Trump Administration Delays Awards Slated To Improve Rural America’s Health

Federal leaders overseeing a $50 billion rural health fund missed a critical deadline to announce how much they’ll give states next year, alerting state leaders to the delay with a mass email.

A 12-sentence message from Alina Czekai, director of the federal Office of Rural Health Transformation, said officials “discovered an additional administrative process requirement.”

The Rural Health Transformation Program, which President Donald Trump touted as an “unprecedented” investment to “revitalize hospitals in our cherished rural communities,” calls for federal regulators to award states shares of $10 billion a year for five years.

In 2026, each state was awarded between $147 million and $281 million, with allocations determined by a federal scoring process to be revisited each year. State leaders had just over seven weeks last year to write applications as they competed against one another for first-year funds.

A national program of “this size, scope, and complexity” that has operated on a tight timeline is going to have “unforeseen issues in implementation,” said Alan Morgan, chief executive of the National Rural Health Association, which represents rural hospitals and clinics. “It’s just going to happen.”

Since the program launched last summer, state leaders have raised concerns about tight deadlines and burdensome reporting demands. First-year progress reports show state leaders have complied with federal demands to boost rural health technology infrastructure while also sending money to local communities.

Still, the speedy rollout did not “set anybody up for success to make meaningful progress,” said Lori Foley, who leads revenue and compliance advisory at PYA, a national consulting firm that has worked with regional and local health systems over the past year.

Rural Health Payout

Tracking State Rural Health Transformation Plans

KFF Health News is working to collect and post approved plans as more states respond to emails and public records requests for their documents.

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For state leaders, the Oct. 30 email has only added to the pressures of the previous months. One called the email funding alert “cryptic.” Another said there have been “plenty of surprises along the way.” One Midwestern state health association leader said her staff was “in the dark over here” about the funding. KFF Health News agreed not to name the state officials because they feared retribution.

On Nov. 2, Kentucky’s Beth Fisher, a spokesperson for the state’s Cabinet for Health and Family Services, confirmed the delay to KFF Health News, even as federal leaders declined to respond to questions. Kentucky won nearly $213 million last year, and Fisher wrote that the rural money was meant to “lessen the impacts” of expected reductions in federal Medicaid funding.

“Team Kentucky believes that healthcare is a basic human right,” Fisher said.

State leaders had expected to hear their 2027 award amount by Oct. 31, as detailed in the original federal notice. The email announcing a delay arrived at 4:05 p.m. Eastern time on Oct. 30, according to one document shared with KFF Health News.

In it, Czekai wrote that each state’s second-year base funding of $100 million was available but that the competitive portion, which varied widely for states last year, is delayed.

“We are working to resolve this as quickly as possible,” wrote Czekai, whose office is part of the Centers for Medicare & Medicaid Services. She did not specify when the competitive portion would be announced but wrote that each state’s budget revisions triggered by the new allocations would be “due back to CMS” by Nov. 30.

Czekai did not respond to a request for comment. The CMS press office declined to respond on the record to a list of detailed questions.

Michael Baker, director of healthcare policy at the American Action Forum, a center-right think tank, said he wasn’t surprised that calculating second-year awards “seems to be more complicated than the office anticipated.”

Baker said federal staff had created “ambitious” grading metrics for the funding, awarding points for initiatives such as expanding rural health workforces and policy priorities such as adopting the presidential fitness test for schoolchildren.

At first glance, last year’s awards did not appear to favor states based on the governor’s political party. But one academic data analysis teased out the amount awarded for each state’s competitive score — the discretionary part Czekai said is now delayed. A KFF Health News review of last year’s awards found that states with Republican governors tended to receive more of the competitive funding. Democratic-controlled states crowded the bottom quarter of those awards.

The second-year funding announcement was slated to happen just days before the midterm elections — in which Democrats won majorities in the Senate and House, as well as several governor races. In the weeks before Election Day, Trump officials lauded the rural health program as a Republican success, by visiting battleground states and publishing a flurry of news releases.

Among the stops: In New Hampshire, Health and Human Services Secretary Robert F. Kennedy Jr. announced an $11 million grant to support mobile health and emergency care. In Ohio, CMS Administrator Mehmet Oz promoted investments including $30.3 million in one-time funds for rural hospitals.

