A First Look at States' Rural Health Transformation Ideas

Last week, as governors from around the country began to publicize the applications their states made to the federal Rural Health Transformation (RHT) Program, it opened a window on the types of innovations they are hoping to implement, including bolstering telehealth infrastructure and helping more rural provider organizations prepare to transition to value-based care. 

Nov. 5 was the deadline for states to submit applications for the $50 billion RHT Program, so states only had a few months to gather stakeholder feedback and craft a narrative document to submit to CMS, which is expected to announce awardees for the five-year program by the end of 2025. The RHT Program focuses on promoting innovation, strategic partnerships, infrastructure development, and workforce investment. What follows are some highlights from applications from several states.

Center of Excellence in Montana

According to Montana’s application, the state plans to launch a Montana Rural Health Center of Excellence to develop and oversee the implementation of data-backed financial sustainability recommendations. Although the state anticipates discontinuing the CoE after 2028, it said the goal is to leverage the state’s existing analytics from ongoing initiatives to conduct a deep analysis of rural community disease burden projections and inpatient and outpatient utilization trends by service line, and cross-reference this with Montana’s current care delivery footprint across access points to identify critical areas of misalignment at the county and facility levels. 

Montana noted that its approach builds on the experience of the Pennsylvania Rural Health Model and experiences from other states. It expects more than half of rural hospitals to opt into this transformation program.

Another goal is to expand technical support for Montana primary care providers  participating in Medicaid value-based contracting as part of the state’s Primary Care Case Management (PCCM) program. Montana currently provides technical support to primary care practices participating in the PCCM program. The State will fund additional technical support for an expanded number of clinics, accelerating what is currently planned for PCCM. The state expects that providing personalized technical assistance will lower the cost and barriers to participation and increase the uptake and success rate of providers in the program.

On the technology front, the state said it plans to improve data usability and statewide operational tools (e.g., bed registry) using HIE data to drive decisions and population health interventions and modernize EHRs for rural providers, including an opt-in model via regional hub ‘community connect’ enabling interoperability, telehealth capabilities, and data sharing while promoting consumer-facing technologies.

Montana said it plans to develop tools that generate actionable and valuable insights for providers and the state, leveraging Montana’s existing data (e.g., HIE) to improve provider operations and efficient care delivery to rural communities. This effort will include creating and validating critical tools for rural care delivery, such as a statewide hospital and behavioral health bed registry to enable CAH transfers. The state said it will demonstrate HIE usability, reduce delays in care, and optimize the use of limited rural healthcare resources.

Telehealth in Washington state

The State of Washington proposes using $15 million to $18 million per year to create a provider technology fund that will enable providers to sustainably expand access to high-quality care. Providers may qualify for funds to purchase new technologies (or to obtain technical assistance for those technologies) to improve operational efficiencies, enable remote services (including telehealth and remote patient monitoring), and achieve improvements in population health via data and analytics. The technology fund will support rural practices investing in up-front costs for integrating technology that support sustainable operational improvements. For example, providers could use funds to integrate AI tools into the administrative components of hospital and clinic workflows. 

The technology fund also will invest in strategic, statewide telehealth and remote monitoring services that bring expertise to rural communities, regardless of provider location. Telehealth expansion will enable accessible specialty care, including behavioral, perinatal, and palliative care. This may involve hub-and-spoke models and technical assistance for providers and non-clinical staff on telehealth best practices, such as Link to Care WA. Potential partners will include the University of Washington Medicine’s eConsult program and private telehealth companies, many of which have experience with Washington’s providers and in rural areas. 

Finally, the provider technology fund will invest in providers’ data infrastructure to enhance population health analytics, quality performance measurement, and monitoring. This data infrastructure will also support closed-loop referrals and improve partnerships between the health care system and community organizations

Washington also proposes to use $4 million per year of RHT Program funds to expand existing remote care service and provider mentorship/education offered through Project ECHO.

