The Shadow
RICHMOND, VA — Governor Glenn Youngkin today issued two executive directives, one launching a Rural Health Transformation effort and the other launching an Administration initiative to materially reduce Supplemental Nutrition Assistance Program (SNAP) error rates in local social service agencies.
“The new funding provided in H.R. 1 for the Rural Health Transformation Program creates a unique and timely opportunity to overhaul the way we deliver healthcare in rural communities. The additional federal funding, which is estimated to be between $500 million and $1 billion for Virginia alone over the next five years, will provide substantial resources to ensure that these communities and those who live there have ready access to healthcare,” said Governor Glenn Youngkin.
“Since day one, Governor Youngkin has led efforts to make government work better for Virginia. This is a once-in-a-generation chance to address healthcare challenges in our rural communities and to improve our SNAP error rates. We will work closely with local social service agencies, hospitals, federally-qualified healthcare clinics, community pharmacists, non-profit organizations and Medicaid managed care organizations to reimagine healthcare delivery,” said Secretary of Health and Human Resources Janet V. Kelly.
Click here to read Executive Directive 12 – Transforming Rural Health and Supporting Health Care Providers.
Click here to read Executive Directive 13 – Materially Reducing Errors in Supplemental Nutrition Assistance Program Benefit Processing.
Background
Public Law No. 119-21, widely known by its legislative designation of H.R. 1 and informally known as the “One Big Beautiful Bill Act” provides significant tax relief and makes changes to spending policies across a wide variety of areas of federal and state engagement, including Medicaid and SNAP.
Medicaid and Rural Health Care Transformation
H.R. 1’s changes to Medicaid are designed to keep it sustainable for the next 60 years and beyond.
H.R. 1 adds work and community engagement requirements for able-bodied adults without dependents beginning on December 31, 2026, prohibits coverage of illegal immigrants, imposes starting in Fiscal Year 2030 new penalties for states whose Medicaid Payment Error Rate exceeds three percent, and requires renewals every six months for individuals in the Medicaid expansion population, increasing from the current annual renewal.
In addition, H.R. 1 begins the gradual unfolding of the loophole that allows Medicaid supplemental payments to hospitals with taxpayer dollars, gradually bringing them to sustainable levels.
Finally, H.R. 1 created a Rural Health Transformation Program which will provide $50 billion between Fiscal Year 2026 and Fiscal Year 2030 to support the provision of health care to rural communities nationwide. Half of program dollars will be divided equally among all states, creating a $100 million per year fund for the next five years for the Commonwealth—totaling $500 million. The other half of the $50 billion will be distributed in competitive grants based on rural metrics defined as the percentage of state population located in a rural tract, the proportion of rural health facilities in the state versus nationwide, the overall situation of hospitals within the state, and other factors as established by Centers for Medicare and Medicaid Services (CMS). Virginia will compete for this incremental grant.
The Governor’s directive instructs the Secretary of Health and Human Resources, in conjunction with the Secretary of Finance, to work with the Department of Medical Assistance Services, the Virginia Department of Health, other state and local government agencies, and representatives from major health care providers including but not limited to for-profit hospitals, nonprofit hospitals, and federally qualified health centers, in order to develop the Plan to leverage funds provided by the Rural Health Care Transformation Fund Program created by H.R. 1 to support quality access to health care in rural Virginia.
The Secretary is also directed to conduct rapid, broad, stakeholder outreach efforts on the rural health care transformation plan, the new work and community engagement requirements, and the new twice-a-year Medicaid eligibility determination for the expansion population.
SNAP
Beginning October 1, 2027, states with SNAP Quality Control Payment Error Rates above six percent will be required to contribute a state match for SNAP benefits to eligible low-income Virginians. The amount of the state match will depend on the demonstrated error rates, ranging from zero to 15 percent of the total benefit amount paid. Currently, benefits are paid with 100 percent federal funds. Virginia does have time to improve processes, reduce error rate, and reduce the state share of payments. If Virginia does not take aggressive action to lower the current error rate of 11.5 percent, the Commonwealth would be required to contribute 15 percent state share to total benefits, or $270 million General Fund annually. A state having a payment error rate that is less than six percent means the state will not have a benefits contribution.
Because SNAP processing is performed by the local DSS office and not the state, all participants will need to engage fully to achieve our objective. The Governor has directed the Secretary of Health and Human Resources and the Commissioner of Social Services to the Secretary of Health and Human Resources, in conjunction with the Secretary of Finance, and the Commissioner of Social Services to take the following steps to meaningfully reduce errors in SNAP benefit processing at the local departments of social services, driving the error rate down below six percent.
1. Design and execute an incentive and disincentive program to encourage local agencies to adopt best practices in error rate reduction.
2. Require local benefit staff to complete a core set of trainings to perform job functions.
3. Require benefits staff to verify applicant expenses and household composition instead of accepting self-attestation.
4. Investigate public-private partnerships to free up capacity at local social services agencies so that more efforts can be directed toward reducing Virginia’s SNAP error rate.
5. Institute system reform and increase quality control measures utilizing contractors, when necessary.
6. Explore the feasibility of contracting with a vendor using cutting edge technology, including artificial intelligence, to improve the accuracy and automation of SNAP decisions.
