Rural Health Transformation Program: CMS Awards $10 Billion in Year 2

The Rural Health Transformation Program awarded $10 billion to all 50 states on November 9, 2026, the second year of a $50 billion, 5-year program to change how health care works in rural America. Every state gets money. Texas gets the most at $281,976,026. New Jersey gets the least at $142,338,224. With year 2 done, CMS has now handed out $20 billion of the $50 billion total, and $30 billion remains for the next 3 years.

The money does not go to practices directly. It goes to states, and states spend it on their own rural health plans. But a rural practice should still pay attention. The funds pay for workforce pipelines, telehealth, equipment, and new payment models in rural areas. State budget revisions tied to the new amounts are due to CMS by November 30, 2026, which is 20 days from today. The plans states file this month decide where the money lands in 2027.

This is the freshest CMS money news of the week. Our 2027 Medicare physician fee schedule post covers the Nov 4 pay rule, and our Medicare enrollment revocation post covers the Nov 4 enforcement rule. This story is the third CMS move of the same week, and it is the one that puts cash into rural care.

Table of contents

• What CMS announced on Nov 9
• How the $10 billion splits
• Winners and losers in year 2
• The 9-day delay and the Nov 30 deadline
• What the money funds
• What it means for a rural practice
• The New Jersey math
• What happens next
• Frequently asked questions

Key takeaways

• CMS awarded $10 billion to all 50 states on Nov 9, 2026, for year 2 of the Rural Health Transformation Program. The program runs 5 years at $10 billion a year, created by the Working Families Tax Cuts Act.
• Every state gets a $100 million baseline. The other $5 billion is competitive, based on rural population, facility characteristics, state policy actions, and implementation progress.
• Texas leads at $281,976,026. New Jersey trails at $142,338,224. North Dakota gained the most, about $7.4 million. Florida lost the most, about $6.1 million. Exactly 25 states gained and 25 lost competitive funding.
• CMS missed its Oct 31 announcement date by 9 days, so states have 3 weeks instead of a month to file revised budgets. Revisions are due Nov 30, 2026.
• All funds must be spent by Sept 30, 2032, or returned to the US Treasury. States begin more detailed quarterly reporting in November 2026.

What CMS announced on Nov 9

The Department of Health and Human Services, through CMS, announced $10 billion in second-year awards on November 9, 2026. The money covers fiscal year 2027 for all 50 states. The program was created by the Working Families Tax Cuts Act in 2025 and runs 5 years, from fiscal year 2026 through fiscal year 2030, at $10 billion a year.

HHS Secretary Robert F. Kennedy Jr. framed the money as flexible by design. "This next $10 billion will expand access to care, strengthen the rural health workforce, improve prevention, and help states build solutions that fit the needs of their own communities," he said in the announcement. CMS Administrator Dr. Mehmet Oz put the gap in plain terms: "Rural Americans have life expectancies three years shorter than their urban peers."

The announcement landed 9 days late. CMS had planned to tell states their 2027 amounts by October 31. It told states in an October 30 email that officials had "discovered an additional administrative process requirement," per KFF Health News reporting cited by Becker's Hospital Review. Medical Daily reported the same 9-day gap and noted the awards end a wait that began when CMS let the Oct 31 date pass. The delay cut the time states have to revise their budgets from a month to 3 weeks.

How the $10 billion splits

Half the money is the same for every state. Each year, $5 billion is split evenly, so every approved state gets a $100 million baseline no matter its size. The other $5 billion is competitive. CMS divides it using rural population, facility characteristics, state policy actions, and, new this round, implementation progress from each state's annual progress report.

That split explains the gap between the top and the bottom. Texas gets $281,976,026, which is $100 million baseline plus about $182 million competitive. New Jersey gets $142,338,224, which is $100 million baseline plus about $42 million competitive. Texas takes home about 4.3 times as much competitive money as New Jersey. Alaska ranks second at $272,653,149, Montana third at $239,740,669, California fourth at $231,105,823, and Oklahoma fifth at $227,097,543. CarePlans published the full state-by-state table for fiscal year 2027.

The competitive half is where a state wins or loses. A state that shows progress on its approved plan can climb. A state that stalls can fall. CMS reviewed annual progress reports from all 50 states before setting year 2 amounts, and it said a lower year 2 amount does not set a state's course for the remaining years. The CMS fact sheet on the year 2 awards explains how the amounts are set.

Winners and losers in year 2

Exactly 25 states gained competitive funding and 25 lost it. North Dakota posted the largest gain, adding about $7.4 million in competitive funding, a 7.5% rise. Iowa added about $7 million, Montana about $6.2 million, and Virginia about $6.2 million. Florida saw the steepest drop, losing about $6.1 million, a 5.6% fall. New Jersey lost about $4.9 million from year 1, and its competitive funding fell 10.4%, the biggest percentage drop of any state.

The year-over-year numbers tell the story in dollars. North Dakota rose from $198,936,970 in year 1 to $206,379,627 in year 2, a gain of $7,442,657. New Jersey fell from $147,250,806 to $142,338,224, a drop of $4,912,582. New York fell from $212,058,208 to $207,750,071, a drop of $4,308,137. Becker's analysis of the CMS data ranked all 50 states by the change in competitive funding, and Red Lake Health computed the same year-over-year table from the two CMS releases.

