$50 billion rural healthcare fund distribution plans detailed
The Trump administration recently launched the application period for the Rural Healthcare Transformation Program, giving states an opportunity to claim a piece of a $10 billion first-year FY26 allotment on behalf of their providers.
$100 million annually is available to each state applicant but the other $5 billion per year will be distributed at CMS’s discretion.
Discretionary awards will be based on a complex points system that includes various factors. State policies evaluated as part of the process include those on certificate-of-need regulations, scope of practice and interstate licensure.
Not eligible for funding:
In-process or planned construction projects
Initiatives with clinical services already paid from another source of coverage
Initiatives to boost payment available from the other source of coverage
Boosting clinician salaries at hospitals with noncompete policies
Providers that receive shares of their state’s funding need not be located in rural areas, as long as the funding is put toward rural healthcare.
CMS signaled it will start rejecting state-directed payment (SDP) submissions from states if they fail to report – and improve on – quality data.
The plans from CMS, included in a recent bulletin, reiterated guidance from 2024 but added that it will start rejecting “effective immediately” SDP plans, called preprints, if they fail to provide greater detail.
“CMS now seems ready to deny [SDP] submissions that are not complete from the start, which will limit the flexibility and teamwork previously observed,” said Susan Feigin Harris, co-head of healthcare, United States, for Norton Rose Fulbright US.
The notice identified a “systemic compliance issue” from its analysis of 2024 approved SDPs and warned of shortcomings, including that only:
83% had evaluation plans that aligned with best practices in evaluation
65% of SDP renewals included evaluation findings
Source: FastFinance review of Approved State Directed Payment Preprints, Medicaid.gov, as of Sept. 5, 2025
Notes: Includes only SDPs explicitly naming hospitals or their employees or contractors as recipients; Does not include other SDPs for specific services that may also fund hospital activities; Does not include SDPs for facilities that may be owned by a health system, such as nursing homes; Some SDPs may include other provider types in addition to hospitals
A key to superior financial results of private equity (PE)-acquired hospitals is long-term reductions in non-clinical staff, according to new research.
The study in the September issue of the Journal of Financial Economics also found unchanged clinical outcomes for certain conditions, but other researchers challenged the clinical findings.
The study’s financial results for PE-acquired hospitals, from 2001 to 2018, included:
Better survival rate of PE-acquired hospitals, compared to non-PE for-profit acquisitions
Seven percent decrease in wage costs over first four years post-acquisition
Nine percent cumulative wage cost decrease in the fifth to eighth year post-acquisition
Decrease in total employee-to-patient ratio post-acquisition
Increased profitability
10% reduction in patient volumes
No significant change in case mix index (increases can indicate upcoding)
One percentage point decrease in the proportion of Medicaid and Medicare patients
Source: Gao, J., et al., Private equity in the hospital industry, Journal of Financial Economics, May 26, 2025
