The Next Chapter for RHTP: Turning Early Investments into Lasting Transformation

Early Investments, Emerging Lessons

The (RHTP) represents an unprecedented federal investment in rural health. With $50 billion available to states over five years, CMS has provided substantial resources, along with notable constraints, to address longstanding rural health care challenges. States are now well into Year 1 implementation, racing to deploy the millions of dollars awarded at the end of December 2025 that must be obligated by October 30, 2026 and spent by September 30, 2027.

Concurrently, states are already preparing to demonstrate Year 1 progress to CMS through the annual reports and Year 2 funding applications due at the end of August. CMS will use these submissions to update each state’s overarching score from its original application based on demonstrated progress on each RHTP initiative and policy-related commitments. CMS will use the rescoring results to determine Year 2 funding amounts and awards by the end of October 2026. States therefore have a limited window to both demonstrate progress and generate evidence needed to guide future investments and build a sustainable model for rural transformation.

While states’ applications outlined broad visions for how they intend to improve rural health outcomes, early contracting offers a more revealing window into states’ first-year approaches for translating vision into action. States are using a range of contracting mechanisms, including broad and targeted Requests for Proposals (RFPs), Letters of Interest, and sole-source arrangements, each with trade-offs in speed, control and competition. They are also investing across a remarkably diverse set of priorities, provider types, community organizations, and transformation strategies. These early procurements reveal different theories of change, governance philosophies and approaches to sequencing investments—differences that reflect the diversity of rural markets, infrastructure, provider capacity and community needs.

As Year 1 implementation progresses, the challenge for states is shifting from rapid funds distribution to making increasingly deliberate investment decisions. Year 1 procurements represent an initial set of hypotheses, executed on urgent timelines, about what will drive rural transformation. As states assess their early investments, they should identify which investments have the greatest potential to improve access, quality, financial sustainability and health outcomes—and where important gaps in their investment portfolios remain. Those insights should shape higher-impact, targeted investments in Years 2 through 5 as CMS’s expectations for measurable, transformative impact continue to grow.

Viewed through that lens, three recurring tensions emerge across early procurements. Together they offer insight not only into how states are approaching rural transformation today, but also into the strategic decisions that will shape Years 2 through 5:

• Proven strategies versus innovative experimentation
• State-directed priorities versus locally defined solutions
• Immediate stabilization versus longer-term transformation

Proven Strategies Versus Innovative Experimentation

Early procurements suggest states are balancing investments in interventions with established evidence and predictable implementation pathways with initiatives designed to test new models that could fundamentally reshape how care is delivered, coordinated, or financed in rural communities.

Workforce investments are among the most common examples of states pursuing well-established strategies. States including , , and are investing in recruitment, retention, training and workforce pipeline strategies. Other examples include investments in brick-and-mortar school-based health centers and support for evidence-based integrated behavioral health and primary care models.

At the same time, many states are reserving a portion of their RHTP investments for initiatives that test new approaches both within and beyond traditional health care settings. Vermont is investing in a and to improve provider efficiency. is deploying remote monitoring technologies in schools to support students with chronic conditions such as diabetes and asthma. is establishing a statewide perinatal and pediatric behavioral health teleconsultation program designed to extend specialty expertise into underserved areas. and are investing in food system infrastructure and local food purchasing initiatives, reflecting growing interest in upstream strategies that address health through community systems rather than clinical services alone.

As early results emerge, the real test will be whether states are willing to make disciplined choices—expanding innovations that demonstrate meaningful impact, refining those with promise, and moving on from those that do not.

State-Directed Priorities Versus Broad Calls for Locally Defined Solutions

A second tension concerns where states believe innovation and problem-solving should originate. RHTP gives states considerable flexibility to either direct investments toward priorities they have identified as critical to rural health improvement or create space for communities and local organizations to define needs and propose solutions.

Some states are using RHTP to advance specific transformation priorities they have identified as critical to improving rural health outcomes. These procurements reflect a belief that states can accelerate transformation by concentrating resources where states understand the needs and can intentionally design the interventions. Examples include investment in hub-and-spoke networks to expand access to cancer care; efforts to strengthen the role of rural pharmacists and pharmacies; and investments in expanding access to doula services to improve maternal health outcomes.

Other states have taken a broader approach, creating opportunities for communities, providers, and local organizations to identify needs and propose solutions. States such as , , , and have issued broad solicitations that invite locally developed proposals across multiple RHTP priority areas. This approach shifts project design closer to communities and reflects the view that transformation is more likely to succeed when solutions are tailored to local needs, assets and market conditions.

