California agency readies rural health transformation application under HR 1, launches stakeholder outreach

State health officials told the Office of Cost and Accountability (OCA) board that California will prepare an application to compete for funds from the federal Rural Health Transformation Program created by the federal budget reconciliation bill known in the meeting as HR 1. The program allocates $50 billion over five years to strengthen health care access in rural areas; officials said half of the funds will be divided equally among states with approved applications and the remaining $25 billion will be awarded based on the quality of state proposals.

The OCA presentation summarized core features of the program and next steps. "The law requires CMS to consider certain factors when distributing these funds, such as a state share of population that lives in a rural part of a metropolitan area, its share of rural health facilities compared to the nation, and the situation of hospitals that serve a disproportionate number of low-income patients," a state presenter said during the meeting. Staff said the Centers for Medicare & Medicaid Services (CMS) must approve or deny applications by Dec. 31, 2025, and that the federal agency will post a notice of funding opportunity (NOFO) and guidance before states file final proposals.

Why this matters: the program is a rare,…