How states are using their funds for the first year of the Rural Health Transformation Program

Tag: Hospitals or Direct Care

The Centers for Medicare and Medicaid Services (CMS) on Oct. 9 released a report detailing how states have allocated their first year of funding from the Rural Health Transformation Program (RHTP).

The program was created through President Trump’s One Big Beautiful Bill (OBBB) Act and distributes $50 billion to all 50 states between 2026 and 2030 to be used to improve their rural health infrastructures, with $10 billion granted per year. It was created after some lawmakers voiced concerns that Medicaid cuts in the OBBB would cause them to lose support from rural constituents.

However, experts have said the RHTP won’t be enough to offset the cuts to state Medicaid budgets, which total an estimated $665 billion from 2025 to 2034, according to a report from research institute Rand Corporation.

Each state submitted a proposal to CMS by last November detailing initiatives they plan to use the funding for. So far, states have largely focused on things like maternal health, substance use disorder treatment, and increasing telehealth access, we previously reported.

States have until Oct. 30 to allocate their first-year funds, which must then be spent by September 2027. Any unspent money goes back to CMS to redistribute in 2028.

Take a look at how three states have used their first-year funding.

(Note: This data is from Dec. 29, 2025 to July 31, 2026.)

Texas

Texas received the most funding out of all 50 states, a total of $281,319,360.67. It has designated $53,288,872.67 as of July 31, or 18.9% of its year-one funding. The state has about 4.3 million rural residents—the largest population of any state. It provided financial information for three of its six initiatives.

The state allocated:

• $24,750,000 for prevention and chronic disease-centered programs, particularly targeting diabetes, cardiovascular disease, chronic respiratory disease, and obesity
• $2,389,223 to boost the number of community health workers and other allied health professionals in Texas
• $20,000,000 for the purchase of mobile intensive care units
• $6,149,649.67 for administrative expenses related to carrying out the initiatives, such as salaries

New Jersey

New Jersey received the least funding of all the states: a total of $147,250,805.85. As of July 31, it had allocated $79,181,620.49, or 53.8% of total first-year funds. New Jersey has around 1 million rural residents across seven counties, according to the state government’s website.

The state allocated:

• $24,719,971 to recruit and train rural healthcare workers
• $18,577,034 for infrastructure and IT advancements
• $14,528,221 for technology innovation to improve care delivery outside of brick-and-mortar settings
• $12,589,147.72 for community-level preventative healthcare initiatives
• $3,788,709.01 to improve chronic disease prevention and management programs
• $4,978,537.76 for administrative costs

Vermont

Vermont is the most rural state in the US based on the percentage of rural residents (80.9%), according to 2024 data from the Federal Housing Finance Agency. The state received $195,053,740.44 for year one and allocated $28,369,910.31, or 14.5%, of funds by July 31. The report included information for four of the state’s five initiatives.

The state allocated:

• $6,549,054 for mental health and substance use disorder urgent care as well as improving access to high-acuity services, like dialysis, for people living in nursing homes
• $4,073,441.98 for telehealth adoption, remote patient monitoring, and a statewide closed-loop referral system
• $11,166,557.30 for healthcare workforce development, such as tuition assistance programs, and expanding pharmacists’ scope of practice to allow them to test patients for things like Covid or flu and prescribe treatments
• $2,635,000 to improve price transparency and boost insurance competition
• $3,945,857.03 for program administrative costs

Industry perspective. Carrie Cochran-McClain, chief policy officer at the trade group the National Rural Health Association (NRHA), told Healthcare Brew it wasn’t surprising that some states hadn’t allocated a significant portion of their funding by the end of July because “the process of getting funds out was so fast and furious” and many states were “starting offices or work essentially from scratch.”

Overall, NRHA is “cautiously optimistic about the opportunity that the program brings to rural health and rural America,” Cochran-McClain said, but added the caveat that “it is very much still to be determined how these dollars are actually going to be spent.”

Healthcare Brew also reached out to CMS for comment but did not hear back by publication.