Rural "slush fund" distributions announced

The Centers for Medicare and Medicaid Services announced this week the establishment of the Rural Health Transformation Program in relation to Trump's "One Big Beautiful Bill" passed in July--and the so called "rural slush fund" that was a last-minute addition to that law.  An earlier post about that late addition to the law is here, also noting that it was added in part to secure the vote of U.S. Senator Lisa Muskowski's (Alaska) support for the law.  

The Rural Health Transformation Program website touts it as 

empower[ing] states to strengthen rural communities across America by improving healthcare access, quality, and outcomes by transforming the healthcare delivery ecosystem. Through innovative system-wide change, the RHT Program invests in the rural healthcare delivery ecosystem for future generations.

Its stated goals are: 

• make rural America healthy again
• sustainable access
• workforce development
• innovative care
• tech innovation

Below, I cut and pasted from this website more information about the structure and requirements.  For now, however, I want to focus on details of the distribution.  First, all states got a share of the distribution,  and the states that fared best were Texas, Alaska, California, Oklahoma and Montana.  That said, the award amounts to the states did not vary dramatically.  The average amount awarded to each state was $200 million, with the range from $147 million (New Jersey) to $281 million (Texas).  Here's an excerpt from the CMS announcement of the awards, which went to all 50 states.  

This unprecedented federal investment will help states expand access to care in rural communities, strengthen the rural health workforce, modernize rural facilities and technology, and support innovative models that bring high-quality, dependable care closer to home.

“More than 60 million Americans living in rural areas have the right to equal access to quality care,” said Health and Human Services Secretary Robert F. Kennedy, Jr. “This historic investment puts local hospitals, clinics, and health workers in control of their communities’ healthcare. Thanks to President Trump’s leadership, rural Americans will now have affordable healthcare close to home, free from bureaucratic obstacles.”

“Today marks an extraordinary milestone for rural health in America,” said CMS Administrator Dr. Mehmet Oz. “Thanks to Congress establishing this investment and President Trump for his leadership, states are stepping forward with bold, creative plans to expand rural access, strengthen their workforces, modernize care, and support the communities that keep our nation running. CMS is proud to partner with every state to turn their ideas into lasting improvements for rural families.”

Roll call covered the matter, with a focus on Texas.  Some key excerpts follow: 

Twenty percent of the score was determined by a state’s policy actions, including vows to pursue waivers to ban SNAP users from buying certain items like soda and candy, reinstating the presidential fitness test for schoolchildren and requiring that medical schools teach students about nutrition, among other things. States could lose money in future years through a “rescoring” process if they don’t follow through on those initiatives, Oz said.

The remaining 30 percent is based on the strength of the ideas that states proposed in their applications.

Projects highlighted by CMS on Monday include ones that aim to expand access to preventative, primary, maternal and behavioral health care. States also are pursuing “food as medicine” initiatives, models to address chronic disease prevention and programs to shore up their health care workforce.

Critics had argued the amount of funding available is nowhere near large enough to offset reductions in federal Medicaid spending made by the reconciliation law, which amounts to $911 billion over 10 years. Sen. Susan Collins, R-Maine, who voted against the bill, had pushed for at least $100 billion in rural health funding.

The $50 billion would offset only about 37 percent of the estimated loss of federal Medicaid funding in rural areas, according to KFF, a health policy research organization.

Oz says the intent of the funding is not to offset reductions.

“The purpose of this $50 billion investment in rural health care is not to pay off bills,” he said. “The purpose of this $50 billion investment is to allow us to right-size the system and to deal with the fundamental hindrances of improvement in rural health care.”

This excerpt from PBS Newshour coverage hits more squarely at the politics of the matter and what the Trump administration's CMS is trying to accomplish with these awards in relation to its wider "Make America Healthy Again" agenda: 

Several Republican-led states — including Arkansas, Iowa, Louisiana, Nebraska, Oklahoma and Texas — have already adopted rules banning the purchase of foods like candy and soda with SNAP benefits.

The money that the states get will be recalculated annually, Oz said, allowing the administration to "claw back" funds if, for example, state leaders don't pass promised policies. Oz said the clawbacks are not punishments, but leverage governors can use to push policies by pointing to the potential loss of millions.

"I've already heard governors express that sentiment that this is not a threat, that this is actually an empowering element of the One Big Beautiful Bill," he said.

Carrie Cochran-McClain, chief policy officer with the National Rural Health Association, said she's heard from a number of Democratic-led states that refused to include such restrictions on SNAP benefits even though it could hurt their chance to get more money from the fund.

"It's not where their state leadership is," she said.

Next, what follows is from a rural health care consultant working out of Texas, which I found on LinkedIn: 

Just reviewed the state allocations from CMS’s landmark $50B Rural Health Transformation Program, and the per‑rural‑person math is fascinating. I'm a CPA and I love excel...so you know I had to create my end of year fun facts related to the CMS awards for RHTP.

If you missed the announcement, here is a link to the full article:
https://lnkd.in/gzgCKfby

For context, the average award across all states is $1,957 per rural person.
Texas received $329 per rural person — a solid, meaningful investment in our rural communities.

To put that in perspective:
Rhode Island: $31,525 per rural person
Just above Texas: Ohio ($345), NC ($360), PA ($390), MI ($413)
Next tier below RI: NJ ($5,343), AK ($4,949), MA ($3,332), DE ($3,231)

Texas’s total award is $1.4 billion over five years — the largest in the country. While we weren’t guaranteed the top spot, the hard work by the Texas team at HHSC on the application positioned us to lead in rural innovation.

I was personally hoping for closer to $2.1B, but we’ll take this $1.4B and put it to work transforming the rural health landscape across Texas. Huge congratulations to the HHSC team and all our partners who made this possible.

Here’s to an innovative, data‑driven 2026 and beyond for rural Texas! 🌟

Finally, I'm pasting here the promised details on the program--the sort of call for applications: 

Program Structure

RHT Program funding is $50 billion to be allocated to approved States over five fiscal years, with $10 billion of funding available each fiscal year, beginning in fiscal year 2026 and ending in fiscal year 2030.

• 50% to be distributed equally amongst all approved States
• 50% will be allocated by CMS based on a variety of factors including rural population, the proportion of rural health facilities in the State, the situation of certain hospitals in the State, and other factors to be specified by CMS in the NOFO

Uses of Funds

States must use RHT Program funds for three or more of the approved uses of funds:Promoting evidence-based, measurable interventions to improve prevention and chronic disease management.

• Providing payments to health care providers for the provision of health care items or services, as specified by the Administrator.
• Promoting consumer-facing, technology-driven solutions for the prevention and management of chronic diseases.
• Providing training and technical assistance for the development and adoption of technology-enabled solutions that improve care delivery in rural hospitals, including remote monitoring, robotics, artificial intelligence, and other advanced technologies.
• Recruiting and retaining clinical workforce talent to rural areas, with commitments to serve rural communities for a minimum of 5 years.
• Providing technical assistance, software, and hardware for significant information technology advances designed to improve efficiency, enhance cybersecurity capability development, and improve patient health outcomes.
• Assisting rural communities to right size their health care delivery systems by identifying needed preventative, ambulatory, pre-hospital, emergency, acute inpatient care, outpatient care, and post-acute care service lines.
• Supporting access to opioid use disorder treatment services (as defined in section 1861(jjj)(1)), other substance use disorder treatment services, and mental health services.
• Developing projects that support innovative models of care that include value-based care arrangements and alternative payment models, as appropriate.
• Additional uses designed to promote sustainable access to high quality rural health care services, as determined by the Administrator.