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AzHHA applauds Governor Hobbs for advancing Rural Health Transformation Program

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Phoenix, Ariz. (Nov. 6, 2025) — The Arizona Hospital and Healthcare Association (AzHHA) today expressed strong support and gratitude to Governor Katie Hobbs for submitting Arizona’s application to the federal government’s Rural Health Transformation Program, a landmark initiative designed to strengthen healthcare access and quality in rural communities.

“Governor Hobbs’ leadership in securing this funding opportunity is critical for Arizona’s rural hospitals and the patients they serve,” said Helena Whitney, senior vice president of policy and advocacy at AzHHA. “Rural hospitals are the backbone of care for thousands of Arizonans, yet they face mounting challenges, from workforce shortages to financial strain, that threaten access to essential services. This program offers a lifeline to stabilize and transform rural healthcare delivery.”

Why this matters for Arizona

Arizona’s rural hospitals operate on thin margins and are disproportionately impacted by recent federal Medicaid cuts. Without intervention, many facilities risk reducing services or closing altogether, jeopardizing care for entire communities. The Rural Health Transformation Program, created under Public Law No: 119-21 (often referred to as the One Big Beautiful Bill Act), allocates $50 billion nationally over five years, with Arizona expected to receive at least $100 million annually upon approval.

AzHHA emphasizes these funds must be strategically invested to: 

  • Strengthen the healthcare workforce: Expand residencies, incentivize clinicians to practice in rural Arizona, and provide retention and relocation support.
  • Improve access and technology: Enhance telehealth, mobile clinics and interoperability to reduce barriers to care.
  • Support behavioral health and maternal care: Address critical gaps in mental health services and obstetric care for rural families.
  • Build resiliency: Help rural hospitals modernize infrastructure and reduce administrative burdens.

“Rural and urban hospitals are interdependent. Weakening one part of the system jeopardizes the entire continuum of care,” Whitney added. “This funding is not a cure-all, but it is a critical step toward preserving access and improving health outcomes for rural Arizonans.”Arizona expects CMS to announce funding awards by Dec. 31, 2025, with implementation beginning in early 2026. AzHHA will continue working closely with state leaders to ensure these dollars deliver maximum impact for rural communities. 

Read Governor Hobbs’ announcement on the application submission here. 

 

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About the Arizona Hospital and Healthcare Association

AzHHA brings together diverse voices to advance health and healthcare in Arizona. As the champion for healthcare leadership in Arizona, AzHHA and its member hospitals explore ideas and take collaborative action at the state capitol, in hospitals and at home to achieve the best healthcare outcomes for our communities. Above all else, we put people and patients first through better care, better health and lower costs. Visit https://www.azhha.org for more information.