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The Centers for Medicare and Medicaid Services this week announced the individual funding awards for the $50 billion federal Rural Health Transformation Program. Now, dedicated project officers will convene program kickoff meetings with each state and provide ongoing assistance and oversight. States will then submit regular progress updates so CMS can identify proven approaches that streamline rural healthcare operations, empower care and resource coordination, and build partnerships.
WHY IT MATTERS
The $50 billion initiative, established under the Working Families Tax Cuts legislation, is aimed at modernizing and sustaining rural healthcare – largely with IT projects and technology innovation as many small and rural hospitals face closure.
According to the U.S. Department of Agriculture, 146 rural hospitals in the United States closed or stopped providing inpatient services from 2005 to 2023.
CMS awarded funding to all 50 states as a foundation to begin implementing their Rural Health Transformation Plans, according to the CMS announcement.
| State | FY26 Award Amount |
| Alabama | $203,404,327 |
| Alaska | $272,174,856 |
| Arizona | $166,988,956 |
| Arkansas | $208,779,396 |
| California | $233,639,308 |
| Colorado | $200,105,604 |
| Connecticut | $154,249,106 |
| Delaware | $157,394,964 |
| Florida | $209,938,195 |
| Georgia | $218,862,170 |
| Hawaii | $188,892,440 |
| Idaho | $185,974,368 |
| Illinois | $193,418,216 |
| Indiana | $206,927,897 |
| Iowa | $209,040,064 |
| Kansas | $221,898,008 |
| Kentucky | $212,905,591 |
| Louisiana | $208,374,448 |
| Maine | $190,008,051 |
| Maryland | $168,180,838 |
| Massachusetts | $162,005,238 |
| Michigan | $173,128,201 |
| Minnesota | $193,090,618 |
| Mississippi | $205,907,220 |
| Missouri | $216,276,818 |
| Montana | $233,509,359 |
| Nebraska | $218,529,075 |
| Nevada | $179,931,608 |
| New Hampshire | $204,016,550 |
| New Jersey | $147,250,806 |
| New Mexico | $211,484,741 |
| New York | $212,058,208 |
| North Carolina | $213,008,356 |
| North Dakota | $198,936,970 |
| Ohio | $202,030,262 |
| Oklahoma | $223,476,949 |
| Oregon | $197,271,578 |
| Pennsylvania | $193,294,054 |
| Rhode Island | $156,169,931 |
| South Carolina | $200,030,252 |
| South Dakota | $189,477,607 |
| Tennessee | $206,888,882 |
| Texas | $281,319,361 |
| Utah | $195,743,566 |
| Vermont | $195,053,740 |
| Virginia | $189,544,888 |
| Washington | $181,257,515 |
| West Virginia | $199,476,099 |
| Wisconsin | $203,670,005 |
| Wyoming | $205,004,743 |
Along with funding for tech upgrades to modernize rural hospitals and health systems, CMS said that the funding will make the rural healthcare system more efficient through the establishment of rural regional centers of excellence, comprehensive data-sharing platforms and clinically integrated networks.
Awards totaling $10 billion will be available each year through 2030, with half of the funds distributed equally among all approved states.
Additional funds were awarded based on "individual state metrics around rurality and a state’s rural health system, current or proposed state policy actions that enhance access and quality of care in rural communities and application initiatives or activities that reflect the greatest potential for, and scale of, impact on the health of rural communities," the agency said.
The first awards range from $147,250,806 for New Jersey to $281,319,361 for Texas. Awards are based in part on the size of each state's rural population.
The funding will help turn the states' proposals "into lasting improvements for rural families," said CMS Administrator Dr. Mehmet Oz, in a statement.
"States are stepping forward with bold, creative plans to expand rural access, strengthen their workforces, modernize care and support the communities that keep our nation running," he said.
The program funded evidence-based, outcomes-driven proposals that would improve care delivery, support providers and advance healthcare service coordination across rural communities, CMS said. The agency then cited physical fitness, food-as-medicine and chronic disease prevention programs and improved emergency medical service options.
Underpinning the proposals are rural healthcare modernization upgrades for interoperability, telehealth and remote patient monitoring, and cybersecurity. CMS said that some states are also exploring artificial intelligence documentation technologies that reduce rural clinician burdens.
Funding is also intended to support training for existing and new community-based clinical workforces.
THE LARGER TREND
The RHTP followed the 2025 One Big Beautiful Bill Act, which posed Medicaid changes that could cause more than 7 million people to lose their health insurance and potentially result in small and rural hospitals closing due to expected increases in uncompensated care.
Some industry experts have raised concerns that it may be difficult for states to sustain RHTP goals and may need to fund capital costs for rural hospitals that are unable to finance required system upgrades independently.
"Cost-shifting may also occur due to limitations on CMS’ ability to incentivize initiatives that don't directly benefit Medicare and, to a lesser extent, Medicaid," Valerie Rogers, senior government relations director at HIMSS, parent company of Healthcare IT News, said last month.
"This scenario could exacerbate disparities among states, specifically rural hospitals, potentially forcing resource-limited areas to develop innovative solutions to overcome these financial challenges," said Rogers.
To ensure that states spend their annual allocations of the $50 billion, CMS launched a new Office of Rural Health Transformation earlier this month. Within the office, a new Division of State Rural Engagement serves as the central liaison with stakeholders and government entities.
A four-part notice of proposed rulemaking on information collection activities and its organization and functions proposes technical requirements for RHTP reporting.
States are also required to convene annually at the CMS Rural Health Summit, to be held in 2026 during the CMS Quality Conference, according to the agency.
ON THE RECORD
"More than 60 million Americans living in rural areas have the right to equal access to quality care," said Health and Human Services Secretary Robert F. Kennedy Jr. in a statement. "This historic investment puts local hospitals, clinics and health workers in control of their communities’ healthcare. Thanks to President Trump’s leadership, rural Americans will now have affordable healthcare close to home, free from bureaucratic obstacles."
Andrea Fox is senior editor of Healthcare IT News.
Email: afox@himss.org
Healthcare IT News is a HIMSS Media publication.
