Hospital and state hospital association leaders are broadly supportive of the Rural Health Transformation Program’s promise to redesign care in rural communities. But they stress that the program’s true impact will depend on how the dollars are executed and distributed — and whether they actually reach hospitals.
CMS awarded $50 billion across all 50 states through the Rural Health Transformation Program, a five-year initiative running from 2026 through 2030. The first-year funding was announced Dec. 29, with each state receiving at least $147 million. Texas leads the allocations with $289.3 million. Still, hospital leaders are awaiting clarity on how and when funds will be distributed — and how much support their rural facilities can realistically expect.
Texas Hospital Association President and CEO John Hawkins said the funding could help rural hospitals walking a financial “highwire,” but emphasized, “the proof will be in the details.”
“The dollars need to be focused on hospitals, which took the brunt of the Medicaid cuts,” Mr. Hawkins told Becker’s. “They need to come quickly without unnecessary administrative hurdles. They need to be self-sustaining, flexible and not create new burdens.”
Several state hospital associations said they will soon meet with state officials to better understand how the funds will be administered. Because states are determining their own plans, not all dollars will be directed toward hospitals.
Oklahoma Hospital Association President and CEO Rich Rasmussen said procurement issues may slow rollout in some states.
“States might have some government statutes that need to be examined, and so I think every state is looking at it from that standpoint,” he said. “And so for us — circling back to Oklahoma — we’re waiting for the state to say, ‘OK, we have what we need. We know how this is going to play out. Now we want to engage our stakeholder groups.’ We’ve worked together with them from the very beginning.”
In Nebraska, the initial plan has drawn frustration. Nebraska Hospital Association President and CEO Jeremy Nordquist told Becker’s that “it appears there is no clear, direct investment for this purpose in our state’s RHTP proposal.”
“Our members are very frustrated that this was sold to them, and the public at large, as a solution for protecting rural healthcare,” he said, adding that the association will continue to work with Gov. Jim Pillen’s administration to “improve the allocation of these funds and limit unnecessary, bureaucratic red tape that will prevent these funds from going towards saving healthcare for rural Nebraskans.”
Other leaders underscored the limits of one-time funding. Hospital and Healthsystem Association of Pennsylvania President and CEO Nicole Stallings noted that the Rural Health Transformation Program’s investment will not offset long-term losses from Medicaid cuts tied to the same legislation. She said the association is committed to partnering with the governor’s administration on implementation and long-term reform.
Adam Thacker, president and CEO of Good Samaritan in Vincennes, Ind., said that although the RHTP funding is appreciated, it represents a fraction of the projected $12.7 billion in rural healthcare cuts over the next decade.
“In Indiana, we expect approximately $200 million annually through the RHTP over five years,” he said. “These dollars absolutely matter, but they are not a substitute for long-term, sustainable policy solutions. There is also continued uncertainty around how the funding will ultimately be distributed at the state level and whether it will meaningfully support day-to-day hospital operations.”
The Rural Health Transformation Program is intended to strengthen access, infrastructure and workforce capacity in rural communities, Mr. Thacker said. He noted Indiana’s health department, hospital association and rural health partners have been collaborating to ensure investments align with state needs and demonstrate value.
As CEO of Good Samaritan, he said the part of Indiana’s plan he finds most compelling is the regional grant model.
“This approach creates a meaningful opportunity for health systems, public health leaders and community partners to come together around the needs of a region — establishing a shared vision and shared accountability for outcomes such as improved chronic disease management, expanded access to prenatal care, and long-term sustainability,” Mr. Thacker said. “Rural hospitals serve roughly 27% of Indiana’s population and are not only healthcare lifelines, but also critical economic anchors within their communities.”
In Tennessee, Unity Medical Center CEO Martha Henley sees the RHTP as “a critical opportunity to move rural healthcare from survival to sustainability.” She said the hospital’s priority is strengthening its workforce through recruitment and retention, clinical training partnerships and defined career pathways.
“A stable workforce is the single most important factor in preserving access to care,” she said.
Manchester-based Unity Medical is also focused on modernization: expanding telehealth, remote monitoring and chronic care management programs. At the same time, Ms. Henley emphasized the need for dedicated financial support for rural emergency departments.
“Emergency care is a consistent financial loss for rural hospitals, yet it remains the most critical service rural communities rely on,” she said. “Dedicated payments and support for rural emergency departments should be considered as part of state strategies to ensure these essential access points remain available regardless of volume or payer mix, consistent with broader efforts in Tennessee to strengthen emergency services and other core access points.”
She also advocated for leaders’ role in the process.
“While many efforts are well intended, policies are most effective when informed by leaders who live and breathe the daily operational realities of rural hospitals,” Ms. Henley said. “Bringing those voices into planning and implementation helps ensure these investments lead to practical, sustainable solutions.
“If deployed thoughtfully, these funds provide rural communities the opportunity to redesign how care is delivered for the next generation.”
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