In a major step toward addressing persistent disparities in medical care across America’s rural communities, the Centers for Medicare & Medicaid Services (CMS) formally announced on December 22, 2025, the establishment of the Office of Rural Health Transformation. The new office is at the heart of a $50 billion federal initiative focused on expanding access to healthcare services in rural areas, improving health outcomes, and building more resilient and equitable care delivery systems.
The launch of this office comes in response to decades of documented challenges faced by rural populations, including limited access to hospitals and specialists, workforce shortages, poor infrastructure, and disproportionately high rates of chronic illness. With many rural hospitals closing or scaling back services in recent years, the federal government’s new investment represents one of the most ambitious efforts yet to reverse these trends and close the healthcare gap between rural and urban communities.
The Office of Rural Health Transformation will operate as the lead body within CMS overseeing the Rural Health Transformation Program. Its core responsibilities include managing how the $50 billion fund is distributed to states, overseeing the implementation of state-level health transformation plans, and coordinating with public health agencies, local stakeholders, and healthcare providers. All 50 states have submitted proposals to receive funding under the program, demonstrating the widespread demand for targeted rural healthcare support.
Unlike previous efforts that focused on short-term relief or direct subsidies to rural hospitals, this program takes a long-term systems approach. States are encouraged to develop comprehensive strategies tailored to their unique rural health challenges. These plans may include measures such as recruiting healthcare workers to underserved areas, expanding telehealth capabilities, increasing mobile care units, improving maternal and prenatal care, addressing behavioral health access, and upgrading critical health infrastructure.
One key feature of the office is its Division of State Rural Engagement, which will work closely with state governments to ensure each implementation plan meets federal standards and aligns with performance metrics. The division will also offer technical assistance, conduct readiness assessments, and provide oversight to guarantee that federal funds are used effectively and equitably.
Federal health officials emphasized that this initiative marks a shift in how rural healthcare is approached. Rather than offering isolated grants or temporary fixes, the Rural Health Transformation Program is designed to empower states to build lasting infrastructure and adopt innovative care models that can be sustained beyond the initial five-year funding period. This includes integrating data systems, improving care coordination, and fostering partnerships between hospitals, clinics, and community organizations.
The challenges facing rural healthcare are well documented. Rural hospitals are more likely to operate on thin margins or at a financial loss, leading to service cutbacks and closures. Patients in remote areas often must travel long distances for specialty care, and shortages of medical professionals have only been worsened by the COVID-19 pandemic and workforce burnout. Advocates say that without meaningful investment, these issues will continue to compromise outcomes for tens of millions of Americans.
Healthcare leaders and rural advocates have expressed strong support for the new office and the funding package, viewing it as a critical turning point in the effort to improve rural health equity. They argue that federal backing—paired with state innovation and local knowledge—can finally provide a framework for reversing decades of underinvestment in rural health.
In tandem with the rural health initiative, CMS also proposed updates to national price transparency rules affecting insurers and employers. These proposed reforms aim to give healthcare consumers more visibility into the cost of care before services are rendered. The new rules would require insurers to disclose more detailed information about negotiated rates with healthcare providers and out-of-pocket cost estimates for patients. This initiative builds on earlier federal transparency efforts and is intended to increase accountability and allow patients to make more informed decisions about their healthcare options.
Policy experts believe that combining increased transparency with expanded access—especially in historically underserved regions—will produce meaningful changes in how people engage with the healthcare system. For rural residents in particular, who may already face logistical and financial barriers to accessing care, knowing the price of services in advance could help reduce the risk of surprise bills and improve financial planning.
CMS leadership has framed these new initiatives as part of a broader strategy to promote health equity, reduce systemic barriers, and support the Biden administration’s stated goal of “healthcare for all, no matter your ZIP code.” Officials emphasized that rural communities, many of which are aging and experiencing population declines, require dedicated attention to ensure they are not left behind as the broader healthcare system modernizes.
While the initiative has been met with optimism, some experts have raised concerns about long-term oversight and how progress will be measured. Critics stress the importance of transparent reporting, outcome-based metrics, and ongoing engagement with rural communities to ensure that the program delivers real and lasting improvements. Stakeholders have also urged CMS to ensure that state plans are made public, allowing communities to track how funds are being used and hold local officials accountable.
As the Office of Rural Health Transformation begins its work, early priorities include finalizing funding awards to states, establishing performance benchmarks, and setting up technical support teams to assist with local implementation. The coming months will be crucial in determining how quickly and effectively the program can begin transforming care delivery in the nation’s most underserved regions.
With over 60 million Americans living in rural areas, the stakes are high. If successful, this federal initiative could serve as a model for future healthcare reforms aimed at closing the urban-rural divide and ensuring that all Americans—regardless of geography—can access timely, high-quality, and affordable care.
