OREGON — The Centers for Medicare and Medicaid Services (CMS) approved Oregon's proposed state-directed payment plan for rural maternity care on May 1, 2026. This approval clears the way for the Oregon Health Authority (OHA) to distribute $37.5 million in state and federal funds to 21 rural hospitals to support maternity care services.

The funding combines $15 million in state dollars with over $22 million in federal matching funds. The state funding is part of a one-time $25 million investment authorized by the Oregon Legislature in House Bill 5025 (2025). The OHA will distribute these funds to hospitals based on the total number of Medicaid patients they care for throughout 2026, with officials planning to release the first payments before the end of 2026.

Most of the 21 hospitals receiving funds are located more than 50 miles from the next closest birth center. Hospitals may use these payments to cover maternity care-related expenses, including hiring or retaining staff, training initiatives, or updating equipment.

Governor Tina Kotek announced the funding in a news release on May 28, 2026. "I fought for these funds in my budget to stabilize services in Oregon because rural communities deserve reliable, high quality maternity care close to home," Kotek said.

Oregon Health Authority Director Dr. Sejal Hathi elaborated on the timing of the funds. "CMS's approval enables us to support rural hospitals at a moment when maternity services are under tremendous pressure," Hathi said. Ashley Thirstrup, OHA chief of staff and external relations division director, indicated that the current funding is not a complete solution. "I don't think we're thinking this hole is going to be plugged by these dollars alone," Thirstrup said.

More than half of all births in Oregon are covered by Medicaid. Malheur County has the highest Medicaid enrollment in Oregon, and Saint Alphonsus Medical Center in Ontario is the only hospital and birthing center in the county. The next closest hospital for pregnant women in Malheur County is over 50 miles away in Boise.

An estimate from Governor Kotek's office indicates that H.R. 1, a tax cuts and spending package passed by Congress, is expected to reduce federal support for Oregon's Medicaid program by approximately $11 billion over the next five years. "The scale of the Medicaid cuts proposed in H.R. 1 is going to put significant pressure on the system overall," Thirstrup said. Providence Seaside Hospital and McKenzie-Willamette Medical Center both closed their labor and delivery programs in the fall of 2025.