As states move through distribution of the $50 billion Rural Health Transformation Program established under HR 1, rural hospital leaders are skeptical the funds will successfully offset the financial pressures they face.
The funds, which CMS awarded in December, will be distributed over a five-year period, with $10 billion going to all 50 states annually from 2026 through 2030.
“We’re being told, ‘Just hang on those years down the road because there’s other people who aren’t going to get the money because they’re probably going to close and so the pool for the rest of you will be bigger,'” Amy Hart, CEO of Crosby, Minn.-based Cuyuna Regional Medical Center, said during the Becker’s Rural Healthcare Leadership Summit on the panel, “Rural Hospital’s Role in Economic Development and Community Growth.”
Cuyuna Regional Medical Center is a 25-bed critical access hospital that comprises five physician clinics and a senior living community in partnership with Presbyterian Homes and Services, according to its website.
The latest Center for Healthcare Quality and Payment Reform analysis found 720 rural hospitals are at risk of closing nationwide. While hospital closures are down in 2026 compared to 2025, analysts warn the slowdown may not signal structural improvement, and that pending Medicaid cuts under HR 1 could convert a large share of those at-risk hospitals into closures within the next two to four years.
Against that backdrop, Ms. Hart said the incoming rural health funds do not change the underlying issue.
“This $50 billion is not going to solve a problem,” Ms. Hart said. She said Cuyuna Regional will use the funds to provide mobile service care, but there will not be revenue attached to it.
Fellow panelist Joshua Elder, MD, vice president of eHealth clinical operations at SCP Health, echoed Ms. Hart’s concerns.
“Whether you get the funds or not, that’s not the point,” Dr. Elder said. “The point is the funds will not be a sustainable metric to an organization. It won’t be a drop in the bucket in terms of the Medicare and Medicaid cuts. The pain that’s going to be felt in rural hospitals, many are not going to get the funds, and even when they do, it’s not going to be a revenue driver to a sustainable model.”
SCP Health works across more than 30 states in emergency, hospital and critical care medicine to support clinical practices in delivering care, according to its website.
Dr. Elder said Medicare shifts and reimbursement pressure hitting rural hospitals is not unique to that setting, but that rural communities feel it more starkly.
“I’d say rural communities [are] a canary in the coal mine in a lot of ways [for] the trends we’re seeing,” he said. “We’re needing to address those because they’re more stark and in some ways more contrast, but in the urban environments, we’re seeing the same.”
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