The Rural Health Transformation Program (RHTP) is a landmark federal initiative designed to strengthen rural healthcare. Administered by CMS, the program provides states with cooperative agreements to implement evidence-based strategies that help improve access, quality, and sustainability of care in rural communities.
The program commits $50 billion over five years (2026—2030).1 Each year, $10 billion will be distributed through two allocation methods:
| Equal Allocation | Formula-Based Allocation |
|---|---|
| Half of the funds allocated equally among the states that apply and are approved. | Half of the funds are allocated based on a formula considering rural population, facility distribution, and hospitals serving low-income patients. |
The deadline for states to submit their RHTP was on November 5, 2025. CMS announced state awards on December 29, 2025. After states receive their funds, they will begin implementing their plans, which may include subawards to other entities.2 For additional information on the RHTP and its implications and impacts on medical providers, see our recent FORsights™ article, “Rural Health Transformation Program: Implications & Opportunities.”
As states prepare to transition from planning to implementation, understanding the benefits of the program, identifying strategic opportunities, and meeting compliance requirements are essential. The following explores these features and provides insight into the tenets of the RHTP.
Benefits
The RHTP offers states more than just funding—it provides flexibility to address the unique challenges of rural healthcare. Below are the key benefits that states can leverage to strengthen care delivery and improve health outcomes.
| Financial Support | Flexibility | Long-Term Support | Technical Advancement |
|---|---|---|---|
| $50 billion total ($10 billion annually) will be allocated among states that apply. | Funding can be tailored to local needs, allowing states to prioritize initiatives that address their unique challenges. | A five-year funding horizon provides stability for sustainable programs and strategic planning. | Resources for IT upgrades, telehealth platforms, and cybersecurity can help strengthen care delivery and data security. |
By capitalizing on these advantages, states can lay the groundwork for lasting improvements in rural health outcomes and help position their communities for future success.
Strategic Opportunities
Beyond financial support, the RHTP creates space for innovation and modernization in rural healthcare systems. Below are just a few of the opportunities where states can have the greatest impact.3
Workforce Development: Attract and retain skilled healthcare professionals through training programs and incentives, supporting rural communities’ access to healthcare.
Technology Innovation: Use innovative technologies to promote effective care delivery, access to digital health tools, and protect data security. Technology can also be used to increase access to care by investing in virtual platforms and broadband connectivity, reducing geographic barriers.
Data-Driven Care Models: Use analytics to help promote preventive medicine, improve chronic disease management, and positively impact population health outcomes through the support of evidence-based interventions.
Public-Private Partnership: Collaborate with local organizations and private entities to amplify impact and share resources.
Behavioral Health Integration: Expand mental health and substance use services through new clients, mobile teams, and integration with primary care.
Compliance Requirements
To maintain funding and help mitigate risk, states must adhere to strict CMS guidelines throughout the implementation process. These requirements are grounded in federal regulations, including 2 CFR 200, applicable portions of 2 CFR 300, the U.S. Department of Health & Human Services (HHS) Grants Policy Statement, and the terms and conditions outlined in the Notice of Award. States can prepare by focusing on the following compliance details and practical steps:
Use of Funds
RHTP funds must be used only for allowable activities and cannot be used to replace Medicaid or Medicare reimbursements. A non-exhaustive list of eligible uses includes:
- Recruitment and training of healthcare professionals for rural areas
- Developing projects that support innovative care models
- Increasing access to opioid use disorder treatment services
- Deploying new technology solutions to help increase telehealth services and management of chronic conditions
- Payments to rural healthcare providers
Reporting4
CMS requires recipients to meet specific post-award reporting obligations to support transparency and accountability. These requirements cover financial, performance, and compliance reporting throughout the award period. Key obligations for states under this award include:
- Submitting quarterly and annual progress reports on plans, timelines, measurable outcomes, and milestones.
- States should consider how program progress, data, and outcomes can be reported in measurable ways.
- Filing Federal Financial Reports (SF-425) either annually or semiannually, as specified in the award terms.
- Under the Federal Funding Accountability and Transparency Act (FFATA), e.g., reporting certain details about themselves and any first-tier subawards of $40,000 or more. Additional reporting is required if:
- 80% or more of prior-year gross revenues come from federal awards,
- $25 million or more in annual gross revenues are from federal awards, and
- The organization’s executive compensation information is not publicly available through SEC or IRS filings.
Audit & Oversight
States must comply with audit requirements outlined in 2 CFR 200 Subpart F, including submitting audit reports and the SF-SAC data collection form to the Federal Audit Clearinghouse. In addition, states should consider these three areas when preparing for award oversight:
- Preparing for possible CMS monitoring reviews and site visits
- Maintaining audit-ready documentation for all funded activities
- Updating policies and procedures to align with RHTP requirements
Privacy & Security
Under this award, states are expected to comply with HIPAA. Additional security guidance includes:
- Following CMS cybersecurity requirements if a project involves both of the following conditions:
- It will have ongoing access to HHS information or technology systems.
- Personal identifiable information, or personal health information (PHI), from the HHS will be handled via Notice of Funding Opportunity (NOFO).
- Adhering to relevant CMS and HHS security protocols as outlined in the NOFO.
Staying proactive and diligent with compliance not only helps safeguard funding, but it can also build trust with federal partners and support the long-term sustainability of rural health initiatives.
How Forvis Mazars Can Help
Navigating the complexities of federal programs, such as the RHTP, can be challenging. The Grants Management Services Team at Forvis Mazars offers all-encompassing support throughout the grant life cycle, from identifying funding opportunities and preparing competitive applications to establishing compliance systems and managing post-award reporting. Whether you need help with one part of the process or complete support, our team is here to guide you every step of the way.
- 1“Rural Health Transformation Program,” finance.senate.gov, August 2025.
- 2“Rural Health Transformation (RHT) Program,” cms.gov, January 2026.
- 3“CMS-RHT-26-001: Rural Health Transformation Program – Notice of Funding Opportunity,” grants.gov, January 2026.
- 4“Post-Award Reporting Requirements,” cms.gov, January 2026.