Rural Nursing Homes Got Left Out of the $50 Billion Federal Rural Health Program — and the Clock Is Already Running

Washington, D.C. — When CMS announced that all 50 states would split $50 billion in rural health funding, it sounded like a lifeline for the stretched rural healthcare system. But for the skilled nursing facilities and nursing homes operating in those same communities, the program’s fine print tells a more complicated story — one where they’re largely watching from the sidelines.

The Rural Health Transformation Program, created under the One Big Beautiful Bill Act, represents the largest federal investment in rural health infrastructure in U.S. history. States are receiving an average of $200 million each in the first year alone, with $10 billion available annually through fiscal year 2030. The goals are broad: strengthen the rural workforce, expand telehealth, build sustainable care systems, and bring preventative services to communities that have gone without them.

What those goals don’t prominently include — at least in the state applications that CMS has approved — is nursing home care.

Post-Acute Care Gets One Line

The program’s approved uses of funds include a sweeping list: chronic disease management, obstetrics, mental health services, workforce recruitment, information technology upgrades, and innovative payment models. Nursing homes and post-acute care appear in just one clause — a provision allowing states to use funds to help rural communities “right size their health care delivery systems” by identifying needed “post-acute care service lines.”

That’s a far cry from the targeted investment advocates have said rural nursing homes need. A review of the state-level project summaries shows that most states have directed their first-year plans toward critical access hospitals, primary care expansion, and telehealth infrastructure. Texas is set to receive $281 million; New Jersey, $147 million. But the breakdowns published by CMS list equipment upgrades, obstetric programs, community paramedicine, and ACO models — not nursing home staffing, Medicaid rate shortfalls, or long-term care access gaps.

The Rural SNF Problem Isn’t New

Rural skilled nursing facilities have long struggled with a funding gap that urban peers don’t face in the same way. They serve older, poorer populations on thin Medicaid margins, often with no hospital backup nearby. Workforce shortages hit rural facilities harder — there’s simply less of a labor pool to draw from. And when a rural nursing home closes, the next-nearest option can be dozens of miles away.

That’s part of why the industry has pushed hard for federal programs that specifically reach SNFs. Rural operators have been vocal about being fighting for permanent telehealth reforms as one tool to extend their reach and reduce unnecessary hospitalizations. But broader infrastructure investments — the kind that could help facilities survive on thin rural margins — have been harder to come by.

The Rural Health Transformation Program could theoretically touch nursing homes if states choose to direct funding toward post-acute care. A handful of states have included language about care coordination and value-based models that might eventually extend to SNFs. But the first-year priorities tell you where the money is actually going.

What Advocates Are Watching

Industry sources say the question now is whether nursing home advocates can make the case for inclusion in future program years — or through the flexibility built into each state’s plan. CMS has signaled that states can propose additional uses of funds with administrator approval, which leaves a door open.

But with states already locked into year-one plans and facing their own budget pressures, the window for redirecting RHT dollars toward long-term care may be narrow. For now, the $50 billion rural health transformation is largely moving without nursing homes at the table.