On October 8, the Centers for Medicare & Medicaid Services (CMS) released its Rural Health Transformation Program Obligated Funds report. The report provides an early state-by-state view of how the $50 billion Rural Health Transformation Program is being put to work. It highlights substantial differences in reported implementation progress and how states direct funds toward rural healthcare needs.

The report reflects state-submitted data through July 31, 2026. CMS says it will refresh the figures after states submit their quarterly reports.

As of July 31, states reported widely varying amounts of first-year funds put to work. For example, California reported about $219.1 million against a $233.6 million award, while New Mexico reported about $755,000 against a $211.5 million award.

Reported uses include rural workforce recruitment and training, hospital infrastructure, telehealth and health IT, chronic disease prevention, maternal care, behavioral health, and regional care coordination.

Several states’ entries focus mainly on administrative costs and grant-management contracts, while others detail funds committed to specific programs and provider initiatives.

On LinkedIn, Andrew E. Van Ostrand, SVP of Sirona Strategies, a Washington, D.C.-based healthcare consulting and lobbying firm, said of the report: “It's a fascinating document, summarizing Year One funds ‘put to work’ through 7/31/26. ‘Put to work’ is the term CMS uses in the report to refer to obligated funds and does not necessarily refer to money actually sent to/received by grantees.”

Ostrand added some key takeaways from Sirona's Health Policy Futures Lab team:

• Across all states, about $4 billion (40 percent) of the $9.995 billion awarded in Budget Period One had been spent by July 31st, leaving nearly $6 billion (60 percent) still not obligated.
• Funding obligations focused on four key areas: technology and innovation accounted for approximately $876 million (22 percent), including IT advances, consumer technology and innovative care; workforce received $651 million (16 percent); chronic disease prevention and management accounted for $481 million (12 percent); and infrastructure investments totaled $280 million (7 percent).
• A detailed look at technology investments shows around $143 million allocated to Telehealth and Virtual Care across 20 states. EHR/EMR Modernization efforts total approximately $154 million across 15 states. Meanwhile, HIE and Interoperability initiatives account for about $141 million across 18 states.

Meanwhile, the U.S. Government Accountability Office (GAO) released the Rural Health Transformation Program: Early Implementation Actions and Monitoring Plans report on October 6. This study highlighted that rural health funding will depend not only on states’ proposed initiatives but also on their implementation progress and compliance with federal requirements.

A few key highlights from this report:

• Initial funding: CMS awarded $10 billion to all 50 states for the first budget period. Individual awards ranged from $147 million for New Jersey to $281 million for Texas.
• Permitted investments: States can use funding for rural clinician recruitment and retention, workforce training, telehealth, remote patient monitoring, artificial intelligence, robotics and other technology-enabled improvements in care delivery.
• CMS plans to monitor progress through state communications, reviews of submitted reports, audits and site visits. GAO found these plans generally consistent with selected federal award-monitoring requirements.
• Future funding: CMS plans to distribute up to $40 billion over the remaining four years based partly on states’ progress toward approved initiatives. Funding may be withheld, reduced or recovered if states fail to comply with award conditions.

Together, the CMS and GAO reports offer an early look at how states are deploying rural health funding and how CMS plans to monitor progress. With nearly $6 billion in first-year funds still unobligated as of July 31, implementation and accountability will be critical as states compete for the remaining $40 billion over the next four years.