States jostle over $50B rural health fund as federal Medicaid cuts trigger scramble
Rather, states should submit applications that “rebuild and reshape” how health care is delivered in rural communities,
“This isn’t a backfill of operating budgets,” said Sutton, CMS’ innovation di- rector. “We’ve been really clear on that.”
Rural hospitals and clinics nationwide face a looming financial catastrophe, with President Donald Trump’s massive tax-andspending law expected to slash federal Medicaid spending on health care in rural areas by
Yet, the words used by CMS Administrator
It’s “what I would call incumbents versus insurgents in the rural space,” said
Applications are due
Half of the
The application identifies specific policy goals such as implementing the Presidential Fitness Test and restrictions to food assistance, as well as broader investment strategies around remote care services, data infrastructure, and consumer-facing technology tools, which CMS identified as “symptom checkers and AI chatbots.”
In September, after CMS officials released the appli- cation, Republican members of
Smaller hospitals fear they will get “a tiny little slice” of each state’s share, said
“There’s a lot of frustration,” Felder said.
But Kinsley, who was previously North Carolina’s secretary of health and human services, said using this money only to shore up a balance sheet “is really just throwing good money after bad.” In contrast, he said, insurgents such as technology-driven startups can offer new strategies.
One of those companies vying for funding is
The company manages the health of 100,000 rural
“They’re doing their job, and they’re talking to a lot of people in the ecosystem and really eager to learn from those of us that have been in the system,” Schneider said. “We’re one of many in that position.”
Instead, CMS provided an emailed statement from Oz saying the program “will help states and communities reimagine what’s possible for rural healthcare.”
“If what we end up with is we have a wearable for every rural patient, I don’t think that’s transformational,” Slabach said, referring to digital health monitors such as fitnesstracking watches.
Slabach, a onetime smallhospital chief executive and an unofficial adviser to hundreds of rural facilities nationwide, named a few ideas for the money - including paying for capital improvements such as electronic health records or equipment, loan repayment programs to aid workforce development, and creating “SWAT” teams that rescue rural hospitals on the brink of closure.


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