Rural Health Transformation: The Smart Play for States is to Work at Two Speeds
As states submit budgets for the first tranche of rural health dollars, they need to balance getting money out the door and laying groundwork for long-term impact and post-grant sustainability.
Authors: Jared Augenstein, Anne Karl and Alex Morin
Editors: Patti Boozang and Amanda Eisenberg
tl;dr
As states submit their budgets to the Centers for Medicare & Medicaid Services (CMS) for the five-year Rural Health Transformation Program (RHTP), they face immediate pressure to move fast as they finalize and deploy first‑year RHTP dollars — balancing CMS timelines with the risk of misallocating funds in ways that undermine long‑term impact.
The smart approach is to work at two speeds: secure early, allowable “quick wins” to demonstrate progress and protect funding while simultaneously designing higher‑risk, higher‑reward initiatives that require more planning and coordination.
Sustainability must be built in from day one, with states investing early in governance, partnerships and reporting infrastructure to ensure RHTP dollars add up to durable rural health transformation beyond the five‑year grant window.
The 80 Million Impact
In late December 2025, states learned the size of their first‑year awards under CMS’ Rural Health Transformation Program (RHTP) — ranging from $147 million in New Jersey to $281 million in Texas. CMS subsequently released state project abstracts for all 50 states, outlining ambitious plans to expand access to care, grow the rural health workforce, modernize health information technology, and pilot new delivery and payment models tailored to local needs.
The scale of these awards — and the pace CMS expects states to move — creates both opportunity and risk for states. To draw down funding, states must stand up multiple implementation processes simultaneously: governance structures, program management infrastructure, procurement and contracting mechanisms, definitions of allowable uses across broadly framed initiatives and stakeholder engagement channels. All of this must happen while states remain accountable to CMS milestones, metrics and the risk of funds being clawed back if dollars are not deployed effectively.
Against this backdrop, the smartest strategy for states over the next six months is not to choose between speed and strategy — but to deliberately pursue both.
Timeline of the RHTP Process:
A Two‑Speed Strategy for RHTP Implementation
States should structure their early implementation work along two parallel pathways.
First, move quickly to get dollars out the door and secure early wins. States should identify allowable uses of funding that can be executed rapidly, demonstrate progress to CMS and build momentum with stakeholders. These “quick wins” help ensure states retain their allocated funding while buying time and credibility for more complex investments. Some states are already signaling where these early opportunities may lie. Delaware has issued an RFP to identify a partner to implement one of its signature initiatives: the development of a new, four-year medical school training primary care and rural focused physicians. New Jersey has also issued several initial public grant opportunities for applicants in rural health preventive initiatives, remote patient monitoring, and clinical workforce development and retention.
Second, simultaneously lay the groundwork for high‑risk, high‑reward investments. While quick wins are essential, they are not sufficient to achieve the transformation states and CMS envision. States must use this initial period to design RFPs, define programmatic requirements and engage stakeholders around more ambitious initiatives — particularly those that require coordination across systems or represent novel approaches to care delivery and payment in rural communities. These investments may take longer to launch, but they are far more likely to drive lasting change if they are thoughtfully designed from the outset.
Crucially, these two speeds should reinforce — not crowd out — one another. Early execution creates the operational space for innovation, while long‑term planning ensures early dollars are not spent in ways that fragment or dilute the state’s broader transformation vision.
Stakeholder Infrastructure as a Strategic Asset
States are already beginning to build the stakeholder engagement infrastructure that will be essential to sustaining this two‑speed approach. Many are establishing advisory committees or similar bodies to guide program design and implementation. Montana has already stood up such a group, while Michigan and Colorado are doing so through public nomination and application processes.
In parallel, states are launching public information‑sharing and listening sessions to bring providers, communities, and other stakeholders up to speed on implementation plans. Alaska held its first major public event in mid‑January, followed by Montana, Nevada and Wisconsin later in the month and early February.
These engagement channels should be viewed not as a compliance exercise, but as a strategic tool. Used well, they can help states pressure‑test ideas, surface implementation risks early and build durable coalitions around more complex reforms that will take years to mature.
Sustainability Starts Now — Not in Year Five
While states are understandably focused on obligating and distributing funds, the more consequential challenge is ensuring RHTP investments align with a clear transformation vision and deliver lasting impact. CMS has made sustainability central to both application scoring and ongoing reporting, signaling that states and partners must plan now for what comes after federal funding ends in 2031.
States cannot achieve sustainability on their own. The success of each RHTP program will depend on a complex network of partners and contracts that support implementation. While some partners were identified in state applications, most states intentionally described partnerships in broad terms to preserve flexibility during implementation.
Potential partners should be asking themselves not only how to secure funding, but how their work can endure:
How does this initiative align with the state’s long‑term rural health vision?
Are proposed uses of funds allowable under CMS rules, and where might braided funding be needed?
What reporting, evaluation, and administrative infrastructure will support both compliance and learning?
How will these investments be sustained once federal funding sunsets?
The Bottom Line
The pressure for states to move quickly is real — and justified. But speed without strategy risks scattering resources across disconnected projects that fail to add up to meaningful transformation. States have to keep eyes on their north star vision, while deliberately working at two speeds — securing early wins while designing for long‑term impact — and embedding sustainability into program design from day one. If they can strike this balance, states can use RHTP not just to spend federal dollars, but to also fundamentally reshape rural health systems for the long haul.