The Centers for Medicare & Medicaid Services rolled out $10 billion in rural health funding to states in the first distribution of federal dollars meant to support rural hospitals. States received an average of $200 million for 2026 to expand rural care access, strengthen workforces, and modernize facilities and technology, according to CMS. A new Office of Rural Health Transformation inside the agency will oversee the program, which will allocate a total of $50 billion to states through 2030.
Half of the funding for 2026 was distributed equally to all 50 states, while the remaining amounts were allocated at CMS’s discretion based on states’ rurality and proposed plans for the funds. Texas received the most funding at $281 million, followed by Alaska and California. New Jersey, Connecticut and Rhode Island received the least.
Funding Goals and State Allocations
To receive funding, states submitted plans to CMS tied to one of the fund’s five goals: promoting preventive care and chronic disease management, improving rural providers’ efficiency and financial sustainability, recruiting and retaining rural healthcare workers, developing more flexible and value-based payment models, and improving access to technology like digital health tools. States are not required to allocate money only to hospitals to receive funding, and states cannot send money to hospitals to pay directly for clinical services that could be reimbursed by another form of health coverage.
Texas said in its application that it would use the funds to add more than 1,000 rural health professionals, develop wellness and nutrition programs, and “elevate technology” in rural health. New Jersey, which received $147 million, the smallest award, said in its application it would use the money to support rural health recruitment, fund essential behavioral health providers and encourage regional technology partnerships.
Broader Context
The Rural Health Transformation program was added to President Donald Trump’s “One Big Beautiful Bill” to win over Republican holdouts who worried the spending package included too many cuts to Medicaid. Rural healthcare access has been steadily declining in the U.S., with more than 100 rural hospitals closed in the past decade. More than one-third of all rural hospitals are at risk of closing, according to the nonprofit Center for Healthcare Quality and Payment Reform.
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://www.healthcaredive.com/news/cms-distributes-2026-rural-health-transformation-funds/808703/