CMS Breaks Out State-Level Rural Health Transformation Program Funding

Alaska is one of the clear winners in grant funding announced by the Centers for Medicare & Medicaid Services (CMS) in the first year of the Rural Health Transformation Program.

All 50 states are receiving awards under the program, a $50 billion initiative to strengthen healthcare in rural communities across the country.  In 2026, states will receive first-year awards from CMS averaging $200 million within a range of $147 million to $281 million. 

But as a July Wall Street Journal story reported, in order to win their votes for the bill that created the program, CMS officials gave Alaska’s senators a verbal assurance that the formula for divvying up the money would work to Alaska’s favor. And indeed, Alaska’s funding of $272 million is second only to Texas, which is receiving $281 million in the first year.  Montana won the fourth-largest award at $233 million. The state with the lowest funding is New Jersey, with $147 million. 

The Rural Health Transformation funding breakdown is described this way by CMS:

• 50% of the funding is distributed equally among all approved states. CMS says this provides states with a strong foundation to begin implementing their Rural Health Transformation Plans; and
• 50% is allocated based on a variety of factors, including individual state metrics around rurality and a state’s rural health system, current or proposed state policy actions that enhance access and quality of care in rural communities, and application initiatives or activities that reflect the greatest potential for, and scale of, impact on the health of rural communities.

Along with telehealth and work force initiatives, states will test new primary care and value-based care models, strengthen partnerships among rural and other providers, and promote regional collaboration that improves health sustainability and patient outcomes.

CMS project officers dedicated to each state will convene program kickoff meetings and provide ongoing guidance and technical assistance during implementation. States will submit regular updates so CMS can track progress, identify proven approaches, support successful execution of their plans, and ensure strong oversight throughout the program.

States will also convene annually at the CMS Rural Health Summit—to be held during the CMS Quality Conference in 2026—to share lessons learned, highlight effective models, and accelerate innovation across regions.