On Monday, September 15, the Centers for Medicare & Medicaid Services (CMS) announced details on how states can apply for funding from the $50 billion Rural Health Transformation Program (RHTP), established under the Working Families Tax Cuts Act. According to a news release, the investment aims to empower states to improve the rural healthcare infrastructure and develop sustainable systems that increase access, improve the quality of care, and achieve better patient outcomes.
Previously, Healthcare Innovation's David Raths reported that some stakeholders were raising questions about the two-tiered funding model and the speed at which states were being asked to submit transformation plans.
The deadline for states to apply is November 5, 2025. CMS cautioned that there is only one chance to apply for funding and one application period for this program.
As Raths reported last month, the components each rural health transformation plan is expected to address are as follows:
• Improve access to hospitals or other healthcare providers and services for rural residents;
• Improve healthcare outcomes of rural residents;
• Prioritize the use of new and emerging technologies, emphasizing the prevention and management of chronic disease;
• Initiate and strengthen local and regional strategic partnerships between rural hospitals and other healthcare providers to promote quality improvement, financial stability, and share best practices;
• Enhance economic opportunity and supply of healthcare providers through enhanced recruitment and training;
• Prioritize data and technology-driven solutions that help rural hospitals and providers deliver high-quality services, as close to a patient’s home;
• Outline strategies to manage long-term financial solvency and operating models of rural hospitals; and
• Identify causes driving the accelerating rate of stand-alone rural hospitals becoming at risk of closure, service reduction, or conversion.
The program has five strategic goals:
- Promote rural health innovations and new access points to support preventative health and address the root causes of diseases.
- Assist rural providers in developing sustainable, long-term access to care by improving their efficiency.
- Attract and keep a highly skilled healthcare workforce by improving recruitment and retention of providers in rural communities.
- Drive the development of innovative care models to improve health outcomes, coordinate care, and support flexible care arrangements.
- Encourage the adoption of innovative technologies to improve efficient care delivery, data security, and access to digital health tools by rural facilities, providers, and patients.
“For too long, when it comes to healthcare access and infrastructure, we've left behind the backbone of America. That stops now with this program that will spark real change for rural healthcare,” CMS Administrator Dr. Mehmet Oz said in a statement.
According to the press release, the $50 billion program funding will be distributed to approved states over five years, with $10 billion available each year starting in the federal fiscal year 2026. Half of the funding will be evenly divided among all approved states. The other half will be allocated based on individual state metrics and applications that demonstrate the greatest potential for and scale of impact on the health of rural communities.
