New Mexico Pursues $1 Billion Federal Boost for Rural Health Care

The New Mexico Health Care Authority has formally requested $1 billion in federal funding aimed at enhancing rural health care services. This significant funding proposal seeks to improve access to specialty care, bolster chronic condition management, and develop a statewide health care data system. On November 4, 2023, the state submitted a comprehensive 128-page application to secure five years of funding through the federal Rural Health Transformation Program.

This program, part of a larger $50 billion initiative established by the recent federal reconciliation bill signed into law in July, aims to address pressing health care challenges in underserved areas. In her introduction letter accompanying the application, Governor Michelle Lujan Grisham described the program as a “critical lifeline” for rural communities in New Mexico, highlighting the unique health challenges residents face, such as higher rates of chronic disease and limited access to medical facilities.

The funding framework outlines a dual distribution approach: half of the allocated funds will be evenly divided among all states that receive approval, while the remaining funds will be awarded based on individual state applications. The Centers for Medicare and Medicaid Services is expected to announce the awardees by December 31, 2023.

Strategic Initiatives for Health Improvement

New Mexico’s application details five key initiatives aimed at utilizing the $1 billion. A significant portion, nearly $400 million, would be allocated to the establishment of the “Healthy Horizons” program. This initiative is designed to expand access to specialty care and improve chronic disease management in rural areas through both enhanced in-person services and remote care options.

The application emphasizes targeting resources towards prevalent chronic conditions in the state, which include arthritis, depression, diabetes, heart disease, and asthma. Furthermore, the proposal allocates $53 million to create a statewide health analytics platform intended to provide timely information to healthcare providers and policymakers.

Additional funds will support the expansion of rural career pathways into health professions with an allocation of $243 million. The state also plans to establish a $123 million Rural Health Sustainability and Innovation Center, alongside a $188 million grant program designed to support local health initiatives in rural, frontier, and tribal communities.

According to Dana Flannery, the state’s Medicaid director, the application reflects the input of rural New Mexicans who best understand their community’s needs. “This plan is a response to the voices of those living in rural areas,” Flannery stated.

Future Policy Directions and Legislative Changes

The submission of New Mexico’s funding application also signals forthcoming policy changes at the state level. Notably, the state intends to pursue membership in interstate licensure compacts during the upcoming 2026 legislative session. These compacts would simplify the process for medical professionals from other states to practice in New Mexico, including physicians, physician assistants, emergency medical services providers, and psychologists.

Although earlier attempts to pass similar legislation were unsuccessful, state legislative leaders have indicated their commitment to advancing this initiative within the first 15 days of the 2026 session.

In addition to these health care initiatives, the application outlines plans to reintroduce the Presidential Fitness Test in schools by the end of 2028. Originally discontinued in 2012, the test aimed to assess students’ physical fitness and has faced mixed reactions. The push to reinstate this assessment aligns with broader national discussions on health and fitness, particularly following recent executive orders aimed at improving student health.

Despite the focus on enhancing health care and educational standards, New Mexico has opted not to pursue certain food restriction waivers for the Supplemental Nutrition Assistance Program (SNAP), which were supported by the previous administration. The application explicitly states that the state will not implement these waivers at this time but will explore ways to promote healthy food choices within the program.

The New Mexico Health Care Authority’s push for federal funding is a critical step forward in addressing the ongoing health care challenges faced by rural communities, underscoring the state’s commitment to improving health outcomes for all residents. The outcome of this application will significantly influence the future of health care accessibility and quality in New Mexico.