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The program and the pitch
CMS announced first-year awards for all 50 states on December 29, ranging from about $147 million for New Jersey to about $281 million for Texas. The program provides $10 billion a year from 2026 through 2030, with half split evenly among states and half allocated on factors such as rurality and state policy. Priorities include prevention, workforce, technology and cybersecurity, regional care networks and new payment models.
KFF Health News reported on April 28 that at least four large company coalitions are pitching services to states. One is led by SAIC and includes Walgreens; another is led by Gainwell Technologies, which already runs systems for many state Medicaid programs. Maine’s initial application listed four Gainwell contracts worth more than $16 million over five years.
Why providers are uneasy
Direct payments to providers are capped at 15% of a state’s award, and replacing electronic records systems that already meet federal standards is capped at 5%. Clinic leaders and advocates worry that vendors and larger systems will capture much of the funding before it reaches frontline care. Policy experts note the program was not designed to replace the Medicaid reductions in the same law. States must obligate first-year funds by October 30 and file progress reports by the end of August, and CMS can reduce awards for noncompliance.
How rural leaders can engage
- Know your state plan: Read the approved budget and identify which initiatives fit your services.
- Partner, do not just compete: Offer to serve as a site for telehealth, monitoring or workforce programs that vendors are proposing.
- Come with projects: Bring defined, costed proposals, such as shared cybersecurity or specialty access through a regional hub.
- Use your association: Work through your state hospital association to ask for transparency on contracts and outcomes.
- Plan for the end: Avoid building permanent costs on five years of grant funding.
Archive entry for Apr 28, 2026, added Nov. 11, 2026.