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How the Rural Health Transformation Program works
The Rural Health Transformation Program was created by Section 71401 of H.R. 1 and signed into law in July 2025. It appropriates $50 billion across federal fiscal years 2026 through 2030.
The part that surprises most people: CMS awards the money to states, not to hospitals. Every state applied and all fifty were approved in December 2025. Half the funding is distributed evenly across approved states, and half is distributed at CMS discretion based on rural facility counts, rural population, and a set of state policy factors.
Your hospital doesn't have RHTP funds. Your state does, and your hospital applies for a subaward through whatever process your state has set up.
Those processes differ substantially from one state to the next.
Appropriated across FY2026–FY2030
Minimum allowable use categories each state must spend against
Maximum share of a state's award for its own administrative costs
What states can spend on
The statute defines ten allowable use categories.
Whether any specific purchase falls inside one of those categories is determined by your state's approved plan and the terms of your subaward. Two hospitals in different states can get different answers about the same technology.
Where care coordination and telehealth technology tend to fit
Categories 4 and 6 are the ones that reference technology most directly.
Training and technical assistance for adoption of technology-enabled solutions in rural hospitals.
Technical assistance, software, and hardware for IT advances designed to improve efficiency, enhance cybersecurity capability, and improve patient health outcomes.
Rural hospitals that narrow a service line often replace it with specialty consults from a referral center.
Behavioral health and substance use access in rural areas is largely delivered remotely.
One pattern worth knowing
Coordination and communication technology rarely gets funded as a standalone line item. It typically appears as a component of a larger project, such as a behavioral health access initiative, a transfer reduction program, or an IT modernization effort.
Three other programs worth knowing
USDA Distance Learning and Telemedicine grants
Built specifically for rural telemedicine equipment and software. Annual application window, matching requirement, awards typically in the low six figures. Many rural hospitals have never applied.
FCC Rural Health Care Program
Covers the Healthcare Connect Fund and the Telecom Program. It funds broadband and connectivity rather than software or services. If bandwidth is a constraint on what you can do clinically, this is the program.
HRSA Office for the Advancement of Telehealth
Runs the Telehealth Network Grant Program and funds twelve regional Telehealth Resource Centers. Those centers provide technical assistance at no cost, and they're one of the more useful phone calls a rural hospital can make.
Questions to bring to your State Office of Rural Health
Find your state
Each state administers its own RHTP plan and subaward process. Start with your state's own program page, then use these national resources.