States race to prove they'll use rural health funds wisely. Money for next year is on the line.

January 14, 2026 / 5:00 AM EST / KFF Health News

States race to prove they'll use rural health funds wisely. Money for next year is on the line.

TL;DR

  • The Rural Health Transformation Program has distributed the first $10 billion of its $50 billion, five-year funding to all 50 states.
  • State allocations vary, with New Jersey receiving $147 million and Texas receiving $281 million.
  • States have eight months to revise budgets and begin spending, with federal reviews starting in late summer.
  • Funding distribution involves an equal base amount for all states, plus additional funding based on a state's rural score and technical scoring of project proposals.
  • An analysis by the University of North Carolina's Sheps Center suggests states with Republican governors may have received more funding based on the technical score portion of the awards.
  • States are planning to use the funds for various initiatives, including addressing workforce shortages, improving electronic health records, expanding telehealth, and tackling behavioral health and obesity issues.
  • CMS requires states to submit revised budgets before funds can be disbursed, with some states potentially not receiving cash until March.
  • Concerns exist that for-profit companies are actively seeking to acquire these funds rather than directly benefiting rural hospitals and residents.