The Centers for Medicare & Medicaid Services (CMS) has announced that all 50 states will receive funding under the Rural Health Transformation Program, a $50 billion initiative established through President Trump’s Working Families Tax Cuts legislation (Public Law 119-21). The program aims to strengthen and modernize health care in rural communities nationwide. In 2026, states will receive first-year awards averaging $200 million, ranging from $147 million to $281 million, to expand access to care, strengthen the rural health workforce, modernize facilities and technology, and implement innovative care models that bring high-quality services closer to home.
Health and Human Services Secretary Robert F. Kennedy, Jr. emphasized that more than 60 million Americans live in rural areas and deserve equal access to quality care. He noted that this historic investment empowers local hospitals, clinics, and health workers, ensuring that rural Americans can receive affordable care without bureaucratic barriers. CMS Administrator Dr. Mehmet Oz highlighted that states are now advancing creative strategies to expand access, modernize care, and strengthen rural health systems, turning bold ideas into tangible improvements for rural families.
The Rural Health Transformation Program supports comprehensive state-led strategies to improve rural health outcomes. Funding will allow states to expand preventive, primary, maternal, and behavioral health services, create new access points, and implement evidence-based programs addressing chronic disease prevention, nutrition, and physical fitness. States will also enhance rural emergency care systems through improved EMS communication, coordinated transfers, and treat-in-place initiatives.
A critical focus of the program is strengthening and sustaining the rural clinical workforce. States will invest in workforce training, residencies, recruitment, retention incentives, and new pathways for students to begin healthcare careers in their local communities. Programs will also support existing clinical staff to ensure continuity and quality of care in rural areas.
The program will modernize rural health infrastructure and technology by upgrading facilities, equipment, cybersecurity, and interoperability. States will expand telehealth, remote patient monitoring, and digital tools, including AI-enabled clinical workflow systems, to improve access and reduce clinician burdens. Operational efficiency will be enhanced through hub-and-spoke models, regional centers of excellence, data-sharing platforms, and integrated care networks, ensuring care remains local while optimizing resource use.
States will also test innovative care and payment models, including value-based care initiatives, to strengthen partnerships between rural and other providers. These strategies aim to improve sustainability, coordination, and health outcomes while supporting regional collaboration and the long-term resilience of rural health systems.
The $50 billion funding will be distributed over five years, with $10 billion allocated annually from 2026 through 2030. Half of the funds will be distributed equally to all approved states, providing a strong foundation for implementing Rural Health Transformation Plans, while the remaining 50% will be allocated based on state-specific metrics, rural health needs, policy actions, and initiatives demonstrating the greatest potential for impact.
CMS will work closely with states to ensure successful implementation, providing dedicated project officers, technical assistance, and oversight. States will report regularly to CMS, enabling progress tracking, identification of effective approaches, and support for execution. Annual meetings at the CMS Rural Health Summit, beginning with the 2026 CMS Quality Conference, will allow states to share lessons, showcase successful models, and accelerate innovation across regions.
Applications for the program underwent a rigorous merit review process, incorporating expertise across clinical, operational, workforce, technology, and payment disciplines. Reviewers were screened for conflicts of interest and used a structured scoring framework aligned with statutory goals to ensure fairness and consistency. The program follows standard HHS grants policies, ensuring integrity and accountability in funding decisions. Additional program information, including the Notice of Funding Opportunity, is available on the CMS website.
