North Dakota to Distribute $199 Million in Rural Health Transformation Grants

North Dakota is moving to distribute $198.9 million in federal Rural Health Transformation Program grants, with the first awards expected this month and the bulk of the money flowing to rural communities through a series of competitive grants over the next six months.

Pat Traynor, interim commissioner of the North Dakota Department of Health and Human Services, said grants will be awarded in phases every several weeks through mid-2026, with the opening round focused on workforce retention. "Workforce is paramount," Traynor said. "You can't have health care without having a strong workforce."

The funding arrives after a compressed legislative scramble. Gov. Kelly Armstrong convened a three-day special session in late January, giving state lawmakers the opportunity to vote on bills authorizing the state to accept the federal money. House Bill 1623 authorized ND HHS to spend $397.9 million over the next two years, covering anticipated allocations across the program's multi-year lifespan. North Dakota first learned in late December that it had been authorized for $199 million for 2026 alone.

Of that first-year allocation, state officials have outlined a preliminary spending plan: $116 million to expand health care access in rural areas, $33.4 million on technology and data connectivity, $32.2 million to address workforce shortages, and $17.1 million to promote healthy lifestyles under an initiative called "Make North Dakota Health Again." The largest share, roughly 58 percent of total funds, is aimed at letting rural residents seek care closer to home rather than traveling to distant facilities.

The money comes from a $50 billion Rural Health Transformation Program passed by Congress last summer as part of a budget reconciliation bill. The five-year federal program was described as a partial offset for funding rural states are expected to lose through Medicaid cuts included elsewhere in the same legislation. Every state is guaranteed at least $500 million across the life of the program and is eligible for up to $1 billion.

Federal rules impose a tight deadline: North Dakota must commit the 2026 funds by the end of October and spend them within the following year. To manage that compressed timeline, ND HHS plans to hire Rural Health Transformation managers, coordinators, data analysts, and other positions dedicated to overseeing the grant programs.

Health care providers, clinics, hospitals, and other eligible organizations in Stutsman County will need to watch the ND HHS Rural Health Transformation Program webpage closely once grant applications open, as all funding opportunities will be posted there as they become available. Traynor indicated that a second round of federal funding, covering 2027, could be announced as early as August.

ND HHS can be reached at (701) 328-2310 or by mail at 600 East Boulevard Ave, Bismarck, ND 58505-0250.