HARRISBURG, PA — Pennsylvania will receive $193 million in federal funding to jump-start a sweeping, five-year effort to stabilize and transform health care in rural communities, state officials said, as providers brace for the effects of looming federal Medicaid spending cuts.
Governor Josh Shapiro announced the award as the first-year allocation under the Commonwealth’s approved Rural Health Transformation Plan, a strategy developed over nearly two years to improve access to care, strengthen the rural health workforce, and modernize services in areas where hospitals and clinics often operate on the financial edge.
Shapiro said the funding positions Pennsylvania to confront long-standing gaps in rural care, where residents frequently face physician shortages, longer travel times, and limited treatment options despite the state’s broader reputation for high-quality health systems. He said the administration’s plan aims to improve access, attract and retain skilled workers, promote sustainable care models, and accelerate technological innovation so that geography does not determine health outcomes.
Pennsylvania Department of Human Services Secretary Dr. Val Arkoosh said the plan reflects extensive collaboration with rural leaders and health care providers who understand the pressures facing their communities. She described the funding as a catalyst for locally driven solutions designed to strengthen access to high-quality care across rural regions.
The money comes from the federal Rural Health Transformation Fund, created under a reconciliation bill that established a five-year, $50 billion national program. Under congressional rules, each approved state receives a base allocation of $100 million per year, with the opportunity to earn up to an additional $100 million annually based on factors such as rural population, land area, uncompensated care, and program performance. Unspent funds from other states and territories can also be redistributed, creating the potential for Pennsylvania to secure additional dollars in future years.
State officials said the funding is renewable over the five-year life of the program and will be tied closely to results and spending effectiveness.
With the first-year award, the Shapiro administration plans to work through established regional economic development organizations to form Regional Care Collaboratives that will guide how projects and funding are deployed locally. Initial dollars will also support Rapid Response Access Stabilization grants intended to bolster existing efforts already underway in rural communities.
The Rural Health Transformation Plan was shaped by listening sessions, regional summits, and open feedback processes involving health care providers, community and educational leaders, county commissioners, members of the General Assembly, and multiple state agencies, including Human Services, Health, Aging, Insurance, and Drug and Alcohol Programs.
Based on that feedback, the Commonwealth structured the plan around several core priorities aligned with federal health goals. Those include expanding technology and infrastructure to improve access to primary and specialty care, investing in workforce incentives such as scholarships, mentoring, housing, and stipends tied to rural service commitments, and strengthening maternal health services to better coordinate prenatal and postpartum care.
Additional initiatives focus on expanding behavioral health services, including 988 crisis response capacity, improving care transitions and long-term care quality for aging residents, and modernizing rural emergency medical services and transportation systems to improve efficiency and sustainability.
State officials said the combined approach is intended not only to protect access to essential services but also to support long-term economic stability in rural Pennsylvania, where hospitals and health systems are often among the largest employers and anchors of local communities.
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