The state submitted an application for federal funds as Medicaid spending cuts put pressure on hospitals and clinics serving rural communities.
FRANKLIN, Va. — Amid concerns of the impacts of cuts to Medicaid from the Trump administration’s spending bill, Virginia has officially submitted its $1 billion funding application to address rural healthcare shortfalls in the state.
The proposal, submitted last week during the Virginia’s statewide elections, centers around four initiatives to manage chronic diseases, grow rural workforce, expand mobile care and invest in technology.
“Our VA Rural Vitality plan takes bold action to ensure every Virginian – no matter their zip code – can access high-quality care close to home,” said Governor Glenn Youngkin.
How we got here
An estimated $1 trillion could be cut from federal Medicaid spending over the next ten years, with potentially millions of people becoming uninsured by 2034.
A $50 billion “rural health transformation program” was established to mitigate bipartisan concerns of the impacts the cuts could have on rural communities.
States can apply for the fund to pay for care intervention, medical services, expanded staffing and more.
Half of the fund’s $50 billion is split equally across the states with approved applications, while the remaining amount is determined by the Centers for Medicare and Medicaid Services.
Six hospitals in Virginia were identified as ‘at risk’ in a letter penned by Massachusetts Senator Edward Markey, because of the potential for uncompensated coverage.
However, an analysis from the Kaiser Family Foundation cited that the fund only makes up one-third of the expected losses for rural communities because of the cuts to Medicaid.
Doctor Dana Stallings, a diabetes clinician who runs “Southside Diabetes in the city of Franklin, noted the cuts are impacting an already vulnerable population.
“I can’t help my patients if they cant come in the door and can’t pay for healthcare. Rates of diabetes and other chronic health conditions skyrocket even more, because they’re not getting their healthcare,” she says.
“I don’t get external funding, so if my patients can’t come and we can’t bill for their appointments our revenue goes down and that puts our business at risk.”
What’s in the application
- Tech Innovation Fund – Grows Virginia’s health tech ecosystem through grants to start-ups enhancing rural care delivery.
- Provider Productivity Fund – Supports adoption of AI-driven decision-support and workflow tools to reduce administrative burden and ease provider burnout.
- Provider Interoperability Fund – Helps rural providers modernize EHR systems, strengthen cybersecurity, and advance data exchange to improve coordination.
- Remote Patient Monitoring (RPM) Fund – Expands use of continuous monitoring technologies to track patient outcomes in facilities and at home.
Homegrown Health Heroes ($132.0M)
- Attract and Retain Physicians – Expands rural residency slots in high-priority specialties and supports long-term retention through wraparound programs.
- Allied Health Degrees – Enables community colleges to launch or expand highdemand health programs by funding essential infrastructure and equipment.
- Earn to Learn Apprenticeships – Creates paid, work-based learning opportunities with education institutions and health care employer partnerships.
- Build Career Pipelines – Establishes high school health academies to introduce students to allied health careers.
Connected Care, Closer to Home ($412.0M)
- Mobile and Hybrid Care – Expands access to primary and preventive services through mobile units and telehealth.
- Community Paramedicine – Funds pilots and startup costs for EMS-led treatin-place care, preventive visits, and telehealth consultations.
- Innovative Maternal Care – Expands rural prenatal and postpartum services with community hubs, mobile units, and telehealth, with a focus on supporting mothers with substance use disorders and preventing rural labor and delivery unit closures.
Live Well, Together ($124.2M)
- Food as Medicine – Supports infrastructure and start-up costs for food pharmacies that provide nutrition education, medically tailored meals, and produce prescriptions.
- Consumer Tech – Funds pilots to test and scale digital health tools that support lasting lifestyle and behavioral changes.
- Active Kids – Invests in repurposing of community spaces to create multi-use areas for physical activity.
- Integrated Care for Duals – Expands outreach and education to help dualeligible seniors enroll in integrated care plan options.
link