Key Takeaways from CMS’s Rural Health Funding Announcement Authors: Zachary Levinson, Scott Hulver, and Tricia Neuman Published: Sep 23, 2025

https://www.kff.org/other-health/key-takeaways-from-cmss-rural-health-funding-announcement/?utm_campaign=KFF%3A%20Health%20Costs&utm_medium=email&_hsenc=p2ANqtz-9eUBBj5HWTV2zVgtzWITSF2czOy6Ylmnv5HtaS_qDc8UaiGZK7l_oFpApZNsmyF6J_NP7fmqrkNW7AsaMxTzeBoM0hfA&_hsmi=382037534&utm_content=382037534&utm_source=hs_email KFF Examines New Details From CMS About the Distribution of the $50 Billion Rural Health Fund A new KFF brief examines a recent funding announcement from the U.S. Centers for Medicare & Medicaid Services (CMS) with details about the distribution of funds through the $50 billion Rural Health Transformation Program. The fund was created to soften the rural hospital impact of reductions in federal Medicaid spending included in the reconciliation law, and for other purposes. Half of the fund ($25 billion) will be distributed among states with approved applications, regardless of the size of the state’s rural population or the needs of rural hospitals and other providers. The other half ($25 billion), according to CMS, will be allocated among approved states based on nearly two dozen factors, such as the size of a state’s rural population and its spending plans and policy choices, including the extent to which the state adopts certain Make America Health Again (MAHA) policies. While the temporary $50 billion fund could help rural communities in a number of ways, it’s unclear the extent to which it will benefit rural hospitals and offset the estimated $137 billion reduction in federal Medicaid spending in rural areas under the reconciliation law. States can choose how much of the funds will go to rural hospitals versus other providers and initiatives, and policy priorities, subject to CMS approval. The CMS announcement also details some restrictions on how the funds can be used, such as by capping the share of funds that can be used to reimburse hospitals and other providers for patient care. Mikhaila Richards | 202.654.1328 | MRichards@kff.org