All 50 States Apply for CMS’s $50 Billion Rural Health Transformation Fund
Key Summary
- Nationwide participation: Every US state submitted a proposal for a share of CMS’s 5-year, $50 billion Rural Health Transformation Program by an October 27, 2025, deadline.
- Funding goals: The initiative aims to improve preventive care, strengthen rural access, build a sustainable workforce, and expand digital health.
- Timeline: Awardees will be announced by December 31, 2025, with funds distributed beginning October 1, 2026.
The Centers for Medicare & Medicaid Services (CMS) confirmed that all 50 states have applied for the $50 billion Rural Health Transformation Program, a sweeping federal initiative designed to revitalize health care delivery in rural America. The fund, authorized under the One Big Beautiful Bill Act, will allocate $10 billion annually between fiscal years 2026 and 2030 to help states expand access, workforce capacity, and digital infrastructure in rural communities.
Main News
Half of the program’s $50 billion will be divided evenly among all states, while the remainder will be awarded competitively based on proposals’ alignment with CMS’s strategic priorities—strengthening preventive care, ensuring sustainable access, developing the rural workforce, and advancing technology-driven care.
CMS Administrator Mehmet Oz, MD, speaking at the Milken Institute Future of Health Summit 2025, described the initiative as an “unprecedented uptick in federal funding for rural health providers.” He emphasized that the additional $10 billion per year represents “nearly a 50% annual increase” in rural Medicaid funding.
Under the program’s review structure, a mix of federal and external experts will assess applications, with reviewers recused from evaluating proposals from their home states. CMS expects to announce awardees by December 31, with the first disbursements scheduled for October 1, 2026.
Industry Implications
The Rural Health Transformation Program arrives amid financial strain for many rural hospitals, particularly as federal Medicaid reductions—totaling nearly $1 trillion over the next decade—loom under the same legislative act. The new fund is intended to offset these cuts by enabling long-term, sustainable improvements in rural care delivery rather than one-time operating support.
Program guidelines emphasize innovation and sustainability, requiring states to apply funds toward projects with enduring impact, such as telehealth expansion, workforce training, behavioral health initiatives, and cybersecurity upgrades. CMS imposed caps on administrative expenses (10%) and restrictions on new construction to ensure investments focus on capacity building and technology adoption.
Rural health care advocates see the fund as a critical opportunity to address chronic workforce shortages and improve infrastructure, though some industry analysts note it may only partially offset upcoming Medicaid funding losses.
Conclusion
With all 50 states now vying for CMS’s historic $50 billion fund, the initiative marks a pivotal moment for rural health in the United States. Implementation beginning in 2026 is expected to reshape rural health care delivery through innovation, workforce development, and digital transformation.
Reference
Muoio D. All 50 states submit applications for $50B Rural Health Transformation Program. Fierce Healthcare. Published November 6, 2025. Accessed November 14, 2025. https://www.fiercehealthcare.com/providers/cms-opens-state-applications-50b-rural-health-transformation-program
