The federal official who runs the program announced Colorado’s $169 million share from Colorado Springs on Monday, alongside the congressman for the Fifth District. None of the money may be spent in El Paso County, which is not among the 52 counties the program covers. Federal rules keep at least 85 percent of it from reaching providers as payment for care.
The program is the Rural Health Transformation Program, created by section 71401 of Public Law 119-21 — the same reconciliation law whose Medicaid changes are projected to cost 23,616 people in Colorado’s Fifth Congressional District their coverage. The Centers for Medicare and Medicaid Services announced Colorado’s awards as $169.6 million. The list the state published the same day sums to $170,210,575.26.
The announcement was made in the county that cannot spend it
Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services, announced Colorado’s share during a visit to Colorado Springs on Monday, FOX21 News reported. During the same visit he met Rep. Jeff Crank and county officials in a roundtable on Medicaid fraud that reporters were not allowed to attend. Oz alleged afterwards that some Colorado providers are billing Medicaid for non-emergency medical transportation, and that homeless people with substance-use problems are being exploited for Medicaid payments.
Crank posted a video of the two of them to his official Facebook page. “Big news!” it begins. “The Trump Administration and CMS Administrator Dr. Oz have announced $169 million to expand healthcare for rural Coloradans. Thanks to the Working Families Tax Cuts, the Rural Health Transformation Program represents the single largest investment in rural healthcare in U.S. history.”
The “largest investment in rural healthcare in U.S. history” claim has been checked before. When the health secretary made a version of it last year, KFF Health News rated it Mostly False, noting that federal Medicaid and Medicare spending in rural areas dwarfs $50 billion, that the fund runs five years while the Medicaid reductions are long-term, and that the Hill-Burton Act spent roughly $47 billion to $109 billion in today’s dollars building rural hospitals between 1946 and 1997.
The “Working Families Tax Cuts” is the same statute as the reconciliation law. Colorado’s health department cites it as H.R. 1, section 71401 of Public Law 119-21.
What the money is
Colorado’s Department of Health Care Policy and Financing received 112 eligible applications asking for more than $250 million across more than 350 projects. It funded 91 organizations and roughly 250 projects. The work ranges from tele-ICU and remote patient monitoring to community paramedicine, maternal and pediatric care, electronic health record upgrades, and a whole-blood transfusion network that trains rural emergency crews to give blood before a patient reaches hospital.
| Colorado’s award, budget year one | $200,105,604.17 |
| Awarded to 91 organizations, September 28 | $170,210,575.26 |
| Federal cap on payments to providers | 15 percent of the award |
| What Colorado budgeted for provider payments | $21,524,573.22, or 11 percent |
| Counties where the money may be spent | 52 of Colorado’s 64. El Paso is not one. |
Why El Paso County is not in it
Eligibility follows the federal rural definition maintained by the Health Resources and Services Administration. Colorado has 28 rural counties and 24 frontier counties by that measure. Larimer, Mesa and Weld counties also qualify through individual rural census tracts. El Paso County appears on none of those lists, and neither do Denver, Boulder, Adams, Arapahoe, Broomfield, Douglas, Jefferson or Pueblo. The state’s own coverage map shows El Paso County blank — no funded grantee serves it.
The department’s eligibility guidance is explicit about where the money may go: “When an LAO applies for a RHTP Grant, the funding must be used within one or more of Colorado’s 52 rural and frontier counties.” An organization headquartered outside those counties may still hold a grant — the rules provide for mobile, telehealth and home-based providers “even if their physical headquarters is not located in a rural or frontier county” — but the spending has to land inside them.
That distinction matters locally. Two grantees have a Pikes Peak connection. Ute Pass Regional Health Service District, which runs ambulance crews out of Woodland Park and Florissant in Teller County, received $2,508,877 — the largest award anywhere near the Tri-Lakes. Peak Vista Community Health Centers, headquartered in Colorado Springs, received $613,812, which it may spend at its clinics in eligible counties at Divide, Limon and Strasburg, but not at any of its El Paso County sites.
What the money can and cannot buy
Both the federal and state announcements present the program as relief for rural providers under financial strain. Sixty percent of Colorado’s rural hospitals run negative operating margins, averaging −1.27 percent, and 66 percent of critical access hospitals are in the red.
