On July 4, Congress passed a package that reduces federal Medicaid and CHIP spending by roughly $990 billion over ten years, with analyses estimating about $137 billion of those reductions in rural areas. In the same bill, lawmakers created the $50 billion Rural Health Transformation Program to help rural systems adapt. States must apply for RHTP funding under CMS’s Notice of Funding Opportunity by November 5, 2025, and hospitals will typically access dollars through state plans and sub-awards.
The math is brutal. Rural healthcare gets $50 billion over five years, from fiscal years 2026 through 2030, while nearly $1 trillion in reductions phase in over a decade, with many cuts extending beyond when the transformation funds end.
Then, on October 1, the government shut down. Medicare’s pandemic-era telehealth flexibilities lapsed, and providers faced immediate uncertainty. Millions of beneficiaries who used telehealth encountered disruptions. At the same time, more than 700 rural hospitals are considered at risk of closure, and nearly half of rural hospitals operated at a loss last year.
Welcome to rural healthcare in 2025, Congress hands you a fire extinguisher while your house burns down, then shuts off the water main for good measure.
The Blind Spot Nobody Is Talking About
States are racing to submit RHTP applications by early November, prioritizing workforce, telehealth infrastructure, chronic disease, and regional coordination. Necessary, but there is a glaring gap, the 48 hours after discharge.
Forty-six percent of rural hospitals operated at a financial loss in 2023. They face impossible economics, limited staff, vast distances, and readmission penalties they cannot realistically avoid without post-discharge continuity. Even when inpatient care is excellent, readmissions spike because no one is accountable for what happens in the first 24 to 48 hours at home.
A patient leaves after heart-failure treatment with medications and a follow-up in two weeks. In that gap, did they get the prescriptions, are symptoms creeping back, do they know whom to call at 9 p.m. on Sunday. In many rural areas, urgent care is not an option, the default becomes 911 and a costly readmission.
Even with $50 billion, if states do not fund post-discharge follow-through, they will pour money into infrastructure that cannot prevent the most expensive outcome, patients coming back.
Why Washington’s Chaos Demands Different Solutions
When the shutdown hit on October 1 and telehealth flexibilities expired, providers had to choose, continue services they might not get paid for, or cut off patients who depend on virtual care. Access can vanish with a vote. The $50 billion is temporary, the reductions are not. When the program sunsets in 2030, rural hospitals will still be here, and so will the cuts.
Rural healthcare cannot depend on Washington’s mood. RHTP dollars must go to models that work regardless of who is in power, which waivers expire, or whether there is a shutdown.
Beyond Telehealth Infrastructure
States are right to invest in telehealth. But a video platform is not the same as proactive clinical oversight, and policy can yank simple access away overnight. What rural patients need is continuous monitoring and rapid escalation, someone spotting trouble before it becomes an emergency department visit, and a model that still functions if flexibilities lapse.
AI Built for Policy Chaos
At Dimer Health, we pair AI-supported monitoring with 24/7 clinician oversight, designed to operate within existing reimbursement pathways, with or without special waivers.
- Every patient receives a virtual follow-up within 24 to 48 hours of discharge.
- AI tracks recovery signals, symptoms, medications, check-ins, and flags risk early, missed meds, worsening dyspnea, confusion.
- A clinician reviews and intervenes within hours, not weeks.
This approach reduces avoidable readmissions and emergency department revisits, delivers clear return on investment on federal funding, and lightens the load on scarce staff, whether telehealth flexibilities are active or not.
Multiplying Workforce Instead of Only Recruiting
Rural areas cannot out-recruit cities. With more than 700 hospitals at risk, recruitment alone will not solve it. AI-supported virtual care multiplies capacity, one clinician can safely oversee far more post-discharge patients when technology handles routine check-ins and surfaces only the cases that need human judgment. This is not about replacing staff, it is about making limited teams sustainable.
What States Must Prioritize
The $50 billion runs from 2026 through 2030. The reductions continue after that. States have a narrow window to build durable infrastructure:
- Measure outcomes, not just access. Fund programs that demonstrably reduce readmissions and emergency department use, not just devices and bandwidth.
- Invest in scalable clinical reach. Service-enabled AI extends local teams, with human oversight for safety.
- Build for policy resilience. Choose models that do not collapse when waivers expire or Congress stalls. The October 1 lapse proved policy can change overnight.
The Real Test
Congress created a $50 billion temporary bridge while enacting nearly $1 trillion in long-term reductions. Then a shutdown erased telehealth flexibilities many depended on. Until that instability changes, rural communities need care models that survive Washington’s chaos.
If states spend RHTP dollars on endpoints without funding proactive follow-up, they will invest billions yet still fail the patient who lives 90 miles from the nearest hospital and lands back in the emergency department three days later.
Access is the first step. Accountability saves lives. Resilience survives Washington.
Forty-six percent of rural hospitals are operating at a loss. Hundreds are at risk of closure. Tens of millions of Americans rely on these hospitals, they do not have time for solutions that only work when Congress is in sync.
Rural healthcare needs systems that guarantee contact and oversight in the 48 hours, two weeks, and 30 days after discharge, no matter which waivers expire, which programs get cut, or whether the government stays open.
With $990 billion in reductions coming, and only $50 billion to prepare, there is no margin for error.
Caroline Hodge, MS, PA-C
Caroline (Carrie) Hodge, MS, PA-C, MBA, is the CEO and Co-Founder of Dimer Health, a physician-led virtual care company redefining transitional care through 24/7 post-discharge medical support. A former National VP at DocGo and Envision Healthcare, she founded Dimer to make high-quality medical support accessible to every patient when they need it most.
