Inside the lobby of Starr County Memorial Hospital on Monday afternoon, more than two dozen local leaders pitched state health department officials about what’s possible if the county were awarded a slice of new federal funding meant for rural health care transformation. 

It’s the first stop for Texas Department of Health and Human Services officials who are expected to crisscross the state for the rest of the week, gathering information for its application due next month. 

State health officials have been working quickly to conduct a rural community listening tour before they submit a statewide application to the Trump Administration for a potential slice of $50 billion set aside in the Big Beautiful Bill. The state is already wading through more than 300 responses, mostly from health care providers, about potential funding ideas. 

A lot of money on the line, but a tight turnaround 

The federal spending bill was passed in July, but state guidelines were not released until Sept. 15, and the deadline for the state’s application is on Nov. 5 – just one day after Election Day. State awards are expected to be announced by the federal government in December 2025. 

And the stakes are high – the money is meant to be spent over the next five years. 

There are two pots of funding, each with $25 million. One pot will be equally divided amongst states regardless of population size or need. The remaining $25 million will take into consideration the quality and scope of the state’s application. 

And any money Texas gets could be split among 150 different rural hospitals, which means the program funding could be quite competitive. 

Nationwide, there are more than 1,800 rural hospitals. In Texas over the past two decades, 25 rural hospitals have already closed, the most of any state, according to CMS provider closure data analyzed by Daily Yonder, a rural news publication. 

“What can we do with that money for the sake that we make a lasting impact, so that we’re not sitting here 10 years from now, where the money is long since gone and we don’t really have something meaningful?” queried Trey Wood, chief financial officer of Texas Health and Human Services. “The [Texas] legislature has been very generous over the last several years, in particular, in regards to rural Texas hospitals. To some extent, we’re trying to take what they’ve done and maybe fill in some gaps.” 

New administration means different funding priorities 

At the same time, rural hospitals are bracing for sweeping cuts to Medicaid eligibility, which could further shrink the pool of insured patients in the community who rely on the hospital for routine medical care. 

It’s estimated that 1.7 million Texans could lose healthcare coverage, according to early estimates by the national health care policy analysis organization KFF. 

Local healthcare providers told officials that many rural residents are already often using emergency ambulances and the 911 system for medical transportation for non-life-threatening conditions, emergency rooms are overwhelmed with patients, and there are few options for serious mental health cases. 

But there are strict parameters about the type and scope of potential federal government investment in rural healthcare – for example, any new federal funding is not eligible for new construction projects. 

Rural communities say they need educated workers to stay

Workforce development was a common theme during the meeting. There’s a lack of educated residents who remain in Starr County, leaders said. There’s an extreme need for EMT providers, as there are more ambulances than available emergency responders to drive them and respond to calls in the community. 

There have been collaborative efforts to train high school students to become EMTs, but they often leverage that access to education to become nurses or other healthcare professionals because the credentials are stackable. For example, the Starr County Memorial Hospital has eight more nurses who were once EMTs but continued their education. 

“Working as a nurse, they’re in a controlled atmosphere. Paramedic jobs are difficult. Especially in areas like ours. We’re so widespread and we have different types of terrain,” said Thaila Muñoz, CEO of Starr County Memorial Hospital. “You’re going out to the ranches, which are isolated and difficult to get to; it’s a difficult job. We’re suffering because we can’t get paramedics to run those ambulances, even though we have eight super nice vehicles out there, we’re usually able to run about six of them at any given time.” 

Muñoz later told the Rio Grande Valley Business Journal that she’s optimistic about the potential for funding despite the shortfall expected for Medicaid-insured patients. 

“We hope so, there’s so much unknown right now, nothing is definite,” she said. “We’re hoping for the best, and that’s why we’re really participating [in the state’s federal grant application].” 

While most small businesses, healthcare providers, and advocates asked for help with patient transportation – that provision is not included in the federal funding parameters – telehealth would be, though. 

That’s something organizations like Border Region Behavioral Health Center already use – they hire specialists to answer the phone for patients in need – something that is a costly budget item, but there are so few residents with such skills who live in the area, it’s a difficult situation. 

Lack of transportation is a barrier to healthcare 

Primary care physician Jake Margo Jr., a native of the region, has worked in Starr County for the past two decades and now works in the emergency department at the hospital. 

“There’s no [transportation] infrastructure, so they’re using our [emergency] ambulances as transportation. We’re seeing 20 to 30 patients [doing that] per shift,” Margo Jr. said. “This has been pretty consistent for the past six months.”

Another issue is that even the existing federally supported health centers are not catching enough of the population who need routine medical care, because it requires up-front payment even for low-cost services as inexpensive as $10 for patients. 

“Sometimes they’re unwilling to do that, but if they go to the ER, they don’t have to pay [up front], that’s the reality that we don’t really talk about,” he said. “The hospital can be the bad guy and say, well, you’d better pay your $1,000 bill that you’re going to be charged in a few minutes because we’ve already established you don’t have any emergency conditions. But at the end of the day, [we still help them because] we’re here for the patients.” 

Some local leaders asked for more mobile health clinic buses to reach residents in rural areas for medical care, which could be covered under the future federal funding. 

At the hospital, there’s a need for more specialists. 

“We only have two operating rooms, so we’re hoping that we could expand if we were to get those grants – so we could bring more specialists – which is something [Doctors Hospital at Renaissance] is already helping with, but we’d have to make the hospital a little bit bigger,” said Elisa Peña, vice president and board member of the Starr County Memorial Hospital and nurse by trade. “So the specialists can do their surgeries here, and our patients don’t have to travel to the McAllen area.” 

Across the street from the Starr County Memorial Hospital, DHR is building a new retail plaza with more doctors. There’s already a pharmacy and several doctors affiliated with the Hidalgo County operator along the same road in Rio Grande City. 

Ambulances from Starr County are already regularly taking critical care patients to higher-level trauma centers in Hidalgo County when needed, in addition to answering 911 calls. 

“So if we could keep our patients here, the ones that are stable enough that they don’t need to be transported, that would be great,” Peña said. 

For more than a decade, Rose Benavidez has been working on workforce development efforts in her role as the Starr County Industrial Foundation leader and trustee of South Texas College.

As for medical transportation expansion, there’s already a Valley Metro bus line for University of Texas Rio Grande Valley students who take classes in both Edinburg and Rio Grande City, which is about an hour apart and runs along the main roadways where many individuals already live. 

It’s possible that primary care clinic stops could be added or enhanced on that existing rural bus route as one innovative idea, Benavidez said. 

“From our perspective, any dollars that will come in will be used to create initiatives that will be innovative but more importantly, that respond to issues that we currently are facing,” she said.