Governor Kotek Secures $37.5 Million to Support Rural Maternity Care Across Oregon

SALEM, Ore. — Rural hospitals across Oregon will receive up to $37.5 million in funding to strengthen and stabilize maternity care services after federal officials approved a state-directed payment program aimed at protecting labor and delivery services in underserved communities.

Governor Tina Kotek, the Oregon Health Authority (OHA), and the Hospital Association of Oregon announced that the Centers for Medicare & Medicaid Services has approved Oregon’s proposal, unlocking federal matching funds that will supplement a state investment authorized by lawmakers earlier this year.

The combined funding will support 21 rural hospitals in 17 counties that provide maternity services, helping facilities maintain staffing levels, purchase critical medical equipment, improve quality of care, and expand outreach efforts for families enrolled in the Oregon Health Plan (OHP).

“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 in a statement. “The Trump Administration’s cuts to Medicaid will make rural maternity care harder to sustain, and I applaud the work by the agency to maximize state dollars to support Oregon providers.”

The directed payment stems from a one-time $25 million investment approved by the Legislature through House Bill 5025 in 2025. State officials say the funding comes at a critical time as many rural hospitals face financial challenges and uncertainty surrounding federal Medicaid funding.

According to OHA, approximately half of all births in Oregon are covered by OHP. Health officials say the new funding will help preserve access to labor and delivery services in remote communities while improving prenatal and postpartum care, reducing preventable complications, and promoting more equitable maternal health outcomes.

“CMS’s approval enables us to support rural hospitals at a moment when maternity services are under tremendous pressure,” said Dr. Sejal Hathi, director of OHA. “These funds will help reinforce essential care for expecting OHP members while also strengthening services for entire communities.”

Hospital leaders welcomed the investment, noting that rural maternity programs have faced mounting workforce shortages and rising operational costs.

“Oregon’s rural hospitals face mounting financial and workforce challenges in sustaining the maternity services families rely on,” said Becky Hultberg, president and CEO of the Hospital Association of Oregon. “This investment highlights what can be achieved when state leaders, hospitals, and our partners work together to protect care in communities.”

Eligible rural hospitals will automatically receive payments, with no application process required. OHA is working with coordinated care organizations and hospitals to establish a payment schedule.

Below is a list of rural hospitals that will receive direct payment (in alphabetical order by county):

In counties such as Malheur County — where more than half of residents are enrolled in OHP — improvements to maternity services often benefit the broader community. While activities like outreach may focus specifically on OHP members, other investments, such as equipment upgrades or additional staffing, enhance care for all patients.

In addition to the directed payment, OHA is continuing to strengthen the full continuum of maternity care by expanding access to doulas and lactation counselors, implementing a community-based access program to support culturally specific and geographically diverse perinatal service providers, and prioritizing maternal and child health through the Rural Health Transformation Program. OHA recognizes that maternity care extends far beyond hospital services—from prenatal visits and labor and delivery to postpartum supports, home visiting, and lactation services—and is working across this entire continuum to close gaps and improve equitable access to care for families in every community. 

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