Five Years Is the Point: How Rural Hospitals Can Use $50 Billion in Federal Funds to Hire and Keep Nurses

TL;DR

Congress set aside $50 billion for rural health care. Hospitals can’t apply for it directly: it comes through your state, with a five-year rural service commitment for each person it supports.

• The money: $10 billion a year from fiscal year 2026 through 2030, shared across all 50 states.
• The use: Sign-on and retention bonuses, relocation help, childcare and similar support, if your state’s plan includes them.
• The catch: Five years of in-person rural service in the same state. Nurses can move between rural hospitals there and keep counting.
• The limit: It generally can’t pay the base salary of a position you already fund. It’s for new or expanded programs.
• The deadline: States must commit their first-year funds by October 30, 2026, and application windows are short.

Short on time? Skip to What to do next for a plan by role and six questions to ask your state.

Why this matters now

If you lead nursing or hiring at a rural hospital, you know the cycle: recruit a nurse, invest in getting them settled, and hope they stay. Now federal money is aimed at that problem, with one condition that changes how you should hire.

Every state now has a share of $50 billion for rural health care, and workforce is one of the most common ways states plan to spend it. That money is real. So is the condition: anyone recruited with it commits to five years of rural service.

That condition reads like fine print. It’s actually the point. A program built around five-year commitments rewards hires who stay, and it exposes every hiring model that was never designed to.

What is the Rural Health Transformation Program?

Section 71401 of Public Law 119-21, the 2025 budget reconciliation law, created the program. It provides $10 billion a year from fiscal year 2026 through 2030. States split half of the money equally, and CMS (the Centers for Medicare & Medicaid Services) allocates the other half based on factors including each state’s needs and proposed initiatives. First-year awards average about $200 million.

Source: Public Law 119-21, Section 71401; KFF, A Closer Look at the $50 Billion Rural Health Transformation Program

The detail that surprises many hospital leaders: only states can receive an award. Your hospital gets the money through your state, usually by applying to a state program or responding to a request for proposals.

Can rural hospitals use the money to hire nurses?

Yes, if your state’s plan includes it. Congress included workforce as an allowed use in the law, in these words: “Recruiting and retaining clinical workforce talent to rural areas, with commitments to serve rural communities for a minimum of 5 years.”

State guidance shows what that can cover. South Dakota’s fact sheet lists:

• Sign-on and retention bonuses
• Relocation and travel allowances
• Childcare vouchers
• Training that leads to a new credential or job in a rural area

Across state applications, retention initiatives often included signing bonuses, relocation assistance, transportation support, and childcare support (Arizona, Connecticut, and Montana are examples).

Source: South Dakota Department of Health; State Health and Value Strategies (December 12, 2025)

How the five-year commitment works

Think of the commitment as a promise attached to a person, not a building. Four rules shape it.

1. It attaches to a person. Anyone who receives something of value, such as a bonus, relocation support, or housing help, takes on the five-year commitment. Shared infrastructure, like training materials, doesn’t trigger it.
2. It has to be rural and in person. CMS says clinicians recruited or retained with these funds must be physically located in rural areas. Telehealth from a non-rural location doesn’t count.
3. It counts across the state, not one building. You can combine time across rural sites in the same state, so a nurse who moves to another rural hospital there keeps building toward five years. A move to another state doesn’t count.
4. It can bend for real life. If a hospital closes, you can serve the remaining time elsewhere in the state’s rural communities. States can prorate an incentive and can ask CMS to forgive the commitment in cases such as death or disability.

What the money won’t pay for

For finance teams, the restrictions matter as much as the permissions. Minnesota’s published list of ineligible expenses shows how states are applying them. The money can’t be used for:

• Replacing existing funding, including salaries already paid from another source
• Paying clinicians for work they already do (a salary is allowable only for time spent on new program work)
• Costs incurred before your grant agreement is signed
• Direct health care services that insurance or other coverage could reimburse

The simple test: is the work new, or an expansion of something you already do? A new sign-on or relocation incentive program can qualify. The base salary of a nurse filling a position you already fund generally won’t. Confirm the details with your state.

The clock: deadlines and timing

Each year’s money has its own deadline. States must obligate (commit) first-year funds by October 30, 2026, and spend them by September 30, 2027, the end of the following fiscal year. CMS redistributes what isn’t spent, and signing a subaward (the agreement that passes state money to a hospital) doesn’t count as spending. The money has to actually be paid out.

