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On July 22, 2026, the Centers for Medicare & Medicaid Services issued a memo to PACE organizations and state Medicaid agencies addressing barriers to expanding PACE access in rural and frontier areas, delivering long-awaited CMS PACE rural expansion guidance on an issue the National PACE Association and its members have been actively engaged in with the agency.
The Scope of This CMS PACE Rural Expansion Guidance
Except for the final section on Rural Health Transformation timelines and payment, the memo is broadly applicable to all PACE organizations, not just those impacted by RHT grants. The guidance responds directly to state interest in using Rural Health Transformation Program funds to expand PACE.
Which States Have Already Signaled Interest
Nine states included PACE in their RHT plans: Connecticut, Kansas, Louisiana, Michigan, Montana, Oklahoma, Pennsylvania, Rhode Island and West Virginia. This broad geographic spread across states with significant rural populations suggests meaningful state-level appetite for using federal transformation funding specifically to extend PACE into underserved rural communities.
Key Flexibility Within This CMS PACE Rural Expansion Guidance
CMS confirms that a mobile clinic is an acceptable alternative care setting to extend clinical services in rural service areas, a concrete operational flexibility that could help PACE organizations reach geographically dispersed rural populations without requiring a full brick-and-mortar center in every service area.
Why Mobile Clinic Flexibility Matters for Rural PACE Programs
Rural and frontier areas often present unique challenges for PACE organizations due to lower population density and longer travel distances between potential participants and a centralized care site. By explicitly confirming mobile clinics as an acceptable alternative, CMS is addressing one of the most commonly cited practical barriers to establishing or expanding PACE programs in these areas.
How Federal Funding Supports This CMS PACE Rural Expansion Guidance
Through the Rural PACE Planning and Development program, HRSA will make up to four awards, of up to $500,000 per year, to provide resources to assist with the development of an initial CMS PACE program serving HRSA-designated rural areas or to expand an existing certified CMS PACE program into HRSA-designated rural areas through PACE service area expansion.
The Policy Research Behind This Funding Announcement
The HRSA announcement follows the critical work of the National Advisory Committee on Rural Health and Human Services and its 2023 policy report, to which numerous NPA and PACE stakeholders contributed, outlining recommendations and considerations to expand PACE in rural America. This multi-year policy development process suggests the current guidance reflects sustained advocacy and research rather than a sudden or reactive policy shift.
Why PACE Expansion Matters for Rural Older Adults
PACE represents a promising strategy to expand access to comprehensive, coordinated care for older adults with complex care needs in rural areas, where access to specialized geriatric and long-term care services has historically lagged behind urban and suburban communities.
A Testing Ground for Broader Rural Health Policy
States may leverage rural PACE as a testing ground for targeted regulatory and operational flexibilities, supporting home- and community-based services rebalancing goals while expanding access to care in underserved areas, positioning this guidance as relevant not just to PACE specifically but to broader rural healthcare delivery innovation more generally.
What This CMS PACE Rural Expansion Guidance Means Going Forward
With nine states already signaling PACE-related plans within their Rural Health Transformation Program applications, and CMS now providing concrete operational guidance around mobile clinics and other flexibilities, this CMS PACE rural expansion guidance could accelerate the pace at which new or expanded rural PACE programs come online over the next several years. Given the National PACE Association’s active engagement in shaping this guidance, PACE organizations and state Medicaid agencies considering rural expansion may find continued advocacy support as they navigate implementation.
What to Watch Going Forward
As states move forward with their Rural Health Transformation Program plans, industry observers will likely watch how many of the nine states that included PACE in their applications successfully launch or expand rural programs using this new guidance and associated HRSA funding. Given PACE’s dual Medicare/Medicaid structure and the unique regulatory waivers already built into the program, this rural expansion push may serve as an important test case for whether federal-state coordination on alternative care settings like mobile clinics can meaningfully close longstanding rural healthcare access gaps for frail elderly populations.
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