Behavioral health strategies for Oklahoma’s application for critical Rural Health Transformation Fund dollars
Oklahoma has an opportunity to make critical, lasting investments in health care access and infrastructure in rural parts of the state.
With a successful application, Oklahoma could receive at least $500 million through the new $50 billion Rural Health Transformation Fund. The fund is the product of H.R. 1, the federal budget reconciliation package passed in July that makes sweeping changes to how states administer their Medicaid programs.
Related: How federal changes to Medicaid will affect mental health services in Oklahoma
The Rural Health Transformation Fund is intended to support rural areas through workforce development, innovative care delivery models, improved data systems, and expanded community-based care, as well as capital investments.
In Oklahoma, state agencies and advocacy organizations begun convening and gathering input from stakeholders ahead of the Nov. 5 application deadline. Awards are set to be announced by the end of the year.
In this report, we outline Healthy Minds’ recommendations for investments that improve access to behavioral health care in rural Oklahoma and align with the goals of the fund.
Key takeaways
- At least half a billion dollars in funding is at stake for Oklahoma through the Rural Health Transformation Fund. The state could be awarded more depending on a competitive application process.
- The funding comes at a critical time: hospitals are facing $8.7 billion in projected losses over the next decade, including about $5.13 billion in losses for rural hospitals, as a result of cuts to Medicaid.
- Getting behavioral health care can be especially challenging in rural Oklahoma, where workforce shortages are more acute and telehealth services are hindered by lower broadband internet access.
- In addition to mitigating the threat of rural hospital closures, the state should use Rural Health Transformation Fund dollars to make sustainable and transformative investments in rural Oklahoma, including: shoring up the pipeline of behavioral health professionals; expanding access to telehealth services through high-speed internet; supporting models to integrate behavioral health care into primary care settings; strengthening community-based mental health care and crisis response; expanding suicide prevention efforts; and improving access to substance use treatment.
A funding opportunity at a critical time
Almost 36% of Oklahomans live in rural areas, but Oklahoma’s rural health infrastructure is highly vulnerable.
The Rural Health Transformation Fund is an opportunity for Oklahoma leaders to make investments in a more accessible, sustainable, and equitable health care system for rural Oklahomans. The fund, administered by the Centers for Medicare and Medicaid Services (CMS), will award $50 billion to states from fiscal years 2026 through 2030.
Half of this funding will go directly to states. Each state with a successful application will receive at least $100 million each year over the next five years — totaling a half billion per state.
The remaining half will be awarded competitively based on the quality of states’ applications, how rural a state is, its hospital conditions, and provider availability, among other factors.
In rural areas, certain federally funded hospitals and clinics ensure people have access to critical health care services even in remote locations. But these facilities — including critical access hospitals, rural health clinics, and federally qualified health centers — are under constant budget constraints, as their primary funding sources are Medicare and Medicaid.
As a result of H.R. 1, Medicaid is set to undergo about a trillion-dollar reduction over the next decade. And federal cuts to the Medicaid program are expected to mean billion-dollar losses for Oklahoma hospitals.
Oklahoma hospital leaders project approximately $8.7 billion in financial losses over the next decade, with rural hospitals projected to lose $5.13 billion during the same period, according to a different report. Many hospitals are already struggling to keep their doors open. A recent report found that 47 Oklahoma hospitals are at risk of closure, with 22 at immediate risk. Hospital representatives fear these losses could result in more hospital closures, cuts to critical services, and the loss of tens of thousands of hospital jobs.
To secure funding, states must have a plan to sustain investments made through the Rural Health Transformation Fund after the five-year funding period ends.
States have some flexibility in spending: any unspent funds at the end of the fiscal year will roll over, but any unused funds by the end of the next fiscal year will be returned to the U.S. Department of the Treasury. States can use up to 10% of the funding on administrative costs but cannot use it to cover everyday bills or services funded through other federal programs.
