All 50 states have submitted applications for their share of a $50 billion pot of money to transform rural health, Centers for Medicare and Medicaid Services (CMS) Administrator Mehmet Oz said Thursday.
The application deadline was Wednesday for states to submit a detailed application for the first tranche of the five-year fund created to help rural providers offset the 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. Award decisions will be made by Dec. 31.
The fund was created under the One Big Beautiful Bill law passed this summer as a backstop against the nearly $1 trillion the law slashed from Medicaid.
“This program moves us from a system that has too often failed rural America to one built on dignity, prevention, and sustainability. Every state with an approved application will receive funding so it can design what works best for its communities—and CMS will be there providing support every step of the way,” Oz said in a statement.
When applications opened in September, CMS said it would consider individual state metrics as well as “applications that reflect the greatest potential for and scale of impact on the health of rural communities.”
Under the program, $25 billion will be allocated to all states equally, meaning each state with an approved application would receive the same amount regardless of the size of its rural population.
The other $25 billion will be awarded based on the discretion of Oz, based on criteria including whether they have adopted Health Secretary Robert F. Kennedy Jr.’s Make America Healthy Again policies.
CMS has outlined several approved uses for the funds, which include prevention and chronic disease management; payments to health care providers; hiring new workers with commitments to serve rural communities for a minimum of five years; and more.
The law gives Oz broad discretion on what he can approve, and there is no specific requirement for states to direct funds to rural hospitals or CMS to approve only funding for rural districts.
Application denials can’t be appealed, nor can any administration decision to withhold funds over compliance concerns.
The One Big Beautiful Bill law cuts about $1 trillion from Medicaid, primarily through stringent work requirements as well as reductions to how states can fund 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 only account for 7 percent of overall Medicaid spending.
