Key Takeaways from CMS’s Rural Health Funding Announcement

(Authors: Zachary Levinson, Scott Hulver, and Tricia Neuman for The Kaiser Family Foundation Published: Sep 23, 2025)

On September 15, 2025, the Centers for Medicare and Medicaid Services (CMS) released a Notice of Funding Opportunity (NOFO) for the $50 billion Rural Health Transformation Program (referred to here as the “rural health fund”). The Notice describes what states need to do to apply for funds, the deadline for state applications, and the criteria that CMS will use to determine how funds will be allocated. The rural health fund was established by the tax and spending reconciliation law of 2025. It was created to help offset the impact on rural areas of the law—which includes an estimated $911 billion in federal Medicaid spending reductions over the next ten years, including an estimated $137 billion in rural areas based on KFF estimates—particularly given ongoing concerns about the financial vulnerability of many rural hospitals and reports of hospital closures. Distribution of the funds will begin before many of the Medicaid cuts under the reconciliation law take effect. Continue reading here…

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