Arielle Zionts and Sarah Jane Tribble, KFF Health News
In the ultimate days of 2025, governors across the nation trumpeted the a whole bunch of tens of millions of federal {dollars} they received from a brand new, $50 billion rural well being fund.
But plans to spend these nine-digit awards aren’t all warmly obtained.
At least one group of Republican state lawmakers seems to have scuttled an initiative preapproved by federal officers. And at the very least one hospital affiliation persuaded its state well being leaders to change who greenlights spending. Other critics are taking a extra cautious method.
That’s as a result of the Centers for Medicare & Medicaid Services, which manages the five-year Rural Health Transformation Program, says states might lose cash in the event that they make main modifications to the plans authorised of their functions. Changes might additionally delay states’ potential to get tasks rolling in time to point out the company that they’re assembly progress deadlines.
“During the application period, states were advised to only propose initiatives and state policy actions that the state deemed feasible,” stated CMS spokesperson Catherine Howden, who famous that the company will work with states case by case.
The current pushback displays “tension” over state plans — which have been authorised by the federal authorities — from state lawmakers and well being leaders who need extra enter amid tight deadlines, stated Carrie Cochran-McClain, chief coverage officer of the National Rural Health Association, the most important group representing rural hospitals and clinics.
Cochran-McClain stated many states should go a invoice to permit federal {dollars} to be spent and added that as a result of this system rolled out so rapidly “there’s important work that still needs to be done in some states between the legislatures and the governors.”
State lawmakers wish to have a say, she stated, in “how the funding is being allocated — how the implementation will go.”
Congressional Republicans created this system as a last-minute sweetener to incorporate of their One Big Beautiful Bill Act, signed into legislation final summer season. The funding was supposed to offset considerations concerning the outsize fallout anticipated in rural communities from the legislation, which is anticipated to slash Medicaid spending by practically $1 trillion over a decade.
CMS officers announced first-year funding — starting from $147 million for New Jersey to $281 million for Texas — on Dec. 29, after scoring functions. Federal officers will start evaluating progress in late summer season and announce 2027 allocations on the finish of October.
A chorus of critics say this system received’t make up for hurt attributable to Medicaid cuts.
The program is “a complete sham,” Sen. Ron Wyden (D-Ore.) stated at a rural coverage convention in February.
Medicaid, a joint federal-state program for low-income and disabled Americans, serves practically 1 in 4 rural residents, and lots of rural hospitals rely upon it to remain afloat.
But the agricultural well being program tilts towards seeding revolutionary tasks and applied sciences, not shoring up rural hospital funds. States can use solely as much as 15% of their funding to pay suppliers for affected person care.
That hasn’t stopped some federal officers and lawmakers from framing this system as a rural hospital rescue.
For instance, the White House website says, “President Trump secured $50 billion in funding for rural hospitals.”
Now that functions have been authorised, some state Republican lawmakers — who’re more likely to represent rural voters than Democrats are — and hospital associations are upset that the political rhetoric doesn’t match what they see.
They’re additionally lobbing criticisms at particular features of their states’ plans, together with the proposed tasks, what’s not included, and the spending approval course of.
In Wyoming, lawmakers didn’t simply criticize an initiative from their state’s utility. They moved to kill it.
State Rep. John Bear, a Republican, stated he and different lawmakers declined to fund “BearCare,” a proposed state-sponsored medical health insurance plan that sufferers might use solely after medical emergencies. But they did approve different features of the agricultural well being program.
The Wyoming Department of Health received’t “proceed with BearCare without express legislative authority to do so,” stated spokesperson Lindsay Mills.
While Wyoming lawmakers eliminated an initiative from their state’s rural well being plan, a bunch in Ohio desires so as to add one thing.
Ohio Rep. Kellie Deeter and different Republican lawmakers asked their governor to make use of the utmost allowed funding for supplier funds — 15% — to help 13 unbiased, rural hospitals.
“We understand that the rural transformation fund is not designed to be given directly to prop up hospitals,” Deeter stated. “We just want to capitalize on the mechanism of the fund that can be utilized for that purpose.”
Those hospitals “operate with very, very narrow margins, and it’s just difficult and, frankly, unsustainable,” she added.
Ken Gordon, a press secretary responding for the governor’s workplace and the state well being division, stated, “It’s still very early in this process, and many details are being worked out.”
State lawmakers across the nation are additionally making an attempt to make sure the federal program’s {dollars} profit rural areas.
In North Dakota, Rep. Bill Tveit, a Republican who lives in a city with about 2,000 residents, introduced a bill that may have required the state to order its funding for applications positioned greater than 35 miles from city areas and small cities.
During a listening to, lawmakers appeared sympathetic to Tveit’s considerations however rapidly shot down his thought.
State Sen. Brad Bekkedahl stated the North Dakota well being division already dedicated to prioritizing funding for probably the most urgent rural well being wants. He additionally stated he’s involved any vital modifications might trigger the state to lose funding as a result of CMS already reviewed and authorised the plan.
Meanwhile, Republican lawmakers in Michigan and North Carolina have criticized their states’ definitions of “partially rural” or “rural,” saying that counties that embody city inhabitants facilities might take cash from lower-density counties, based on Michigan Advance and North Carolina Health News.
Lawmakers aren’t the one ones talking out.
The Colorado Hospital Association wrote a letter to state lawmakers denouncing how the state created its plan and two of its proposed initiatives.
“Not only were Colorado’s rural hospitals’ recommendations disregarded,” president and CEO Jeff Tieman wrote, however the plan consists of concepts “they actively oppose and believe will harm the communities they serve.”
The division responded to one of many affiliation’s considerations by including rural well being leaders to the funding approval committee.
Meanwhile, in Michigan and Nebraska, some well being teams are upset that their states’ plans lack particular funding streams for rural hospitals.
Lauren LaPine-Ray, who oversees rural well being coverage on the Michigan Health & Hospital Association, predicted the state’s rural hospitals will compete with different organizations, equivalent to tutorial facilities and well being clinics, for funding. She stated about 65% of the group’s rural members have by no means utilized for a state grant earlier than.
“The rural hospitals, the ones that really need the funding the most, will not be well equipped to apply for and pull down these dollars,” LaPine-Ray stated.
Jed Hansen, government director of the Nebraska Rural Health Association, stated the federal funding received’t go to “rural hospitals, rural clinics, and rural providers in a meaningful way.”
“Rural Health Transformation will not save a single hospital in our state,” he stated. “I don’t think it will save a hospital nationally.”
