Rural Health Transformation Funds Kick Off as States Prepare Budgets

CMS unveiled the first $10 billion of a five-year, $50 billion Rural Health Transformation program, distributing state grants from about $147 million to $281 million and adding a discretionary “technical score” portion that sparked questions about political influence. States must file revised budgets by Jan. 30 and wait for CMS approval before drawing funds; eight months remain to begin spending and demonstrate progress ahead of 2027 funding decisions. The money is intended to expand rural health access through telehealth, electronic health records upgrades, and workforce initiatives, while states also propose policy actions such as SNAP waivers, nutrition-related programs, fitness tests, and potential certificate-of-need reforms. Critics caution some funds could bypass rural hospitals, but CMS says the program is designed to be flexible to local needs and states are setting up offices and advisory groups to manage disbursement and oversight.