As states prepare to receive a potential share of $50 billion in federal funding intended to bolster rural health care innovations across the country, the Texas Medical Association has worked diligently to help strengthen Texas’ submission.
Funding under The Rural Health Transformation Program, created by the One Big Beautiful Bill Act (OBBBA), is intended to promote the development of initiatives that address chronic disease prevention and management, strengthen the recruitment and retention of the health care workforce in rural communities, and support the use of technologies, including artificial intelligence, to improve health outcomes and coordination of care in rural areas.
Starting in 2026, the fund will provide up to $50 billion distributed among all approved states over five years, $10 billion per year. Half of the money will be distributed equally among all approved states with the remaining half allocated through a grant process by the Centers for Medicare & Medicaid Services (CMS) based on unique factors, including the percentage of the state’s population that is in a rural area, the amount and condition of rural health facilities in the state, and other factors to be specified by CMS.
To be eligible for funding, states must submit a one-time application to CMS. The Texas Health and Human Services Commission (HHSC) sought public comments from stakeholders to contribute ideas for how the state should apply for funding to bolster rural health care.
According to a TMA analysis, 10% of the state’s population lives in designated rural counties, with a direct patient care physician for every 1,128 people. By comparison, nonrural counties have one direct care physician for every 465 people.
In September, TMA and the Texas Public Health Coalition (TPHC), of which TMA is a member, submitted several grant proposals to HHSC.
“TMA did a fantastic job of reaching out to rural physicians for input and then bringing that back to incorporate into those submissions,” said Austin internist Maria Monge, MD, vice chair of TMA’s Council on Science and Public Health.
She adds the fund has the potential to fill rural care gaps, if needed, created by other federal changes under OBBBA like recent Medicaid cuts and changes to the Affordable Care Act.
TMA’s own proposal to the state recommends Texas use funding to develop a grant program to create rural training tracks to train family physicians for rural practice and address chronic disease in rural physician shortage areas.
“Rural training tracks have demonstrated success in preparing family physicians to be better prepared for practicing in a rural community. Family physicians are uniquely trained to treat all populations and their focus on primary care serves to prevent and treat chronic diseases using evidence-based medical practices,” TMA’s submission stated.
TMA also was “instrumental” in helping to formulate and support proposals by TPHC, said Dr. Monge, TPHC chair. The coalition is comprised of over 30 health professional organizations dedicated to disease prevention and health promotion in Texas.
TPHC’s three applications – one alongside the Partnership for a Healthy Texas – propose OBBBA-funded initiatives focused on strengthening the tie among public health, local health care workforce and services, and the needs of the patient population, including programs that support:
- Chronic disease prevention via mobile health clinics, screenings, and pop-up health events and community outreach to support rural communities with limited access to health care;
- A statewide workforce gap analysis to identify evidence-based strategies to recruit, train, and retain public health professionals serving rural communities and to study the connection between the lack of a public health workforce and a rise in negative health outcomes; and
- Perinatal and postpartum telemedicine initiatives that work to enhance access to care, specifically in maternal health deserts.
States must apply for funding before the Nov. 5 deadline, with CMS announcing awardees by Dec. 31. HHSC will review all ideas submitted to the agency and then submit one, sweeping application to CMS with its chosen project proposals. If awarded, HHSC will receive the funds on behalf of the state.
TMA plans to sign on in support of HHSC’s grant request to CMS alongside other medical professional associations and advocacy groups across Texas, highlighting medicine’s unified support for the state to receive a share of the available federal funds.
As of this writing, HHSC had not yet submitted its application.
Per CMS, states’ applications must address at least three of the program’s goals to:
- Support evidence-based rural health initiatives that promote preventive health and address root causes of diseases;
- Help rural clinicians become long-term access points for care by improving efficiency and sustainability;
- Attract and retain the health care workforce by strengthening recruitment and retention of medical professionals in rural communities;
- Spark the growth of innovative care models to improve health outcomes, coordinate care, and promote flexible care arrangements; and
- Foster use of innovative technologies that promote efficient care delivery, data security, and access to digital health tools by rural facilities, clinicians, and patients.
CMS will base initial workload funding amounts on the information provided in the grant application and the use of government data sets. A total of 23 factors will be considered in the prioritization process encompassing three major areas. One is data that describes the rural nature of a state, such as the size of the rural population – for which Texas leads the nation. The other major areas include the strength of the program initiatives presented in the state’s grant application and current state policies.
OBBBA’s Medicaid provisions could mean Texas receives between $31-39 billion less in federal support for insuring low-income state residents, according to KFF analysis. As of May 2025, over 4 million Texans are enrolled in Medicaid, per KFF research. Of those, 13% live in a rural area.
By not adopting and implementing Medicaid expansion, however, Texas may not be impacted by OBBBA provisions the same way many other states will.
Still, Dr. Monge notes the federal funds should not serve as a “one-to-one replacement” of services, especially as funds are set to expire after five years. Unless other methods of financial assistance are identified after that time, she worries programs maintained by the fund will be left without support.
“But I’m still confident the proposals that get funded do have the potential to help Texas’ rural physicians and patients,” she said.
TMA remains in communication with the state on its application. Continue to read Texas Medicine Today for updates.