The U.S. Centers for Medicare & Medicaid Services (CMS) has introduced a new $50 billion federal program designed to build more sustainable rural health care systems and improve outcomes.

The Rural Health Transformation Program was created under the Working Families Tax Cuts Act and funding was authorized by the recently approved One Big Beautiful Bill Act. The program represents an investment to strengthen access among underserved patient populations in rural, tribal and remote regions, according to CMS.

The program is aimed at empowering states to transform existing rural health care infrastructures and enhance quality, CMS Administrator Dr. Mehmet Oz said in a statement on Monday.

“This program is a historic investment that will catalyze needed change in rural health systems and improve lives for generations to come,” Oz said in the statement. “For too long, when it comes to health care access and infrastructure, we’ve left behind the backbone of America. That stops now with this program that will spark real change for rural health care.”

States must apply by the deadline of Nov. 5, 2025 to be considered for participation. CMS anticipates to announce the awardees by Dec. 31, 2025.

The new program incentivizes providers across all 50 states to develop innovative, lasting solutions to some of the most prolific challenges among underserved rural communities.

Through the rural health program, up to $10 billion in available funding will be distributed over a five-year period. Half of the funding will be evenly distributed among approved states, with the remaining amount awarded based on individual state metrics with the greatest potential for scalable health impacts/improvement for rural communities.

Five strategic goals of the new program’s funding include:

• Supporting rural health innovations and new access to preventative health care while addressing root causes of diseases
• Helping rural providers become long-term access points for care by improving efficiency and sustainability
• Attract and retain a highly skilled health care workforce by strengthening recruitment and retention of rural health care providers
• Bolster growth of innovative care models to improve health outcomes, care coordination and promote more flexible care arrangements
• Foster technology use that improves efficient care delivery, data security and access to digital health tools by rural facilities, providers and patients

Health inequities have long proliferated among rural patient populations.

The disparities have been exacerbated by staffing shortages amid rising demand for hospice care. Additionally, reimbursement rates have not kept pace with inflation and rising care delivery costs, according to many stakeholders. Hospices in rural regions have particularly been hard hit by financial and labor pressures, with these issues frequently/commonly cited among programs that have permanently or temporarily shuttered in recent years.

Other barriers have included a lack of access to respite among rural family caregivers, as well as lagging supportive services around social determinants of health. Recent research has tied these issues to adverse outcomes and caregivers’ inability to manage patient symptoms or communicate with clinicians.

“Rural communities are the bedrock of America. Now, at last, we are acting with the largest investment ever made to improve health care for rural Americans,” U.S. Health and Human Services Sec. Robert F. Kennedy, Jr. said in the statement. “This $50 billion program is about delivering dignity and dependable care to rural communities, making sure every American has access to affordable, high-quality treatment.”