Can rural healthcare turn $50B funding into lasting transformation?

In September of 2025, rural healthcare organizations got some welcome news: CMS would be offering $50 billion in funding to states to support the delivery of rural healthcare. The funding would help states expand access and shore up infrastructure for the one in five Americans who live outside of urbanized areas. 

The announcement of this Rural Health Transformation Program (RHTP) was greeted with enthusiasm, but also with some confusion. How would the money be distributed? What could states spend it on? And how far could it go to make up for the massive shortfalls in funding coming their way as part of a drastically slimmed down Medicaid program?  

At ViVE 2026, held in Los Angeles in February, rural healthcare experts delved into the challenges that arise when optimism and operational realities collide with big bucks on the line. 

No clear playbook for a historic investment

CMS has used words like “historic” and “unprecedented” to describe the Rural Health Transformation Program (RHTP), and rural health providers agree that they haven’t seen anything like it before. 

But novelty isn’t always an easy thing for a system replete with cultural inertia, complex regulations, and competing incentives, even when stakeholders agree on their overarching goals. 

“Everybody has the same desire and vision to improve rural healthcare,” said Christopher Jones, Senior Fellow and VP for Healthcare Policy at the Cicero Institute and a former Commissioner for the North Dakota Department of Health and Human Services. “But the way states view it, the way vendors view it, and the way providers view it is very different. And they have very different levels of competence in certain areas.”  

“There are 50 states that all have 50 different sets of laws that have 50 different procurement rules that have different dynamics between their governor and their legislature…there isn’t going to be a single playbook for how to roll this out nationally. That’s just not the way it’s going to work.”  

The program is unique because the funding will be delivered to state-level entities, who will them choose how to dole it out to specific organizations within their regions. That puts states in the unfamiliar position of having to deeply understand and prioritize who needs what across their entire geographic area. 

“The states really aren’t designed to be able to figure out what’s the right technology or the right solution, even for the initiatives that they listed in their proposals,” observed James Mault, MD, FACS, a general and cardiothoracic surgeon from Denver with expertise in remote patient monitoring technologies.  “We’re trying to identify the landmines so states can create a plan around them, but each one is going to look extremely different due to these individualized challenges.” 

“If not handled appropriately, it’s going to create a feeding frenzy,” he added. “You’ve got vendors who want a piece of the action. You’ve got hospitals and providers hoping to fund their projects. And you’ve obviously got a lot of state-level politics with governors and legislators who want to divvy out this money. It can get messy very quickly if the states aren’t careful.” 

Creating the right conditions to operationalize transformation

For the few small, independent rural hospitals left in operation, a clear roadmap and centralized support system will be essential for snagging an adequate portion of the available funding, said Brittany Sachdeva, DNP, RN, Chief Operating Officer at Cibolo Health, which offers transformation support for rural hospitals. 

“A single independent or small community independent provider is going to struggle to find their way into these dollars,” she said. “They don’t have the grant writing infrastructure that these big systems do. They don’t have dedicated resources that they can apply to doing transformational work.”  

Collaborative governance models and shared infrastructure will be essential to translating funding into sustainable operational change, she asserted. 

“Whether it’s an ACO or another form of high-value network, structured collaboration will be incredibly important so these facilities can actually receive the dollars in a manner that can be executed on. It has to be accountable, sustainable, and managed in a central way, versus trying to do it one tiny hospital at a time.”  

Once these organizations receive their funding, however, transformation is likely to happen quickly and efficiently. 

“These lean, rural providers have an incredible ability to implement,” she said. “They don’t have the same level of bureaucracy or nuance as you do in large systems, so once they decide that they’re going to go forward with something, they just make it happen.”  

Translating “start-up capital” into long-term sustainability

While $50 billion sounds like a substantial sum of money, it’s going to be divided among all 50 states over the next ten years. All states will receive at least $500 million, but the remaining funds will be allocated according to a CMS scoring system. And since there’s a defined start and end date to the funding, rural entities need to view the money more like “start-up capital” to launch self-sustaining programs. 

That means showing early results – and having a plan to keep programs running even after the money is gone – will be essential for RHTP participants. 

“Sustainability will be defined differently by different states,” said Jones. “It’s going to be based on however the state wants rural healthcare delivered, as well as the skills and resources that they have in those rural markets to make it happen long-term.” 

The states aren’t the only ones to impress, added Mault. CMS is expecting grantees to meet specific milestones at defined junctures, and reserves the right to cut off funding for those who fail to make the grade. 

“If you can’t start to show results in the first couple of years, you’ll get cut off because there’s no point throwing good money after bad,” he said. “You need to show not only the clinical outcomes benefit, but the economic impact that can pay for itself.”   

To start off strong and keep building momentum, “figure out the solutions that are out there right now and can be implemented quickly,” advised Jones. “You need to be flexible with what you’re trying to achieve so that you’re not locked into something for a long period of time. Because if something doesn’t work, you have to be able to recalibrate quickly.”   

“Go talk to your other peer states and say, ‘What did you do? What can I learn from you?’ Because some states are going to falter and some states are going to be successful. You want to be among the latter so you can maximize your grant dollars and do great things for your communities.” 

Jennifer Bresnick is a journalist and freelance content creator with a decade of experience in the health IT industry.  Her work has focused on leveraging innovative technology tools to create value, improve health equity, and achieve the promises of the learning health system.  She can be reached at [email protected].