Centers for Medicare & Medicaid Services Rural Health Transformation Program

$50 Billion available for Rural Health Initiatives over Five Fiscal Years

The Centers for Medicare & Medicaid (CMS) released a new Notice of Funding Opportunity (NOFO). Eligibility for the RHT funding is limited to the 50 U.S. individual States. Joint State applications are not eligible. Additionally, the District of Columbia and all U.S. territories are not eligible.

Applications must be developed in collaboration with the State health agency/department of health; State Medicaid agency; the State office of rural health; the State’s tribal affairs office or tribal liaison, as applicable; Indian health care providers, as applicable; and other key stakeholders, such as Community Health Centers, behavioral health providers, and rural hospital systems. States are now engaging stakeholders, soliciting collaboration, and conducting stakeholder meetings. Information regarding each State’s activities, and how to get involved, may be found by searching “Rural Health Transformation Program” with the State name.

Program Overview

With the aim of “Supporting rural communities to improve healthcare access, quality, and outcomes through system transformation,” the Rural Health Transformation Program (RHT) set forth guidance to address barriers, disparities, and longstanding health-care challenges in rural communities. There is no cost-sharing requirement. Funding and timelines follow:

• • $10 billion available for each fiscal year
  • 50% to be distributed equally amongst all approved States
  • 50% will be allocated by CMS based on factors specified by CMS in the NOFO
  • Application due November 5, 2025
  • Application approval December 31, 2025
  • Earliest start date December 31, 2025
  • Funding for fiscal years 2026 through 2030

Congress established the RHT Program, and authorized the Administrator of CMS to provide funding, charging States to invest in at least three (3) of the following allowed uses of funds:

1. Promotion of preventive care and chronic disease management via evidence-based measurable interventions.
2. Provider payments limited to restrictions such as payments for services not covered under insurance.
3. Consumer technology, such as patient tools to help in the prevention and management of chronic diseases.
4. Training and technical assistance to develop solutions for rural care challenges such as remote monitoring, robotics, and artificial intelligence.
5. Workforce recruitment of clinical talent with commitments for a minimum of 5 years.
6. IT advances, such as those that increase efficiency, enhance cybersecurity, and improve patient outcomes.
7. Appropriate care access, such as increasing preventative, ambulatory, pre-hospital, emergency, acute inpatient, outpatient, and post-acute service lines.
8. Behavioral health access to Opioid Use Disorder treatment services, Substance Use Disorder treatment services, and mental health services.
9. Innovative care models of care, such as value-based care, alternative payment models, and others as appropriate.

Allowable Use of Funds

The RHT NOFO includes allowable and unallowable uses of the funds. A 10% limit applies for all State administrative budget costs. The RHT NOFO encourages forming or expanding rural integrated health networks, with potential use of the funds to include (limitations apply):

• • Provider payments
  • Technical assistance regarding community needs assessments and developing community infrastructure
  • Developing integrated physical health and behavioral health systems of care
  • Training of staff in care coordination; integrated care, outreach, and population health
  • Developing multidisciplinary care teams, community-based programs to promote public health
  • Increasing innovative sites of care including schools, retail centers, public libraries, home visits, and mobile care delivery
  • Improving IT systems for improved population health management

Allowable Providers

Allowable providers include the following:

• • Hospitals: Critical Access Hospitals, Sole Community Hospitals, other hospitals
  • Community Health Centers: Federally Qualified Health Centers (FQHCs), FQHC look-alikes, designated rural health clinics, and other community health centers receiving Section 330 grants
  • Behavioral Health Providers: community mental health centers, certified community behavioral health clinics, and opioid treatment programs

Application Process

Upon application approval, the funding distribution will include Baseline funding of 50% of the total funding available each budget period. The remaining 50% of the total funds, Workload funding, will be based on the application’s total points. Total points awarded to each application are based on the following:

1. Rural Facility and Population Score Factors

• • Absolute size of rural population in a State
  • Proportion of Rural Health Facilities in the State
  • Uncompensated care in a State
  • Percentage of State population located in rural areas
  • Metrics that define a State as being frontier
  • Area of a State in total square miles
  • Percentage of hospitals in a State that receive Medicaid DSH payments

 2. Technical Score Factors

• • Population health clinical infrastructure
  • Health and lifestyle
  • SNAP waivers
  • Nutrition Continuing Medical Education
  • Rural provider strategic partnerships
  • EMS
  • Certificate of Need
  • Talent recruitment
  • Licensure compacts
  • Scope of practice
  • Medicaid provider payment incentives
  • Individuals dually eligible for Medicare and Medicaid
  • Short-term, limited-duration insurance
  • Remote care services
  • Data infrastructure
  • Consumer-facing tech

Technical scores are based on application information, data, and State policy. The RHT Program includes the below factors for State policies.

• • SNAP Waivers: State policies regarding restrictions on SNAP benefits that prohibit the purchase of non-nutritious items, such as soda, candy, energy drinks, fruit, and vegetable drinks with less than 50% natural juice, and desserts.
  • Nutrition Continuing Medical Education: State policies regarding requirements for nutrition to be a component of continuing medical education.
  • Certificate of Need (CON): State policies regarding CON restrictions on health care facility types, such as medical inpatient, medical outpatient, behavioral inpatient, behavioral outpatient, long-term care, day services, ancillaries, imaging, and others.
  • Licensure Compacts: State policies regarding Interstate Licensure Compacts, such as those for Physicians, Nurses, Emergency Medical Services, Psychologists, and Physician Assistants.
  • Scope of Practice: State policies regarding expanding the scope of practice of Physician Assistants, Nurse Practitioners, Pharmacists, and Dental Hygienists who have training and competence in preventive and primary care.
  • Short-Term, Limited-Duration Insurance (STLDI): State policies regarding STDLI restrictions, terms, and coverage.
  • Remote Care Services: State Medicaid policies regarding access to remote care and telehealth services.

Post Award

Upon award, States remain eligible for all five years of funding pending availability of funds. States must demonstrate satisfactory progress toward their identified application goals and compliance with all terms and conditions of the Federal award.

The RHT Program NOFO, and Further Guidance

This summary of the RHT Program is provided for reference only. The CMS Notice of Funding Opportunity Application, Rural Health Transformation Program, Opportunity number: CMS-RHT-26-001 is the controlling document.

Link to the CMS RHT Program website, including Frequently Asked Questions, can be found at the following: https://www.cms.gov/priorities/rural-health-transformation-rht-program/overview.

Click Here for a downloadable PDF of the CMS NOFO CMS-RHT-26-001.

If you have questions, please feel free to reach out to Brigita Landstrom at Brigita.Landstrom@SunHawkConsulting or Jim Rough at Jim@SunHawkConsulting.com.