Governor Kelly and KDHE Announce Increased Medicaid Funding for Rural and Critical Access Hospitals

Governor Laura Kelly and the Kansas Department of Health and Environment (KDHE) today announced the approval of Kansas’ Health Care Access Improvement Program (HCAIP) preprint by the Centers for Medicare and Medicaid Services (CMS). This preprint outlines the Kansas plan for Critical Access Hospitals (CAHs) and Rural Emergency Hospitals (REHs) to receive enhanced Medicaid payments from KDHE, injecting $83 million into these essential healthcare facilities.  

“Through much needed expansion of HCAIP, we are ensuring critical funding is allocated where it’s needed most: to rural hospitals and to providers serving Medicaid patients across Kansas,” Governor Laura Kelly said. “We are dedicated to implementing initiatives that increase access to quality health care and improve health outcomes for all Kansans, regardless of zip code.” 

HCAIP was formed in 2004 to increase access to health care through a provider tax and reimbursement structure. This state legislation initiated an annual assessment of certain services provided by specific hospitals to enhance health care access for low-income individuals in Kansas. Additionally, Kansas formed an HCAIP panel comprised of hospital leadership from across the state responsible for administering the program and providing governance and oversight. With the approval of Kansas’ plan, CAHs and REHs will benefit from increased funds needed to continue providing rural Kansas communities with quality health care services.  

“We appreciate CMS’ approval of the preprint and are eager to implement these enhanced payments for CAHs and REHs,” KDHE Secretary Janet Stanek said. “These funds are central to hospitals across the state keeping their doors open so more Kansans can get the critical care they need closer to home.” 

In 2025, CMS approved Kansas’ 2025 provider assessment preprint, which increased the provider assessment from 3% to 6%. The combined increase to the provider assessment and approval to include CAHs and REHs in the program marks the Kelly administration’s continued focus on equipping hospitals to provide excellent health care services to Kansans.