Article
The program in brief
CMS announced first-year awards on Dec. 29, 2025, under the $50 billion, five-year program created by the One Big Beautiful Bill Act. About $10 billion is available each year through 2030. First-year awards range from about $147 million for New Jersey to $281 million for Texas and average $200 million. Half of the money was split equally among states and half allocated by rurality, health system measures, state policy and expected impact. States may spend no more than 15% of their funds on provider payments for patient care.
Where the friction is
A March 4 KFF Health News report described resistance in several states. Ohio Republican lawmakers asked the governor to use the full 15% to support 13 independent rural hospitals. Wyoming legislators declined to fund BearCare, a proposed state health insurance plan, and the health department says it will not proceed without their authorization. In Michigan and North Carolina, lawmakers questioned rural definitions that include counties with urban centers. The Colorado Hospital Association said rural hospitals’ input was ignored, and the state then added rural leaders to its funding committee. The Michigan Health & Hospital Association said about 65% of its rural members have never applied for a state grant. In North Dakota, a bill to reserve funds for the most remote areas failed amid concern that big plan changes could cost the state money, a risk CMS has flagged.
What rural hospital leaders should do
- Learn your state’s plan in detail. Identify which CMS focus areas, such as workforce, technology and cybersecurity, or new payment models, your state is funding and where your organization fits.
- Build grant capacity. If your hospital has never applied for state funds, line up a grant writer or partner with a regional system, network or association now.
- Bring projects, not requests. Proposals tied to measurable access, workforce or care coordination goals fit the program better than general operating support.
- Work through your association. State hospital associations are negotiating definitions and allocation rules. Give them data on your services and finances.
- Plan without it. The program will not replace Medicaid revenue at risk under the same law. Budget as if grant dollars are temporary.
Archive entry for Mar 7, 2026, added Nov. 11, 2026.