Grant Funding Announced for Rural Healthcare Programs to Offset Effects of COVID-19

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On August 12, 2021, as part of the American Rescue Plan Act, USDA announced up to $500 million in grant funding through the Emergency Rural Healthcare Grants program. The goal is to help broaden access to COVID-19 testing and vaccines, rural healthcare services, and food assistance through food bank and food distribution facilities.

The funding is available to eligible applicants (public bodies, nonprofits, and federally recognized tribes) through two tracks – Track One: Recovery Grants and Track Two: Impact Grants.

Track One: Recovery Grants

The Recovery Grants are designed to provide immediate relief to address economic conditions arising from the COVID-19 emergency. The Recovery Grants range from $25,000 - $1 million. The USDA is anticipating allocating approximately $350 million in Track One: Recovery Funding.

The applications will be accepted until the funds are exhausted. Each Rural Development state office will complete the application reviews for applications received by 4pm local time on October 12, 2021.

Uses of the grant funds include:

  • Increasing capacity for vaccine distribution,
  • Providing medical supplies and equipment to increase medical surge capacity,
  • Reimburse health care-related lost revenue (see Note below),
  • Increase telehealth capabilities,
  • Construct or renovate temporary or permanent structures to provide healthcare services,
  • Support staffing needs for testing or vaccine administration, and
  • Supporting facilities, equipment, and operating expenses with food banks and food distribution facilities.

The applicant is limited in the amount of the grant funds it can request and requires cost-sharing or matching funds. The grant amount depends on the population to be served, and the Median Household Income (MHI). Facilities and projects must be able to show other sources of funds to cover the matching funds, or remining portion of project costs.

The amount of Grant Funds is limited to the following percentages of eligible project costs:

  1. Up to 75% when the population is 5,000 or less, and the MHI is below the higher of the poverty line or 60% of statewide nonmetropolitan MHI.
  2. Up to 55% when the population is 12,000 or less, and the MHI is below the higher of the poverty line or 70% of statewide nonmetropolitan MHI.
  3. Up to 35% when the population is 20,000 or less, and the MHI is below the higher of the poverty line or 80% of statewide nonmetropolitan MHI.
  4. Up to 15% when the population is 20,000 or less, and the MHI is below the higher of the poverty line or 90% of statewide nonmetropolitan MHI.

Note: Requests for grant funds to reimburse healthcare related lost revenue must include a certification from a certified public accountant (CPA) confirming the calculation of lost revenue requested is accurate. CPAs may use one of two approaches to verify the lost revenue calculation:

1) comparison of actual revenues or

2) comparison of approved budget to actual revenues.

Under both approaches, the application may choose the applicable time period (month, quarter, year)), as long as the same time period is chosen for both years. The certification must also definitively state that requested lost revenues have not been reimbursed from other federal or state resources.

Funding under ARPA was for new programs, as well as existing programs that are subject to single audit. Learn more about the implications.

Track Two: Impact Grants

The Impact Grants are designed to advance ideas and solutions to solve regional healthcare problems, as well as support the long-term sustainability of rural health. Impact Grants range from $5 million - $10 million. The USDA is anticipating allocating approximately $125 million in Track Two: Impact Funding.

Track Two applicants must establish a network or consortium of entities for the purposes of this grant. The consortium may be newly formed, or already in existence.

The network or consortium must:

  1. Be comprised of at least three or more healthcare provider organizations, economic development entities, federally recognized Tribes, or institutions of higher learning,
  2. Be comprised of rural or urban nonprofit entities, as long as at least 66% of the network members are located in a rural area, and primarily serve a rural area, and
  3. Identify one lead entity to serve as the primary applicant and recipient of the Impact Grant funds. This lead entity is accountable for monitoring and reporting on the project performance and financial management of the grant.

Like the Track One: Recovery Grants, the Track Two: Impact Grants also include a requirement of cost-sharing or matching funds. The amount of grant assistance is limited to the percentages of eligible project costs as outlined below:

  1. Up to 75% when the population is 5,000 or less, and the MHI is below the higher of the poverty line or 60% of statewide nonmetropolitan MHI.
  2. Up to 55% when the population is 12,000 or less, and the MHI is below the higher of the poverty line or 70% of statewide nonmetropolitan MHI.
  3. Up to 35% when the population is 20,000 or less, and the MHI is below the higher of the poverty line or 80% of statewide nonmetropolitan MHI.
  4. Up to 15% when the population is 20,000 or less, and the MHI is below the higher of the poverty line or 90% of statewide nonmetropolitan MHI.

The proposed grant period is anticipated to begin no earlier than January 1, 2022 and is expected to end no later than 36 months following that date. Grant applications must be received by the applicable Rural Development office by 4pm local time on October 12, 2021.

Our experienced healthcare advisors can help guide you through the Emergency Rural Healthcare Grants application process.

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