When Wyoming applied for $200 million from the Trump administration’s Rural Health Transformation Program in 2025, it proposed an array of concepts to bolster the state’s precarious healthcare network — from regionalizing emergency medical services to clinical workforce training grants.
One of the core ideas was establishing a so-called “perpetuity,” a system of investments that could generate revenue for healthcare programs in perpetuity. The perpetuity was key to finding long-term solutions that went beyond one-time funding opportunities, application authors said.
However, the perpetuity pitch did not pass muster with the federal administrators at the Centers for Medicare and Medicaid Services, which is implementing the $50 billion program. Wyoming Department of Health staff have been negotiating with the federal agency on the application’s fine points this spring.
“Because of some esoteric federal regulations, it became clear that CMS may not and ultimately would not approve the perpetuity fund,” Wyoming Department of Health Director Stefan Johansson told the Legislature’s Labor, Health and Social Services Committee Thursday, “and that’s essentially where we stand today in our negotiations.”
That leaves Wyoming’s application sans two of its core proposals. The state also ditched a proposal to establish a state-operated public insurance plan for healthcare emergencies after lawmakers frowned on the idea.
Even without them, Wyoming still hopes to inject millions into programs that could prop up rural hospitals, workforce and preventative health measures. The federal agency announced in December that Wyoming would be awarded $205 million in 2026, but the money won’t flow into state coffers until the Centers for Medicare and Medicaid Services approves the amended application.
“I am optimistic that this process won’t be dragged out too much further, and we hopefully will see federal approval for our alternative proposal in the days or weeks to come,” Johansson said.
He also urged lawmakers to keep the perpetuity fund concept on the table for a future federal opportunity or even a state-driven initiative.
“It’s just a very unique and Wyoming-specific financing vehicle that I think could be very productive and fruitful for the state,” when it comes to sustaining basic healthcare services in Wyoming, Johansson said.
The opportunity
The Rural Health Transformation Program is a federal initiative created by President Donald Trump’s 2025 One Big Beautiful Bill Act. The program will funnel $50 billion to states over five years to stabilize and strengthen rural hospitals and providers. It aims to offset a portion of the federal funds for healthcare cut by the same legislation.
The application process for states unfolded in about two months last fall. In Wyoming, Department of Health staff held stakeholder conferences and 11 public meetings to gather input. The state received 1,300 responses to an online survey it circulated. Using the input, staff drew up an application.
“Our biggest challenge lies in access to basic medical care,” Wyoming’s 84-page application stated.
The document identified the state’s priorities as building the state’s healthcare workforce, improving residents’ metabolic, cardiovascular and behavioral health and using technology to improve chronic disease management and bring care closer to home. Some of the initiatives proposed to address those priorities include:
- Build cooperative agreements for EMS agencies to work together on a regional basis.
- Stand up a grant process for technology to improve care delivery.
- Fund annual awards to cover educational costs for individuals interested in joining one of four clinical pipelines: nursing, EMS, behavioral health and physician.
- Establish the perpetuity fund and the state-managed health insurance program, dubbed “BearCare.”
The Centers for Medicare and Medicaid Services announced in December that all 50 states will receive awards in 2026 under the program. Wyoming was awarded $205 million.
That kicked off a deeper scrutiny of the application by federal administrators, who took issue with the perpetuity fund as an allowable cost, Johansson said. Through investment management, the perpetuity would have allowed the state to spend less of its award in the short term but stretch the benefits over a longer period of time. Federal administrators also flagged Wyoming’s plan to spend roughly half of its award on its smallest rural and frontier hospitals, known as critical access hospitals, and emergency medical services, he said.
“The bulk of what we have proposed is to shore up, sustain and also transform our smallest rural hospitals and our EMS providers,” Johansson explained.
While the health department abandoned the perpetuity fund, he continued, staff and Gov. Mark Gordon stood firm on proposals “to really use these funds the best way we can to address those underlying economic issues in these service areas of high fixed cost and low patient volume.”
Wyoming submitted its final alternative budget proposal last week, he said, and hopes to get approval notification soon.
“I can see why the perpetuity fund was one step too creative for a big federal bureaucracy like CMS,” Sen. Charles Scott, R-Casper, said. But, he added, “it seems to me we’re doing exactly what Congress intended … and it looks to me like the bureaucracy is trying to defeat some of the intent of the Congress in this particular matter.”
Implementation
Final approval would only be one step in a process that will require drafting contracts, requesting proposals, making approvals and obligating funds. State workers, contractors and healthcare providers will have to hustle to lay the groundwork for programs they hope will shore up healthcare for the long term.
The state is about a month behind due to the negotiations, Johansson said. However, he believes the goals are achievable if approval happens soon. Wyoming must obligate year one program funds by the end of October, he said.
During the Labor Committee’s Thursday meeting, lawmakers also discussed several state policy actions to assist Wyoming in the federal application process. They relate to issues such as dental hygiene scope of practice and physician assistant licensure.
