Rural Health Transformation Program: A $50 billion rural healthcare overhaul
We update this guide as CMS and state agencies release new implementation details. The program entered active implementation in January 2026. States are now distributing funds through RFPs and procurement processes.
CMS held the first Rural Health Transformation Summit on March 18, 2026, convening leaders from all 50 states. Multiple states have now received CMS budget approval and are actively issuing RFPs for vendors and program partners. If your organization delivers telehealth, technology-enabled care, or workforce services in rural areas, the window to engage your state's procurement process is open now.
All 50 states began receiving funds from the Rural Health Transformation Program (RHTP) in early 2026. The program, which distributes $50 billion over five years, is the largest dedicated federal investment in rural healthcare in decades. States are now turning those awards into live RFPs, vendor contracts, and program launches.
This post explains what the program is, how the money moves, what states are actually doing with it, and what it means for organizations delivering technology-enabled care in rural markets.
What the RHTP is
The Rural Health Transformation Program was authorized under Section 71401 of Public Law 119-21, commonly called the One Big Beautiful Bill Act (Working Families Tax Cuts legislation), signed into law in July 2025. The program is administered by a newly created Office of Rural Health Transformation (ORHT) within CMS's Center for Medicaid and CHIP Services (CMCS), led by Director Alina Czekai.
One piece of context matters for understanding the program's scope: the same legislation that created RHTP also included an estimated $911 billion in federal Medicaid spending reductions over ten years, including an estimated $137 billion affecting rural areas, according to KFF. RHTP provides $50 billion over five years. That context shapes how provider organizations and state health officials are thinking about the program's adequacy and their own planning horizons.
Participation in RHTP is not a program that providers or patients enroll in directly. The awards go to states, which then design and execute implementation plans through cooperative agreements with CMS. Providers, digital health companies, health systems, and community organizations participate as sub-awardees or vendors under state contracts.
How the funding works
CMS distributes $10 billion per year from FY2026 through FY2030. The program runs through September 30, 2031. First-year (FY2026) awards average $200 million per state, ranging from $147 million (New Jersey) to $281 million (Texas). Alaska and California were also among the top recipients.
The allocation formula splits the annual $10 billion into two streams:
- 50% distributed equally among all 50 states. Each state receives approximately $100 million from this stream annually, regardless of rural population size.
- 50% allocated based on CMS-assessed factors including rural population, proportion of rural health facilities, current state policy commitments, and the scale of proposed impact.
A consequence of the equal-distribution structure is that per-resident funding varies widely. According to KFF, Texas receives approximately $66 per rural resident in 2026, while Rhode Island receives approximately $6,305. States cannot use RHTP funds as matching funds for additional federal dollars.
Funding is contingent on states meeting their stated program commitments. CMS has made clear that continued annual funding depends on progress against goals documented in each state's Rural Health Transformation Plan.
What states must do with the funds
Each state must address three or more of the approved categories of fund use established by CMS. These categories span five strategic goals:
1. Make Rural America Healthy Again
Evidence-based interventions for chronic disease prevention and management, behavioral health access, maternal and child health, and food-as-medicine programs. States develop measurable prevention targets as part of their plans.
2. Sustainable Access
Stabilizing rural providers as long-term care access points. This includes hub-and-spoke networks, regional coordination of specialty and emergency services, and strategies for hospitals at risk of closure or service reduction. New construction is prohibited — the focus is operational sustainability, not physical infrastructure.
3. Workforce Development
Recruitment and retention of rural providers, with a specific requirement that funded positions carry five-year rural service commitments. Clinical pipelines, training programs, loan repayment, and community health worker development all qualify. West Virginia's program includes Learn and Earn apprenticeships specifically designed to recruit rural-native healthcare workers.
4. Technology and Innovation
Telehealth expansion, AI clinical documentation, remote monitoring, interoperability improvements, cybersecurity upgrades for rural facilities, and emerging technology training. This is the category most directly relevant to digital health vendors and EHR platforms operating in rural markets.
5. Innovative Care Models
Value-based care transitions, ACO development, and payment model innovation moving rural providers from fee-for-service toward outcomes-based reimbursement. CMS has noted alignment with its AHEAD payment model as a specific priority for state plans.
Payments directly to providers for patient care are capped at 15% of total funds. Infrastructure investments are capped at 20%. New construction is prohibited entirely. These constraints are deliberate: the program is designed to drive systemic change, not stabilize individual facilities in the short term.
Where implementation stands: April 2026
March 18, 2026: CMS held the first Rural Health Transformation Summit, convening leaders from all 50 states, ORHT project officers, and subject matter experts. States shared early implementation priorities and discussed fund distribution approaches. The summit launched an ongoing learning collaborative that CMS intends to sustain throughout the program period.
Budget approvals and fund distribution: States had up to 30 days post-award to submit revised budgets aligned with their final award amounts. CMS began issuing budget approvals in February 2026. Montana received CMS budget approval on February 19 and has since issued RFPs for vendors. Tennessee and New Mexico are in active procurement. Colorado is holding advisory committee meetings and developing its RFA materials. The pace of distribution varies significantly by state, depending on state procurement infrastructure and the complexity of planned initiatives.
