Source: United States Senator for New Mexico Martin Heinrich
Washington, D.C. – Today, U.S. Senators Martin Heinrich (D-N.M.) and Ben Ray Luján (D-N.M.), a member of the Senate Finance Committee, joined Leader Chuck Schumer (D-N.Y.) and Ranking Member of the Senate Finance Committee, Ron Wyden (D-OR), along with 12 of their Democratic colleagues, to demand accountability from the Centers for Medicare & Medicaid Services (CMS) on how the rural health slush fund will be distributed to states and what guidance will be considered in this decision:
In a letter to Mehmet Oz, the Administrator for the Centers for Medicare & Medicaid Services, the Senators demanded clarity on how the rural health slush fund will be distributed across the country. Earlier this month, Senate Republicans passed their “Big, Ugly Betrayal,” which delivered devastating cuts to the U.S. health care system – slashing funding by over $1 trillion dollars, the largest cut to healthcare in history. To try and cover up the damage of these cuts, they included a $50 billion rural health slush fund. However, this temporary fund only accounts for 5 percent of the cuts, which will have devastating, irreversible impacts. Perhaps even more alarming is the potentially blatant political distribution of this fund, underscoring the importance of accountability as to how CMS plans to award this money to states.
“We are alarmed by reports suggesting these taxpayer funds are already promised to Republican members of Congress in exchange for their votes in support of the Big, Ugly Betrayal. In addition, the vague legislative language creating this fund will seemingly function as your personal fund to be distributed according to your political whims. As states, patients, hospitals, nursing homes and other health care providers brace for devastating cuts, we urge you to provide straightforward, detailed answers on how you plan to administer these funds,” the Senators wrote. “Republicans in Congress hastily developed the rural health slush fund to buy their members’ votes and give their caucus political cover for voting for the Big, Ugly Betrayal. Several Members of Congress have already touted your promises about the funding their states and districts will receive from the rural health slush fund.”
Moreover, there are many questions about how the funds will be distributed. Shortly after the passage of the “Big, Ugly Betrayal,” Republican Senators took to “X” (formerly known as Twitter) to celebrate specific money for their states to support rural hospitals. Senator Britt (R-AL) tweeted: “the Senate just amended the Big Beautiful Bill to invest over $500M in Alabama’s rural hospitals.” Senator Husted (R-OH) said: “I’m proud to have secured $1.3 billion in funding for rural hospitals across Ohio—because every Ohioan deserves access to quality care close to home.” Senator Cassidy (R-LA) even noted an inequity, tweeting: “We secured a $50 billion fund to support rural hospitals. Louisiana is set to receive about 2% of that money, despite having only 1% of the U.S. population—a double share.” Since CMS has yet to release the criteria for how the funding will be awarded, there are questions about if this slush fund constituted a political pay-off.
Additionally, the Senators noted the hasty and ill-conceived wording of the fund, which leaves it open to abuse, fraud, and re-appropriation.
“Not only does the Republican rural health slush fund provide a meager amount of funding that fails to plug the $1 trillion hole caused by the Big, Ugly Betrayal, the fund is drafted in such a vague and open-ended manner that it is not even guaranteed to support rural health care. States are not required to use this funding to support rural hospitals or other rural health care providers. In fact, states can use funds to pay any health care providers, support technology-driven efforts like wearable devices, or fund unproven models of care that have nothing to do with rural health,” the Senators continued. “Further, there are no parameters outlined in the legislative language for how CMS should award, distribute, or rescind funding from the rural health slush fund, making it even more susceptible to abuse.”
To combat this apparent political giveaway, the Senators demanded answers on several questions, including:
- When will CMS provide guidance to states on criteria for an application?
- Will they commit to clear defined criteria before distributing these funds, and an appeals process related to funding award decisions?
- Will CMS prioritize rural providers receiving these funding awards?
- How will CMS define proper vs improper use of funds and accountability for how CMS will hold states accountable for improper use?
- What states/districts has the Trump administration already promised funding to?
In addition to Heinrich, Luján, Schumer, and Wyden, other Senators who signed on to the letter include Senators Alsobrooks (D-Md.), Blumenthal (D-Conn.), Durbin (D-Ill.), Gillibrand (D-N.Y.), Kim (D-N.J.), Markey (D-Mass.), Merkley (D-Ore.), Padilla (D-Calif.), Sanders (I-Vt.), Smith (D-Minn.), Van Hollen (D-Md.), and Warren (D-Mass.).
The full text of the letter can be seen here and below.
Dear Administrator Oz:
As you know, the Republican reconciliation bill cuts funding to the U.S. health care system by over $1 trillion, and will devastate communities nationwide, with disproportionate, negative impacts on health care access in rural America. To cover up the harms of these catastrophic cuts, Trump and Republicans stood up a temporary $50 billion rural health slush fund. This meager investment amounts to just five percent of the Big, Ugly Betrayal’s largest health care cuts in history.
