All 50 states have submitted applications for their share of the $50 billion fund. Changes in rural healthMehmet Oz, administrator of the Centers for Medicare and Medicaid Services (CMS), said on Thursday.
Wednesday was the application deadline for states to submit a detailed application for the first tranche of a five-year fund created to help rural providers offset cuts to Medicaid and other health programs contained in the tax cut law.
“Each proposal must outline how states intend to expand access, enhance quality, and improve outcomes for patients through sustainable, state-driven innovation,” CMS said. Decisions regarding awards will be made by December 31.
The fund was created under the One Big Beautiful bill legislation passed this summer as a backstop against the nearly $1 trillion legislation Removed from Medicaid,
Oz said in a statement, “This program moves us from a system that has too often failed rural America to one based on dignity, prevention, and sustainability. Each state with an approved application will receive funding to design what works best for their communities, and CMS will provide support every step of the way.”
When applications opened in September, CMS said it would consider individual state metrics as well as “applications that demonstrate the greatest potential and scale of impact on the health of rural communities.”
Under the program, $25 billion will be allocated equally to all states, meaning each state with an approved application will receive the same amount regardless of the size of its rural population.
The other $25 billion will be awarded based on Oz’s discretion, including whether he has adopted Health Secretary Robert F. Kennedy Jr.’s Make America Healthy Again policies.
CMS has outlined several approved uses for the funds, including prevention and chronic disease management; payments to health care providers; Hiring new employees with a commitment to serving rural communities for at least five years; and more.
The law gives Oz wide discretion in what he can approve, and there is no specific requirement for states to direct funds to rural hospitals or for CMS to approve funding only for rural districts.
Application denials cannot be appealed, nor can an administration decide to withhold funds over compliance concerns.
The One Big Beautiful Bill legislation cuts nearly $1 trillion from Medicaid, primarily through tougher work requirements as well as cuts to how states can finance their Medicaid programs through provider taxes and state-directed payments.
Rural hospitals rely heavily on Medicaid funding because many of the patients they care for are low-income. But the Trump administration has noted that rural hospitals account for only 7 percent of total Medicaid spending.
