The Trump administration announced two new rural health awards this week, delivering $90 million to South Dakota and $35 million to Pennsylvania through the federal Rural Health Transformation Program.
The RHTP, created under the Working Families Tax Cuts Act, directs $50 billion over five years to help states modernize rural healthcare delivery. CMS oversees the program through its Office of Rural Health Transformation and is distributing funds to all 50 states on a rolling basis for fiscal year 2026.
South Dakota’s $90 million will fund health IT modernization, cybersecurity upgrades and interoperability improvements across rural and tribal communities. The state’s plan also covers diagnostic and surgical capacity, maternal health resources and workforce recruitment. The award follows more than $31 million in “Rural Strong” grants South Dakota has already received for 28 projects across 20 health systems.
Pennsylvania’s $35 million will support new screening technology, additional operating rooms and expanded medical transportation for rural providers, with up to $1 million available per eligible location. Pennsylvania has already committed $42 million to 66 qualified projects under the program, and Sen. Dave McCormick said the state’s total fiscal year 2026 allocation stands at $193,294,054.
CMS Administrator Dr. Mehmet Oz issued nearly identical statements on both awards, saying the funding reflects a patient-first approach to rural health.
“This is what rural health transformation should look like: federal investment that is putting patients first, driving lasting improvements and expanding healthcare for the hardworking Americans who call these communities home,” Dr. Oz said.
HHS Secretary Robert F. Kennedy Jr. said the program gives states flexibility to design solutions for their own rural populations while requiring accountability for results.
In South Dakota, Gov. Larry Rhoden said the funding will help modernize care while protecting patient data, and Sen. John Thune and Sen. Mike Rounds both credited the state’s plan with putting providers on a path to financial sustainability.
In Pennsylvania, Rep. John Joyce, a physician who practiced in rural communities for more than 25 years, said the funding will strengthen the workforce and modernize technology and facilities. Rep. Ryan Mackenzie said the state has secured nearly $200 million through the program this fiscal year for projects spanning buildings, transportation, maternal care and mental health services.
