Maine DHHS releases $30M to strengthen rural hospital resiliency

AUGUSTA— The Maine Department of Health and Human Services, in partnership with the Office of Affordable Health Care, announced the release of $30 million in funding through Maine’s Rural Health Transformation Program to help strengthen the long-term financial health and sustainability of rural hospitals across Maine. 

Maine DHHS has identified and invited 11 rural hospitals to participate in the initiative based on an analysis of hospital financial data publicly available from the Maine Health Data Organization. The analysis considered key financial indicators to identify hospitals that could benefit most from this one-time investment. Among the hospitals is Northern Light CA Dean Hospital of Greenville.

The Rural Hospital Efficiency Fund is one component of Maine’s broader Rural Health Transformation Program, which is designed to improve access, quality, and health outcomes while supporting a sustainable rural health care system.

“This initiative is a direct result of what we heard from rural communities as we developed Maine’s Rural Health Transformation Program strategy,” Maine DHHS Commissioner Sara Gagné-Holmes. “DHHS engaged rural residents, health care providers, community leaders, and other partners to understand the pressures facing rural health care delivery and access. The Rural Hospital Efficiency Fund will translate that input into direct support for hospitals serving rural Maine, providing technical assistance to inform strategic investments that strengthen operations and preserve access to care over the long term.

The other 10 hospitals invited to participate are: Cary Medical Center, MaineHealth Franklin Hospital, Houlton Regional Hospital, MaineGeneral Medical Center – Alfond Center for Health, Millinocket Regional Hospital, Mount Desert Island Hospital, Northern Light AR Gould Hospital, Northern Maine Medical Center, MaineHealth Pen Bay Hospital and Penobscot Valley Hospital.

Participating hospitals will receive individualized technical assistance from industry experts on financial efficiency and sustainability. Hospitals will use that assistance to develop individualized sustainability plans identifying priority projects.

Funding will be distributed in two phases:

Phase 1: Approximately $3 million will be distributed among participating hospitals to support staff participation, as needed, in technical assistance activities and the development of individualized sustainability plans. Any funding not used during this Phase will be reallocated in Phase 2.

Phase 2: Approximately $27 million will be available to support approved hospital-identified efficiency projects. Funding decisions will consider the quality of each proposed project, its anticipated impact, and its compliance with federal and state program requirements.

Eligible projects may focus on improving financial oversight and management, increasing structural and operational efficiency, or strengthening regional planning to ensure efficient delivery of service. Projects will be tailored to the circumstances of each hospital and are intended to produce lasting improvements in financial health and operational efficiency.

This funding program will run from September through August 2027, with participating hospitals submitting sustainability plans by January 2027 and approved projects implemented by August 2027.

“On behalf of Maine Hospital Association and our member hospitals, we are excited to see the State moving forward with its plan to use a portion of the federal Rural Transformation funding to help hospitals explore ways to meet the challenges of providing healthcare in rural Maine,” Maine Hospital Association President Jeffrey Austin said. “Hospitals are open 24-hours per day, 365 days per year; they are also providers of community-based services like primary care and behavioral health. Too often in Maine, if the hospital doesn’t provide the care, it won’t get provided at all. The headwinds to providing care in rural Maine are strong, but collaboration with the State to meet the challenge is a welcome opportunity. We look forward to working together.”

Additional funding opportunities and program activities aligned with Maine’s approved Rural Health Transformation Program application will continue to be announced in the coming weeks and months. Providers, partners, and community members are encouraged to visit Maine’s RHTP website for updates.

Maine’s Rural Health Transformation Program is a five-year federal grant program designed to improve health outcomes, expand patient access to care, strengthen the health care workforce, advance innovation, and support sustainable rural health systems. For more information about Maine’s RHTP visit https://www.maine.gov/dhhs/ruralhealth.