Texas just secured the largest rural health investment in state history. For rural hospitals and providers, the question is no longer whether to modernize, but how fast.
Something significant is happening in rural Texas healthcare right now, and it's not incremental. Two parallel legislative actions have created a funding environment that rural hospitals and providers have never seen before, and may not see again.
The first is the Rural Health Stabilization and Innovation Act (Texas House Bill 18), signed into law by Governor Abbott in June 2025. The second is Texas's $1.4 billion allocation through the federal Rural Health Transformation Program, the largest award of any state in the country. Together, they represent a coordinated state and federal commitment to keeping rural hospitals open, modernizing how care is delivered, and addressing the chronic disease burden that disproportionately affects rural Texans.
At Welby Health, we've spent years building exactly what these programs are now calling for: AI-powered remote patient monitoring, chronic care management, and clinical decision support designed for providers who don't have the luxury of unlimited staff, unlimited budgets, or unlimited time. The alignment between what we do and what Texas is funding isn't coincidental. It reflects where healthcare delivery needs to go, and rural Texas is leading the charge.
HB 18 is a comprehensive piece of legislation that tackles rural hospital viability from multiple angles. At its core, it establishes the State Office of Rural Hospital Finance within HHSC, creates a financial vulnerability index to assess which hospitals are most at risk, and stands up four distinct grant programs.
The Financial Stabilization Grant Program targets hospitals, hospital districts, and hospital authorities that are at moderate to high risk of financial instability. Eligibility is determined by the vulnerability index, with priority going to facilities most likely to lose services or close entirely. For grant applications received before December 2026, HHSC will use existing published data on financial stability to make these determinations.
The Emergency Hardship Grant Program provides rapid support for hospitals facing sudden crises, whether from natural disasters, payroll shortfalls, or other unforeseeable circumstances.
The Innovation Grant Program is where things get particularly interesting for technology-forward providers. This program funds initiatives that improve healthcare access and quality in rural counties, with a specific requirement that funded projects demonstrate a path to financial sustainability without ongoing state support. The legislation prioritizes initiatives focused on improving services for vulnerable populations. If you're a rural hospital thinking about deploying remote monitoring, chronic care management, or AI-enabled clinical tools, this is the grant mechanism designed to support that transition.
The Rural Hospital Support Grant Program provides broader operational funding to improve financial stability, continue operations, and support long-term viability.
Beyond the grants, HB 18 also creates the Texas Rural Hospital Officers Academy (a professional development program for rural hospital leaders), mandates cost-based Medicaid reimbursement updates, establishes an add-on reimbursement rate for rural hospitals with OB/GYN departments, and stands up a Rural Pediatric Mental Health Care Access Program leveraging telehealth.
The bottom line: this legislation is specifically designed to give rural hospitals the financial breathing room and the tools to innovate their way to stability, not just survive.
Running alongside HB 18 is the federal Rural Health Transformation Program. Congress authorized $50 billion over five years as part of the One Big Beautiful Bill Act, and Texas applied with a plan called "Rural Texas Strong: Supporting Health and Wellness." CMS awarded Texas $281 million annually for five years, the most of any state in the program.
The Rural Texas Strong application outlines six strategic initiatives. Two of them speak directly to the kind of work Welby does every day.
The first is the chronic disease management initiative, which the state has proposed at $218 million over the life of the program. This will fund grants to rural hospital districts for diabetes education, remote monitoring, nutrition programs, wellness services, and low-cost access to primary care. The application specifically calls out diabetes education and management as a major focus, with outcome measures tied directly to the kinds of metrics remote care management programs are designed to move.
The second is the Lone Star Advanced AI and Telehealth initiative, proposed at $150 million. This envisions a statewide AI and telehealth system to support diagnostics, care navigation, risk detection, documentation, and billing optimization. Eligible recipients include clinically integrated networks, accountable care organizations, and similar cooperatives, with rural hospitals, rural health clinics, EMS providers, FQHCs, and technology innovators identified as key stakeholders.
HHSC will distribute this funding through a competitive grant process, with Requests for Applications expected to begin in spring 2026. Local governments, rural hospitals, FQHCs, behavioral health providers, and other qualified applicants will be eligible to apply.
Here's the reality for most rural hospitals in Texas: the need is not abstract. According to a January 2026 report from the Center for Healthcare Quality and Payment Reform, 105 of Texas's 154 rural hospitals experienced a loss of patient services in 2024-2025. Eighty-four are at risk of closure. Twenty-three face the threat of shutting down immediately.
