Published
September 12, 2025
The application period for Rural Health Transformation Program (RHTP) has closed. As local communities await funding decisions from the U.S. Department of Health and Human Services (HHS), the Chamber has answered frequently asked questions and outlined next steps in the process.
This resource outlines how the funding will flow through state channels, who is eligible for resources, and the concrete steps rural hospitals can take now to compete for support.
What is the RHTP?
The Rural Health Transformation Program (RHTP), established under the One Big Beautiful Bill Act (OBBA), allocates $50 billion to stabilize and strengthen rural hospitals and healthcare providers. On September 15, Centers for Medicare & Medicaid Services (CMS) published details on how states can apply to receive funding from the $50 billion program.
This strategic investment aims to address the core challenges that many rural hospitals face: low patient volumes, critical workforce shortages, deteriorating infrastructure, outdated technology, and shifting reimbursement models. The program is designed to ensure long-term stability and improved access to care in rural communities nationwide.
Dates to Know:
- Mid September: Application released
- Late September: Introductory webinars
- Throughout October: Application formation
- Early November: Submission deadline
- By December 31: Awardee decisions
- 2026: Continuous monitoring and support from CMS
How is the Funding Distributed?
Of the $50 billion allocated through the RHTP, 50% will be divided equally among all states that apply and are approved by the Centers for Medicare & Medicaid Services (CMS).
The remaining 50% will be distributed using a CMS-developed formula that considers:
- The size of each state’s rural population
- The proportion of health care facilities located in rural areas
- The number of hospitals serving a high proportion of low-income patients.
If all 50 states participate and are approved, each state will receive a minimum of $100 million annually for five years.
How Can the Funds be Used?
The law provides states with flexibility to collaborate directly with rural hospitals in determining how best to use the funds. Key areas of investment may include:
- Short-term financial stabilization to ensure continuity of care
- Upgrading critical infrastructure and medical equipment
- Expanding and strengthening the rural health workforce
- Addressing reimbursement and payment system challenges
- Developing long-term sustainability plans to secure the future of rural hospitals
Who is Eligible to Apply?
Applications for the Rural Health Transformation Program (RHTP) must be submitted by state government agencies to the Centers for Medicare & Medicaid Services (CMS) via Grants.gov. Rural hospitals do not apply directly; instead, they participate through collaboration with their state health departments and other relevant state entities.
Once a state’s application is approved, funds are distributed to rural hospitals and providers based on criteria developed by the state in coordination with local stakeholders.
The application deadline is early November 2025.
Steps for Rural Hospitals and Providers to Engage in the RHTP Process
1. Confirm Your State’s Participation. Reach out to your state health department, rural health association, or Medicaid/health services agency to determine whether your state has submitted an application to CMS for the RHTP.
2. Advocate for Your Hospital’s Needs. If your state is preparing or has submitted an application, ensure your hospital’s priorities are clearly communicated. Compile relevant data such as financial performance, patient volume, infrastructure needs, workforce gaps, and technology limitations.
3. Respond to State Requests for Information. States may issue formal requests to rural hospitals to identify areas of greatest need. Be prepared to submit timely and complete documentation to support your hospital’s case for funding.
4. Participate in Shaping the State Plan. Since the law allows states to tailor funding priorities to local conditions, rural hospitals should actively engage in stakeholder meetings, advisory boards, and public comment opportunities to help influence the state’s strategy.
5. Monitor Funding and Compliance. Once funding is received, ensure your hospital complies with all state and federal reporting requirements. Maintain transparency in how funds are used and track measurable outcomes to demonstrate impact.
Key Contacts & Resources
- The Centers for Medicare and Medicaid (CMS) FAQ
- Fact Sheet: Rural Health Transformation Program
