The Department of Health and Human Services, through the Centers for Medicare & Medicaid Services (CMS), on Monday announced $10 billion in second-year awards to all 50 states under the Rural Health Transformation Program. The program provides $50 billion over five years to help states change how health care is delivered in rural communities.
Each state’s award is labeled as its fiscal year 2027 amount. The awards range from $142,338,224 for New Jersey to $281,976,026 for Texas, according to the list in the CMS release. Alaska received the second-largest amount, $272,653,149.
The Working Families Tax Cuts Act created the program. CMS said $10 billion is awarded each year from fiscal year 2026 through fiscal year 2030. With the new awards, $20 billion has been awarded, and CMS said another $30 billion will be awarded over the remaining three years.
Half of each year’s money is split equally among the states, which gives each of the 50 states $100 million in baseline funding a year, CMS said. The other half is allocated using factors set in the program’s notice of funding opportunity. Those include traits of a state’s rural population and health facilities, the initiatives in its transformation plan, certain state policy actions and other data-driven factors.
All 50 states sent CMS annual reports on their first-year progress, and CMS reviewed them in setting the awards. CMS said the awards also reflected state progress on policies such as the Presidential Fitness Test and continuing medical education for physicians on nutrition. For the parts of funding tied to initiatives, CMS uses checkpoints that track steps such as setting up governance, getting project plans approved and launching initiatives.
CMS said the equal baseline stays the same, but the workload portion can change each year. As a result, a state’s total award may increase, decrease or stay similar, the fact sheet says. CMS said a decrease in one year does not set a state’s funding path for the rest of the program. The release did not list first-year awards or say which states’ totals rose or fell.
States must use the money for at least three approved uses. The approved uses cover preventing and managing chronic disease, hiring and keeping rural health workers, care that relies on technology, behavioral health and substance use services, and new models of care and payment. CMS said the funds may not replace existing government funding sources or programs.
HHS Secretary Robert F. Kennedy, Jr. said the new $10 billion will widen access to care, bolster the rural health workforce and improve prevention. CMS Administrator Dr. Mehmet Oz said rural residents’ life expectancy trails that of urban residents by three years, and that the program funds investments meant to close that gap.
States will begin more detailed quarterly reporting in November 2026, according to the fact sheet. Money not spent by Sept. 30, 2032, goes back to the U.S. Treasury. The statute also allows unspent funds to be redistributed to other states in a separate distribution cycle, CMS said.