August 8, 2025 – Jacksonville, FL
Understanding the opportunity and limits of this new federal investment in rural care.
Rural providers have long faced a paradox: they serve some of the nation’s most vulnerable populations, yet operate with some of the thinnest margins. With over 40% of rural hospitals running in the red, even modest shifts in Medicaid policy can ripple into large-scale service cuts or closures.
To blunt the impact of Medicaid funding changes over the next decade, Congress recently established a $50 billion Rural Health Fund, a one-time investment meant to soften the blow of projected losses. While the fund offers much-needed relief, it comes with important caveats that providers should understand as they plan ahead.
Here’s what’s in the fund, what’s not, and what it could mean for care teams on the ground.
The Rural Health Fund was created in response to anticipated Medicaid payment reductions that could hit rural providers especially hard. According to the Kaiser Family Foundation (KFF), rural health systems could lose an estimated $137 billion in Medicaid funding over the next 10 years due to changes in reimbursement models and cost containment strategies.
The fund is designed to close part of that gap, roughly 37%, by providing $10 billion annually from 2026 to 2030. Half of that money will be distributed equally among states that meet minimum criteria, while the other half will be allocated at the discretion of CMS.
While the funding offers an important lifeline, it does not change the underlying financial structure or operational challenges that rural organizations face. Providers may still grapple with:
Although the Rural Health Fund might provide short-term strengths, a long-term question remains at large. How can rural practices and hospitals build models of care that are sustainable, proactive, and patient-centered even after the funding runs out?
Funding in itself doesn’t drive better health outcomes. The way care is delivered does.
Programs that prioritize care continuity, prevention, and remote support may position rural providers to not only stabilize operations but also reduce costs and improve performance metrics. Program examples can be seen below:
CMS-reimbursed programs (like CCM, APCM, PCM) that support patients with multiple or high-risk conditions through monthly nurse-led outreach, care planning, and medication coordination.
Especially in rural areas where long travel distances or provider shortages could cause additional barriers to care, virtual care can serve as a practical extension of the clinic. This would reduce avoidable ER visits and keep patients connected between appointments.
Leveraging third-party partners or outsourced clinical teams allows practices to deliver consistent, high-quality support without overburdening in-house staff.
To continue, it’s worth noting that the Rural Health Fund is time-limited, with funding ending in 2030 and no guarantees of renewal. While it may alleviate some financial pressure in the short term, it does not address the structural shifts coming with Medicaid reform or the increasing demands of value-based care.
For providers, the opportunity lies in using this window to invest in scalable, sustainable models that:
Here are a few things rural care teams and administrators should keep an eye on:
The Rural Health Fund application process is expected to open in September 2025, with a final submission deadline of December 31, 2025. States will be required to submit their applications, including a Rural Health Transformation Plan, through www.medicaid.gov. CMS will review and approve submissions by the end of the year, with funding scheduled to begin in FY 2026.
The $50 billion Rural Health Fund is a welcome investment, but not a silver bullet. As healthcare continues to shift toward prevention, accountability, and patient-centered care, providers who embrace smarter care delivery models will be better positioned to thrive.
The future of rural health depends on how care teams use the dedicated funding to evolve.
At Wellbox, we partner with rural practices, clinics, and health systems to support care delivery that’s proactive, patient-focused, and built to last. Learn more about how we help providers extend their reach, ease operational burden, and improve outcomes without adding more to their plates. Discover care management support at wellboxhealth.com
Share to© 2024 Wellbox Inc. All rights reserved | Privacy | Terms of Use