Access to quality healthcare in rural America has long been a challenge — but a new federal initiative may help. The Rural Health Transformation Fund, a $50 billion program from the Centers for Medicare & Medicaid Services (CMS), aims to help states rebuild and modernize their rural health systems. From strengthening behavioral health services to expanding telehealth and stabilizing rural hospitals, this fund presents an opportunity for change.
What is the Rural Health Transformation Fund?
The Rural Health Transformation Fund is a landmark federal investment aimed at revitalizing healthcare in rural America. Launched by the Centers for Medicare & Medicaid Services (CMS), the program allocates $50 billion over five years (2026–2030) to support state-led initiatives that improve access, quality, and sustainability of rural healthcare systems.
At its core, the fund is a response to growing concerns about the stability of rural healthcare. With many rural communities facing chronic provider shortages, limited behavioral health services, and underfunded infrastructure, the Rural Health Transformation Fund provides a funding source to states looking to build more resilient systems.
Ultimately, this initiative is more than a stopgap; it’s a chance to transform rural healthcare delivery. For rural healthcare providers, the fund represents a historic opportunity to shape systems that are more inclusive, responsive, and equitable.
How to apply to the Rural Health Transformation Fund
To access funding from the Rural Health Transformation Fund, U.S. states must submit a formal application to the CMS outlining a comprehensive plan to strengthen rural healthcare. Only states are eligible to apply — territories and the District of Columbia are excluded — and applications must be submitted by November 5, 2025.
The cornerstone of the CMS application process is the creation of a Rural Health Transformation Plan, which must clearly identify how the state will invest the funding to drive innovation, improve care delivery, and address disparities in rural communities.
To qualify, a state must commit to implementing at least three of the program’s 10 approved focus areas, which include:
- Expanding access to innovative technology
- Improving mental health services
- Supporting alternative care and/or value-based payment models
- Upgrading infrastructure
- Preventing disease through evidence-based best practices
Once CMS reviews and approves a state’s plan, funding will begin in Fiscal Year 2026 and continue annually through FY 2030. States that receive approval will be eligible for both baseline and need-based funding allocations.
For rural health leaders and providers, it’s essential to stay engaged in the planning process at the state level. Participating in stakeholder discussions can help ensure that the final application reflects the needs of the rural healthcare ecosystem.
Goals of the Rural Health Transformation Fund
According to the CMS, the strategic goals of the Rural Health Transformation Fund are as follows:
- Support rural health innovations and new access points to promote preventative health and address root causes of diseases. Projects will use evidence-based, outcomes-driven interventions to improve disease prevention, chronic disease management, behavioral health, and prenatal care.
- Help rural providers become long-term access points for care by improving efficiency and sustainability. With RHT Program support, rural facilities work together — or with high-quality regional systems — to share or coordinate operations, technology, primary and specialty care, and emergency services.
- Attract and retain a high-skilled health care workforce by strengthening recruitment and retention of healthcare providers in rural communities. Help rural providers practice at the top of their license and develop a broader set of providers to serve a rural community’s needs, such as community health workers, pharmacists, and individuals trained to help patients navigate the healthcare system.
- Spark the growth of innovative care models to improve health outcomes, coordinate care, and promote flexible care arrangements. Develop and implement payment mechanisms incentivizing providers or Accountable Care Organizations (ACOs) to reduce health care costs, improve quality of care, and shift care to lower cost settings.
- Foster use of innovative technologies that promote efficient care delivery, data security, and access to digital health tools by rural facilities, providers, and patients. Projects support access to remote care, improve data sharing, strengthen cybersecurity, and invest in emerging technologies.
Allowable uses of these funds
Once a state’s application is approved by CMS, the funds can be used across a range of critical focus areas designed to improve access, quality, and sustainability. These areas reflect the most urgent challenges and opportunities in rural healthcare delivery today:
- Telehealth and digital infrastructure: States can invest in expanding broadband access, upgrading telehealth platforms, and supporting remote patient monitoring — key tools in reaching underserved rural populations.
- Mental health and substance use services: Funding can be used to integrate or expand services for mental health, substance use disorders, and crisis response systems in rural communities.
- Workforce development and retention: States may use funds to recruit, train, and retain healthcare professionals in rural areas, with a focus on behavioral health, primary care, and culturally competent care.
- Hospital and facility sustainability: Investments can be directed toward stabilizing financially distressed rural hospitals, improving operations, or transitioning to new models of care.
- Chronic disease and preventive health: States can focus on managing high-burden conditions like diabetes, heart disease, and asthma through community health initiatives.
- Infrastructure, data, and cybersecurity: Enhancing data systems and protecting health information are also allowable uses.
Alternative payment and delivery models: The fund supports innovative Medicaid payment reforms that improve rural care access and outcomes.
Community Health and Rural Health Training and Solutions
Community health providers face unique needs and challenges — serving a diverse and under-served patient population, high-cost, complex patient population, and an ever-changing funding landscape. Challenges in recruiting and retaining staff along with the healthcare professional shortage across the country create additional challenges in providing high quality, whole person care.
Learn how Relias solutions for community health and rural health clinics can help.
Learn more →
