Oklahoma’s application for a five-year, $50 billion rural health fund secured the state over $223 million for 2026. The state received one of the highest investments nationally, only ranking behind California, Montana, Alaska and Texas.
The Rural Health Transformation Program was signed into law in President Donald Trump’s megabill alongside an estimated $911 billion in reductions to federal Medicaid spending over a decade. But the goal is not to make up for the cuts. Instead, officials want to transform how care is delivered in rural communities by focusing on five goals:
- Make rural America healthy again
- Sustainable access
- Workforce development
- Innovative care
- Tech innovation
The Centers for Medicare and Medicaid Services (CMS) is administering the program, with $10 billion available annually for state grants from FY 2026 to FY 2030. The agency will distribute $25 billion equally among all 50 states. The other half is based on various measures, including rural factors and application initiatives.
States had to work within certain funding restrictions and describe how they plan to sustain successful initiatives after funding ends. And, if federal officials determine a state has misused funds, they can be withheld, reduced or clawed back.
Oklahoma’s application was submitted by the Oklahoma State Department of Health. It worked with several partners to develop the state’s plan, including the Boston Consulting Group, other state agencies, and stakeholder groups, like hospitals, tribal nations and rural providers.
Community input gathered by the agency focused on workforce shortages, options for leveraging technology, transportation challenges, chronic disease prevention and management, and coordinated care.
Oklahoma received $23 million more than expected, as CMS advised states use a $200 million annual estimate when drafting their applications. First-year funding was awarded within a range of $147 million to $281 million among states.
The federal agency is requiring the State Department of Health to rework its budget to accommodate the additional funding, according to a department spokesperson. Until CMS approves the state’s revisions, funding will be unavailable.
Oklahoma will begin the phased implementation of its six Rural Health Transformation Program initiatives across the state, which include:
- Innovating the care model: Bringing care closer to home through telehealth, transportation support, expanded care teams and investments in local health infrastructure.
- Moving upstream: Strengthening community-led prevention and wellness through chronic disease prevention and management programs.
- Growing the next-gen of rural talent: Includes “grow your own” initiatives, training placements and recruitment.
- Facilitating regional collaboration: Helping local partners share resources.
- Shifting to value: Supporting the transition to value-based care, which rewards positive patient outcomes and quality of care.
- Building health data utility: Investing in technology that improves data sharing and care coordination.
Commissioner of Health Keith Reed said in a press release this funding offers a “once-in-a-lifetime chance to reshape rural health in Oklahoma.”
“The RHT Program is a powerful step forward, laying the foundation for lasting change,” Reed said. “Continued collaboration is key to success, and we encourage communities and stakeholders to stay engaged as we tackle the complex realities of rural healthcare, together.”
The state published a Rural Health Transformation Program Initiatives Summary Packet, which breaks down the programs receiving funding by their initiative. It also includes the timelines by which they’ll be implemented.
Examples of projects include behavioral health integration in primary care, community health worker expansion in hospitals, rural residency programs, electronic health record expansion, school-based services support, a chronic disease management program and telestroke program.
Rich Rasmussen, president and CEO of the Oklahoma Hospital Association, praised the state’s plan, which also includes the development of a clinically integrated network. This helps providers partner on patient outcomes and collectively negotiate better insurance rates while remaining independent.
The idea is, eventually, facilities would see shared savings, making the model sustainable.
“If I'm a little hospital sitting in Boise City, I don't have a lot of strength in my contract negotiations,” Rasmussen said. “But if I can be linked to 20 or 30 other rural providers, now I have more strength.”
From a policy perspective, Rasmussen said there is still work to be done, including Medicaid state plan amendments and an extension of telehealth waivers put in place during COVID.
But, he said, Oklahoma being granted the fifth-largest award from CMS is a demonstration of the state’s efforts to identify opportunities to improve its health care system – especially amid looming Medicaid cuts. Over 10 years, state hospitals will face a $6.7 billion impact.
“The importance of these dollars becomes even more important because now you have to reimagine how you deliver that care, who you deliver the care to [and] the partnerships that are going to be necessary to keep the system whole,” Rasmussen said.
“If we can show rural hospitals that there may be ways to grow other service lines, that they can collaborate more effectively, then maybe the $6.7 billion in cuts over the next decade may not close as many that we're fearful of losing.”
Updates, including procurement and funding opportunities, will be posted on the state’s Rural Health Transformation Program website.
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