While the Centers for Medicare & Medicaid Services has announced grant awards to states under the Rural Health Transformation program, agency regulators have made it clear that they are prepared to take back some of that money if they do not like how a state’s planning is proceeding.
Despite the federal approval of program funding, regulators continue to work with state Medicaid officials to mold their proposed programs to bring them into greater alignment with administration health care objectives.
In some cases, states have already modified their plans in response to CMS feedback.
According to one published report, CMS administrator Mehmet Oz told participants at a recent event that “We will take the money back” if states “don’t abide by what they wrote, or if they don’t do a good job.”
The Rural Health Transformation Program is a $50 billion fund administered by CMS that will run from FY 2026 through FY 2030. The program is expected to provide funding to all 50 states to expand access to care, modernize health infrastructure, and strengthen the health care workforce in rural communities and was created to help compensate for a portion of the losses that states and their residents will experience when 2025 cuts in Medicaid eligibility and Affordable Care Act insurance plan subsidies take full effect over the next year or so.
Learn more about the challenges states face, and the potential for federal clawbacks over how they implement their Rural Health Transformation program initiatives from the KFF Health News article “Backed by Threat of Clawbacks, Feds Wield Tight Grip on $50B Rural Health Fund.”