The money is not structured to fix that directly. CMS caps payments to providers at 15 percent of a state’s award and bars the funds from replacing services an insurer would otherwise pay for. Colorado budgeted below the cap: its approved project narrative puts total provider payments across all ten initiatives at $21,524,573.22, which it describes as 11 percent of the year-one total. The remaining 89 percent goes to training, technical assistance, telehealth equipment, data systems, workforce programs and planning. Those may prove durable. They are not revenue.
How the awards outgrew the budget
The awards came to more than the department had said it would hand out. Its two-page budget overview set the competitive pool at $160,295,755, and the nine competitive programs in its budget narrative add up to $164,745,755. The list published on September 28 sums to $170,210,575.26.
Both figures were estimates, the department says. In a written response to The Independent’s questions on October 1, Marc Williams, a public information officer for the department, said the two documents “reflect earlier planning estimates” and that the difference was found inside Colorado’s first-year budget, with no increase in federal funding. Planned spending on agreements with other state agencies fell from $15 million to about $12.4 million. Planned spending on contracts for training and technical assistance fell from $19.5 million to about $11.2 million. That freed about $10.9 million, three-quarters of it from the contracts line.
The money went to two places. About $10 million was added to the competitive grants, which now take 85 percent of the award, up from 80. The rest established a Tribal Program, which a slide from the department’s September 28 presentation to its advisory committee puts at $1.3 million. The slide is a projection for the second budget year: the department used the first-year changes to plan its second-year request, Williams said in a second response later on October 1, and has not yet been told what that year’s award will be. The department is still working out the Tribal Program’s scope with the Southern Ute Indian Tribe, the Ute Mountain Ute Tribe and Denver Indian Health and Family Services.
The slide labels the competitive grants “Direct Provider Funding.” That is a wider category than the provider payments described above. A grant pays a rural provider, or an organization working with one, to carry out a project; payment for delivering care is what CMS caps at 15 percent of the award. Asked whether the $21.5 million Colorado had planned for such payments changed along with the other lines, Williams cited the cap and said “the amount will be adjusted accordingly.” He gave no figure.
Two smaller answers came with it. Running the program will cost about $5.3 million in the first year, covering staff, equipment and travel as well as contracts; the $2.9 million in the budget overview is the contracts alone. And the department is finalizing an agreement worth about $450,000 with the state’s Behavioral Health Administration to train the professionals who deliver mobile crisis response and youth post-crisis stabilization services in rural communities.
How Colorado did against other states
The comparison most often drawn is between the fund and the Medicaid reductions in the same law. KFF estimates federal Medicaid spending in rural areas nationally will fall by $137 billion over ten years, against $50 billion appropriated for the fund over five. Its state-level data puts Colorado’s rural reduction at $1.661 billion.
Measured against other states, Colorado did comparatively well out of the allocation. It bears about 1.24 percent of the national rural Medicaid reduction and received 2.00 percent of the first-year fund — roughly 1.6 times its share of the damage. KFF itself cautions that these comparisons mislead if pushed too far: the fund runs through 2030 while most Medicaid changes begin in 2027 and keep growing afterwards, first-year allotments cannot reliably be multiplied by five, and unspent money may be redistributed among states.
The other half of the same law
Colorado’s own application does not treat the two halves as unrelated. Under its sustainability plan, the approved project narrative states that the program’s payment models “will help Colorado reduce reliance on Medicaid financing mechanisms being phased out federally, ensuring compliance and long-term fiscal health.”
Rep. Jeff Crank, who represents the Fifth District, voted for the law twice — on passage in May 2025 and on concurrence that July. The Senate Joint Economic Committee‘s minority staff, working from Congressional Budget Office estimates, puts the number of people in his district projected to lose Medicaid coverage at 23,616. The district lies entirely inside El Paso County, so none of the rural health money reaches it. The Independent asked how many rural residents of El Paso County stand to lose coverage. No such figure exists, and the question does not have an answer in the terms this program uses: by the federal rural definition the program follows, El Paso County has no rural population at all, which is why it is ineligible.
The county figures that do exist are larger. Colorado’s health department puts average monthly Health First Colorado enrollment in El Paso County at 159,371 in the year to June 2025 — 21.02 percent of the county’s population — of whom 49,800 are adults and parents covered through the Affordable Care Act expansion, the group the new work requirements reach. Across the Fifth District the department counts 178,644 average monthly enrollees and 61,705 in the expansion population.
