CMS Administrator Mehmet Oz announced on Thursday that all 50 states have officially submitted their applications to tap into a substantial $50 billion fund aimed at revolutionizing rural healthcare. This initiative, spearheaded by the Centers for Medicare and Medicaid Services, promises significant changes in how rural health services are delivered across the nation.

The deadline for states to present their comprehensive plans was Wednesday. These applications are crucial as they lay the groundwork for the initial phase of a five-year funding program. This program is designed to help rural healthcare providers mitigate the financial impacts of the recent Medicaid and other health program cuts introduced by the tax cut legislation.

The CMS has made it clear that each state’s proposal must articulate a strategy to expand access, enhance the quality of care, and improve patient outcomes through sustainable and state-specific innovations. Decisions on which proposals will receive funding are expected by December 31.

This fund was established under the One Big Beautiful Bill law, enacted earlier this year. It acts as a counterbalance to the law’s significant $1 trillion reduction in Medicaid funding.

“This program represents a shift from a system that has often let down rural America to one that prioritizes dignity, prevention, and sustainability,” Oz stated. “Once their applications are approved, each state will receive funding to craft solutions tailored to their unique community needs, with CMS offering continuous support throughout the process.”

When applications opened in September, CMS said it would consider individual state metrics as well as “applications that reflect the greatest potential for and scale of impact on the health of rural communities.”  

Under the program, $25 billion will be allocated to all states equally, meaning each state with an approved application would receive the same amount regardless of the size of its rural population.  

The other $25 billion will be awarded based on the discretion of Oz, based on criteria including whether they have adopted Health Secretary Robert F. Kennedy Jr.’s Make America Healthy Again policies. 

CMS has outlined several approved uses for the funds, which include prevention and chronic disease management; payments to health care providers; hiring new workers with commitments to serve rural communities for a minimum of five years; and more.   

The law gives Oz broad discretion on what he can approve, and there is no specific requirement for states to direct funds to rural hospitals or CMS to approve only funding for rural districts. 

Application denials can’t be appealed, nor can any administration decision to withhold funds over compliance concerns.   

The One Big Beautiful Bill law cuts about $1 trillion from Medicaid, primarily through stringent work requirements as well as reductions to how states can fund their Medicaid programs through provider taxes and state-directed payments. 

Rural hospitals rely heavily on Medicaid funding because many of the patients they care for are low income. But the Trump administration has noted that rural hospitals only account for 7 percent of overall Medicaid spending.