Carolina submitted its application for these funds with bipartisan support from the state’s congressional delegation. These funds are awarded for 2026, and North Carolina will be eligible for more funding each year for the next five years.

"North Carolina has long been a leader in advancing rural health care solutions, and we are excited about how this new program can support innovations to help make rural communities healthier," said Governor Josh Stein. "Our state’s rural communities are wonderful places to live and raise a family but face unique health care challenges. This grant will connect more people to more high-quality health care."

Program overview

The North Carolina Department of Health and Human Services worked quickly to develop the state’s plan through extensive engagement with more than 420 stakeholders, including rural hospitals, community health centers, local health departments, Tribal communities, community-based organizations, and faith-based organizations.

"We look forward to continuing the collaborative effort needed to make sure everyone has access to affordable, high-quality, patient-centered health care while reducing the burden on rural health providers," said state Health and Human Services Secretary Dev Sangvai. "The North Carolina Rural Health Transformation Program is one part of our efforts to support the more than 3 million people in North Carolina who live in rural communities."

North Carolina has the second-largest rural population in the country, second only to Texas. The rural population of North Carolina represents more than 5 percent of the entire U.S. rural population.

Six key strategies

North Carolina’s Rural Health Transformation Program outlines six key strategies to transform rural health care systems over the next five years:

Launching locally governed NC ROOTS hubs to connect medical, mental health, and social supports.

Expanding prevention, chronic disease management, maternal health, and nutrition programs.

Increasing access to mental health services, including substance use disorder treatment.

Investing in the rural health care workforce.

Supporting more rural providers in transitioning to value-based care models, where providers are paid based on keeping people healthy and out of the hospital rather than on how many services are provided.

Enhancing technology in health care through artificial intelligence and expanded broadband access.

These initiatives will be implemented through a broad coalition of state agencies, community-based organizations, academic institutions, rural providers, and private-sector partners.

As an example of innovation and collaboration, North Carolina proposes to create a Rural Health Innovation Fund that will help rural health care providers get access to technology that will support their practices. As soon as the federal funding is received, NCDHHS will establish a statewide governing structure, start building regional NC ROOTS hubs, and engage stakeholders in funding decisions.

The steering committee

North Carolina’s RHTP will be guided by a statewide steering committee, including NCDHHS’ Office of Rural Health and divisions of Medicaid, Public Health, and Mental Health, in collaboration with universities, community colleges, community health centers, rural health clinics, small rural hospitals, school-based clinics, and local partners.

On January 16, NCDHHS leaders will hold a virtual event to highlight the NC RHTP goals and next steps, the program’s statewide impact, and the importance of federal partnership in addressing root causes of disease. The overall goal for the first year of the NC RHTP is to expand the reach of existing statewide efforts that align with RHTP initiatives as North Carolina works to set up strong foundations for long-term sustainability. NCDHHS will share more information about the event in the coming weeks.

The RHTP is expected to improve health care delivery for more than 3 million North Carolinians in rural communities, support more than 400 rural health facilities, and bring hundreds of millions of dollars in federal investment to the state over the next five years.

NCDHHS said North Carolina is eager to maximize the funding awarded by the Rural Health Transformation Program, but the state will need to overcome significant funding losses as a result of federal reconciliation law HR 1, including the loss of nearly $50 billion in federal funds to North Carolina’s Medicaid program over the next 10 years and critical funding to hospitals in the state. “NCDHHS will take advantage of the available funding while continuing to advocate for more funding for NC’s rural health care system in the future.”

Lawmakers’ reactions

House District 27 Representative Rodney Pierce said, “This investment is critical for rural districts like ours where families rely on not only primary care providers, specialists, and our county health departments, but also institutions like ECU Health North Hospital and Rural Health Group.”

Pierce continued, “With some of the highest rates of chronic conditions like hypertension, diabetes, and cancers—along with growing behavioral, substance abuse, and mental health needs—these resources will help expand access to comprehensive, preventive, and behavioral health care where it’s needed most.”

Pierce noted that while he is appreciative, "The funding is not nearly enough. At a time when federal tax cuts favor the wealthy and critical health programs like Medicaid face cuts, rural communities need a far stronger commitment from Washington.”

Congressman Don Davis said, “The Centers for Medicare & Medicaid Services’ North Carolina Rural Health Transformation Program award is vital for improving health outcomes for rural North Carolina families.” He noted the program “will allow our state, which has three million rural residents across 85 counties—the second-largest rural population in the nation—to expand proven innovative models, foster sustainable innovation, and strengthen our rural workforce.”

United States Senator Ted Budd said, “Today’s announcement by the Centers for Medicare & Medicaid Services ... will greatly benefit patients across our state. While I was proud to support the inclusion of this funding in the Working Families Tax Cut Act, it is unfortunate that the state’s application was not appropriately coordinated with federal officials and did not request funding levels that more accurately correlate with our significant rural population.”