We are alarmed by reports suggesting these taxpayer funds are already promised to Republican members of Congress in exchange for their votes in support of the Big, Ugly Betrayal. In addition, the vague legislative language creating this fund will seemingly function as your personal fund to be distributed according to your political whims. As states, patients, hospitals, nursing homes and other health care providers brace for devastating cuts, we urge you to provide straightforward, detailed answers on how you plan to administer these funds.
Republicans in Congress hastily developed the rural health slush fund to buy their members’ votes and give their caucus political cover for voting for the reconciliation bill. Several Members of Congress have already touted your promises about the funding their states and districts will receive from the rural health slush fund. Before the Big, Ugly Betrayal was even signed into law, Senator Husted celebrated the $1.3 billion he claims is promised to rural hospitals in Ohio, and Senator Hawley said the bill will give $1 billion to rural hospitals in Missouri.
Other reports suggest you promised to send funding from the rural health slush fund to districts in Pennsylvania that are not even rural. The Trump Administration’s explanation that this fund can and will be used for more than rural areas was a key fact that swayed Republicans to vote for the bill. The rural health slush fund appears to be nothing more than a political parachute to pay off members of Congress for their unpopular votes.
Rural communities will suffer greatly because of the health care cuts enacted in the Republican reconciliation bill. One-third of all rural hospitals are already at risk of closing, and the bill will force over 330 rural hospitals to reduce service lines, convert to other types of hospitals with fewer services, or close altogether. The Big, Ugly Betrayal makes no meaningful investments in rural hospitals, rural health centers, and other rural health care providers, which have some of the most fragile operating margins in the nation, and often are the largest employers and economic engines of their communities.
Not only does the Republican rural health slush fund provide a meager amount of funding that fails to plug the $1 trillion hole caused by the reconciliation bill, the fund is drafted in such a vague and open-ended manner that it is not even guaranteed to support rural health care. States are not required to use this funding to support rural hospitals or other rural health care providers. In fact, states can use funds to pay any health care providers, support technology-driven efforts like wearable devices, or fund unproven models of care that have nothing to do with rural health.
Further, there are no parameters outlined in the legislative language for how CMS should award, distribute, or rescind funding from the rural health slush fund, making it even more susceptible to abuse. There is no clear definition of an appropriate state application for the rural health slush fund, CMS is not required to follow a clear formula for distribution of funds, and there are no guardrails on how CMS should claw back funding from states in cases of inappropriate use. Without more clarity, this rural health slush fund is vulnerable to the very abuse of taxpayer spending that Republicans purport to care about.
To provide states, rural hospitals, and other health care providers clarity on the available use of funding from the rural health slush fund in advance of the December 31, 2025 deadline for CMS to approve or deny state applications, we request that you provide a staff-level briefing on the parameters of this fund as well as detailed, written responses to the following questions by August 15, 2025:
1. When will CMS provide states with guidance on the components that should be included in an appropriate state application for funding from the fund?
a) Will CMS provide guidance to states on applications for use of funds that are required to be distributed equally among states with an approved application?
b) Will CMS provide guidance to states on applications for use of funds that are not required to be distributed equally among states?
2. What percentage of program funding will CMS allocate to rural health care providers?
a) How will CMS ensure that states use this federal funding to benefit rural hospitals and other health care facilities, providers, and patients?
b) What is the breakdown of funding that CMS anticipates allocating across the different categories of eligible providers?
c) How will CMS make sure that states use the funds for purposes that support the financial viability of rural hospitals and other health care providers, including by providing funding to address high fixed costs and low volumes, improve health care workforce retention and recruitment in rural areas, and replace aging infrastructure?
3. The Big, Ugly Betrayal outlines several metrics that CMS may consider when distributing funding to states. How will CMS apply these metrics—the number of people who live in rural communities, the number of rural health facilities in a state, and the number of Medicaid Disproportionate Share Hospitals (DSH) in a state—when distributing funding to states?
4. Will CMS commit to make the formula for awarding and distributing funds to states public before making any commitments to states and before formally distributing funding?
5. Will CMS commit to creating a public website outlining state applicants for funding, the funding formula and criteria for distributing funds, and approved state applications?
6. How will CMS define and determine improper uses of funding? How will CMS monitor funds to ensure appropriate spending and use?
7. Will CMS commit to establishing an appeals process for states to provide an opportunity to contest decisions made on award, distribution and/or clawback of funding?
8. Given the ongoing hiring freeze at CMS, it appears that the agency cannot hire more people to distribute this funding. How will CMS use the $200 million in implementation funding tied to the rural health slush fund?
a)Will CMS hire a third party to administer this fund?
b) If yes, has CMS already committed to a hire a specific third party to administer this fund and, if so, which vendor?
9. What other states or districts have Trump Administration officials already promised funding from the rural health slush fund to? Which states and districts have received this promised funding?
While this taxpayer-supported rural health slush fund is wholly insufficient to plug the massive hole created by the Big, Ugly Betrayal including the 15 million people expected to lose insurance coverage, it is critical that CMS move with urgency to provide clarity to rural communities, states, hospitals, and other health care providers about the fund. We look forward to your prompt response.