Oklahoma Human Services, the Oklahoma Department of Health, the Oklahoma Department of Mental Health and Substance Abuse Services, the Oklahoma Health Care Authority, the Governor’s office and legislative representatives are part of steering committee to develop the state’s plan and submit the application on behalf of the state.
Agencies have also engaged with stakeholders including the Oklahoma Hospital Association, Primary Care Association, and Rural Health Association, individual hospital systems, university partners, and residents to develop the plan. The state’s Office of Broadband Technology has also been a key contributor.
Challenges in rural Oklahoma
A limited workforce and lower access to broadband internet can make it challenging for rural Oklahomans to get behavioral health care.
According to estimates from the state Department of Mental Health, between 80 and 95% of adults with a mental illness in rural Oklahoma do not receive treatment. Beaver and Cimarron counties, for example, have especially high treatment gaps — 96% and 97%, respectively — highlighting a critical shortage of mental health services in these areas.
Suicide rates have also trended higher in rural Oklahoma counties in recent years. A recent Healthy Minds analysis also found a between suicide death rates and broadband access, where suicide rates were higher where access to broadband was lower and vice versa.
With about 21 deaths for every 100,000 residents, Oklahoma has the ninth-highest suicide rate in the country.
Maternal mental health is also part of this crisis. Muskogee, Adair, Cherokee, Choctaw, Carter, McCurtain, Pushmataha, and Seminole were also ranked among the highest-risk areas in the country for maternal mental health challenges.
Exacerbating these challenges is a shortage of mental health professionals, which exists statewide but is even more acute in rural areas. In a 2023 analysis, Healthy Minds found that the state needs 35.7 psychiatric prescribers for every 100,000 Oklahomans, but has only 13.1 prescribers per 100,000.
All 77 counties in Oklahoma have shortages of mental health and primary care providers, according to data from the Health Resources and Services Administration.
As Oklahoma explores the promising model of integrated behavioral health care, these shortages pose a serious challenge: integrated care relies on primary care and behavioral health providers. But in rural areas, even basic primary care can be out of reach.
Telehealth can be a potential solution to connect Oklahomans to care that is otherwise difficult to access, though nearly 20% of Oklahomans do not have access to high-speed internet. Addressing these challenges is essential to improve health care access in rural Oklahoma.
Recommended priority areas
To solve these challenges and create durable systems for health care access in rural Oklahoma, we recommend several opportunities for investment that align with goals of the Rural Health Transformation Fund, and we urge Oklahoma leaders to prioritize these areas in the state’s funding application.
Strengthen workforce development and incentives
Statewide shortages of behavioral health professionals affect rural communities most acutely. To this end, we recommend Oklahoma use the Rural Health Transformation Fund to make a significant investment in its pipeline of behavioral health professionals.
In a 2023 report, Healthy Minds projected that an investment of approximately $30 million in targeted funding and policy initiatives could significantly strengthen Oklahoma’s workforce pipelines, including in rural areas.
The state could use Rural Health Transformation Fund dollars to fast-track effective training opportunities for students, expand programs that retain clinicians in the state, offer loan repayment opportunities, align educational programs with current treatment system needs, and offer skill-building opportunities for paraprofessionals.
In-state training opportunities for future psychologists and psychiatrists are critical — students often stay and work in the state where they complete their training. When too few in-state training opportunities are available, we force Oklahoma students to complete their training out of state, making it less likely that they return to work in Oklahoma.
For example, Oklahoma could use the funding to fund five psychiatry residency slots. During the first three years, Oklahoma could fully fund the residencies, then taper funding in years 4 and 5 to allow higher ed institutions time to develop sustainable funding plans.
Healthy Minds previously found that if Oklahoma added 28 psychiatry residency slots, the state could reach the national average for psychiatry workforce levels within a decade, assuming a 75% retention rate. Adding five slots to an additional eight funded through a 2024 application brings Oklahoma closer to that goal.
The state could also use funds to create 20 pre-doctoral psychology internships over a period of five years, which would build significant capacity in Oklahoma’s psychology pipeline. Similarly, we recommend a strategy that would fully fund programs for the first three years, then taper funding off in years 4 and 5.
