The Rural Health Transformation Program explained: $50B for 50 states over 5 years

Primary care will be part of a new $50 billion national movement to improve health and health care for rural Americans, according to the U.S. Department of Health and Human Services (HHS).

The beginning of 2026 signals the start of launching new health initiatives across the 50 states under HHS’ Rural Health Transformation Program (RHT Program). HHS Secretary Robert F. Kennedy, Jr., and Medicare Administrator Mehmet Oz, MD, MBA, announced the program last year. Applications were reviewed and funding was announced in late December.

“More than 60 million Americans living in rural areas have the right to equal access to quality care,” Kennedy said in the official announcement by the U.S. Centers for Medicare & Medicaid Services. “This historic investment puts local hospitals, clinics, and health workers in control of their communities’ health care.”

Kennedy credited the leadership of President Donald Trump so that “rural Americans will now have affordable health care close to home, free from bureaucratic obstacles.”

This explainer looks at the main points and recent history of the program, including details about the state grants and how those could affect primary care. Information comes from online sources including the U.S. Centers for Medicare & Medicaid Services (CMS).

What is the Rural Health Transformation Program?

The Rural Health Transformation Program is a federal initiative designed to strengthen rural health care delivery across the United States by allocating $50 billion over five years to states. Unlike past targeted grants, this program creates a state-driven, flexible approach to expanding access, promoting preventive care, modernizing technology, and supporting workforce development in rural communities. The program was established under the Working Families Tax Cuts Act, also called the One Big Beautiful Bill Act, in 2025. States design transformation plans that reflect local priorities, and CMS awards funding based on those plans. It is the largest dedicated federal investment in rural health in decades.

What did CMS recently announce about state applications and awards?

On Dec. 29, 2025, the U.S. Centers for Medicare & Medicaid Services (CMS) publicly announced that all 50 states submitted approved applications and will receive funding awards from the Rural Health Transformation Program. These awards will provide states with their initial allocations for FY 2026, a critical step toward launching local rural health innovations. According to CMS, this funding is expected to support expanded access to primary, maternal, and behavioral health services, workforce recruitment and retention programs, technology modernization, and broader care transformation goals across rural communities.

How much did specific states receive for the first year?

While individual awards vary, the first-year allocations reflect both equal baseline funding and differential need based on rural population metrics and proposed solutions. For example, Texas and Alaska received among the highest FY 2026 awards — each in excess of $270 million, reflecting extensive rural populations and ambitious transformation plans. In contrast, smaller states with smaller rural footprints, such as New Jersey and Connecticut, received roughly $147 million – $154 million in initial funding. States like Montana ($233 million) and North Carolina ($213 million) also secured substantial awards to support broad rural health strategies.

What must states do with their RHT Program funds?

States must design and implement multi-component programs addressing at least three approved transformation objectives. These include: expanding preventive and chronic disease management services; funding care delivery innovations; strengthening recruitment and retention of rural clinicians and team members; incorporating technology for telehealth and data interoperability; and developing innovative payment and care models. The law requires measurable goals and reporting on outcomes, which means that physician leaders may find opportunities to engage in state measurement and evaluation frameworks.

Did state applications include details and plans for programs to improve rural health?

Yes, it appears there will be a variety of programs. At least three national summaries can be accessed online, and some states have published their own program applications or summaries through state government websites.

• CMS has published its “RHT Program State Project Abstracts.”
• The National Rural Health Association published this statement with a link to its “Rural Health Transformation Program State Application Summary: State-level Initiatives & Proposed Activities.”
• The National Association of Community Health Centers published this statement with a link to a downloadable spreadsheet of its own state-by-state review of applications.

What does this mean for primary care?

Primary care gets mentioned among the state applications. Here are some examples:

• Connecticut: Add physician residency programs in primary care
• Delaware: Create the state’s first medical school Primary Care-Rural Health track and establish “Train Here, Stay Here” programs with education awards for medical students and residents
• Kansas: Integrate more behavioral care into primary care, emergency departments and nursing facilities
• New Hampshire: The state’s Rural Population Health Initiative will invest in team-based primary care and prevention
• New York: Develop new technology-enhanced primary care for use in rural areas

How can independent primary care physicians engage with the RHT Program?

Independent practices should actively engage state rural health offices, Medicaid agencies, primary care associations, and community health networks to ensure provider voices shape how RHT funds are deployed locally. Participation can range from serving on stakeholder advisory groups to proposing direct sub-grants for care transformation projects that support primary care capacity, chronic disease management, and team-based care. Practices may also position themselves as partners in workforce training programs and telehealth expansions funded through state initiatives. Engagement now can influence how resources flow to smaller providers rather than being concentrated only in larger health systems.