CMS cautioned against reading too much into a single year. Year 1 spending data through July 31, 2026, was a point-in-time snapshot and was not used to set year 2 awards. A state that lost ground this year can gain it back next year by showing progress on its plan. The program runs 3 more years after this one, so the year 2 table is a halftime score, not a final result.

The 9-day delay and the Nov 30 deadline

The delay matters because it squeezes the states. CMS missed its October 31 date, then announced the awards on November 9. States now have until November 30 to submit revised budgets tied to the new allocations. That is 3 weeks to rework a budget instead of a full month.

The deadline is the date to watch. A state that files late risks its funding. A state that files a thin plan risks its competitive share in year 3. CMS will monitor progress, and states begin more detailed quarterly reporting in November 2026. The reporting is new, and it is the mechanism CMS uses to judge whether a state's plan is moving or stalling.

For a rural practice, the deadline means the state plan for 2027 is being written right now. The plan decides which workforce programs get funded, which telehealth projects get built, and which facilities get equipment money. A practice that wants a say in where the money lands in its county has 20 days to talk to its state health department, not 6 months.

What the money funds

States design their own strategies under their approved transformation plans, so the money buys different things in different states. The HHS announcement names the categories. States may use the funds to improve prevention and chronic disease management, create access to care that lasts, strengthen the rural health workforce, advance new care and payment models, and put modern technology and data to work for rural patients and providers.

Year 1 shows what that looks like on the ground. States turned their plans into action by setting up partnerships, launching initiatives, investing in equipment and technology, building workforce pipelines, and putting resources to work in rural communities, per the HHS announcement. CMS runs an Office of Rural Health Transformation that works directly with each state, giving technical help, tracking progress, and turning plans into lasting changes. Program guidance and state information sit on the Medicaid.gov rural health page.

Two details from the award formula are worth noting. CMS weighed state progress on policies to improve rural health, and it named two examples: the Presidential Fitness Test and continuing medical education for physicians on nutrition. States that moved on those policies scored better. The formula rewards states that show work, not states that file paperwork.

What it means for a rural practice

The money does not arrive as a check to your practice. It arrives as programs in your state. Here is what to do with that fact.

First, find your state's plan. Every state filed a transformation plan to get year 1 money, and every state filed a progress report to get year 2 money. The plan names the workforce, telehealth, and facility projects your state chose. Read it. It tells you which programs will hire, which clinics will get equipment, and which payment models your state is testing.

Second, talk to your state health department before November 30. The revised budgets are due that day. A rural practice that asks for a workforce program or a telehealth buildout in its county has a real chance of getting it into the plan while the budget is open. After November 30, the plan is set for the year.

Third, watch the workforce money. Rural practices lose staff to cities and hospitals. The program funds workforce pipelines, which means training, recruitment, and retention programs in rural areas. A practice that cannot hire a nurse or a biller should ask its state what workforce programs the transformation money funds and how to use them.

Fourth, watch the telehealth money. Telehealth flexibilities run through December 31, 2027, per the Consolidated Appropriations Act of 2026, and rural health clinics may keep billing telehealth through the end of 2027. The transformation program funds the technology that makes telehealth work in places with thin broadband and long drives. Our RHC and FQHC billing guide covers how rural clinics bill today, and our telehealth billing checklist covers the verification steps that keep telehealth claims clean.

Fifth, keep your own billing tight while the state money moves. State programs change the payer mix and the patient flow, and a practice with a clean cycle adapts fast. Medical billing services cover the back end, and our medical billing guide for small practices covers the setup that fits a 1 to 5 provider office. A rural practice that pairs state workforce money with a clean revenue cycle keeps more of both.

The New Jersey math

New Jersey is the smallest award in the program, and the math shows why. Strip out the $100 million baseline every state gets, and the competitive share is what is left. New Jersey's competitive share in year 2 is $42,338,224. Texas takes $181,976,026. New Jersey's competitive share fell $4,912,582 from year 1, when it was $47,250,806. That is a 10.4% drop, the steepest percentage fall in the country.

The gap is not about size alone. New Jersey has fewer rural residents than Texas, so its competitive share starts lower. But a 10.4% drop means the state lost ground on the factors CMS scores: rural population, facility characteristics, state policy actions, and implementation progress. The state can win it back in year 3 by showing progress on its plan. The $30 billion left in the program is still up for grabs, and the formula resets every year.

For a New Jersey rural practice, the number is a warning and a prompt. The state has the least money in the program and the steepest competitive drop. Practices in the state's rural counties should ask the health department which programs the $142 million funds and how to get into them before the November 30 budget deadline.

What happens next

Three dates matter after this announcement. November 30, 2026 is the deadline for state budget revisions. November 2026 is when states begin more detailed quarterly reporting to CMS. September 30, 2032 is the last day states can spend the money. Any funds unspent by that date go back to the US Treasury.

Year 3 awards come next fall, and the formula will run again on fresh progress reports. States that show work on their plans can climb. States that stall can fall. The program's 5-year structure gives states room to build, test, and scale, per the HHS announcement, and CMS says it will keep working with states to turn plans into lasting changes.

Congress could also change the picture. The program was created by the Working Families Tax Cuts Act, and future legislation could add money or change the rules. For now, the $10 billion a year stands, and the next $10 billion lands in the fall of 2027. Rural practices should treat the program as a 5-year funding stream, not a one-time grant, and plan hiring and equipment around it.

Frequently asked questions