Oklahoma could also consider a program like Virginia-based RISE-UP, which is training 100 clinical mental health counseling students to work in underserved rural areas. The program offers a $10,000 stipend to cover their travel and internship-related expenditures. If Oklahoma pursued a similar initiative, it could also require clinical students who receive these scholarships to commit to working in rural areas for a period of time after their training.
In parallel, the Legislature could require medical schools to restart rural rotations, exposing students to challenges of rural medicine but also building community connections that may encourage future graduates to return to serve these communities.
Expand access to telehealth and high-speed internet
Oklahoma should use Rural Health Transformation Fund dollars to support expanded access to telehealth services by partnering with the Oklahoma Broadband Office to accelerate infrastructure development and technological improvements in school districts, community health centers, and rural clinics.
The state could also use the funding to provide a one-time investment for primary care practices to set up dedicated telehealth rooms, fully equipped with a laptop and reliable high-speed internet, for patients to use for both mental and physical health care virtual visits.
The funding could be used to provide technical assistance to ensure that small rural providers are ready to adopt and sustain virtual care systems (e.g., training staff to navigate telehealth platforms, billing, privacy regulations, and evidence-based practices) after funds expire.
Expanded telehealth services can also play a crucial role in schools. The state could use funding to build school-based capacity by investing in telehealth-ready rooms for students to access before, during, and after school hours, as determined by school administrators.
Telehealth can be a lifeline for rural youth: a study of 40 rural schools across the U.S. found that students who accessed telehealth services returned to class without needing a follow-up visit, and 67.7% of students using telehealth for primary care had no other provider.
Being able to access telehealth services in schools is likely to become even more urgent: Oklahoma’s Medicaid program will soon seek federal approval to allow school-based services to all eligible students for whom they are medically needed. Currently, only students who have an individualized education plan, or IEP, on file, can access school-based services through Medicaid.
Implementation is expected to begin in 2026. Once in place, schools can sustain services through existing school staff, local providers (e.g., CCBHCs), and Medicaid reimbursement.
Support integrated behavioral health care models
Part of the solution to rural Oklahoma’s behavioral health shortages is integrating behavioral health services into primary care settings. This expands treatment capacity in the mental health workforce — and can offer seamless access to behavioral health treatment in a comfortable, familiar environment for patients.
Oklahoma can support rural primary care providers by collaborating with higher education partners, tribal health systems, and community-based providers to deliver recurring, in-person, or virtual training that equips providers with the knowledge to quickly identify and manage patients’ mental health conditions.
With dedicated telehealth rooms inside clinic settings, providers could quickly refer patients with mental health or substance use concerns to on-site virtual treatment.
Preserve and expand the Certified Community Behavioral Health Clinic (CCBHC) model
CCBHCs are a vital part of the state’s safety-net behavioral health system and have improved access to mental health care in many Oklahoma communities. But financial pressures, a lack of integrated data systems, and poor collaboration among stakeholders hinders this work.
Oklahoma can tap the Rural Health Transformation Fund to help the state invest in one-time supports (such as trainings, tools, systems) and to develop an integrated platform for data and reporting to improve transparency.
Because CCBHCs must serve everyone regardless of their ability to pay, these organizations have to absorb the costs of care for people for whom there is no payer source, or when payment rates don't cover the full cost of a person's care. This is called “uncompensated care.”
In previous years, uncompensated care was not typically included in the mental health department’s budget. It was only paid if extra funds were available at year’s end. The state could use funding to develop a robust data system and methodology to track costs of uncompensated care — and in doing so could help all parties better plan their budgets.
Strengthen crisis response and peer support
As the 988 funding from the American Rescue Plan Act is set to expire at the end of FY 2026, Oklahoma can consider using Rural Health Transformation Fund dollars as part of a plan to sustain the lifeline long-term.
