Innovation Grant Program

The Texas Health and Human Services Commission (HHSC) is administering the Innovation Grant Program to support rural healthcare infrastructure and sustainability across the state of Texas. HHSC operates as the state’s primary health and human services agency, overseeing programs that improve access to care, public health outcomes, and service delivery systems. This funding opportunity arises under the Rural Health Stabilization and Innovation Act, enacted in 2025 to address financial instability and closure risks facing rural hospitals. Through this initiative, HHSC aims to strengthen rural healthcare systems by promoting innovative, sustainable solutions that improve access and quality of care. The primary purpose of the Innovation Grant Program is to provide financial support to Rural Hospitals, Rural Hospital Authorities, and Rural Hospital Districts in Texas. The program prioritizes initiatives that expand healthcare access, improve care quality, enhance financial stability, and ensure long-term sustainability without continued state funding. Eligible projects may include operational improvements, service expansions, or facility upgrades that directly contribute to these objectives. Funding may also support renovation or modernization of existing structures, as long as such improvements are completed within the project period and result in operational enhancements. The program provides a total of 25 million dollars in available funding, with multiple awards anticipated. Individual applicants must propose budgets ranging from 2 million to 5 million dollars, aligning with the scope and scale of their proposed initiatives. Funds must be used strictly for allowable expenses incurred during the defined project period and cannot be used for prohibited activities such as new construction, debt payments, or general administrative costs unrelated to the project. Importantly, there is no cost-sharing or matching requirement associated with this grant, lowering financial barriers for eligible rural entities. Eligible applicants are limited to organizations classified as Rural Hospitals, Rural Hospital Districts, or Rural Hospital Authorities within Texas. Applicants must demonstrate legal authority to apply, maintain good standing with regulatory bodies, and meet all compliance requirements outlined in the solicitation. Partnerships between hospitals are permitted, provided that a single lead entity submits a unified application and assumes full responsibility for project execution and reporting. Applicants must submit detailed proposals outlining their project design, budget, sustainability plan, and administrative capacity. The application process requires submission of a complete application package, including narrative proposals, budget documentation, required forms, and supporting exhibits. Applications must be submitted through the HHSC Online Bid Room or via physical delivery on USB drives, following strict formatting and organizational guidelines. The deadline for submission is May 28, 2026, at 10:30 a.m. Central Time, and applications must be received by this deadline to be considered. An applicant conference is scheduled to provide guidance, and a formal question-and-answer process is available prior to submission. Applications undergo a structured evaluation process that includes initial compliance screening, followed by scoring based on innovation, sustainability, and budget alignment. HHSC may also consider past performance, geographic distribution, and alignment with priority populations such as uninsured individuals, rural older adults, and pregnant women. Final funding decisions are made at the discretion of HHSC leadership, taking into account program priorities and available funding. Selected applicants may enter a negotiation phase before final award agreements are executed. The anticipated timeline includes an award notification in July 2026, with project implementation expected to begin in August 2026. The project period is anticipated to run through October 2028, with all funds required to be expended by August 31, 2028, and final closeout activities completed shortly thereafter. Throughout the grant term, recipients must comply with reporting requirements, performance monitoring, and sustainability planning to ensure long-term impact.

Focus heavily on innovation and sustainability since they account for 90% of scoring; ensure budget alignment and completeness; submit all required forms to avoid disqualification