As CMS Embarks on “Rural Transformation,” a New Jersey Health System Weighs In

CMS Administrator Mehmet Oz, MD, MBA, stepped out of black SUV in the heart of Atlantic City on Friday, with the resort’s casinos towering above him. He was halfway through a visit with leaders from AtlanticCare, which serves more than 1 million residents at 110 sites in southern New Jersey, in the first of several planned meetings with health system leaders.¹

Oz had seen the beachfront campus of Stockton University, which graduated 60 nurses this year and plans to open a medical school with Philadelphia-based Drexel University.² He spoke with patients at a Federally Qualified Health Center (FQHC) that AtlantiCare operates. He held a roundtable on policy and regulatory reform with leaders from AtlantiCare, Stockton, Drexel, and Oracle Health, which is overhauling the health system’s digital technology.

Mehmet Oz, MD, MBA | Image: HHS

And, Oz heard a pitch he will hear often in coming months: Under President Donald Trump’s One Big Beautiful Bill Act, CMS has to spend $50 billion on a Rural Transformation Program over the next 5 years—and South Jersey would like a piece of the pie.³

The rural health fund emerged late in the law’s path through Congress, as key US Senators feared hospital closures if patients lose Medicaid access. The Kaiser Family Foundation predicts the law will shift $155 billion out of rural health care, when health outcomes already lag behind those in more developed areas.⁴ Meanwhile, there are fears the rise of technology and artificial intelligence (AI) could widen gaps.⁵ The law comes amid lingering financial stress from the COVID-19 pandemic and looming threats, such as anticipated premium increases for those with Affordable Care Act Marketplace plans, if Congress lets subsidies expire.⁶

On Friday, Oz’s exchanges with leaders and patients won praise from AtlantiCare President and CEO Michael Charlton, MHL, and State Sen. Vincent Polistina, who represents Atlantic County in the New Jersey legislature. Amid heated public debate over Medicaid, physicians and health care advocates have shared similar accounts with The American Journal of Managed Care (AJMC), saying stakeholder access is much improved since Oz arrived.

Michael Charlton, MHL | Image: AtlantiCare

“It’s incredibly impactful, not only to have Dr Oz here because of his current role, but it is more impactful that he is a physician who understands the challenges that the health system and the community face,” Charlton said.

Oz insisted that the purpose of the new law is to reform Medicaid and put all states on the same course. “If you decide we need to completely change Medicaid, then we should all do it together,” he said during an interview. “We should have the same rules, so every state is treated the same.”

And, he said, “To reform the system, you need some money.”

The Rural Transformation Program is not a grant fund to simply cover costs of the uninsured. States must spell out plans to improve rural access and outcomes, prioritize new technology and patient connections, and improve collaboration between providers.³ It caps administrative costs at 10% and specifies that money must go to providers. Sites at risk of closure get priority under the program. On Friday, Oz spoke passionately about the need to put money and effort behind things that work, such as FQHCs and the PACE program, which keeps elderly in their homes as they age.⁷

In a statement, Charlton said the integrated health system is well-positioned to make its mark as transformation unfolds, given its commitments to medical education, workforce development, and technology.¹ “As a health system serving southern New Jersey—including Atlantic City, a community marked by both extraordinary need and untapped potential—we were proud to host this important conversation,” he said.

States will have a key role in the process, as Oz explained that governors must apply for grants “together with health systems.” Polistina, who took part in the tour, said distributing the $50 billion was a key topic. Eligible sites have to meet CMS criteria, and Polistina said some AtlantiCare sites will qualify.⁸

State Sen. Vincent Polistina, R-Atlantic County | Image: New Jersey Senate Republicans

“Certainly, there are rural hospitals in New Jersey, and some are going to qualify under that designation,” he said. “So, we need to make sure that all the systems know that and are doing what is necessary to make sure they're accessing whatever money we can get.”

South Jersey’s Rural Landscape Creates Tech Hurdles

Casinos aside, New Jersey is called the Garden State for a reason. The gambling resort only covers 3% of Atlantic County, where local folks will tell you it’s blueberry season. A 40-minute drive up the Atlantic City Expressway brings you to Hammonton, the “Blueberry Capital of the World.”⁹ It’s within a county that is 79.3% rural, a place known for corn, tomatoes, and peaches long before the casinos came to town.¹⁰ The other 4 counties AtlantiCare serves are just as rural, with vast stretches unavailable for development because they sit in the Pine Barrens, atop an aquifer that provides region’s water supply.¹¹

The untouched terrain means some lack infrastructure for modern technology. Atlantic County, for example, is among 7 counties that New Jersey utility regulators targeted with a $40 million investment to improve broadband in pockets with little or no access.¹² As explained by the Commonwealth Fund, lack of broadband doesn’t just affect health facilities;⁵ it also leaves out patients who might benefit from remote monitoring or electronic “nudges” to manage diabetes, for example.

Oz said transformation funds could close these gaps.

“The infrastructure around a lot of hospitals—especially rural hospitals, underserved hospitals—has lagged,” he said in response to a question from AJMC. “They don't have the IT tools that they need, but they have to have them because of AI,” which Oz and other experts believe could create efficiencies, allowing physicians and nurses to keep up with a growing Medicare population.

