Historic $1.4 Billion Federal Funding Opens Door for Area Hospitals to Modernize Services, Expand Care
- Rita Shipp
- Jan 5
- 3 min read
Several hospitals serving Jasper, Newton, Tyler, Polk, Sabine, Angelina, and San Augustine counties are officially classified as rural hospitals under Texas law, making them eligible to apply for upcoming healthcare grants tied to a historic $1.4 billion federal investment announced by Governor Greg Abbott.
The funding is part of Rural Texas Strong: Supporting Health and Wellness, a statewide initiative submitted by the Texas Health and Human Services Commission (HHSC) to the Centers for Medicare & Medicaid Services (CMS) under the federal Rural Health Transformation Program. If approved, Texas would receive approximately $281 million per year over five years, the largest allocation of any state participating in the program.
Local hospitals listed as eligible rural facilities
According to HHSC’s Directory of Texas Rural Hospitals, the following facilities serving East Texas communities meet the criteria to be considered rural hospitals and may apply for future grant opportunities once applications open:
CHI St. Luke’s Health Memorial – Livingston (Polk County)
CHI St. Luke’s Health Memorial – Lufkin (Angelina County)
CHI St. Luke’s Health Memorial – San Augustine (San Augustine County)
CHRISTUS Southeast Texas – Jasper Memorial (Jasper County)
Sabine County Hospital (Sabine County)
Tyler County Hospital (Tyler County)
Woodland Heights Medical Center – Lufkin (Angelina County)
These designations are based on county population, bed count, and federal classifications such as Critical Access Hospital (CAH), Sole Community Hospital (SCH), and Rural Referral Center (RRC).
Eligibility does not mean funding has been awarded
HHSC officials emphasize that inclusion on the rural hospital directory does not mean grants have already been awarded or submitted. Instead, the directory identifies hospitals that are eligible to participate once HHSC opens competitive grant opportunities.
Texas submitted a single, statewide application to CMS on November 3, 2025. CMS was expected to make a determination by December 31, 2025. As of early January, HHSC has not yet announced the final decision or released details on grant timelines. If approved, HHSC will administer the funds and release competitive Requests for Applications (RFAs) beginning in spring 2026, allowing eligible rural hospitals, local governments, and healthcare providers to apply for project-based funding.
“We are grateful for the federal government’s investment in increasing access to preventive and lifesaving care for people who live in rural communities across the state,” said HHS Executive Commissioner Cecile Young. “Thanks to the input and partnership of our rural healthcare stakeholders, Texas now has the opportunity for innovative and tailored solutions that will improve health care for current and future generations of Texans.”
How the funding could be used
According to HHSC, funds awarded through the Rural Texas Strong initiative would be distributed through a competitive process to support projects aimed at strengthening rural healthcare systems, including:
Reducing chronic disease through prevention, wellness, and nutrition programs
Expanding telehealth and artificial intelligence tools to bridge service gaps
Recruiting and retaining rural healthcare workers through training and incentives
Upgrading aging medical equipment and hospital infrastructure
Improving cybersecurity protections to safeguard patient data
The program is designed to stabilize rural healthcare access and prevent hospital closures in communities where residents may otherwise travel long distances for medical care.
What happens next
If CMS approves Texas’ application, HHSC will release detailed grant guidance, eligibility requirements, and scoring criteria in the coming months. Funding would be distributed annually from fiscal years 2026 through 2030, with awards based on specific project proposals rather than automatic allocations.
More information about the Rural Texas Strong initiative is available on the Texas Health and Human Services Commission website, including project details and supporting materials.
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