What is the RHTP?

The RHTP was authorized under the One Big Beautiful Bill Act (OBBBA) to help mitigate the impact of upcoming Medicaid funding cuts on rural healthcare organizations. The program includes $50 billion in funding and will last five years. CMS will allocate $10 billion each year between 2026 and 2030.

According to CMS, five strategic goals of the program include:

• Making rural America healthy again by promoting preventive care and chronic disease management
• Improving rural providers' efficiency and sustainability
• Attracting and retaining healthcare workers for rural communities, with five-year service commitments
• Developing and implementing innovative payment models
• Improving access to digital tools, remote care, and other technologies

CMS opened applications for the program last September, and states had until Nov. 5 to apply. Awardees were announced at the end of December.

According to CMS, the average state award for 2026 was $200 million. Half of the funding was distributed equally among states, which benefited states with smaller populations on a per capita basis. The remaining half was distributed based on a variety of factors, including state-level policies such as efforts to "make rural America healthy again" like implementing the presidential fitness test in schools.

"An infusion of cash to sustain operations was going to be critical, and that was the intent of the $50 billion," said Lisa Harvey-McPherson, VP of government relations at Northern Light Health.

Harvey-McPherson and other leaders who met with lawmakers said the cash would have made a big difference, as it would've allowed hospitals to fill the gap for care that wouldn't be covered through charity care or Medicaid following the cuts passed in the OBBBA.

However, the RHTP's implementation has instead focused on creating new programs to rethink rural health rather than filling in financial gaps. According to a review from the Bipartisan Policy Center, many of the applications submitted for RHTP funds prioritized bolstering a clinical workforce in rural areas and investing in technology to increase care efficiency and accessibility.

Some hospital leaders have signaled to state leaders they're not interested in the RHTP in its current form, as they're concerned they won't be able to sustain programs built with money from the fund, Payne reports. Meanwhile, other leaders are taking part but are skeptical of the fund's ability to transform rural care, especially with new challenges looming.

"It's hard to think about transformation when you're thinking about survival," said Randy Clar, SVP of Northern Light Health.

For example, Damian Flowers, an ED doctor at MDI Health, said the money could help fund a more centralized system for transferring patients between facilities. That system could make sure ambulances are available where they're needed while also helping to move patients to appropriate care more quickly.

Part of the funding could also be used to make some care, like dentistry, more sustainable, according to Lori Dwyer, president and CEO of Penobscot Community Health Care.

As many health system leaders decide which facilities or services to close in the coming years amid a revenue crisis, any opportunities to spend RHTP funds in a way that could help providers is important.

"Everybody's trying to fill in holes with the yet-to-be-distributed [Rural Health Transformation Program] money," said Tim Clifford, a physician in Bucksport, Maine. "But they don't know how much they're going to get, and they don't know how big the holes are that they're going to need to fill."

There have also been some efforts to bolster the RHTP. For example, Sen. Josh Hawley (R-Mo.) proposed legislation to double the size and timeline of the fund.

Hospital lobbyists have also started working to roll back Medicaid cuts, or blunt them through new funding. But for now, questions about the RHTP in its current form remain, and health systems are facing difficult decisions about which programs they can afford.

"What CMS and [CMS Administrator Mehmet Oz] have done is good for a different time," Harvey-McPherson said. "It is good for a time when we have a stable base."