The Centers for Medicare & Medicaid Services released an early state-by-state report on how $50 billion in Rural Health Transformation Program funds are being used. The document reflects state data through July 31, 2026. The report shows substantial differences in how states direct money toward rural healthcare needs.
Disparities in State Spending
By July 31, the amounts of Year-One money that states said they had applied differed widely. California listed roughly $219.1 million of its $233.6 million allocation, while New Mexico recorded about $755,000 of its $211.5 million entitlement. Reported applications span hiring and training rural staff, upgrading hospital facilities, expanding telehealth and health-IT services, preventing chronic illnesses, providing maternal and behavioral health care, and coordinating regional services.
Some state submissions highlight primarily administrative expenses and contracts for managing grants, whereas others enumerate money earmarked for particular programs and provider projects. Andrew E. Van Ostrand, SVP of Sirona Strategies, said the term “put to work” refers to obligated funds and does not necessarily mean money has been sent to grantees.
Where the Money Goes
Nationwide, roughly $4 billion of the $9.995 billion allocated for Budget Period One had been expended by July 31, leaving close to $6 billion still uncommitted. The obligated spending concentrated on four primary categories: about $876 million went to technology and innovation, including information-technology upgrades and consumer tech, $651 million funded workforce programs, $481 million supported chronic disease prevention and management, and $280 million was directed toward infrastructure projects.
A closer examination of tech-related spending reveals roughly $143 million dedicated to Telehealth and Virtual Care in 20 states. Efforts to modernize electronic health records amount to about $154 million spread over 15 states, while initiatives for health-information exchange and interoperability represent roughly $141 million across 18 states.
Monitoring and Future Funding
The program began with $10 billion in initial allocations, with state awards varying from $147 million for New Jersey up to $281 million for Texas. Permitted uses include attracting and keeping rural clinicians, training the workforce, expanding telehealth, deploying remote patient monitoring, and employing artificial intelligence, robotics, and other tech-driven enhancements. CMS intends to track advancement via communications with states, examination of reported data, audits and on-site inspections.
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