Almost one year into HR 1’s $50 billion Rural Health Transformation Program, many rural hospital leaders still have questions about the funds.
Administered by CMS, $10 billion annually will be distributed to all 50 states from 2026 through 2030, with each state designing and releasing its own funding opportunities. While the money has been approved for some hospitals, many have not received it. When the funds do arrive, the awards are often modest.
Becker’s connected with several rural hospital executives and state hospital associations to find out where their RHTP funding stands. Several reported approved projects are still waiting on payment.
At Osceola (Wis.) Medical Center, CEO Kelly Macken-Marble said they are expecting approximately $60,000 to support expansion of AI documentation tools to 15 more users in an outpatient clinic.
“While we have not yet received these dollars, we expect them in the next month,” Ms. Macken-Marble said. “We are looking forward to the next round that will focus on the hospital to help with upgrading our technology infrastructure.”
Over in New Hampshire, Plymouth-based Speare Memorial Hospital president and CEO Craig Williams said the hospital received a $50,000 planning grant under New Hampshire’s Go North program to evaluate its current provider compensation models to prepare for value-based care.
Projects will be kicked off over the next several weeks, with reimbursement from the planning grant beginning in early 2027. Speare Memorial also submitted applications under Go North’s Primary Care RFA, which was due Oct. 15, and its Critical Access Hospital and Acute Care RFA, which is due Nov. 12.
“Generally, much of our internal activity is focused on applying for the grants during the fall of 2026 with an expectation of grant notifications in late 2026 and we would not expect to see any funding hit our books until early 2027,” Mr. Williams said.
However, other hospitals like Trego County Lemke Memorial Hospital in WaKeeney, Kan., have yet to see funds, CEO Tyler Stapp told Becker’s.
Susan Stacey, BSN, RN, chief executive of Providence Inland Northwest Washington, also confirmed they have not seen funding distributed – but multiple projects with Providence Mount Carmel Hospital in Colville and Providence St. Joseph’s Hospital in Chewelah have been approved for funding.
“Projects include clinical equipment such as endoscopy equipment, beds, EKG machines, ultrasound machines and other essential patient equipment for our rural hospitals,” Ms. Stacey said. “Additionally, funds are also approved for infrastructure investments such as HVAC, trash compactor, fire panel, etc. We look forward to implementing the approved projects.”
David Walker, CEO of George E. Weems Memorial Hospital in Apalachicola, Fla., said while funds have not been distributed, the hospital expects to finalize grant agreements by the end of October or soon after.
Mr. Walker said George E. Weems and seven other rural hospitals are partnering to build a stronger regional healthcare network to expand access in areas like specialty care, telehealth services, behavioral health programs, oncology readiness, telestroke and neurology resources, enhanced care coordination and technology modernization.
“Together, these efforts will strengthen rural healthcare across our region, improving access to high-quality care while allowing more patients to receive services closer to home,” he said.
Jeremiah Hodshire, president and CEO of Hillsdale (Mich.) Hospital, said the hospital applied for funding but has received nothing, with no given timeline other than it could be any day that the money comes through.
He said the program cannot offset Medicaid cuts under HR 1, even if the funds arrive.
“[None] of those dollars are going to keep our doors open,” he said. “It is a band-aid on a very gaping, very, very infected wound, which is what we’re facing right now in healthcare.”
State-level distribution of the funds is moving at different speeds.
Michigan received $173 million, the 43rd most in the country, Lauren LaPine-Ray, DrPH, vice president and executive director of the MHA Center of Rural Excellence at the Michigan Health & Hospital Association, said. The MHA Center of Rural Excellence was awarded $13.1 million to provide to rural hospitals out of the $70.4 million the state had allocated as of July.
Ms. LaPine-Ray said Michigan’s rural hospitals may use the funds to support expansion of community health workers in rural areas, support joint community health needs assessment efforts between rural hospitals and local health departments, expand community paramedicine program access, and increase medical assistant and emergency management technician numbers.
“Additionally, eligible rural hospitals are using funds to expand access to crisis behavioral health services in rural areas of the state,” she said. “Continued investment in direct, flexible funding to rural hospitals specifically is crucial to maintain access to care and to fulfill the original intent of Congress when they created the program.”
Mr. Hodshire said new programs launched with the funds could saddle hospitals with costs after the money runs out. “This is a five-year grant, five-year funding. This is not a 20-year, 30-year,” he said.
He also urged policymakers to revisit the program’s design and heed recommendations from rural leaders who know the challenges of delivering care. “Year one is not working,” he said.
In New York, the state dedicated $76 million of its year-one funds to hospitals and their community partners, including federally qualified health centers, behavioral health providers and other community-based organizations. The state announced 90 awards to 56 organizations in early September, with contracts being executed to ensure funds are obligated as required, Thomas Quatroche Jr., PhD, president and CEO of the Healthcare Association of New York State, said.
In Alaska, award notifications went out a few weeks ago.
“We’ll likely have a better feel for how it will all shake out in the next three to six months,” Jann Mylet, director of external affairs for the Alaska Hospital & Healthcare Association, said.
As states work through the first rounds of funding, the American Hospital Association pressed CMS Administrator Mehmet Oz, MD, in an Aug. 5 letter to change how the money moves in years two through five of the program.
In the letter, the AHA asked CMS to work with Congress to let states revise their initial applications and give them more time to spend obligated funds. The AHA said states had less than two months to create their applications, calling it a “massive task,” and were then required to spend the funds by the following budget year.
The association also urged CMS to tell states that hospitals should not have to pay for projects upfront and wait for reimbursement, because many rural facilities and providers cannot front those costs.
The AHA also asked CMS to steer more funding to hospitals by lifting the 15% cap on provider payments and the 20% cap on infrastructure and capital improvements.
“These restrictions are not required by statute and hinder the fund’s ability to achieve its intent to stabilize, modernize and sustain rural hospitals,” the letter said.
Lastly, the AHA asked CMS to post where the states’ dollars end up, ensuring that stakeholders, including Congress, can determine whether the program funding intended for hospitals is actually being directed to them.
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