CMS’s Rural Health Transformation Fund: What It Signals for Health Tech Companies

On September 15, CMS released its Notice of Funding Opportunity (NOFO) for the new $50 billion Rural Health Transformation (RHT) Program established under H.R.1, with state applications due by November 5, 2025 and awards expected by year-end. While only states can apply, the structure of this fund and its support for technology innovations provides a roadmap of where federal dollars will flow—and how health tech companies can align with RHT objectives.

The NOFO encourages states to sub-award or contract with, among others, private partners to design and implement planned initiatives. CMS emphasizes “community collaboration” and strategic partnerships between rural providers and technology-enabled organizations.

How The Funds are Distributed

Starting in Fiscal Year (FY) 2026, $25 billion in “baseline funding” will be distributed equally across all states with approved applications over five years. The other $25 billion, known as “workload funding,” will be distributed over the same period, but funding amounts will be based on two equally-weighted sets of criteria established by CMS: (1) “Rural Facility and Population Factors”, which score how rural a state is compared to other states and considers information on the state’s rural health facilities and factors related to uncompensated care, and (2) “Technical Score Factors”, which score the extent to which the state’s policies and proposed initiatives align with the Trump administration’s Make America Healthy Again (MAHA) agenda. Health tech companies should take the relevant Technical Score Factors (e.g., remote care services, data infrastructure, consumer-facing technology and talent recruitment) into account when developing strategic initiatives to partner with state health agencies.

Below are the top five takeaways for health tech innovators:

1. Health Improvement Technology Takes Center Stage

CMS has explicitly specified consumer-facing health technology as an allowable funding category, with direct scoring weight (3.75% of workload points) for states that invest in digital tools to support prevention and chronic disease management in rural areas. States are also allowed to use funds to support training and technical assistance (TA) for adoption of tech-enabled solutions. This signals a major opening for companies offering digital therapeutics, AI-enabled medical devices, remote monitoring, chronic care apps and personalized engagement platforms. Vendors that can demonstrate outcomes-driven, scalable and CMS-aligned solutions that address rural access gaps will be attractive partners for states building competitive applications.

2. Telehealth and Remote Care Services Are Now Core Infrastructure

Another 3.75% of workload funding scoring weight rewards states for the quality and outcomes related to their (1) proposed initiatives and (2) current policy landscape and proposed policy actions that support remote care services, including telehealth, remote patient monitoring, multi-modal virtual care, and AI-supported virtual care and monitoring. Companies should look for opportunities to shape and participate in states’ proposed remote care initiatives and be prepared to align with state Medicaid reimbursement structures for remote care. There are many ways that greater technology support could benefit remote care, such as by advancing the interstate licensure process to streamline licensure, as well as credentialing. Technology companies that can demonstrate agility and ability to integrate into existing delivery systems (especially for behavioral health and primary care) may have an advantage.

3. Data Infrastructure and Interoperability Will Drive Funding

CMS also designated IT advances aimed at improving efficiency and health outcomes at rural health facilities as an allowable funding category. This includes data infrastructure investments (which also have direct scoring weight of 3.75% of workload points) such as cloud-based, multi-tenant EHR systems, interoperability solutions and analytics platforms. Health tech companies that can offer states the ability to modernize rural health care delivery IT systems, enable data exchange and meet ONC/CMS standards will be well-positioned. Importantly, this also ties to CMS’s performance-based funding model, which puts states at risk of losing future allocations if they fail to demonstrate measurable improvements in data-driven care.

4. Workforce and Training Solutions Need Tech Enablement

States are required to dedicate funding to workforce recruitment, retention and training, with an emphasis on rural clinical commitments. Technology companies offering virtual training platforms, AI-enabled clinical support tools and tech-enabled workforce extension models (e.g., decision support for nurse practitioners or paramedics) may align with these priorities. Solutions that reduce burden and extend ever-scarce clinician capacity may be especially attractive.

5. The Time is Now

Health technology companies should be proactively engaging state agencies and provider groups now, positioning themselves as essential collaborators to help states meet CMS’s scoring criteria and sustainability requirements. Most states have released Requests for Information (RFIs) to gather input from the public. Companies can reference closed RFIs to identify potential areas of alignment with state initiatives and policies and respond to any relevant RFIs that are open to express interest in collaboration. With applications due in November, now is the time engage with state applicants and other anchor community partners.

Bottom Line

CMS’s RHT Program represents more than just a state funding opportunity—it is a market signal that prevention, technology-enabled care and data-driven transformation are becoming more central pillars of rural health strategy.

Despite significant funding cuts to rural health care as part of H.R.1, this fund marks a significant federal investment in rural health transformation—and a rare opportunity for health tech innovators to scale solutions that meet rural America’s urgent needs.

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For more information about the NOFO, including detailed scoring methodology, refer to our public newsletter: .

States that have closed RFIs include Alaska, Utah, and New Mexico. Massachusetts' RFI is active and closes on 10/9/25. Refer to the  for information on all RFIs and public comment periods.