Sarah Jane Tribble, KFF Health News and Arielle Zionts and Maia Rosenfeld
Imagine beginning the brand new 12 months with the promise of not less than a $147 million payout from the federal authorities.
But there are strings hooked up.
In late December, President Donald Trump’s administration introduced how a lot all 50 states would get beneath its new Rural Health Transformation Program, assigning them to make use of the cash to repair systemic issues that go away rural Americans with out entry to good well being care. Now, the clock is ticking.
Within eight months, states should submit revised budgets, start spending, and present the cash goes to good use. Federal officers will start reviewing state progress in late summer time and announce 2027 funding ranges by the top of October.
The cash — divided into distinctive allocations for every state, starting from $147 million for New Jersey to $281 million for Texas — represents the primary $10 billion installment from the five-year, $50 billion program. Congress created the fund as a last-minute sweetener in Trump’s One Big Beautiful Bill Act final summer time to offset the outsize fallout anticipated in rural communities from the statute’s almost $1 trillion in Medicaid spending cuts over the following decade.
Federal officers crafted the fund to offer states “space to be creative,” Mehmet Oz, administrator of the Centers for Medicare & Medicaid Services, mentioned on a name with reporters after saying the funding Dec. 29. “Some states will fail, and we will learn from that.”
The cash was divided in response to a sophisticated components.
In 2026, every state will obtain an equal $100 million share under the law for the primary half of the cash, plus extra funding from the second half. Oz’s employees steered payouts from the second portion based mostly on every state’s rural rating, in addition to outcomes from a “technical” scoring system for undertaking proposals.
Within hours of the announcement, teachers and researchers started to parse the awards to raised perceive why some states acquired greater than others, together with whether or not the awards mirrored any partisanship or political favoritism.
At first look, whole awards don’t seem to favor states ruled by both Republicans or Democrats. But one academic data analysis teased out the quantity awarded for every state’s technical rating, which is the half decided by the discretion of company officers.
The evaluation was carried out on the University of North Carolina’s Cecil G. Sheps Center for Health Services Research, which focuses on rural well being. A KFF Health News evaluation of the Sheps Center information discovered that states with Republican governors tended to obtain more cash for the elements of their software based mostly on the technical rating. Democratic-controlled states crowded the underside quarter of these technical rating awards.
Overall, although, the state awards reveal wild variation in how a lot cash every state will get per rural resident, nearly a hundredfold distinction between the highest and backside.
In an emailed assertion to The Arizona Republic, a spokesperson for Arizona’s Democratic Gov. Katie Hobbs accused the administration of shortchanging rural residents within the state, which was awarded $167 million this 12 months from this system.
CMS spokesperson Chris Krepich mentioned in an emailed assertion to KFF Health News that “politics played no role in funding decisions.”
On the December name, Oz pushed states to start out engaged on coverage actions championed by the administration — resembling approving presidential health assessments and limiting meals advantages — that might require legislative approval.
Half of states promised to mandate the presidential health check, Oz mentioned. Many states additionally proposed meals waivers beneath the Supplemental Nutrition Assistance Program, often known as SNAP, which might restrict low-nutrition objects resembling soda. He additionally mentioned some states promised to show well being care professionals about diet. And others confirmed they’ll repeal certificate-of-need laws, which require firms to show that new well being amenities they need to open are vital.
Krepich mentioned CMS’ new Office of Rural Health Transformation is hiring program officers to function level folks for 3 or 4 states. Many states are organising their very own workplaces to supervise the brand new funding.
Oz highlighted Alabama’s “big maternity initiative with robotics doing ultrasounds” and mentioned states are tackling points starting from behavioral well being to weight problems.
A KFF Health News evaluation of state “project abstracts” and “spotlights” launched by CMS reveals that many states plan to deal with the workforce challenges in rural areas. Delaware, for instance, plans to make use of its funding to create the state’s first four-year medical college with a rural main care observe.
A 3rd of states mentioned they need to enhance digital well being information, and each state talked about telehealth.
Many state legislatures must pass laws to distribute the funding to their state workplaces. Meanwhile, state officers are hiring employees, organizing advisory committees, and preparing to dole out money.
“I’m excited about what’s next,” mentioned Terry Scoggin, former interim chief government of the Texas Organization of Rural & Community Hospitals, or TORCH. Texas was awarded the largest allocation. The cash will bolster a rural hospital funding invoice Republican Texas Gov. Greg Abbott signed final 12 months, Scoggin mentioned.
More than two dozen cash-strapped rural hospitals in Texas have closed or been converted to clinics since 2005, a nationwide pattern that hit the Lone Star State significantly laborious. The state has the biggest rural inhabitants within the United States. Texas’ allocation quantities to about $66 per rural resident, according to a KFF policy analysis. By distinction, Rhode Island was granted about $6,300 per rural resident.
Scoggin mentioned he has “a ton of concerns” about firms taking the cash as a substitute of it serving to rural hospitals and residents. “I was blown away about how many for-profit companies reached out.” The firms have additionally known as rural hospitals and requested to work with them to use for state cash, he mentioned.
The awards must be judged on how they profit rural residents as a result of “the stated goal of the program is to improve rural health,” mentioned Paula Chatterjee, an assistant professor of drugs on the University of Pennsylvania who co-authored a Senate Finance Committee memo on the transformation fund.
Researchers on the Sheps Center performed the evaluation to estimate how a lot cash states acquired from the technical rating, which is the portion of funding based mostly on the standard of their proposals and state coverage actions that align with “Make America Healthy Again” priorities.
New Mexico received the least quantity of technical funding, with lower than 10% of its award based mostly on the discretionary metrics. Alaska received the biggest technical award, in response to the Sheps Center information.
Texas, Nebraska, New Hampshire, and Hawaii rounded out the highest 5 recipients of technical funding. In addition to New Mexico, the opposite lowest technical awards went to Michigan, New Jersey, Arizona, and California.
Mark Holmes, director of the Sheps Center, declined to touch upon whether or not he noticed any political bias within the awards however mentioned the nuance within the remaining portion of discretionary awards based mostly on technical scores is essential as a result of these {dollars} could be redistributed and doubtlessly clawed again in future years.
“We can be fairly certain that every state will get at least a slightly, if not a vastly, different amount next year based on this re-pooling and reallocation piece,” Holmes mentioned.
States now have a restricted time to indicate they’re utilizing the cash successfully to safe future funding.
But they will’t begin spending but. CMS adopted commonplace grant procedures and is requiring every state to submit revised budgets earlier than they will draw down cash, Krepich mentioned.
States have till Jan. 30 to resubmit their budgets, and CMS then has 30 days to reply, in response to the usual Notice of Award. Under that timing, some states could not have money in hand till March.
“CMS is working closely with states to complete this process as efficiently as possible,” Krepich mentioned.