On Dec. 29, 2025, Virginia was awarded $189,544,888 in health care funding from the Centers for Medicare and Medicaid Services (CMS). The funding is aimed at remedying rural health care inequities in the commonwealth.
Rural Health Transformation Fund
CMS announced the initial notice of funding opportunity in September 2025 and states were given until November of 2025 to submit applications to dip into the $50 billion fund.
The amount of money each state received depended upon a variety of factors including but not limited to (1) the number of rural residents and health facilities in the state; (2) the relative amount of uncompensated care in the state; (3) the quality of workforce and other state initiatives supported by the rural health fund; and (4) the extent to which states adopt Make America Healthy Again policies.
Virginia and Rural Health Care
Currently, 60% of Virginia localities are categorized as rural, making this funding critical to both residents of these localities, as well as local economies. Rural health care organizations and constituents face unique challenges in the state, such as limited proximity to emergency care and specialists, outdated technology and high rates of chronic disease. These rural regions also experience increased maternal health deserts, as well as greater dependence on Medicare and Medicaid programs.
In 2024, Virginia House of Delegates Speaker Don Scott, D-Portsmouth, established the House Select Committee on Advancing Rural and Small Town Health Care. The committee aims to “identify the most pressing challenges confronting rural hospitals, elevate the profile of innovative programs serving patients with medical needs endemic in rural areas and help develop legislative proposals for consideration by the Virginia General Assembly.”
With regard to the Rural Health Transformation Fund, Virginia lawmakers initially requested $1 billion from the fund to carry out the proposed VA Rural Vitality Plan. The prospective plan is detailed below.
Proposed Initiatives
The awarded grant will go to funding four integrated rural health care initiatives in the state: CareIQ, Homegrown Health Heroes, Connected Care and Live Well, Together. These initiatives intend to:
- Modernize health technology to support preventative care and data-driven decisionmaking.
- Strengthen and expand rural health workforce to sustain local care delivery.
- Improve access to primary, speciality and maternal care.
- Advance prevention and wellness to reduce chronic disease and improve quality of life.
Care IQ
The state proposed $282 million to the CareIQ initiative with the goal of strengthening care coordination, reducing administrative burden and supporting value-based care transformation. This would be enacted through the following measures:
- Investing in early stage health technology startups.
- Modernizing electronic health records and productivity tools.
- Expanding remote patient monitoring capacity.
Homegrown Health Heroes
$132 million would go toward the Homegrown Health Heroes initiative to create long-term workforce sustainability and stimulate rural economic growth. This would be enacted through the following measures:
- Addressing provider shortages by funding rural health care residencies, allied health apprenticeships and community college programs.
- Expanding high school pathways to health care.
Connected Care
The Connected Care Initiative would receive a proposed $412 million investment with the goal of enhancing care continuity and reducing avoidable hospitalizations for rural residents. This would be enacted through the following measures:
- Expanding health care access through mobile health clinics, hub-and-spoke telehealth models, community paramedicine and improved maternal care networks.
Live Well, Together
The final initiative, Live Well, Together, would receive a proposed $124 million grant to advance community health and wellness through a variety of means. These actions include:
- Implementing “food-as-medicine” programs.
- Supporting children’s physical health initiatives.
- Improving wearable technology for chronic disease management.
- Aiding in navigation support for dual-eligibility beneficiaries.
CMS hopes that this funding creates lasting changes for the rural health care system in the US.
“We think we have an opportunity not just to plug a few of the holes, but to transform in a lasting way the rural health care system in this country,” said Centers for Medicare and Medicaid Services administrator Mehmet Oz.
