Vermont Business Magazine The Centers for Medicare & Medicaid Services (CMS) has released a Notice of Funding Opportunity for the new Rural Health Transformation Program, a $50 billion federal initiative to modernize rural health care infrastructure across the nation.
The Vermont Agency of Human Services (AHS) announced today that the state, working across agencies and in alliance with providers and community partners, will submit an application for funding. This initiative will provide long-term investments in health care facilities, technology, and workforce development—not direct service funding—giving Vermont the tools to create a stronger, more sustainable health system. The Rural Health Transformation Program has the potential to bring in at least $500 million to Vermont over the next five years, AHS stated.
“This is a rare opportunity to build on years of work and invest in the infrastructure Vermonters need,” said Jenney Samuelson, Secretary of AHS. “It’s about ensuring the right care, in the right place, at the right time—at a cost our communities can afford.”
According to National Rural Health Association, a nonprofit based in Washington, DC, the funding is part of the "One Big Beautiful Bill Act," enacted into law on July 4, 2025, which created a $50 billion fund (up from $25 billion), called the Rural Health Transformation Program, in an attempt to offset losses that rural health providers will experience associated with other health provisions in the legislation.
The Act cuts over $900 billion through 2034, mostly from Medicaid ($790 million), according to healthline.com. Medicaid supports low-income and disabled Americans and is a major funding source for rural hospitals. The Affordable Care Act (Obama Care) also will be affected as costs will increase and eligibility will be tightened.
The Act passed by a tie-breaking vote by Vice President Vance after Senator Liz Murkowski (R-Alaska) insisted that this $50 billion be added to the bill.
The $50 billion will be distributed to all states between fiscal years (FYs) 2026 – 2030. $10 billion will be distributed each fiscal year.
The bill lists several allowable uses of Rural Health Transformation Program funds, according to the NRHA.
• Promoting evidence-based interventions to improve prevention/chronic disease mgmt.
• Payments to providers
• Promoting technology driven solutions for prevention and mgmt.
• Training/TA for developing and adopting technology-enabled solutions that improve care delivery in rural hospitals
• Recruiting and retaining clinical staff to rural areas with 5-year obligation to stay
• TA, software, hardware for significant tech advances to improve efficiency, cybersecurity, patient outcomes
• Assisting rural communities to right size health care delivery by identifying needed services, facilities, etc.
• Supporting access to OUD/SUD treatment
• Projects that support value-based care
• Additional uses “designed to promote sustainable access to high quality rural health care services” as determined by CMS Administrator.
As a condition of receiving funds, states must submit to the CMS Administrator a plan to use the funds to carry out at least 3 of the activities listed above and annual reports on use of funds. Annual reports may include information to be determined by the CMS Administrator.
Funds must be used by the end of the fiscal year following the fiscal year in which the funds were allotted. For example, funds distributed in FY 2026 must be used by the end of FY 2027.
By March 31, 2028, CMS will annually determine the amount of funds that are unused by states and redistribute such funds. Any unused funds left as of October 1, 2032, will be returned to the Treasury. If CMS determines that a state has misused funds, it may withhold payments, reduce payments, or recover payments from the state. Additionally, no more than 10% of funds can be used for state administrative expenses.
CMS has set a six-week application window, with state proposals due in early November and awards expected by December 31, 2025. Funding will begin in January 2026. Vermont will work with hospitals, health care providers, community partners, advocacy groups, and community members across the state to shape the proposal.
For more information about Vermont’s application process and opportunities for public input, visit: healthcarereform.vermont.gov.
About AHS
AHS’s mission is to improve the conditions and well-being of people in Vermont. The mission is a commitment to fostering positive change in the lives of Vermonters. It underscores our dedication to creating an environment where individuals not only survive but thrive.
Source: 9.16.2025. Vermont Agency of Human Services. Waterbury, Vt. — https://humanservices.vermont.gov.
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