Year Two of the Rural Health Fund Shifts $68 Million Among States, Less Than 1 Percent of the Total
CMS awarded $10 billion in Year 2 rural health funds on Nov. 9. Against Year 1, 25 states gained and 25 lost; North Dakota and Florida moved most.
Of the $10 billion the Centers for Medicare and Medicaid Services awarded on Nov. 9 for the second year of the Rural Health Transformation Program, about $68 million shifted from some states to others compared with last year's split, by our comparison of the two award tables.
CMS announced the Year 2 awards for all 50 states, bringing the program's total to $20 billion of the $50 billion Congress set aside for fiscal years 2026 through 2030. Texas again received the most, $281,976,026, and New Jersey the least, $142,338,224. CMS did not publish a comparison with the first-year awards announced Dec. 29, 2025. We lined the two tables up.
How much did state awards change?
Very little. Exactly 25 states gained and 25 lost. The gains summed to $67,986,237 and the losses to almost exactly the same amount, so the net movement was 0.68 percent of the year's $10 billion. The median state's award moved by 1.3 percent.
That stability is built into the formula. Half of each year's money, $5 billion, is split equally, $100 million per state, according to the CMS Year 2 fact sheet. The other half is allocated using factors in the program's funding notice, including rural population, facility characteristics, initiatives in each state's plan and “progress toward state policy actions.” Only that second half can move. Measured against it, the shift was 1.4 percent.
Our comparison of FY 2026 and FY 2027 awards, largest changes:
Largest gains: North Dakota, up $7.44 million to $206.4 million (3.7 percent). Iowa, up $6.97 million to $216.0 million (3.3 percent). Montana, up $6.23 million to $239.7 million (2.7 percent). Virginia, up $6.17 million to $195.7 million (3.3 percent). Kansas, up $4.00 million to $225.9 million (1.8 percent).
Largest losses: Florida, down $6.11 million to $203.8 million (2.9 percent). Vermont, down $5.06 million to $190.0 million (2.6 percent). New Jersey, down $4.91 million to $142.3 million (3.3 percent). New York, down $4.31 million to $207.8 million (2.0 percent). Washington, down $4.20 million to $177.1 million (2.3 percent).
The second year looks like the first. For clinicians, the budget that matters now is what their own state does with roughly $200 million a year.
Why did some states move?
CMS did not say, state by state. The fact sheet says the competitive portion “can change from year to year” and that “a state's total award may increase, decrease, or remain similar from one year to the next.” It also says CMS published Year 1 obligation data through July 31, 2026, but that those figures “do not, by themselves, measure a state's overall progress or determine its Year 2 award.” Without the scoring detail, the reasons for any single state's change cannot be read from the public tables.
The gap between the largest and smallest awards widened slightly, from $134.1 million in the first year to $139.6 million, by our arithmetic. Over two years Texas has now been awarded $563.3 million, Alaska $544.8 million and New Jersey $289.6 million.
What do the states we have followed get?
Several states whose spending plans we have reported on saw small changes. Nebraska, which CMS said had recruitment contracts in 51 counties, rose $718,700 to $219.2 million. Alaska rose $478,293 to $272.7 million and Georgia $2.87 million to $221.7 million; both were the subject of our October report on where their money goes. Mississippi, which is funding physician recruitment and psychiatric emergency units, fell $1.23 million to $204.7 million. Missouri rose $2.27 million to $218.5 million.
HHS Secretary Robert F. Kennedy Jr. said in the announcement, “We are giving rural America the resources and flexibility to build stronger health systems.” CMS Administrator Mehmet Oz said, “Rural Americans have life expectancies three years shorter than their urban peers.”
What should rural physicians watch?
The deadlines that matter are spending deadlines. CMS says unexpended funds are subject to redistribution under the statute, that properly obligated funds generally remain available through the end of the following fiscal year, and that all funds must be spent by Sept. 30, 2032, or returned to the Treasury. States that are slow to obligate money could see it move elsewhere.
For physicians in rural practice, the useful step is local. Find your state's plan through the CMS rural health page for states or your state Medicaid agency, see which initiatives received money in Year 1, and ask your hospital or group whether it has applied for recruitment, telehealth or workforce funds. Where an offer cites program money, ask what happens to the commitment if a state's award falls in a later year. Three more annual awards, $30 billion in total, remain.
Reported, fact-checked and edited by The Script Pad's editorial staff. See How we use AI.
This article is for professional education and does not replace clinical judgment. Treatment decisions should be based on the individual patient and current guidelines.
