With Large Federal Rural Health Award, Promising Possibilities Abound for Texas

Many of us look at a new year as a new beginning – and if the year ahead is going to be better than the one preceding it, it’s good to start your journey with positives and reasons for optimism. Thanks to a historic investment from our federal government, Texas’ rural hospitals and communities are starting the year with 281 million reasons to believe in a better future.

John Hawkins, President/CEO, Texas Hospital Association — Hawkins

Just before the calendar flipped to 2026, the Centers for Medicare & Medicaid Services (CMS) announced the first-year funding awards for each state in the Rural Health Transformation Program, a five-year, $50 billion investment in rural health care nationwide.

Texas’ application, developed with input from the Texas Hospital Association and others, obviously resonated with CMS, which allocated a nation-leading $281.3 million to the Lone Star State for this first fiscal year. We at THA are excited with the opportunity this game-changing infusion of funds presents for all of rural Texas – including more than 150 rural hospitals in our state and the estimated 3.7 million residents who live in a rural county.

The Texas Health and Human Services Commission’s (HHSC) application, titled Rural Texas Strong, contained six high-level strategies. For the purposes of THA and our member hospitals, I’d particularly like to draw attention to the initiative titled “Infrastructure and Capital Investments for Rural Texas,” which has direct relevance to the financial health of our facilities.

Under this initiative, “Rural hospitals, clinics, behavioral health providers, opioid/substance abuse programs, EMS, pharmacies, and public health offices will be permitted to add and replace the equipment they need to improve patient care, within the required limitations on new construction and remodel projects,” HHSC wrote in its plan, citing data that found correlation between a hospital’s ability to reinvest and its financial health.

HHSC also envisions using the money for buildings and other infrastructure. “Funds will be used to replace allowable equipment, including: lab equipment, CT, ultrasound or mammography equipment, stretchers (especially self-loading), wheelchairs, patient beds, telemetry units, nurse call systems, AMBuses, generators, defibrillators, crash carts, medication dispensing units, sleep labs, vital sign monitors, and oxygen tanks can all be brought to current standards,” the agency wrote.

That’s music to our ears, as are HHSC’s aims to improve hospital liquidity and reduce the number of hospitals with less than 10 days cash on hand. According to the plan, 48 rural facilities in Texas were in that unenviable spot in 2024.

The state’s application also includes promising pursuits tied to virtual care, which can help reduce travel burdens for rural patients in remote areas, and AI, which can assist hospitals with both patient care tasks and administrative ones. Creating a statewide telehealth network, and taking steps for patients to better access virtual care, is one piece of HHSC’s envisioned puzzle that could prove especially fruitful.

I encourage everyone to browse HHSC’s full application; its initiatives contain a number of focused ideas that – if implemented with proper funding and prudent organization – can help our state reduce chronic disease, add new boosts to our rural health workforce and much more.

In short, Texas’ considerable slice of the Rural Health Transformation Program is a golden opportunity to bring new health care capabilities – and new hope for healthier, longer lives – to swaths of our state that need those prospects. THA is ecstatic that our state received an allocation in line with its sprawling size and considerable needs, and we stand ready to work with HHSC and other policymakers to turn this funding into a new era for rural health care.