Bridging the Gap: How AI is Revolutionizing Financial Accessibility in Healthcare

This one is personal for me. I got some of my practical hours to become a registered dietitian at a rural hospital in Fayette, Alabama, about an hour outside of Tuscaloosa. A census of 13 was considered a busy day. Thirteen patients. The entire hospital. If something was serious, patients were sent to Tuscaloosa. If it was really serious, they were looking at a 90-minute drive from Fayette to Birmingham. That was just how it worked. And for the people in that community, that hospital was everything: emergency care, a few swing beds, the nursing home attached to it, the few provider offices nearby that existed because the hospital did.

Experiences like that are a big part of why I ended up getting my MPH. My focus was on nutrition and health outcomes in underserved communities, and the pattern is always the same: when people lose access to essential services, whether it’s a grocery store or a hospital, the health impacts compound. Food deserts get a lot of attention, and they should. But healthcare deserts are just as devastating, and they’re getting worse.

That’s why I’ve been watching the Rural Health Transformation Program so closely. Not just because of Thrivory’s work with health systems, but because I’ve seen what it looks like when a facility is running so thin that the conversation stops being about how to improve care and becomes about how to keep the doors open.

$50 billion is coming. It’s not designed to keep hospitals running.

The CMS Rural Health Transformation Program is the largest federal investment in rural healthcare in American history: $50 billion allocated across all 50 states, with the first $10 billion set to flow starting in October. The goal is to address workforce shortages, modernize infrastructure, expand access, and stand up new care models.

But here’s what’s actually happening on the ground. NPR reported that at least 10 states are using their transformation funding to “right-size” rural hospitals, which in practice means cutting inpatient services. Montana’s plan explicitly says hospitals may need to downsize to qualify for funding. CMS has been clear that the program’s purpose is “not to pay operating expenses.”

Big Sandy Medical Center in Montana, a 25-bed rural hospital that’s been serving its community since 1965, needs $1 million in deferred maintenance, including a failing HVAC system, and can barely make payroll each month. But the transformation fund won’t cover that. For a hospital that’s already down to one emergency room with a single curtain between two beds, it’s hard to imagine what right-sizing even looks like.

The same bill that funds transformation is cutting Medicaid

Becker’s reported that rural health system IT leaders are delaying technology upgrades specifically because of reimbursement uncertainty. Marshall Medical Center in California, a 65-year-old hospital, is putting all infrastructure updates on hold indefinitely.

Here’s where it gets really frustrating. The same legislation that created the $50 billion transformation fund also cut Medicaid by an estimated $911 billion over the next decade, with roughly $137 billion of that hitting rural areas directly. So on one hand, here’s money to transform. On the other, your Medicaid reimbursement is about to get cut, so you’re freezing spending because you don’t know what your revenue will look like in 18 months.

The transformation fund is supposed to drive investment. The Medicaid cuts are causing hospitals to pull back. These two forces are working against each other, and the hospitals caught in the middle are the ones communities depend on most.

When hospitals close, communities don’t just lose a building

According to the Center for Healthcare Quality and Payment Reform, 756 rural hospitals are currently at risk of closure in the U.S. 323 of those are at immediate risk, meaning their financial reserves can only cover losses for two to three years. And according to the UNC Sheps Center for Health Services Research, 146 rural hospitals closed between 2010 and 2023.

What a lot of people don’t realize is that rural hospitals are usually the largest employers in their region. When a rural hospital closes, it’s not just the loss of healthcare. It’s the loss of jobs across every skill level. It’s the loss of employer-based health insurance for families. It’s the loss of income that circulates through local businesses, restaurants, schools. Research shows that hospital closures decreased local labor force participation by 1.4% and led to measurable population decline. When the hospital goes, the community starts shrinking.

And it goes further than economics. A study published in Health Services Research that examined every rural hospital closure in the U.S. from 2005 to 2019 found that in moderately rural counties, closures led to a 10% increase in low birth weight births and later initiation of prenatal care. In the most rural counties, residents were 29-52% less likely to deliver in their own county after a closure.

I think about the women I worked with during my training. If the hospital in a town like Fayette closed, you’re not driving 10 minutes for a prenatal visit. You’re driving 45 minutes to an hour to Tuscaloosa, and if something goes wrong during delivery, you might be looking at another hour-plus to Birmingham for a higher level of care. That’s not a hypothetical. That’s the reality for hundreds of rural communities right now,

I did my WIC rotation in Hale and Sumter County, Alabama. Those are Black Belt counties where access to care was already limited when I was there. Earlier this year, a Public Citizen report flagged Hill Hospital of Sumter County and Hale County Hospital as being at heightened risk of closing or reducing services due to the Medicaid cuts in the same legislation that created the transformation fund. 

This is a cash flow problem, and it needs financial infrastructure to fix it

Every transformation plan, in every state, requires working capital. Workforce recruitment costs money. Telehealth build-outs cost money. Chronic care management programs, facility maintenance, equipment upgrades. All of it requires upfront investment. And the revenue from those new services will follow the same reimbursement cycle as everything else: deliver care today, get paid later.

For rural hospitals with heavy Medicaid and Medicare payer mixes, reimbursement takes 60-90 days on a good day. And for many of these hospitals, commercial payers are doing most of the financial heavy lifting. Medicare reimburses roughly at cost. Medicaid often reimburses below cost. The commercial volume is what offsets those losses and keeps operations going. When those commercial reimbursements are also taking 30-60 days to arrive, the one revenue stream that’s actually keeping the hospital afloat is sitting in A/R.

You can’t recruit nurses and physicians when you’re managing cash week to week. You can’t build out the telehealth programs these transformation plans call for when your finance team is spending all their time chasing claims. You can’t even maintain the building you already have when every dollar is spoken for before it arrives.

Here’s what I keep coming back to. Healthcare has infrastructure for submitting claims. It doesn’t have infrastructure for getting paid. Providers submit claims and then they wait. Nobody can tell them with any certainty what they’re going to get paid, when, or whether the claim will even be approved. For a rural hospital running on margins this thin, that uncertainty is the problem.

Cash flow is the prerequisite for transformation. Not something you figure out after the plan is in place. It has to come first. And solving it requires building a financial layer underneath healthcare that gives hospitals predictability: knowing what a claim is worth before it’s adjudicated, accessing earned revenue without waiting months, and not absorbing the risk of every denial.

The bottom line

$50 billion is historic. But the hospitals that need it most are stuck in a cycle: they need to invest to qualify for transformation funding, but they can’t invest because their revenue is trapped in a reimbursement system that was never built for organizations running on margins this thin.

That’s solvable. And it starts with giving rural hospitals the financial infrastructure they’ve never had.

If your hospital or health system is navigating this, we’d love to learn more about your situation.

Thrivory is a healthcare fintech and AI company building the financial infrastructure layer for healthcare. Our platform turns submitted claims into same-day capital with predictive visibility into reimbursement timing and denial risk. Learn more at thrivory.com.