What comes with the money
Half the national fund is distributed evenly among approved states. CMS allocates the other half at its discretion across 23 weighted scoring factors, among them state policy commitments. Colorado’s application maps its initiatives to those factors by name, including nutrition in continuing medical education and scope of practice. It records that Colorado has no certificate-of-need program “and will maintain this rural status,” cites a federally approved waiver restricting soft-drink purchases with food assistance dollars, and lists four categories of state legislation it might pursue “to optimize grant efficacy,” including telehealth parity, interstate licensure reciprocity and further expansion of scope of care.
The federal conditions are firm. CMS may withhold, reduce, eliminate or recover funding if it finds a state out of compliance, not making satisfactory progress, or that the funding is no longer in the government’s interest. The statute provides no administrative or judicial review of those decisions. States file quarterly and annual reports, with a final report due in February 2031, and had to obligate first-year money by October 30 — which is the likeliest explanation for 91 awards landing on a single day in late September.
What happens next
The awards run through September 30, 2027. Four more budget years follow, through federal fiscal 2030, and allotments in those years are not fixed at the first-year level. The department’s September 28 presentation lists October 15 as the date CMS is to tell Colorado its second-year amount, after rescoring, and October 31 as the deadline for a revised second-year budget narrative.
Update, October 1, 2026: This article now includes the Department of Health Care Policy and Financing’s written responses to questions The Independent sent on September 28 and October 1 about how the awards came to exceed the competitive pool in the state’s published budget. The opening paragraph now cites the federal 15 percent cap on provider payments rather than the 11 percent in the state’s approved plan, which the department says will be adjusted. An earlier version attributed the $21.5 million provider-payment figure to the department’s budget narrative; it appears in the approved project narrative.
Sources & further reading
The Independent’s own coverage: Crank and Killin Answer Our Questions · Crank and Killin, in Their Own Words
Primary documents: the state’s award list · its rural and frontier county fact sheet · its eligibility guidance · the approved budget narrative · its two-page budget overview · its September 28 advisory committee presentation · the approved project narrative · CMS funding restrictions
The announcement: FOX21 News on Oz’s Colorado Springs visit · KFF Health News fact-check of the “largest in history” claim
County and district data: El Paso County fact sheet, fiscal 2025 · Medicaid membership and funding by congressional district
Estimates and analysis: KFF on Medicaid reductions in rural areas · KFF on the limits of comparing fund allotments to Medicaid cuts · KFF on the program’s design and oversight
Methodology
The award total was calculated by The Independent from the 92 award lines the department published, which cover 91 organizations; one appears twice. The department’s own summary and the federal announcement give $169.6 million, a difference of about $610,000, or 0.36 percent, which is not explained in either document.
The county eligibility finding rests on the department’s rural and frontier county fact sheet, read in full, and is corroborated by the department’s own grantee coverage map, in which El Paso County is unshaded. The provider payment figure and the 11 percent share are stated in the approved project narrative, which The Independent read in full, as it did the 55-page budget narrative. Both are planning documents approved in April 2026 rather than records of money spent; figures in them are commitments, not expenditures.
The account of how the awards came to exceed the published pool rests on two written responses of October 1, 2026, from Marc Williams, a public information officer for the department: one to five questions The Independent emailed on September 28, the other to three follow-up questions sent that afternoon. The starting figures in the first response are those of the department’s two-page budget overview, which The Independent read in full. The revised figures, and the $1.3 million for the Tribal Program, are the department’s own, taken from that response and from slide 9 of its September 28 presentation to the program’s advisory committee, which The Independent also read in full; they have not been checked against a published budget. The $164,745,755 total for the nine competitive programs in the budget narrative was added up by The Independent from that document’s program tables.
The national and Colorado Medicaid reduction figures are KFF estimates derived from Congressional Budget Office projections and are presented as estimates throughout. Colorado’s share of the national rural reduction and of the first-year fund were calculated by The Independent from KFF’s published state data and the department’s award figure. Where this article describes what a document says, the document was opened and read rather than searched.
On the question of rural residents of El Paso County: the program follows the rural definition maintained by the federal Office of Rural Health Policy, under which the county qualifies neither as a whole nor through individual census tracts. The Census Bureau classifies population as urban or rural by a different method, at block level, which would produce a non-zero figure for the county but has no bearing on eligibility here. No published estimate breaks projected Medicaid coverage losses down to rural residents of a single county, and The Independent has not constructed one.
Corrections and additions: [email protected].
