CMS Launches $50B Rural Health Transformation Program
February 10, 2026The Centers for Medicare and Medicaid Services recently announced its award decisions for the Rural Health Transformation Program, established as part of the One Big Beautiful Bill Act, and provided a summary of each state project that will receive funding.
The One Big Beautiful Bill Act established the Rural Health Transformation Program, allocating $50 billion for fiscal years 2026–2030 to support rural healthcare providers, workforce expansion, and system improvements. Funding is available to the 50 US states, excluding the District of Columbia and US territories.
As part of this initiative, the Centers for Medicare & Medicaid Services (CMS) announced the following strategic goals:
- Make rural America healthy again: focusing on preventative health, chronic disease management, behavioral health, and prenatal care
- Sustainable access: focusing on care coordination
- Workforce development: focusing on recruitment and retention
- Innovative care: focusing on alternative payment mechanisms to incentivize quality of care and lower costs
- Tech innovation: focusing on remote care, data sharing, and cybersecurity
Starting in 2026, $10 billion will be available each year, half of which will be distributed equally among all states. The remaining 50% was to be awarded at the discretion of the CMS based on state applications submitted in early November 2025 that outlined proposed projects for use of the funds.
On December 29, 2025, CMS announced its award decisions and published a summary of each state project that will receive funding. In sum, during the first-year awards, each state will receive an average of $200 million (New Jersey is set to receive the lowest award of $147 million and Texas is set to receive the highest award of $281 million).
Below is a chart excerpting the awardees’ initiative summaries from CMS’s 50 States Spotlights for the 10 largest awards.
HOW WE CAN HELP
We previously discussed in a Health Law Scan blog post that states face potential Medicaid funding cuts as a result of the One Big Beautiful Bill Act, through restrictions on states’ abilities to use provider taxes, reductions in federal matching funds, and stricter eligibility requirements. The Rural Health Transformation Program offers critical funding to expand access, strengthen the workforce, and drive sustainable innovation. Stakeholders should proactively engage, align with compliance requirements, and leverage these resources to deliver lasting improvements to rural communities.
Morgan Lewis lawyers have a deep background advising our clients on the impacts of grant programs and changes to Medicaid, other state and federal healthcare programs, and health plans. We are ready to assist with any transactional, regulatory, and compliance needs.
Rural Health Transformation Program State Initiatives
|
State |
FY26 Funds |
Executive Summary |
|
Alaska |
$272M |
Alaska is one of the most rural and frontier states, with vast geographic scale, extreme climate, and a widely dispersed population. Alaska’s application centers on serving vulnerable populations by rightsizing primary care delivery and expanding obstetric care access. |
|
California |
$234M |
California’s rural areas make up 82% of the state’s land area and face persistent challenges in access, workforce stability, and infrastructure. California presents a statewide application focused on Medical Service Study Areas (MSSAs) and Primary Care Health Professional Shortage Areas (PCHPSAs). |
|
Florida |
$210M |
Florida has one of the largest populations in the country, with 1.2 million rural residents. Florida’s proposed initiatives span care delivery, resource-sharing collaboratives, remote patient monitoring, and community paramedicine. |
|
Georgia |
$219M |
Georgia describes striking gaps in rural maternal and primary care: 82 rural counties have no OB-GYN and 53 lack a hospital. Georgia focuses on obstetric carts, AHEAD model adoption, mobile health units, and telehealth infrastructure. |
|
Kansas |
$222M |
Kansas faces rural healthcare challenges, including provider shortages, limited preventive services access, and barriers to value-based care participation. Kansas proposes initiatives focused on hospital financial support, workforce incentives, PACE expansion, and a statewide network for value-based care participation. |
|
Missouri |
$216M |
Missouri’s rural population, nearly 2.5 million individuals spread across 104 rural and rural-adjacent counties, faces longstanding challenges with access to care and operational sustainability. Missouri focuses on a hub-and-spoke model to promote regional and local collaboration. |
|
Montana |
$234M |
Montana has a very low population density, and nearly all counties are considered rural. Montana focuses on strengthening the healthcare workforce, securing financial solvency for rural providers, embedding prevention and community health at the center of care, and expanding technology use. |
|
Nebraska |
$219M |
Nebraska’s rural areas face challenges stemming from an agriculture-dominated economy, ranking tenth highest nationally for obesity and fifth highest for maternity deserts. Nebraska addresses these challenges through food-as-medicine programs, workforce development, technology initiatives, and right-sizing the healthcare system. |
|
Oklahoma |
$223M |
Most of Oklahoma is rural and struggles with geographic dispersion, sparse infrastructure, long travel times, high uninsurance rates, and poor health outcomes. Oklahoma aims to address the needs of their rural residents, including their large indigenous population (16%) and agriculture communities. |
|
Texas |
$281M |
Texas’s rural healthcare challenges span 202 of 254 counties (80% of the state), with particular needs in hospital support, local delivery system infrastructure, and fragmented specialty care access. Texas is particularly focused on leveraging state-wide technology initiatives, supporting the rural clinical workforce, establishing CINs, and empowering patients to focus on disease prevention and healthy living. |
Contacts
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