The University of Washington (UW) School of Medicine’s Project ECHO program offers a multidisciplinary tele-monitoring and education platform for Washington clinicians. UW Project ECHO currently offers ECHO programs that help providers deal with complex and specialized patient issues (dementia, chronic disease, etc.), infectious diseases, psychiatry and behavioral health, and intellectual and developmental disabilities. 

RHT Program funds will enable the expansion of existing ECHO programs (implementation in additional clinics or healthcare facilities) and the addition of new ECHO programs, such as perinatal psychology, chronic kidney disease, and chronic respiratory disease.


Health Hubs in Iowa 

Iowa’s primary strategy for improving access is called Hometown Connections. Iowa will enhance hospital centers of excellence that share resources within a network of health systems and care sites. By formally pairing hospitals together to solve access, revenue, and sustainability problems, the application said, rural residents can receive primary and preventive care close to home while receiving access to specialized care at a nearby “Health Hub.”

Iowa said it will also increase access to care by co-locating multiple types of healthcare (different service lines) in rural areas. This effort, titled Communities of Care, provides incentives and technical assistance to co-locate public health services, chronic disease care providers, nutrition services, behavioral health providers, Federally Qualified Health Centers (FQHCs), Area Agencies on Aging, and/or other community care providers to allow clients to access multiple types of services in one location. These partnerships will involve innovative care models to allow for these services to occur on the same visit. 

The state said it would promote partnerships among providers through Hometown Connections and Communities of Care by incentivizing agreements and contractual relationships between non-affiliated organizations to improve health outcomes in rural areas. 

Care coordination in Wyoming 

Among its proposed initiatives, Wyoming said it wants to focus on clinically integrated care coordination for chronic disease. The goal is to improve the clinical coordination of care for dual Medicare/Medicaid eligibles who are at high risk of chronic disease.

The state said it would open a competitive Request for Applications to hospitals, providers, and other rural health facilities for care coordination initiatives in each Wyoming county. Each provider model might vary but each successful bidder for that particular county or counties would submit a proposal illustrating their coordination model and the causal logic on how it will effectively manage chronic disease in a high-risk population. In its RFA, the State will prioritize applications that:
• Leverage the use of community health workers, community EMS, and other lower-level health professionals to coordinate care;
• Demonstrate cooperation with other providers; and,
• Use technology such as remote patient monitoring and home dialysis that will help patients receive care closer to home.

Statewide telehealth network in Alabama

Alabama’s application leans heavily on improvements in telehealth capabilities. It calls for establishing a statewide telehealth network and remote monitoring capacity linking rural providers to specialty hubs. The state wants to maintain emergency access and expand maternal health services through digital regionalization and telerobotic ultrasound and develop regional specialty networks for oncology screening and follow-up via mobile and regional services.

Other goals include reducing maternal morbidity and mortality through digital obstetric regionalization and timely specialty consults and increasing cancer screening rates through mobile screening,

Alabama wants to stand up regional collaborative IT and cybersecurity hubs to support EHR integration, interoperability, compliance, and shared security operations. It also will provide for the interconnectivity of these hubs to allow for the secure free-flowing exchange of health information.

The state plans to use connected EHRs and data dashboards to track quality, utilization, and outcomes; drive continuous improvement and reduce avoidable transfers. It will seek to implement payment and delivery reforms that support regionalization, telehealth billing, treat-in-place reimbursement, and shared-service cost recovery, transitioning to self-funded models by FY2030.

I have mainly highlighted here examples of plans to enhance technology infrastructure and interoperability in rural settings, but of course rural hospitals have very immediate pressing financial needs. As Montana’s application notes, 89% of rural hospitals in the state operate at a negative profit margin. Alabama’s application says that 60 percent of the state’s rural hospitals are at risk of closing, and that alarming statistic only puts it at the seventh-highest percentage among the 50 states. In addition, the expected cuts in Medicaid enrollment are expected to exacerbate the challenges rural hospitals face. Whether this Rural Health Transformation Program or other initiatives will allow states to bolster the financial health of rural hospitals in the short term remains a looming question.