Program’s Launch

After first-year awards were announced a few days ahead of schedule in late 2025, states had eight months to submit revised budgets, begin spending, and show how they were spending their money.

The first annual progress reports, detailing how each state awarded and spent their money, were due to CMS by the end of August. Officials at CMS have declined repeated requests to release those reports publicly.

KFF Health News gathered more than half the states’ first-year progress reports, through emails and records requests. Together, they reveal that many states hired management and technology consultants, listing them as providing technical assistance, grants management, and “other consulting.”

States also sent money to rural hospitals, clinics, ambulance services, and other local entities, despite worries that they would get largely left behind.

In Nevada, for example, state officials awarded a $1.3 million grant to the Northern Nye County Hospital District to reopen a physician-based primary care clinic. A $1.4 million grant was awarded to Esmeralda County to build a network of three rural clinics in a region where residents “regularly travel 70 to more than 200 miles to obtain routine and specialty healthcare,” according to the award notice.

In Idaho, about $7 million will go directly to five Native American tribes, including the Nez Perce and Shoshone-Bannock, according to the state’s first-year report. AJ McWhorter, a spokesperson for Idaho’s health department, said in an email that tribal lands sit in some of the most rural parts of the state and “are frequently among the furthest (distance wise) from medical services.”

Idaho also reported roughly $3 million going to the national nonprofit consulting firm Comagine Health.

Oregon also contracted with Comagine, obligating $2.2 million for family support and to “expand life-saving overdose response tools in communities that need them most,” according to the state’s report. And it set aside about $17 million in tribal funding for projects including IT upgrades, behavioral health, and restoring local healthcare.

According to the documents KFF Health News collected, six states — Arizona, Connecticut, Kansas, Louisiana, Rhode Island, and South Carolina — reported multimillion-dollar contracts with consultants that together totaled more than $60 million.

In Montana, a competition among consultants who wanted to oversee a new statewide “center of excellence” boiled over in late August. Manatt Health Strategies filed a protest letter, asking state officials not to give a $25 million consulting and management contract to Florida-based Indelible Health Solutions. Manatt’s protest letter alleged a conflict of interest.

“All of the stakeholders must have confidence that the process is fair, open, and free from conflicts that could influence outcomes,” Manatt’s William Bernstein wrote.

Montana voided Indelible’s potential award on Sept. 11, according to Janna Williams, a spokesperson for Montana’s Department of Administration.

States’ Concerns

CMS leaders have said over the past year that they want states sharing information. While speaking at a rural health summit in St. Louis in October, CMS’ Jason Berry announced the creation of an online portal so state officials can “learn from one another.”

An audience member asked Berry, who oversees state engagement for the Office of Rural Health Transformation, about appealing a decision from a CMS project officer.

“I wouldn’t say that there’s a way to necessarily appeal,” Berry said, “but you can raise it for discussion.”

Such appearances and visits to states from CMS officials over the past year apparently have done little to squelch concerns among some state officials about the program’s operations and tight timelines.

In public comments filed in response to a federal review, a handful of state leaders wrote in May that the time and staff hours federal officials predicted it would take to fill out their annual report was a significant underestimate. Instead, officials from the five states, which included Republican-led Tennessee, said a “more realistic – though still modest – estimate is approximately 120 hours.”

Nebraska’s Ryan Daly, finance officer for that state’s rural health program, wrote separately in May that he believed reporting would take at least 400 to 520 hours. And in August, Colorado’s deputy Medicaid director, Cristen Bates, wrote a letter stating the time frame for the rollout meant second-year awards would be “based on an incomplete implementation period, resulting in an inaccurate evaluation of state and program performance every year.”

Shin-Yi Lin, deputy director of Medicaid policy in New Jersey, asked in a May public comment for clearer guidance on reporting, “so that States can be judged fairly relative to other States.”

CMS did not directly respond to the states, though the agency said in an August response to the public comments that it had worked to reduce the burden, and it estimated the initial annual reports would take 80 hours for each state to complete.

The American Action Forum’s Baker called for federal officials to be more transparent and release more than the award amounts, including explanations of state successes and areas needing improvement.

Doing so would ensure that “those of us on the outside can continue to think critically” about whether the program is helping rural residents, Baker said.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on KFF Health News and is republished here under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.