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The federal layer

Fifty states run the same program. Here is the program.

The Rural Health Transformation Program is one federal statute, one pot of money, and one set of rules. The money rarely arrives as a direct grant: it moves through state plans, distribution gates, and subawards. Learn how the federal layer works once, and you can read who controls the money in any state in minutes.

Total program
$50B
Approved states
50
Funded years
FY26 to FY30
Sunset
Oct 2032

The mechanics

Ten billion dollars a year, for five years.

Section 71401 of Public Law 119-21 authorizes $50 billion across fiscal years FY26 through FY30, at $10 billion a year. CMS approved all 50 states on December 29, 2025.

50%

Baseline

Split equally among the approved states, roughly $100 million per state each year, regardless of size.

50%

Workload and discretionary

Allocated by rurality, state policy actions, and the projected scale of each state's plan.

First-year awards average $200M, ranging $147.3M to $281M (NJ low, TX high).

What the money funds

The 10 allowable uses.

The statute names 10 categories of allowable use. Every state plan must fund three or more of them. When you read a state page, each sub-initiative maps back to one of these.

  1. 01

    Chronic disease prevention and management

    Evidence-based programs that prevent and manage chronic disease in rural populations.

  2. 02

    Payments to providers for items or services

    Direct payments to rural health care providers, capped at 15% of a state's annual award.

  3. 03

    Consumer-facing, technology-driven solutions

    Tools patients use directly to prevent and manage chronic disease.

  4. 04

    Technology-enabled solutions in rural hospitals

    Training and technical assistance to adopt remote monitoring, artificial intelligence, and robotics in rural hospitals.

  5. 05

    Clinical workforce recruitment and retention

    Recruiting and keeping clinical talent in rural areas, with a commitment to serve at least five years.

  6. 06

    Information-technology advances

    Software and hardware that improve efficiency, strengthen cybersecurity, and improve patient outcomes.

  7. 07

    Right-sizing delivery systems

    Helping rural communities match service lines, from preventive to post-acute, to real demand.

  8. 08

    Behavioral health and substance use treatment

    Access to opioid use disorder, other substance use disorder, and mental health treatment.

  9. 09

    Innovative care models

    Value-based care and alternative payment arrangements.

  10. 10

    Additional sustainable-access activities

    Other activities that promote sustainable access to rural health care, as determined by CMS.

The rules that decide funding

New activity is fundable. Existing budgets are not.

The single rule that turns down the most proposals is anti-supplantation. The money is for what a state would not otherwise do.

Counts as fundable

  • New or expanded programs
  • A pilot extended to a new population
  • One-time technology adoption
  • Capacity that did not exist before
  • A demonstration with an endpoint

Reads as supplantation

  • Existing staff salaries
  • Funding a state already budgeted
  • Replacing local, tribal, or private dollars
  • Provider payments for insurance-reimbursable services
  • Ongoing operating cost with no endpoint

15%

Ceiling on payments to providers, as a share of a state's annual award.

10%

Ceiling on administrative expenses.

Who, and by when

States hold the award. Subrecipients do the work.

Who receives funds

All 50 states are approved recipients (the District of Columbia and territories are excluded). Each state passes funds to subrecipients, hospitals, vendors, and community organizations, through its own competitive procurement. That is the door vendors and health systems walk through.

The clock

  • Oct 1 2025 Budget period one opens.
  • Sep 30 2027 First-year funds must be spent.
  • Oct 31 each year CMS announces the next year's allocation.
  • Oct 1 2032 The program sunsets.

Common questions

The program, answered.

What is the Rural Health Transformation Program?
A $50 billion federal program created by Section 71401 of Public Law 119-21. It runs $10 billion a year across fiscal years 2026 through 2030 and funds rural health care in all 50 states.
How is the $50 billion distributed?
Half is split equally among the 50 approved states, roughly $100 million per state each year. The other half is allocated by workload and discretionary factors including rurality, state policy actions, and the projected impact of each state's plan.
How large is each state's first-year award?
First-year awards average about $200 million, ranging from $147 million to $281 million. CMS approved all 50 states on December 29, 2025.
What can the money be used for?
The statute lists 10 allowable uses, from chronic disease prevention to workforce, technology adoption, behavioral health, and innovative care models. Each state must fund three or more of them.
What is the anti-supplantation rule?
Funds must pay for new or expanded activity. They cannot replace existing state, local, tribal, or private funding, such as current staff salaries, and provider payments cannot replace amounts already reimbursable by insurance.
Are there spending caps?
Yes. Payments to providers cannot exceed 15% of a state's annual award, and administrative expenses cannot exceed 10%.
What is the deadline to use the money?
For the first budget period, the year runs October 1, 2025 through September 30, 2026, and funds must be spent no later than September 30, 2027. CMS announces each next year's workload allocation by October 31 of the prior year.
When does the program end?
The program sunsets on October 1, 2032. The five funded years are fiscal 2026 through fiscal 2030.

Now see how the money reaches you.

The federal layer is the same everywhere. The money, the gates, and the named people who control them are different in every state.

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