The Centers for Medicare & Medicaid Services has approved Oregon’s proposed state directed payment plan, unlocking up to $37.5 million for 21 rural hospitals to strengthen and stabilize maternity care services in some of the state’s most remote communities.

Supporting Rural Hospitals

The approved federal funds will match state funding secured by Gov. Tina Kotek, leading to the total investment. For rural hospitals, many of which anticipate reductions in Medicaid funding, the payments are intended to support staffing, essential medical equipment, job retention and creation, and improvements to maternity care.

The coordinated effort is led by Gov. Kotek, the Oregon Health Authority and the Hospital Association of Oregon. The directed payment is part of a one-time $25 million investment authorized by the Legislature in House Bill 5025 (2025).

Gov. Kotek emphasized her commitment to rural communities, stating that she fought for these funds to stabilize services in Oregon because rural communities deserve reliable, high-quality maternity care close to home.

Impact on Rural Communities

Roughly half of all births in Oregon are covered by the Oregon Health Plan (OHP). Medicaid funding changes have already begun to impact rural health care providers in Oregon and across the country.

Oregon Health Authority Director Dr. Sejal Hathi highlighted the urgency of supporting rural hospitals, stating that CMS’s approval enables them to support rural hospitals at a moment when maternity services are under tremendous pressure.

The payments are intended to stabilize maternity services by supporting staffing, equipment upgrades and expanded patient services. State officials say the investment is expected to improve access to prenatal and postpartum care, reduce preventable complications and promote more equitable maternal health outcomes for OHP members in rural Oregon.

Original reporting: KTVZ (Central Oregon) — read the source article.