The Centers for Medicare & Medicaid Services (CMS) has allocated more than $213 million to support rural hospitals in North Carolina. The funding, totaling $213,008,356, was approved as part of the Working Families Tax Cut Act signed into law earlier this year.
Earlier this month, Senator Ted Budd (R-N.C.) and other members of the North Carolina congressional delegation sent a bipartisan letter to CMS Administrator Dr. Mehmet Oz. The letter expressed strong support for the North Carolina Department of Health and Human Services’ (DHHS) Rural Health Transformation Program (RHTP) application and urged approval before the December 31 deadline.
Following the funding announcement, Senator Budd stated:
“North Carolina has the second-largest rural population in America, home to 7.6% of our nation’s rural residents. Today’s announcement by the Centers for Medicare & Medicaid Services (CMS) of $213 million from the Rural Health Transformation Program will greatly benefit patients across our state. While I was proud to support the inclusion of this funding in the Working Families Tax Cut Act, it is unfortunate that the State’s application was not appropriately coordinated with federal officials and did not request funding levels that more accurately correlate with our significant rural population.”
In their letter to CMS, members of Congress highlighted that North Carolina accounts for three million rural residents across 85 counties—the second-largest rural population in the country—and requested that CMS allocate additional dollars so total funding would be proportional to this large population. They noted discrepancies in how “rural” is defined under current federal guidelines, which led to some primarily urban counties being included while some highly rural areas were excluded.
The DHHS applied for RHTP funds on November 3 and plans to distribute them through its Office of Rural Health if awarded. A statewide steering committee involving Medicaid, Public Health, and Behavioral Health divisions would oversee implementation. The program aims to address ongoing healthcare challenges faced by rural communities in North Carolina—including shortages in primary care and mental health services—and seeks to improve health outcomes by expanding access to innovative care models and integrating medical, behavioral, and social services.
By fiscal year 2031, NCRHTP aims to increase provider-to-population ratios in rural areas, reduce preventable hospital readmissions and emergency visits, lower chronic disease risk factors, and expand integrated behavioral health services. Technology such as advanced AI tools will be used to improve data sharing and clinical decision-making while supporting cost reduction for providers.
The congressional delegation emphasized that approving North Carolina’s application would help improve both health outcomes and economic stability in rural communities across the state.
