The Rural Health Transformation Program (RHTP), established under the One Big Beautiful Bill Act (OBBA), allocates $50 billion to stabilize and strengthen rural hospitals and healthcare providers. On September 15, Centers for Medicare & Medicaid Services (CMS) published details on how states can apply to receive funding from the $50 billion program.
The application period for RHTP has closed. The below frequently asked questions may be helpful as local communities await funding decisions from the U.S. Department of Health and Human Services (HHS).
Timeline
Q: When will award decisions be announced?
A: By December 31, 2025.
Q: When does monitoring begin?
A: CMS will begin continuous monitoring and support in 2026 and beyond.
Funding and Allocation
Q: How are funds distributed among states?
A: 50% of total funds will be equally distributed among all states with CMS-approved applications. The remaining 50% will be strategically allocated by the CMS Administrator based on:
Share of population in rural census tracts
Number and needs of rural health facilities
Hospital status and needs within the state
Additional relevant factors identified by CMS
Q: Can all 50 states receive funding?
A: Yes, all 50 states are eligible for approval and funding. The District of Columbia and U.S. territories are not eligible.
Funding Use and Deadlines
Q: How long do states have to spend awarded funds?
A: Each budget period’s funds must be used by the end of the following fiscal year.
Budget Period 1: Starts Dec 31, 2025, ends Sept 30, 2026
Subsequent periods begin Oct 31 each year through FY2030.
Q: What happens to unspent funds?
A: CMS will redistribute any unspent or unallocated funds in the following fiscal year. Redistributed funds must be used by the end of that next fiscal year (except FY2032 funds, which must be used by the end of FY2032).
Q: Can funds be used for Medicare or Medicaid reimbursement?
A: No. Funding cannot be used to pay for clinical services already covered by insurance or other payers, or to duplicate existing reimbursement sources.
Award Administration
Q: How will states be notified if selected?
A: Successful applicants receive a Notice of Award (NoA) through the CMS Grant Solutions system, signed by the CMS Grants Management Officer.
Q: What if an application is not approved?
A: CMS will notify the applicant electronically via the contact email listed on the SF-424 within 30 days of the award date.
Q: How long does eligibility last?
A: Approved states remain eligible for the full 5-year program period, contingent upon:
Continued program authority and available funds
Satisfactory performance
Compliance with award terms
Q: Can funding be reduced or terminated?
A: Yes, CMS may suspend or end funding if performance standards or reporting requirements are not met.
Pro Tip: States must submit required progress and post-award reports through the CMS online system.
Additional Resources
For more information, CMS has released slides, a recording, and a transcript from a virtual informational event in September.