What is the timeline for implementation and future milestones?

Following the December 2025 award announcements, states will begin rolling out RHT Program activities throughout 2026 and beyond, with annual monitoring and reporting requirements guiding subsequent funding decisions. States must demonstrate progress on objectives such as access expansion, workforce development, and care innovation to remain eligible for continued funding through FY 2030. Physicians and practice leaders should stay engaged with state rural health updates, participate in planning forums, and prepare for evolving opportunities as each state operationalizes its transformation strategies.

Why is CMS involved?

CMS coordinated the initial application process and, also in late 2025, announced creation of the new Office of Rural Health Transformation (ORHT) in its Center for Medicaid and CHIP Services, referring to the Children’s Health Insurance Program.

Who is leading the ORHT?

The new leader of ORHT will be Alina Czekai, MPH.

“I am honored to lead the Office of Rural Health Transformation at such a pivotal moment for rural health care,” Czekai said in a statement. “Having completed a rigorous review of state applications, our team is prepared to partner with states on the transformational work ahead — advancing innovative care models, modernizing rural health infrastructure, and strengthening systems that will endure well beyond the life of the program.”

Czekai had a biography published by the nonprofit advocacy organization Primary Care Collaborative.

“With a background in government health policy at CMS and experience in various health care startups, Alina bridges the gap between government and industry,” it said. “During her time as a Senior Advisor at CMS under Administrator Seema Verma, Alina codeveloped CMS Innovation’s Center’s first ever value-based rural care model. Alina comes from a line of generational farmers in Upstate New York and is a champion in advocating for improvements in rural health delivery systems.”

In the big picture, why was the RHT Program created, and what problem is it trying to solve?

Rural communities have faced persistent access barriers, workforce shortages, hospital closures, and underinvestment in infrastructure for years — conditions that were exacerbated by reimbursement pressures and declining Medicaid support. The RHT Program aims to counteract these systemic challenges by giving states resources to expand preventative services, enhance care integration, and strengthen rural clinical and administrative capacity. The program acknowledges that rural health needs vary widely by geography, population, and existing infrastructure, which is why it emphasizes state-driven planning and innovation.

How much funding is available and how will it be distributed over time?

The RHT Program makes $50 billion available across five fiscal years, beginning in FY 2026 and extending through FY 2030, with $10 billion allocated per year. In the first year, CMS has announced that each state will receive first-year award amounts averaging about $200 million, with individual state awards ranging from approximately $147 million to $281 million. Funding is divided into two broad streams: 50 % distributed equally among the 50 states with approved applications, and 50 % allocated based on rural health indicators, project quality, and commitments in state plans.

Who was eligible to receive RHT Program awards?

Only the 50 U.S. states are eligible to receive direct awards under the RHT Program; U.S. territories and the District of Columbia are not eligible to apply as stand-alone recipients. However, within states, local providers, independent practices, clinics, community health centers, hospitals, and rural health associations can participate as key implementation partners or recipients of downstream sub-awards or contracts from their state. For independent primary care practices, this model means your ability to benefit from RHT funds depends on how your state designs and implements its transformation strategies.

What are the program’s strategic priorities and long-term goals?

CMS and rural health advocates describe the RHT Program’s strategic priorities as: expanding access and prevention, strengthening sustainable care delivery, bolstering the rural health workforce, modernizing infrastructure and technology, and piloting innovative care and payment models. Over the long term, the goal is not just short-term financial support, but structural transformation — creating care systems that are financially viable, technology-enabled, and responsive to rural community health needs. Achieving these goals will require iterative evaluation and adaptation, making provider input crucial throughout the funding cycle.

What challenges or criticisms exist around the RHT Program?

Although the RHT Program represents an unprecedented infusion of targeted rural health funding, policy analysts note that it may not fully substitute for larger systemic financing shifts, especially given accompanying federal Medicaid cuts projected over the next decade. Others caution that state political agendas and policy conditions tied to awards may influence how funds are used, and disparities in administrative capacity could lead to uneven implementation across states. For rural physicians, this means monitoring not only the presence of funds but how effectively they translate to sustainable local support for practices and care delivery.

What does this mean for rural health care sustainability?

If effectively implemented, the RHT Program could enhance rural access to primary care, improve workforce stability, and accelerate digital and preventive innovations that help rural clinicians work more efficiently. For solo and small group practices struggling with recruitment and reimbursement pressures, state-level transformation plans may offer new opportunities for value-based care contracts, shared services networks, and telehealth infrastructure. However, the magnitude of change will depend on state priorities, local collaboration, and the ability of practices to integrate into broader regional transformation strategies.