Rural Health Transformation Fund: As Application Deadline Nears, Implementation Considerations Come Into Focus
Updated on: October 28, 2025
Published on: October 28, 2025
The November 5 deadline is rapidly approaching for states to apply for Rural Health Transformation (RHT) Fund grants from the Centers for Medicare and Medicaid Services (CMS). State officials seeking RHT funds will not only have to write compelling applications but prepare for some complex implementation considerations as well, which we describe in greater detail below.
The Rural Health Transformation Fund was approved by the federal government as part of the One Big Beautiful Bill Act, which was signed into law on July 4, 2025. The Notice of Funding Opportunity (NOFO) included significant guidance to states on how, and under what criteria CMS will distribute the $50 billion fund.
Enacted to ease the impact of major Medicaid policy changes affecting rural healthcare providers, the fund is intended to deliver direct financial assistance to providers, support population-level efforts to reduce chronic disease, improve technology and telehealth digital infrastructure, promote workforce retention and recruitment, and spark development of innovative new models for delivering healthcare in rural settings. CMS has outlined five stated goals for the RHT Program that include:
- Supporting rural health innovations
- Helping rural providers become long term access points for care by improving efficiency and sustainability
- Attracting and retaining a high-skilled healthcare workforce
- Sparking the growth of innovative care models
- Fostering the use of innovative technologies that promote efficient care delivery, data security, and access to digital health tools by rural facilities, providers, and patients.
The expected award date is December 31, 2025, and funded projects can move into implementation immediately.
From 2026 through 2030, $5 billion per year will be divided equally among all states with approved rural health transformation plans, and another $5 billion annually at CMS’s discretion based on factors outlined in the NOFO. Scoring criteria for the Rural Health Transformation Program (RHT Program) are detailed, with factors divided into initiative-based and policy-based categories. These criteria assess the quality of proposed initiatives and the state’s existing policies. The full details can be found in the NOFO and subsequent FAQ documents located at: https://www.cms.gov/priorities/rural-health-transformation-rht-program/rural-health-transformation-rht-program.
Upon award, states will have to act fast to implement the policy initiatives approved by CMS. As states work to finalize grant applications, it is important to consider the following challenges and potential barriers to implementation of a large-scale reform effort within the stated timeline.
- Funds Distribution – States will need an accountable method of distributing awarded funds. Some considerations for states include expedited payment processing, preventing fraudulent payments and promoting fund transparency. The ideal funding distribution solution will link payments to required federal reporting and performance metrics tracking.
- Demonstrating Progress for Phase 0 & 1 – States should articulate achievable results for early stages of grant implementation and build in time to engage with key stakeholders & partners on further planning as the initial grant application period did not allow for the robust collaboration needed to support the implementation of the activity.
- State Legislative Coordination – Agency staff should consider any supporting state legislation or administrative rules that are needed to authorize activities that have been included in the grant application. This should include reviewing the need for legislative appropriation to authorize spending of grant funds.
The Rural Health Transformation Fund is a major new opportunity for states to win federal funding to address longstanding, complex challenges in delivering healthcare and improving health in rural areas. Optimizing state outcomes involves not only a successful application but careful implementation planning to achieve program goals.
