CMS has awarded $50 billion across all 50 states through its new Rural Health Transformation Program, a five-year federal initiative established under the Working Families Tax Cuts Act and expanded by the One Big Beautiful Bill Act.
The application window for the program ran from Sept. 15 to Nov. 5. All 50 states applied, and CMS completed a two-tier review process before issuing final awards Dec. 29. The first tier guaranteed equal baseline funding, while the second used a merit-based scoring system reviewed by rural health experts. Although states must submit annual updates, funding is not contingent on performance.
Policy experts and rural hospital leaders have raised concerns about whether states will direct funds toward local providers, since they are not legally required to do so. The broader legislation funding the program also includes long-term Medicaid cuts projected to reduce rural funding by $155 billion over 10 years.
Four things to know:
1. CMS will distribute $50 billion across all 50 states
The Rural Health Transformation Program will run from 2026 to 2030, with $10 billion disbursed annually. The program aims to improve access, infrastructure and workforce capacity in rural communities, according to a Dec. 29 news release.
2. First-year awards range from $147M to $281M
CMS allocated half of the fiscal year 2026 funds equally across all states. The remaining 50% was awarded based on rural population size, proposed policy actions, and potential for impact. The average award was approximately $200 million.
3. Funds will support care models, modernization and workforce efforts
States will use the money to expand access to services, modernize rural facilities and technology, strengthen the clinical workforce, and implement new care delivery and payment models.
4. CMS will oversee implementation through annual reporting
Each state will be assigned a CMS project officer. States must submit yearly progress reports, and CMS will convene an annual rural health summit beginning in 2026 to share best practices.
CMS awarded the following amounts to each state for fiscal year 2026:
| State | Award Amount |
| Alabama | $203,404,327 |
| Alaska | $272,174,856 |
| Arizona | $166,988,956 |
| Arkansas | $208,779,396 |
| California | $233,639,308 |
| Colorado | $200,105,604 |
| Connecticut | $154,249,106 |
| Delaware | $157,394,964 |
| Florida | $209,938,195 |
| Georgia | $218,862,170 |
| Hawaii | $188,892,440 |
| Idaho | $185,974,368 |
| Illinois | $193,418,216 |
| Indiana | $206,927,897 |
| Iowa | $209,040,064 |
| Kansas | $221,898,008 |
| Kentucky | $212,905,591 |
| Louisiana | $208,374,448 |
| Maine | $190,008,051 |
| Maryland | $168,180,838 |
| Massachusetts | $162,005,238 |
| Michigan | $173,128,201 |
| Minnesota | $193,090,618 |
| Mississippi | $205,907,220 |
| Missouri | $216,276,818 |
| Montana | $233,509,359 |
| Nebraska | $218,529,075 |
| Nevada | $179,931,608 |
| New Hampshire | $204,016,550 |
| New Jersey | $147,250,806 |
| New Mexico | $211,484,741 |
| New York | $212,058,208 |
| North Carolina | $213,008,356 |
| North Dakota | $198,936,970 |
| Ohio | $202,030,262 |
| Oklahoma | $223,476,949 |
| Oregon | $197,271,578 |
| Pennsylvania | $193,294,054 |
| Rhode Island | $156,169,931 |
| South Carolina | $200,030,252 |
| South Dakota | $189,477,607 |
| Tennessee | $206,888,882 |
| Texas | $281,319,361 |
| Utah | $195,743,566 |
| Vermont | $195,053,740 |
| Virginia | $189,544,888 |
| Washington | $181,257,515 |
| West Virginia | $199,476,099 |
| Wisconsin | $203,670,005 |
| Wyoming | $205,004,743 |
