On September 15, 2025, CMS launched the Rural Health Transformation (RHT) Program. This provision of the One Big Beautiful Bill Act (OBBBA) includes an investment of $50 billion over five years aimed at strengthening rural health care across the U.S. The program provides states with cooperative agreement funding to support rural health facilities, including Rural Health Clinics (RHCs), Critical Access Hospitals (CAHs), Sole Community Hospitals (SCHs), Rural Emergency Hospitals (REHs), Federally Qualified Health Centers (FQHCs), Community Mental Health Centers (CMHCs), Opioid Treatment Programs, and Certified Community Behavioral Health Clinics (CCBHCs). The goal is to expand access, improve quality, enhance sustainability, innovate in care delivery, upgrade technology, and strengthen the rural health workforce.
How Organizations Can Benefit
Rural health organizations stand to benefit significantly through state-directed initiatives under the RHT Program. Funds may support recruitment and retention of clinicians, expansion of behavioral health services, adoption of technology-enabled solutions, chronic disease management, and partnerships with regional providers.
Approved Uses of Funds
According to CMS guidelines, RHT funds may be used for at least three of the following categories:
- Prevention and chronic disease management programs
- Direct payments to providers for specific services
- Consumer-facing technology-driven solutions (telehealth, remote monitoring)
- Workforce recruitment and retention with service commitments
- IT and cybersecurity upgrades
- Behavioral health and substance use disorder services
- Innovative care models (value-based payment)
- Resizing and strengthening service delivery systems
Restrictions on Funds
Funds are not a blank check. Key restrictions include:
- Funds cannot supplant existing reimbursements for clinical services
- Awards must be spent within the fiscal year following allocation
- No more than 10% of funds can be used for administrative costs
- States, not individual clinics, must apply — but states can allocate funds to rural health organizations
- Workforce incentives must include multi-year service commitments
Suggestions for Maximizing Benefit
Rural health organizations can position themselves to benefit by:
- Engaging with state agencies during planning
- Preparing data on service gaps, outcomes, and workforce needs
- Collaborating regionally with hospitals and other providers
- Leveraging telehealth and patient engagement technologies
- Building sustainable programs that outlast federal funding
Where to Learn More
States must apply via the Notice of Funding Opportunity (NOFO) available on Grants.gov. Applications are due by November 5, 2025, with awards announced by December 31, 2025. For details, visit the CMS RHT Program page here.
CMS has also released a frequently asked questions (FAQ) document that will be updated throughout the application period here.
Published: 10/29/2025
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