Missouri has been awarded $216.3 million in federal funding to improve rural health, according to a Monday press release from the U.S. Centers for Medicare and Medicaid.
The funding — the ninth-largest amount awarded to any state — is the first of a potential five years of support for Missouri through the federal Rural Health Transformation Program.
Each year between 2026 and 2030, the $50 billion program will disburse $5 billion equally to approved states. The allocations from another $5 billion annually will depend partly on reviewers’ assessment of states’ applications and partly on yearly progress.
U.S. lawmakers portrayed the federal program, approved by Congress this summer as part of the One Big Beautiful Bill Act, as a counterweight to the federal law’s deep cuts to Medicaid. But the program will offset less than a third of an anticipated $137 billion loss of Medicaid spending in rural areas over the next decade, according to the nonpartisan health care research organization KFF.
Jess Bax, director of the Missouri Department of Social Services, said in a press release from Gov. Mike Kehoe’s office Monday that the funding could “change the landscape of healthcare access and outcomes for our rural communities.”
“By addressing longstanding health disparities affecting rural residents through these locally driven solutions,” Bax said, “we are helping rural providers build capacity, modernize services, and better meet the needs of Missouri patients.”
Missouri’s application proposes to establish 30 community hubs across 104 counties to help hospitals, clinics and community organizations identify local priorities and coordinate care. This part of the application builds on a pilot program, launched in 2024, that put six rural hospitals in charge of hubs.
Some health care advocates and rural medical providers familiar with that pilot, called ToRCH, or Transformation of Rural Community Health, told The Independent it allowed hospitals to partner with community organizations to use Medicaid funding to address underlying causes of illness.
State lawmakers put $15 million into the program during the 2023 legislative session and have made that an ongoing appropriation, though only about $8 million had been used by the end of fiscal year 2025.
Next steps include finalizing the state’s agreement with the Centers for Medicare and Medicaid and putting funding in motion for “hub activation, workforce initiatives and tech procurement,” according to a press release from the Missouri Hospital Association.
Though Missouri was given a relatively large award, it ranked 36th for the amount of funding allotted per rural resident, at $115.09 per person, according to an analysis by Timothy McBride, a health economist at Washington University in St. Louis. While Texas was awarded the most funding, with $281.3 million, it got the least money per rural resident, at $59.29 per person.
The funding formula for the program took into account factors including the size of a state’s rural population, the number of rural care facilities and uncompensated care as a percent of hospital expenses.
Missouri’s application includes plans to overhaul the state’s Medicaid payment system, rewarding healthy outcomes rather than the volume of services provided.
The press release from the governor’s office named MO HealthNet, which runs the state’s Medicaid program, as the recipient of the federal funding. It said the division of the state’s social services department “is leading Missouri’s efforts to increase access to care, improve quality, enhance care coordination, and incentivize long-term sustainability.”
“The primary goal of Missouri’s plan is to revamp the Medicaid payment system to guarantee the effective use of taxpayer dollars,” said Baylee Watts, spokesperson for the social services department, in a Dec. 9 email to The Independent.
Health care experts and providers said that while they welcome federal investments in the long-term sustainability of rural health care, they worry rural hospitals won’t survive revenue losses from an increase in uninsured patients thanks to the federal law.
Rural hospitals run on tight margins, partly because they have high overhead costs but deliver lower volumes of payable services than urban providers.
Lori Wightman, CEO of Bothwell Regional Health Center in Sedalia, said on Dec. 16 that the hospital, one of the participants in the pilot program, had only 14 days of cash on hand. And, she said, the hospital needs a new roof.
“Every time it rains a lot, we get a certain leak in our operating room and then just shut down two rooms,” Wightman said. “And paying for a new roof is not the sexiest, but it’s absolutely needed to keep access in our town.”
Grants to allow providers to repair critical infrastructure and add high-demand services are some of the first planned actions with the funding, according to Missouri’s application.
The state aims to award 10 grants in 2026 for hospital infrastructure projects and three grants to introduce services like oncology or obstetric surgery.
Also on the agenda for 2026, according to the application, are tech contracts and staffing for a new Rural Health Transformation Office.
The state plans to hire more than 100 people, assigning about 90 to run community hubs and 20-25 to seven “regional coordinating networks.”
The largest single item in Missouri’s application is for a “digital backbone” to share and track data, accounting for over a third of the state’s nearly $1 billion request at $364 million. As part of this digital backbone, the state plans to create a platform to allow medical providers and community organizations to share and follow up on referrals — including for non-medical services to keep people healthy, like food assistance.
Kehoe, in his press release, highlighted the state’s support for community organizations in Missouri’s project.
“Through Missouri’s Rural Health Transformation plan,” Kehoe said, “we are supporting local partners who understand their communities and are positioned to deliver meaningful, lasting impact for future generations of Missourians.”
This story was originally published by the Missouri Independent.
