Virginia to get $190 million in federal dollars to expand and modernize rural healthcare

Virginia will receive nearly $190 million in first-year federal funding to expand and modernize health care in rural communities under a new nationwide initiative announced by the Centers for Medicare & Medicaid Services, with state officials outlining an ambitious long-term plan expected to benefit more than 1.5 million rural Virginians, including residents of the Eastern Shore.

The funding comes through CMS’s Rural Health Transformation Program, a $50 billion federal investment rolling out from 2026 through 2030. Virginia’s allocation for fiscal year 2026 totals $189,544,888, part of a five-year strategy the Commonwealth has branded “VA Rural Vitality.” The initiative will be administered by the Virginia Department of Medical Assistance Services (DMAS) and is designed to address long-standing gaps in rural health access, workforce capacity, and technology.

State officials say VA Rural Vitality will focus on modernizing health care delivery, expanding the rural workforce, improving access to care closer to home, and advancing prevention and wellness. The program targets challenges common in rural Virginia, including outdated technology, provider shortages, long travel distances for care, and high rates of chronic disease. Over five years, the plan envisions a $1 billion total investment combining federal funds, partnerships, and additional grant support.

Under the proposal submitted to CMS, Virginia will work with several statewide partners, including the Virginia Innovation Partnership Corporation, the Virginia Health Care Foundation, the Virginia Hospital Research and Education Foundation, the Virginia Foundation for Community College Education, Virginia Works, the Virginia Department of Education, and the Virginia Center for Health Innovation, which will serve as the evaluation partner. Additional partners—such as rural hospitals, federally qualified health centers, free clinics, tribes, and digital health providers—will be selected competitively as the program expands.

Funding will be divided across three major initiatives. The CareIQ program will invest more than $280 million in health technology, including electronic health record upgrades, remote patient monitoring, and early-stage digital health innovation. Homegrown Health Heroes, funded at roughly $132 million, will focus on workforce development through rural medical residencies, allied health apprenticeships, and education pipelines starting in high school and community colleges. The largest share, Connected Care, Closer to Home, will invest more than $400 million to expand mobile clinics, telehealth hubs, community paramedicine, and maternal care networks, reducing the need for rural patients to travel long distances for treatment.

Federal officials say the program gives states broad flexibility while requiring regular progress reporting and oversight. CMS will assign dedicated project officers to Virginia as implementation begins, with annual reviews and coordination meetings planned.

While state leaders have not yet released a breakdown of how funds will be distributed regionally, officials say rural areas such as the Eastern Shore are expected to benefit directly as Virginia works to strengthen local health systems and ensure sustainable, long-term access to care closer to home.