These hospitals are operating with thin margins, high chronic disease burden, aging infrastructure, and workforce shortages. They need solutions that generate revenue, improve outcomes, and reduce operational burden simultaneously, and they need those solutions to be deployable without a massive internal buildout.
This is where the intersection of HB 18 and Rural Texas Strong creates a window. The state is about to distribute hundreds of millions of dollars through competitive grants to hospitals that can demonstrate they are ready to deploy technology, manage chronic disease populations, and produce measurable outcomes. The hospitals that can walk into that process with a technology partner already in place, with demonstrated results and a clear implementation plan, are going to be the ones who secure funding.
Welby Health was built for this exact scenario. We provide a fully managed chronic care management and remote patient monitoring platform that combines AI-powered clinical technology with dedicated licensed RN case managers. Our model is turnkey, meaning a hospital can be live on the program with minimal burden on existing staff.
Here's how our capabilities map to what Texas is funding:
For the chronic disease management initiative, Welby deploys cellular-enabled blood pressure cuffs, glucose monitors, weight scales, pulse oximeters, and heart rate monitors directly to patients. Our clinical team manages those patients using NCQA-accredited care protocols, with each patient receiving regular engagement from a dedicated nurse case manager. We monitor hypertension, diabetes, CHF, COPD, and obesity, which are the exact conditions the Rural Texas Strong application identifies as priorities.
For the AI and telehealth initiative, our MARKUS AI platform continuously analyzes patient vitals, flags rising-risk patients before they hit crisis, automates clinical documentation, identifies compliance gaps, and prioritizes interventions. MARKUS was built specifically for clinical workflows. It doesn't just surface data; it tells our nursing team what to do next and why. This is the type of AI-enabled care navigation, risk detection, and documentation support the state's application describes.
For the Innovation Grant Program under HB 18, Welby's financial model is directly relevant. Our platform unlocks revenue from existing Medicare, Medicaid, and commercial patients through CCM and RPM billing codes that many rural hospitals are not currently capturing. This means a Welby deployment doesn't just improve care; it creates a sustainable revenue stream that continues after grant funding ends, which is exactly what the Innovation Grant requires.
Grant applications are won on demonstrated outcomes, and this is where Welby's track record matters. Our program has produced 84% blood pressure control within 90 days, 81% A1C control within 90 days, a 20% average decrease in blood pressure, over 20% blood glucose reduction within four weeks, and 5.5x greater adherence to guideline-directed medical therapy for heart failure patients. Our patient Net Promoter Score is 97, and each patient enrolled saves the practice approximately one hour of staff time per month.
These are not theoretical projections. These are measured results from live patient populations. For rural hospitals building a grant application, the ability to point to a technology partner with published outcomes data across the exact metrics HHSC will be evaluating is a meaningful competitive advantage.
The competitive grant process hasn't opened yet. HHSC is still finalizing budget amounts for each initiative and CMS must approve the budget before funds flow. But that doesn't mean this is a "wait and see" moment. Spring 2026 is the expected timeline for RFAs.
Rural hospitals that want to be competitive should be doing a few things now. First, subscribe to HHSC's GovDelivery notifications for the Rural Texas Strong program and monitor the Electronic State Business Daily for procurement opportunities. Second, assess your current chronic disease population and identify the revenue you're leaving on the table by not billing CCM and RPM codes. Third, evaluate technology partners who can demonstrate measurable outcomes in the specific areas the state has prioritized. And fourth, start building the narrative for your grant application now, because the hospitals that arrive at the RFA with a clear implementation plan and a proven partner will have a significant edge over those scrambling to put something together from scratch.
Texas has never had this much capital pointed at rural health innovation at the same time. HB 18 provides the state-level framework, the grants, and the technical infrastructure. Rural Texas Strong provides $1.4 billion in federal funding across five years. Together, they create a runway for rural hospitals to modernize care delivery, stabilize financially, and serve their communities for the long term.
At Welby, we're ready to be the partner that helps rural hospitals step into this moment. Not with a pitch, but with a platform, a clinical team, and results that speak for themselves.
If you're a rural hospital or health system in Texas exploring how to participate in the Rural Health Stabilization and Innovation Act or the Rural Texas Strong initiative, we'd welcome the conversation. Reach out to our team at welbyhealth.com to schedule a consultation.
Welby Health provides AI-powered remote patient monitoring and chronic care management for physician practices and health systems. Our platform combines licensed RN case managers, NCQA-accredited care protocols, and the MARKUS AI clinical intelligence engine to deliver proactive, measurable chronic disease management at scale.
