$50 Billion CMS Initiative Aims to Redefine Rural Health Care

The Centers for Medicare & Medicaid Services (CMS) has announced a new $50 billion Rural Health Transformation Program designed to overhaul health care delivery across rural America. This unprecedented investment will allow states to address critical access gaps, strengthen health infrastructure, and implement innovative solutions tailored to the needs of rural communities.

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What The Program Covers

Over the next five years, states can apply to secure funding that supports:

• Expanding rural access points and preventive care initiatives. More clinics, community health centers, and mobile units will bring services closer to patients who currently face long travel times.
• Helping providers remain financially sustainable. Funding can support hospital operations, strengthen billing practices, and redesign care delivery models so providers can stay open and serve their communities long term.
• Recruiting and retaining skilled health professionals. Investments will support workforce pipelines, loan repayment programs, and residency opportunities for doctors, nurses, and behavioral health specialists.
• Piloting flexible, patient-centered care models. States may test mobile health units, integrated behavioral health programs, and value-based payment systems designed to improve outcomes.
• Leveraging technology. Expanding broadband, implementing telehealth, and securing health data are all priorities to connect patients with care teams no matter where they live.

How Funding Works

Beginning in fiscal year 2026, $10 billion will be distributed annually. Half of the funds will be divided evenly among participating states, ensuring that every approved applicant receives a baseline allocation. The other half will be awarded competitively, with priority given to states that demonstrate innovative approaches and measurable potential impact.

States have until November 5, 2025, to submit their applications. CMS plans to announce recipients by the end of December 2025, allowing states to begin implementing programs in early 2026.

Why It Matters

The Rural Health Transformation Program represents the largest federal commitment to rural health to date. By prioritizing access, sustainability, workforce development, patient-centered models, and technology, CMS hopes to address decades of inequity and ensure that rural patients receive consistent, high-quality care.

For healthcare professionals, this program could shape the future of care delivery. From practice owners seeking financial stability to hospital administrators facing workforce shortages, the program’s impact will be felt across every corner of the rural health ecosystem.

For more on this program, see the CMS Press Release.