Texas will distribute more than $1.4 billion over five years to improve rural healthcare services following the state’s funding approval through the Centers for Medicare & Medicaid Services (CMS).
The funding, awarded through CMS’s Rural Health Transformation (RHT) Program, will support health outcomes, facility modernizations and healthcare provider in rural communities throughout the state. As part of the federal formula approval process, CMS awarded Texas $281.3 million for fiscal year (FY) 2026, the largest first-year award amount in the program.
RHT is a $50 billion, five-year federal investment that will distribute $10 billion annually from 2026 through 2030 to modernize rural healthcare. CMS allocates 50% of annual funds evenly across approved states, then distributes the remaining 50% based on rural-need factors and a review of each state’s application. CMS will set future-year award amounts on an annual schedule.
The Texas Health and Human Services Commission (HHSC) plans to move funding to local communities through competitive grant and procurement processes. HHSC aims to select at least one provider or entity in each of Texas’ 202 rural counties across its initiative set.
To participate, entities must either maintain a physical address in one of the 202 rural counties or primarily serve rural Texas residents.
HHSC organized its approach around six initiatives:
- Make Rural Texans Healthy Again: Community-based prevention, wellness and nutrition efforts targeting diabetes, cardiovascular disease, chronic respiratory disease or obesity. HHSC would issue grants to rural hospital districts that opt in.
- Rural Texas Patients in the Driver’s Seat: A patient-facing portal designed to integrate with provider electronic medical records and connect to regional or statewide health information exchange networks.
- Lone Star Advanced AI and Telehealth: Predictive tools, remote care and workflow support intended to close service gaps.
- The Next Generation of the Small Town Doctor and Team: Recruitment and retention efforts built around training and career pathways.
- Unified Care Infrastructure and Rural Cyber Protection: Shared infrastructure and cybersecurity, including procurement through Texas DIR cooperative contracts and implementation support for rural providers.
- Infrastructure and Capital Improvement for Rural Texas: Equipment replacement and targeted facility upgrades, with limits on new construction and major remodel activity.
Photo by cottonbro studio from Pexels
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