Windows are short, so check now. Programs are already moving: North Dakota opened a retention funding opportunity for 37 critical access hospitals and their clinics, Texas made $99 million available to rural hospitals, and West Virginia committed nearly $4 million to workforce recruitment, training and mentorship. Minnesota’s workforce retention applications were due June 22, 2026. Check your state’s program page now, not after October 30.

Source: KFF; State Health and Value Strategies (April 10 and June 11, 2026); Minnesota Department of Health

Where international hiring needs a plan. Direct-hire of an EB-3 nurse (an employment-based green card category) takes 12 to 24 months, as our direct-hire guide explains. An incentive promised today may not be paid until the nurse arrives, which can fall in a later budget period. Before building an international pipeline around a grant, ask your state which budget period each cost will be charged to and whether your award continues into later years. Minnesota, for example, tells grantees that years two through five depend on future CMS awards. Visa timing also shifted in October; see the table at the end.

Where international direct hire fits

A five-year rural commitment and a hiring model built around permanence point the same way. A nurse hired directly through EB-3 arrives as a permanent resident and is employed by your hospital from day one, not by an agency. Nothing in that model is designed to end when an assignment does.

Whether your state lets you use incentives like relocation support for an internationally recruited nurse is a state decision. The law’s workforce language doesn’t say where a clinician trained. Ask your program office before you plan around it, and get the answer in writing.

Proof point: This is the model behind a rural North Dakota hospital welcoming its first international nurse. Read the North Dakota case study.

A five-year commitment, done fairly

A commitment protects a community’s investment. It can also turn into the kind of contract that has drawn scrutiny in international recruitment, where a nurse ends up owing more than they understood when they signed.

The program’s own rules lean the right way: a state may not impose debt with accrued interest on a provider who doesn’t complete the commitment, though a state-contracted entity may impose debt when the provider contracted with it directly. Whatever your state allows, hold any commitment to the standard in our direct-hire guide: the nurse should know in writing, before signing, what it covers, what happens if they leave early, and who would be owed.

What to do next

You don’t have to solve all of this at once. Start with your state, then give each leader one job.

Bring these six questions to your state program office:

1. Is our hospital an eligible subrecipient (a hospital that receives state funds), and when does the next funding opportunity open?
2. Which workforce costs are allowable: sign-on and retention bonuses, relocation, housing, childcare?
3. Does the five-year commitment apply to this incentive, and how is it documented?
4. Can incentives apply to nurses recruited from outside the state, including internationally educated nurses?
5. Which budget period will each cost be charged to, and does our award continue into later years?
6. If a nurse moves to another rural facility in the state, how is the commitment tracked?

Next steps

Talk to us. Global MedTeam helps US hospitals, including rural and critical access hospitals, hire internationally educated nurses directly through EB-3. We can help you map an international pipeline to your state program’s timeline and prepare the questions above. Your state program decides whether a cost is fundable, and licensed counsel handles immigration filings.

See it in practice. Read the North Dakota case study, or see our approach for rural hospitals.

Stay current. Program rules and visa dates change often. Get updates in our newsletter.

For hospital finance and grants teams

Spending limits on state awards

Per budget period, provider payments can’t exceed 15% of a state’s award, administrative costs are limited to 10%, and capital and infrastructure spending can’t exceed 20% and is limited to existing facilities. States can set tighter limits for their own programs.

Source: CMS, Rural Health Transformation Program Frequently Asked Questions; Public Law 119-21, Section 71401

Visa Bulletin: October 2026 EB-3 Final Action Dates

In the October 2026 Visa Bulletin, the first of fiscal year 2027, the EB-3 Final Action Date for most countries moved back to May 15, 2024, while the Philippines advanced to August 15, 2023. Final Action Dates show when a visa can generally be issued. The country column follows chargeability, usually country of birth.

Source: US Department of State, Visa Bulletin, October and September 2026

Frequently asked questions

What is the Rural Health Transformation Program?

A $50 billion federal program, created by Section 71401 of Public Law 119-21, that funds the 50 states at $10 billion a year from fiscal year 2026 through 2030 to strengthen rural health care, including the rural clinical workforce.

Can a rural hospital apply directly to CMS?

No. Only the 50 states receive awards. Hospitals receive funding through state programs, subawards or contracts.

Can the funds pay nurse salaries?

Only for new or expanded program work, not to replace existing funding or pay clinicians for work they already do.

Can internationally educated nurses be part of a funded workforce plan?

The law doesn’t say where a clinician must have trained, but each state designs its own program. Ask your state program office.