A. The “rural health care delivery fund” is created as a nonreverting fund in the state treasury. The fund consists of appropriations, gifts, grants, donations, income from investment of the fund and any other revenue credited to the fund. The department shall administer the fund, and money in the fund is appropriated to the department to carry out the provisions of this section. Expenditures shall be by warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary of human services or the secretary’s authorized representative.

B. A rural health care provider or rural health care facility may apply to the department for a grant to defray operating losses, including rural health care provider or rural health care facility start-up costs, incurred in providing inpatient, outpatient, primary, specialty or behavioral health services to New Mexico residents. The department may award a grant from the rural health care delivery fund to a rural health care provider or rural health care facility that is providing a new or expanded health care service as approved by the department that covers operating losses for the new or expanded health care service, subject to the following conditions and limitations:

(1)     the rural health care provider or rural health care facility meets state licensing requirements to provide health care services and is an enrolled medicaid provider that actively serves medicaid recipients;

(2)     grants are for one year and for no more than the first five years of operation as a newly constructed rural health care facility or the operation of a new or expanded health care service;

(3)     grants are limited to covering operating losses for which recognized revenue is not sufficient;

(4)     the rural health care provider or rural health care facility provides adequate cost data, as defined by rule of the department, based on financial and statistical records that can be verified by qualified auditors and which data are based on an approved method of cost finding and the accrual basis of accounting and can be confirmed as having been delivered through review of claims;

(5)     grant award amounts shall be reconciled by the department to audited operating losses after the close of the grant period;

(6)     in the case of a rural health care provider, the provider commits to: (a) a period of operation equivalent to the number of years grants are awarded; and

(b) actively serve medicaid recipients throughout the duration of the grant period; and

(7)     in prioritizing grant awards, the department shall consider the health needs of the state and the locality and the long-term sustainability of the new or expanded service.

C. As used in this section:

(1)     “allowable costs” means necessary and proper costs defined by rule of the department based on medicare reimbursement principles, including reasonable direct expenses, but not including general overhead and management fees paid to a parent corporation;

(2)     “department” means the human services department [health care authority department];

(3)     “health care services” means services for the diagnosis, prevention, treatment, cure or relief of a physical, dental, behavioral or mental health condition, substance use disorder, illness, injury or disease and for medical or behavioral health ground transportation;

(4)     “medicaid” means the medical assistance program established pursuant to Title 19 of the federal Social Security Act and regulations issued pursuant to that act;

(5)     “medicaid provider” means a person that provides medicaid-related services to medicaid recipients;

(6)     “medicaid recipient” means a person whom the department has determined to be eligible to receive medicaid-related services in the state;

(7)     “operating losses” means the projected difference between recognized revenue and allowable costs for a grant request period;

(8)     “recognized revenue” means operating revenue, including revenue directly related to the rendering of patient care services and revenue from nonpatient care services to patients and persons other than patients; the value of donated commodities; supplemental payments; distributions from the safety net care pool fund; and distributions of federal funds;

(9)     “rural health care facility” means a health care facility licensed in the state that provides inpatient or outpatient physical or behavioral health services or programmatic services in a county that has a population of one hundred thousand or fewer according to the most recent federal decennial census;

(10)    “rural health care provider” means an individual health professional licensed by the appropriate board, a medical or behavioral health ground transportation entity licensed by the public regulation commission or a health facility organization licensed by the department of health to provide health care diagnosis and treatment of physical or behavioral health or programmatic services in a county that has a population of one hundred thousand or fewer according to the most recent federal decennial census; and

(11)    “start-up costs” means the planning, development and operation of rural health care services, including legal fees; accounting fees; costs associated with leasing equipment, a location or property; depreciation of equipment costs; and staffing costs. “Start-up costs” does not mean the construction or purchase of land or buildings.