backCMS Awards $50 Billion Under Rural Health Transformation Program to 50 States
On December 29, 2025, CMS announced $50 billion in rural health funding will be available under the Rural Health Transformation Program. Last September, states applied for funding through a one-page summary of their proposed projects and were evaluated based on criteria established by CMS through a Notice of Funding Opportunity. According to CMS, starting this year, all 50 states will receive first-year awards from CMS averaging approximately $200 million each. As directed by Congress, the Rural Health Transformation Program’s $50 billion in funding will be allocated to approved states over five years, with $10 billion available each year from 2026 through 2030.
As background, the Rural Health Transformation (RHT) Program was authorized by the One Big Beautiful Bill Act (Section 71401 of Public Law 119-21). According to CMS, the RHT Program goals include promoting preventative health, sustainable access, workforce development in rural communities through recruitment and retention, innovative care models, and emerging technologies. Under CMS’s eligibility criteria, states are required to use RHT Program funds for three or more of the following approved uses:
- Promoting evidence-based, measurable interventions to improve prevention and chronic disease management.
- Providing payments to health care providers for the provision of health care items or services, as specified by the Administrator.
- Promoting consumer-facing, technology-driven solutions for the prevention and management of chronic diseases.
- Providing training and technical assistance for the development and adoption of technology-enabled solutions that improve care delivery in rural hospitals, including remote monitoring, robotics, artificial intelligence, and other advanced technologies.
- Recruiting and retaining clinical workforce talent to rural areas, with commitments to serve rural communities for a minimum of 5 years.
- Providing technical assistance, software, and hardware for significant information technology advances designed to improve efficiency, enhance cybersecurity capability development, and improve patient health outcomes.
- Assisting rural communities to right size their health care delivery systems by identifying needed preventative, ambulatory, pre-hospital, emergency, acute inpatient care, outpatient care, and post-acute care service lines.
- Supporting access to opioid use disorder treatment services (as defined in section 1861(jjj)(1)), other substance use disorder treatment services, and mental health services.
- Developing projects that support innovative models of care that include value-based care arrangements and alternative payment models, as appropriate.
- Additional uses designed to promote sustainable access to high quality rural health care services, as determined by the Administrator.
The $50 billion will be structured in two types of distributions. Under the first type, 50 percent of the funding will be distributed equally among all approved states. For the second type, the remaining 50 percent will be distributed to states based on a variety of factors such as 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.
With CMS announcing the $10 billion FY 2026 award amounts last week, no state received less than $147 million. The top awardees were Texas with $281 million, Alaska with $272 million, and California and Montana each with approximately $234 million.
CMS’s Press Release is available here.
CMS’s overview of the RHT Program is available here.
RHT Program abstracts from each state are available here.
Reporter Michael L. LaBattaglia, Washington, D.C., +1 202 626 5579, mlabattaglia@kslaw.com
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