Sub-award pathways vary by state: Some states are distributing funds through direct allocations by state agencies. Others are using third-party administrators and competitive RFP processes. Rhode Island established a Rural Stakeholder Advisory Committee and designated its Primary Care Association to oversee fund allocations. North Dakota directed funds through the Bank of North Dakota as administrator of a rural health infrastructure loan program. Organizations wanting to access RHTP funding need to monitor their specific state's procurement approach.
What this means for organizations using Healthie
RHTP does not have a patient enrollment mechanism the way GUIDE or ACCESS does. There is no federal reimbursement code for Healthie customers to bill against simply because they serve rural patients. The operational relevance is indirect but real, and it runs through the state procurement process.
Technology-enabled care vendors
The technology and innovation funding category is explicitly designed for the kind of infrastructure Healthie customers build: telehealth delivery, AI clinical documentation, remote monitoring, interoperability with rural health systems. States are procuring vendors to deploy these capabilities. If your organization operates in rural markets or serves rural patient populations, reviewing your state's RHTP plan and watching for relevant RFPs is worth doing now.
Organizations running value-based or ACO-adjacent models
States prioritizing innovative care model development are actively seeking partners with outcomes-tracking infrastructure and value-based care experience. Organizations already using Healthie's metrics and reporting tools to track clinical outcomes are better positioned to demonstrate the kind of evidence CMS requires for RHTP-funded care model innovation.
Workforce-focused organizations
If your organization trains, recruits, or provides clinical infrastructure for rural providers, the workforce development category funds are specifically designed for you. The five-year rural service commitment requirement means states are looking for partners who can support long-term provider retention, not one-time placement.
Rural hospital and critical access hospital partners
RHTP funding is flowing to rural facilities through state sub-awards. Organizations that supply EHR, billing, or care management infrastructure to critical access hospitals and rural health clinics should monitor RFPs from their state agencies. Sustainable access funding is specifically designed to address the financial instability and service reduction risk facing many rural facilities.
How Healthie supports RHTP-aligned workflows
For organizations positioning to access state RHTP funding, several Healthie capabilities are directly relevant to the documentation and outcome-tracking requirements states are designing around.
Telehealth infrastructure
States funding telehealth expansion need vendors with proven, HIPAA-compliant telehealth delivery. Healthie's integrated telehealth, scheduling, and charting workflows support auditable, longitudinal delivery. No separate telehealth platform needed.
Outcome tracking for value-based care transitions
RHTP's innovative care model category requires demonstrating measurable health outcomes. Healthie's metrics dashboard tracks clinical data over time, supports custom outcome metrics, and integrates with wearables and health devices. Organizations transitioning toward ACO or value-based arrangements can use this infrastructure to build the outcome documentation states want to see in sub-award applications.
Chronic disease management programs
The chronic disease prevention and management category aligns with Healthie's Programs feature, which lets organizations deliver structured, longitudinal care protocols at scale. Whether a state is funding a diabetes prevention program, a maternal health initiative, or a behavioral health integration model, Healthie supports the repeatable delivery structure and patient engagement tracking that program funders require.
AI clinical documentation for rural workforce efficiency
AI Scribe directly addresses the administrative burden that makes rural provider retention difficult. Documentation time is a known driver of rural provider burnout and workforce attrition. For states funding technology-enabled workforce retention strategies, AI documentation is a concrete, measurable intervention. According to internal Healthie data, 95% of clinicians using Scribe report meaningful time savings, and 90% save approximately 15 minutes per session.
Interoperability for rural health systems
States with interoperability improvement priorities need platforms that can exchange data with HIEs, primary care networks, and state health information systems. Healthie's API-first architecture and FHIR support are relevant for organizations building rural health data infrastructure under RHTP funding.
Action checklist
For organizations wanting to engage with RHTP funding through their state:
- Find your state's RHTP plan. CMS published state project abstracts at cms.gov/files/document/rht-program-state-provided-abstracts.pdf. Your state health agency should also have a dedicated RHTP page.
- Identify which strategic goals align with your services. Technology, workforce, and chronic disease management are the most relevant for digital health operators.
- Monitor your state's procurement announcements. Bookmark your state Medicaid agency and health department procurement pages. Subscribe to email updates where available.
- Document your existing outcomes data. States evaluating sub-award applicants will favor organizations that can show measurable results from existing programs. Pull your clinical metrics and patient outcome data now.
- Confirm which rural geographies you serve. RHTP eligibility for sub-awards typically requires serving patients or facilities in CMS-designated rural areas. Know your footprint before applying.
- Review your interoperability capabilities. States with health information exchange priorities will ask about FHIR support, HIE connectivity, and data sharing infrastructure.
For current program details, monitor cms.gov/priorities/rural-health-transformation-rht-program/overview. For program questions, contact CMS at MAHARural@cms.hhs.gov.