States that initially cast a wide net can gain valuable insight into emerging needs, opportunities and promising solutions—insights that can help states move from broad exploration toward more targeted investments that create sustainable impact.

Immediate Stabilization Versus Longer-Term Transformation

Perhaps the most consequential tension emerging concerns how states are balancing immediate needs with longer-term transformation. Many rural providers face operational and financial challenges that threaten their ability to continue operating today. However, RHTP was not designed to simply stabilize existing systems, but to support lasting transformation. States therefore face a difficult balancing act: addressing urgent needs while investing in the infrastructure, payment models, governance structures and planning processes needed to redesign rural health systems for the future.

States investing in stabilization efforts include , and , through facility upgrades, minor renovations, equipment purchases, vehicle/ambulance purchases and other capital investments. Kansas is specifically supporting facilities transitioning to Rural Emergency Hospital status, recognizing the immediate challenges many rural providers face in adapting to new delivery models.

States investing in the systems and structures needed to support longer-term transformation include:

• Payment redesign. is helping providers prepare for value-based payment arrangements, while is developing a population-based primary care payment model that rewards quality and performance.
• Regional and statewide coordination infrastructure. and are building regional hub models that bring together providers, community organizations, and local stakeholders to coordinate initiatives, align resources, and drive transformation. is advancing the , a statewide, neutral digital infrastructure that will connect providers, payers, and patients through one hub with real-time insurance verification and prior authorization serving as an initial use case. These investments illustrate how some states are building foundational infrastructure that can support multiple transformation initiatives over time.
• Planning and analysis for future investments. Some states are investing in planning and analysis to guide future rounds of investment. and are developing comprehensive statewide health delivery strategies. is seeking a partner to assess rural health facilities’ long-term financial stability and formulate sustainability strategies. is creating a ten-year strategy for expanding rural graduate medical education opportunities. is assessing telehealth and digital infrastructure needs, while is conducting a statewide maternal health service and access assessment.

These investments suggest that many states view transformation as more than a collection of individual projects. While discrete initiatives can address immediate needs, long-term change requires the systems, infrastructure, governance structures, and financing mechanisms necessary to coordinate and sustain improvement over time. The key distinction across states is how they are sequencing those efforts. Some states are prioritizing stabilization as a prerequisite for transformation, while others are investing in both simultaneously or using RHTP to accelerate structural redesign from the outset.

Looking Ahead

Early RHTP procurements reveal a field in active experimentation rather than consensus. States are pursuing different—and often overlapping—pathways to rural transformation, reflecting varying assumptions about what drives change, where innovation should originate, and how transformation should be sequenced.

As implementation progresses, the challenge will increasingly shift from deploying funds to determining which strategies warrant deeper and sustained investment. With CMS poised to evaluate Year 1 progress before awarding Year 2 funds, states have a narrow window to convert early implementation into a clear strategy for sustained transformation. Broad distribution of Year 1 funding allowed states to engage stakeholders, better understand market needs, and test different approaches; however, Years 2 through 5 should increasingly focus on designing and implementing strategies most likely to achieve the program's long-term goals. Lasting transformation is unlikely to result from continuing to spread limited resources across an ever-growing portfolio of worthy individual projects. States will need to make difficult choices—particularly given the wide provider and community interest in leveraging RHTP funds—about where concentrated investment has the greatest potential to produce the lasting transformation the program was designed to catalyze.

Making those choices will require states to wrestle with the more fundamental questions about how to redesign rural health delivery and payment systems. Which care delivery models are best positioned to sustain access in rural communities? How should payment systems evolve to support high-quality, financially sustainable care? What regional infrastructure is needed to coordinate services across providers and communities? And what financing and policy mechanisms—including Medicaid waiver authorities and value-based payment models—can sustain successful initiatives beyond the life of the RHTP program?

That shift is important given the time-limited nature of this opportunity. RHTP funding extends for five years, but the foundations for sustainable transformation must be established much earlier. States that wait until the later years of the program to consider long-term strategy may find themselves with successful projects but no clear pathway for sustaining or scaling them.

Ultimately, success will not be measured by how quickly funds were distributed or how many projects were launched, but by whether states are able to translate early investments and lessons into a coherent transformation strategy that fundamentally strengthens rural health care systems long after RHTP has ended.