This funding could be used on an interim basis to keep 988 running in Oklahoma until lawmakers identify and approve a permanent funding source.
The state should also prioritize strengthening coordination between 988, 911 call centers, and local crisis teams, including rural CCBHCs.
Oklahoma can also strengthen crisis response by making peer specialists available in more rural communities and improving coordination between crisis response systems to ensure prompt access and continuity of care. When peers are part of crisis response teams, they use their own lived experiences as they work to deescalate crises and connect people to resources for care.
Oklahoma could use Rural Health Transformation Fund dollars to develop an initiative like PeerWORKS, a University of Arizona College of Medicine program that prepares peer specialists to grow behavioral health services in rural areas. PeerWORKS is a certification program followed by an optional paid apprenticeship with local providers. It provides a $750 monthly stipend during training and a $500 completion bonus, with apprenticeship hourly wages ranging between $13 and $15.
Improve access to medications for opioid use disorder (MOUD)
As Oklahoma has faced increases in overdose death rates, driven largely by opioids and methamphetamine, the state should ensure rural communities have access to the gold standard of treatment for opioid use disorder: MOUD.
ODMHSAS and the Oklahoma Department of Corrections provide access to MOUD through their contractors in some jails and prisons; however, access remains scarce across rural counties.
Given that incarcerated individuals transitioning back into the community face a significantly higher risk of drug overdose death when released without appropriate MOUD treatment, the state should consider using the Rural Health Transformation Fund to develop a strong MOUD infrastructure, following best practices that include offering the full range of MOUD medications in all correctional settings, as well as a warm handoff to treatment providers post-release to promote continuity of care.
Funding could also support training initiatives for primary care providers to expand MOUD access, particularly for pregnant women and complex opioid use disorder cases. Additionally, increasing telehealth access and allowing remote patients to begin treatment at home with online support from clinicians can be a strategy to address transportation or geographic barriers in rural communities.
Expand suicide prevention efforts
More than 40% of Oklahomans who died by suicide between 2013 and 2022 had a known behavioral health condition but were not receiving treatment at the time of their death. Universal, routine mental health screenings for suicide risk or other mental health challenges can be a critical tool to identify and connect struggling Oklahomans with support.
The Rural Health Transformation Fund could be a resource to offer rural providers technical assistance to expand early suicide risk screening into rural primary care settings as part of routine preventative care. Leaders could also consider funding to expand Zero Suicide in Oklahoma, a framework for health care systems to screen for and prevent suicide deaths.
Funds could also be used to support projects conducting psychological autopsies, which examine circumstances around suicide deaths to identify factors in communities and can be used to craft community-based prevention strategies. Furthermore, rural schools could benefit from peer-to-peer programs like “Hope Squad,” in which students nominated by their classmates receive mental health training from advisors who prepare them to recognize signs of distress or suicidality among their peers.
Connect more rural providers to the state’s Health Information Exchange
Oklahoma’s statewide Health Information Exchange (HIE) allows providers across networks and clinic locations to seamlessly access important patient records and improve care coordination. But many smaller, rural clinics and community centers have not joined the HIE because of unaffordable connection costs, monthly fees, limited training opportunities, or incompatible data systems.
Oklahoma should consider using funds to support rural providers’ integration into the HIE, which can reduce administrative burden on already under-resourced rural providers.
What’s next for Oklahoma
Rural Oklahoma is up against urgent challenges: high rates of suicide, untreated mental health and substance use disorders, shortage of healthcare professionals, hospital financial instability, and limited high-speed internet access that hinders telehealth.
Rural Health Transformation Fund dollars are a critical opportunity to invest in initiatives that can address these challenges for years to come and promote healthier lives for residents of rural Oklahoma.
We hope to see the state continue using its Rural Health Transformation Program website to share updates, report outcomes, and involve community members in the process.
Finally, it is critical — both for Oklahoma’s chance at a successful application and for the investments themselves — that these improvements are made sustainably, so they can continue to benefit rural Oklahoma long after this funding is exhausted.