“AI is not going to replace doctors; it’s going to empower doctors,” Oz said. “It’s not going to take nurses out of the equation. It's going to give nurses information and support navigation tools so to make their jobs more efficient.

“It's also going to give ways for patients to track what their health provider wants for them, so you can nudge them a little bit,” he said.

At AtlantiCare, Investments Tell the Story

In a statement, health system leaders said the roundtable discussion with Oz “centered on how evolving federal policy intersects with day-to-day delivery of care—and the need for reforms that improve access, reduce complexity, and strengthen equity.”

Today’s medical center in Atlantic City bears no resemblance to the hospital that served the island a generation ago. One constant is the location: in the center of town and 2 blocks off the Boardwalk, which was brand new in 1898 when the hospital started in a farmhouse. In 1975, a second medical center opened on Atlantic County’s mainland, near major transportation arteries. Both have seen recent investments; the mainland campus opened 50 private rooms in May, and a $38 million medical arts pavilion opened at the Atlantic City campus in 2022.^13,14 The health system’s FQHC services include behavioral health, pediatric, and substance abuse care and a dental clinic.

Work with Oracle will allow AtlantiCare to be among the first to use the tech company’s new clinical digital assistant, among the technologies sweeping health care to record patient visits and retrieve medical records with voice commands.¹⁵

“AtlantiCare is small enough to be nimble in our transformation efforts, yet big enough to matter and make a real difference,” Charlton said.

References

1. AtlantiCare announces VISION 2030. News release. April 10, 2024. Accessed July 18, 2025. https://www.atlanticare.org/news/atlanticare-announces-vision-2030
2. Southwick R. New Jersey health system plans to revamp campus, build medical school, and more. Chief Healthcare Executive. April 11, 2024. Accessed July 18, 2025. https://www.chiefhealthcareexecutive.com/view/new-jersey-health-system-plans-to-revamp-campus-build-medical-school-and-more
3. Kammerer A. The “One Big Beautiful Bill” currently appropriates $50 billion for rural health care. Spencer Kane. July 2, 2025. Accessed July 18, 2025. https://www.spencerfane.com/insight/the-one-big-beautiful-bill-currently-appropriates-50-billion-for-rural-health-care/
4. President Trump’s One Big Beautiful Bill makes changes to Medicaid. Cromwell. July 11, 2025. Accessed July 18, 2025. https://www.crowell.com/en/insights/client-alerts/president-trumps-one-big-beautiful-bill-makes-changes-to-medicaid
5. In rural America, a weak signal can mean worse health. Commonwealth Fund. May 23, 2025. Accessed July 18, 2025. https://www.commonwealthfund.org/publications/podcast/2025/may/in-rural-america-weak-signal-can-mean-worse-health
6. Simmons-Duffin S. ACA health insurance will cost the average person 75% more next year, research shows. National Public Radio. July 18, 2025. Accessed July 18, 2025. https://www.npr.org/sections/shots-health-news/2025/07/18/nx-s1-5471281/aca-health-insurance-premiums-obamacare-bbb-kff
7. Caffrey M. A different way of looking at how you can age in America. AJMC.com. May 21, 2025. Accessed July 18, 2025. https://www.ajmc.com/view/-a-different-way-of-looking-at-how-you-can-age-in-america-
8. Rural health clinics. CMS. July 10, 2024. Accessed July 18, 2025. https://www.cms.gov/medicare/health-safety-standards/certification-compliance/rural-health-clinics
9. Newall M. Hammonton is a perfect stop on the way to the Shore. The Philadelphia Inquirer. May 14, 2025. July 18, 2025. https://www.inquirer.com/entertainment/hammonton-guide-shore-stop-20250514.html
10. Most rural counties in New Jersey. Stacker. July 25, 2022. Accessed July 18, 205. https://stacker.com/stories/new-jersey/most-rural-counties-new-jersey
11. Water supply and the Kirkwood-Cohansey aquifer. Pinelands Preservation Alliance. Accessed July 18, 2025. https://pinelandsalliance.org/water-supply-aquifer/
12. NJBPU grantees start deployment phase of internet access project. New Jersey Board of Public Utilities. June 26, 2025. Accessed July 18, 2025. https://www.nj.gov/bpu/newsroom/2025/approved/20250626.html
13. AtlantiCare opens $75M expansion featuring 50 private rooms with integrated care technology. News release. AtlantiCare. May 28, 2025. AccessedJuly 18, 2025. https://www.atlanticare.org/news/atlanticare-opens-75m-expansion-featuring-50-private-rooms-integrated-care-technology
14. AtlantiCare cuts ribbon on new medical arts pavilion. Downbeach. November 16, 2022. Accessed July 18, 205. https://downbeach.com/news/2022/nov/16/atlanticare-cuts-ribbon-on-new-medical-arts-pavili/
15. Southwick R. AtlantiCare CEO discusses expansion, teaming with Cleveland Clinic and Oracle, and more. April 29, 2024. Accessed July 18, 2025. https://www.chiefhealthcareexecutive.com/view/atlanticare-ceo-discusses-expansion-teaming-with-cleveland-clinic-and-oracle-and-more