Rural Health Transformation Program Offers Opportunity

By: Ranier Simons, ADAP Blog Guest Contributor

Budget reconciliation legislation, H.R. 1, also known as the "One Big Beautiful Bill Act," was signed into law in July of this year. The bill slashes overall Medicaid spending by $911 billion over ten years. This funding reduction would decrease Medicaid spending in rural areas by over $119 billion over the next ten years (Saunders, Burns, & Levinson, 2025). Medicaid covers one in four adults in rural areas, where 20% of the U.S. population resides. In response to the significant fiscal damage to rural areas resulting from H.R. 1, the bill includes a $50 billion fund known as the Rural Health Transformation Program (RHT). The $50 billion RHT is temporary, time-limited funding that does not remedy the over $119 million in cuts from H.R.1. However, it presents as an option to obtain a modicum of assistance to bolster rural programs.

Photo Source: CMS

To receive RHT funding, states must apply for a grant by submitting a Rural Health Transformation Plan. The RHT will distribute $10 billion annually from 2026 through 2030. Half of the funds will be distributed equally among the states that obtain approval of their transformation plans, and the remainder will be left to the discretion of CMS. The due date for applications is November 5, 2025, with a statutory deadline of December 31, 2025, for CMS to issue rewards (Howard et al., 2025). 

According to the Rural Health Transformation Program website, the program was created to “empower states to strengthen rural communities across America by improving healthcare access, quality, and outcomes by transforming the healthcare delivery ecosystem. In essence, the program is designed to stabilize and transform rural health systems nationwide by supporting infrastructure, workforce development, and innovative care delivery models. All comprehensive rural health transformation plans submitted with the funding application must include proposals that invest in at least three of the following areas (Karl et al.):

• Prevention and Chronic Disease: Implementing evidence-based, measurable interventions to improve prevention and chronic disease management. 
• Provider Payments: Supporting payments to providers for delivering healthcare services that fill a gap in care coverage (e.g., uncompensated care). 
• Consumer Technology Solutions: Expanding consumer-facing, technology-driven tools for chronic disease prevention and management.
• Training and Technical Assistance: Building capacity for adoption of technology-enabled solutions in rural hospitals. 
• Workforce: Recruiting and retaining clinicians in rural areas, with a minimum five-year service commitment. 
• IT Advances: Upgrading information technology at rural health facilities to improve efficiency and health outcomes. 
• Right-Sizing Care Availability: Helping rural communities align healthcare service lines (preventive, ambulatory, emergency, inpatient, post-acute) with community needs. 
• Behavioral Health: Expanding access to opioid-use disorder treatment, other substance-use disorder services, and mental healthcare. 
• Innovative Care Models: Supporting value-based care, alternative payment models, and other innovative delivery arrangements. 
• Capital Expenditures and Infrastructure: Investing in facility upgrades, minor renovations, and equipment to ensure sustainable operations. 
• Community Collaboration: Fostering partnerships between rural facilities and other providers to strengthen quality, financial stability, and access.

Photo Source: Shulkin Blog

Presently, numerous states are actively seeking public input on what projects and priorities they should consider in creating programs with which to utilize the funds they apply for. The following link indicates which states are presently receiving comments, as well as the official guidance on how to submit suggestions: Tracking State Preparation for the Rural Health Transformation Program. One state example is Louisiana, which created a landing page for its Request for Information (RFI). Notably, among the rural health challenges that need to be addressed, the Louisiana Department of Health directly highlighted HIV. The site specifies that 56% of new HIV cases are from outside of New Orleans and Baton Rouge. Georgia is another state that could benefit from funding for programs to address the needs of its rural population that is living with HIV. The results from a recently published paper indicate that significant disparities in HIV care access and support exist when comparing rural Georgians to those living in urban areas (Purcell et al., 2025).

As states create application proposals, it is imperative that they research all the fine details of what can and cannot be included. Prohibited uses of funds include support for new construction and building expansions, clinician salaries or wages at facilities with non-compete agreements, expenditures associated with financing the non-federal share of program costs, and requirements related to documenting citizenship (Karl et al., 2025). Given the current political climate, it is essential to navigate the application process with discernment while ensuring that a submitted plan aligns with all organizational goals.

As states submit plans, it would be very encouraging to see elements included that align with the Ending the HIV Epidemic (EHE) Initiative, increase capacity for HIV linkage to care in rural areas, and ways to improve rural PrEP access. Some rural hospitals have already closed, and the massive cuts in Medicaid spending threaten to close more. The RHT is a band-aid on a large wound that is more appropriate for stitches. However, in the status quo of rural healthcare, every dollar counts.

[1] Howard, H, Lopez, R., McLean, J, SHVS. (2025, September 18). Tracking State Preparation for the Rural Health Transformation Program. Retrieved from https://shvs.org/tracking-state-preparation-for-the-rural-health-transformation-program/

[2] Karl, A., Herring, A., Osius, L., Rains, J., Mannatt Health. (2025, September 17). CMS Releases Rural Health Transformation Funding Opportunity. Retrieved from https://shvs.org/wp-content/uploads/2025/09/CMS-Releases-Rural-Health-Transformation-Funding-Opportunity_SHVS.pdf

[3] Purcell, D. J., Standifer, M., Martin, E., Rivera, M., & Hopkins, J. (2025). Disparities in HIV Care: A Rural-Urban Analysis of Healthcare Access and Treatment Adherence in Georgia. Healthcare (Basel, Switzerland), 13(12), 1374. https://doi.org/10.3390/healthcare13121374

[4] Saunders, H., Burns, A., Levinson, Z. (2025, Jun 27). How Might the House-Passed Reconciliation Bill’s Medicaid Cuts Affect Rural Areas? Retrieved from https://www.kff.org/medicaid/how-might-the-reconciliation-bills-medicaid-cuts-affect-rural-areas/

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.