Texas Rural Hospital Financial Stabilization Grant

Laurie Anderson
512.424.6784
laurie.anderson@hhs.texas.gov

Texas Health and Human Services Commission is offering grants for operational costs for rural hospitals in Texas to support the hospitals as they transition to improved long-term financial solvency and sustainability.

Awardees will be required to submit:

• A 2-year Financial Solvency Plan
• Monthly progress reports
• Documents that support eligible expenses

Frequently asked questions

Eligibility requirements:

• Classified as a rural hospital
• The sole Licensed General or Special Hospital provider in the county
• Licensed by the Health and Human Services Commission for 25 or fewer beds
• Able to provide management reports, including cash flow reports, profit and loss accounts, and balance sheets, to demonstrate the full financial position of its business
• Able to demonstrate financial need

To be funded for Tier 1 (Basic Need), the applicant must meet at least 3 of the following financial conditions:

1. Operating margin is less than 5%
2. Applicant has less than 60 days cash on hand indicating severe distress and imminent likelihood of closure
3. Applicant's rolling 13-week cash flow forecast shows entity working at baseline levels
4. Forecasted report unprofitability due to reduced income due to fewer elective surgeries and others

To be funded for Tier 2 (Moderate Need), the applicant must meet at least 3 of the following financial conditions:

1. Operating margin is less than or equal to 0%
2. Applicant is an independent (non-system) rural hospital that has less than 30 days cash on hand indicating severe distress, imminent likelihood of closure
3. Applicant's rolling 13-week cash flow forecast shows entity working at a 15% or less loss
4. Applicant reports unprofitability due to reduced income due to fewer elective surgeries and others not longer than 6 months

To be funded for Tier 3 (High Need), the applicant must meet at least 3 of the following financial conditions:

1. Applicant has multiple consecutive years of operating margin less than or equal to 0%
2. Applicant is an independent (non-system) rural hospital that reports no cash on hand indicating severe distress and imminent likelihood of immediate closure
3. Applicant reports a debt-to-capitalization ratio greater than 50% indicating poor financial condition. Debt-to-capitalization ratio = Total Debt divided by Total Capital
4. Applicant reports a rolling 13-week cash flow forecast that shows the entity working at a significant loss of more than 16%
5. Applicant reports unprofitability due to reduced income due to fewer elective surgeries that is greater than 6 months

Award Amounts:

Tier 1 Basic Need:

• $100,000 in year 1
• $50,000 in year 2

Tier 2 Moderate Need:

• $175,000 in year 1
• $87,500 in year 2

Tier 3 High Need:

• $250,000 in year 1
• $125,000 in year 2

Links to additional guidance, application instructions, and the online application portal are available on the program website.