What RHTP is
The Rural Health Transformation Program is a federal fund, created by H.R.1 in 2025, that pays states to rebuild how rural residents get care. Every state received an award in Year 1.
How the money is split
Each year's funds are divided two ways. Half is split equally among approved states. The other half is allocated by the Centers for Medicare & Medicaid Services (CMS) using a scoring of state factors and each state's application.
The result is a floor every state can count on and a competitive share that rewards stronger plans.
What states can spend it on
States must use funds for at least 3 of the permitted uses. The statute lists 11 permitted uses, including:
- Prevention and chronic disease
- Provider payments
- Consumer-facing technology
- Training and technical assistance
- Workforce recruitment and retention
- IT and cybersecurity
- Right-sizing care delivery
- Behavioral health and substance use
- Innovative care models
- Capital and infrastructure
- Fostering collaboration
Which uses a state picks, and how it combines them, shapes the opportunities for hospitals, clinics and innovators.
Limits on spending
Four caps apply to how a state may use its funds.
| Category | Cap |
|---|---|
| Administration | No more than 10% |
| Provider payments | No more than 15% |
| Infrastructure | No more than 20% |
| Replacing an EHR system | No more than 5% |
How states report
Funds flow to states as cooperative agreements with CMS. States file quarterly and annual reports, so spending and results are tracked through the life of the program.