CMS releases details on the Rural Health Transformation Program

Key Takeaways

On September 2, the Centers for Medicare & Medicaid Services (CMS) released additional details on the Rural Health Transformation (RHT) Program, overviewing program goals, requirements and timelines. The RHT Program was established by the One Big Beautiful Bill Act (OBBBA) (Section 71401 of P.L. 119-21) to strengthen health care in rural America. Administered by the CMS, the RHT program empowers states to improve healthcare access, quality and outcomes by transforming rural health care delivery systems.

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Rural Health Transformation Program goals 

The RHT Program is designed to strengthen rural communities through five broad goals: improving health by addressing root causes of disease; ensuring sustainable access through coordination and stronger networks; expanding rural workforce development; advancing innovative care models; and driving technology innovation.

Program funding and uses

The RHT program will provide $50 billion over five fiscal years (FY 2026–2030), with $10 billion available each year. Funding will be distributed to states through cooperative agreements:

• 50% distributed equally across approved states
• 50% allocated by CMS based on factors such as rural population and health facility needs

Eligible uses of funds include (states must use funds for at least three):

• Evidence-based interventions for prevention and chronic disease management
• Payments to providers for health care services
• Consumer-facing, technology-driven health solutions
• Training and technical assistance for adopting advanced technologies (e.g. artificial intelligence (AI), robotics and remote monitoring)
• Recruiting and retaining clinical workforce talent with 5-year rural service commitments
• Enhancing IT capacity, efficiency and cybersecurity in rural hospitals
• Supporting opioid, substance use disorder and mental health treatment services
• Developing innovative care and payment models
• Other Administrator-approved uses that promote sustainable rural access

See the full list of eligible uses

Timeline

While only states are directly eligible to apply for RHT funding, counties can expect to be closely involved as local partners in program implementation. The application process will open with the release of a Notice of Funding Opportunity (NOFO), which is expected in mid-September 2025, followed by an introductory webinar in late September. Applications will likely close in early November, with award announcements by December 31, 2025.

Importance to counties

The RHTP offers counties an important opportunity to strengthen local health care systems, particularly in areas where hospitals face financial strain or workforce shortages. As states and CMS will have broad discretion over how funds are allocated and what qualifies as “rural,” counties will need to be proactive in shaping state transformation plans.

Counties should prepare now by coordinating with state health officials; identifying local health system needs; and exploring opportunities to support workforce, technology and innovative care initiatives when funds are distributed. Early engagement and planning can help ensure that county priorities—such as maintaining hospital operations, expanding behavioral health services, upgrading technology and workforce recruitment—are included in funding proposals.