|
CMS has released Texas’ Year 1 funding for Rural Texas Strong, the state’s Rural Health Transformation Program. On April 7, 2026, HHSC was granted access to $281 million for Year 1 implementation.
Why it matters: Texas is no longer waiting on approval to start spending money. The budget is approved, the notice of award is posted, and the state can now move from planning into execution. The bigger question now is not whether the money is coming. It is how Texas plans to invest it in certain rural communities and for certain uses.
The big picture: Rural Texas Strong is the vehicle Texas will use to distribute federal rural transformation funding across six initiatives, but only three get money right now:
- #1 MAHA
- #4 Workforce
- #6 Infrastructure, limited to minor renovations only
Who can get funding before October 30, 2026:
- Rural hospitals: Initiative 1 was initially for hospital districts, but now includes authorities and privates
- All rural providers: Initiative 4 focuses on workforce recruitment and retention, and Initiative 6 focuses on infrastructure, which CMS limits to minor renovations of current buildings
By the numbers:
- $281.3 million awarded to HHSC for Year 1
- $275.2 million earmarked for contractual costs in Budget Period 1
- Major funding flows to Initiatives 1, 4, and 6
Here is the funding distribution:
![]()
Between the lines: Approval matters, but approval alone does not create progress. This is the point where organizations need to understand whether they are positioned to apply, compete, partner, or wait.
What to watch:
- Timing is critical: Texas is behind other states, so Year 1 will be rushed
- Procurement path matters: Direct awards tied to government entities may sound faster, but state procurement realities could slow them down. RFAs typically take longer, so they may need to be routed more quickly to stay on schedule.
- Initiative 1 may continue: That is important if Texas is trying to carry Year 1 funds forward into Years 2 through 5.
- Definitions will matter: Lists are already circulating, but statutory definitions will likely determine who actually qualifies. If you are on the direct award list, you will be notified.
- HHSC communication will be limited: The current Rural Texas Strong response to questions has effectively been, “We are in a blackout period and cannot talk to you.”
Who can apply directly:
- All rural hospitals
- Hospital districts and hospital authorities that qualify as units of local government, are located in a Texas county with a population of 68,750 or less, and own and operate a rural hospital
- Licensed rural hospitals located in Texas counties with populations of 68,750 or less
- Health care providers, including medical, behavioral health, long-term care, emergency response, or other client services, located in a Texas county with a population of 68,750 or less
- Health care providers located in a Texas county with a population of 68,750 or less, including rural hospitals and other entities that are legally licensed or certified to operate and provide medical or client services
What can help: Based on previous procurement experience, HHSC cannot say much without risking litigation that could freeze the funding and procurement process. The Executive Access Toolkit includes guidance from other states and budget workbooks to help you navigate and prepare.
The bottom line: Texas has its Year 1 green light. The opportunity now is not only to track the program, but to understand where your organization fits in the rollout. Get up to speed on what you can and cannot spend money on, and be ready with your narrative and spending plans. Time is of the essence.
View the approved materials here.
|
Responses