On July 4, 2025, the One Big Beautiful Bill Act (OBBB) was signed into law, creating the Rural Health Transformation Program (RHTP) and investing $50 billion from Fiscal Years (FY) 2026 to 2030 to reshape rural health care nationwide and help offset an anticipated $1 trillion in Medicaid reductions over the next decade. The Notice of Funding Opportunity (NOFO) was released on September 15, 2025.
Funding Overview
The RHTP divides funding into two main streams and, if awarded, states will have flexibility in how to distribute funds across rural hospitals, clinics, and providers.
| Funding Stream | Details |
| Direct Awards – $25 billion |
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| Formula-Based Awards – $25 billion | The Centers for Medicare and Medicaid Services (CMS) will distribute additional funding to states with approved grant applications based on:
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Eligible Funding Uses
States will have broad discretion in using awarded funds, enabling them to address pressing rural health needs, such as:
- Advancing research, right-sized care, and chronic disease prevention.
- Expanding opioid, substance use, and behavioral health services.
- Investing in technology, telehealth, and cybersecurity.
- Supporting workforce pay, recruitment, retention, and training.
- Capital projects (with limitations) and facility–community collaboration.
Additionally, up to 10 percent of each award may be used for administrative and program management costs.
Application Timeline
The NOFO was released on September 15, 2025. An optional Letter of Intent (LOI) is due September 30, 2025, and final applications are due November 5, 2025. CMS will announce awards by December 31, 2025. This is a one-time opportunity; states will not be able to apply again.
Application Requirements
Each state must submit a complete packet of materials to CMS for review, including:
- Project Summary, Narrative, and Budget (formerly the Rural Health Transformation Plan)
- Governor’s Endorsement
- Indirect Cost Rate Agreement
- Business Attestations
- Program Duplication Assessment
- Other Supporting Documentation
Hagerty Can Help
Hagerty brings deep expertise in supporting public health and healthcare systems, with a proven track record of working with over 100 hospitals and healthcare systems nationwide, along with numerous state and local public health departments.
We have helped clients identify, obtain, and manage more than $95 billion in federal and state grants. Building on this expertise, we can assist states in maximizing the RHTP through:
- Grant Writing and Application: Developing tailored Rural Health Transformation Plans.
- Program Design: Creating programs that enable providers to access and use funds efficiently.
- Program and Grant Management: Advising, managing, and ensuring compliance, deploying funding, and monitoring subrecipients.
Additionally, states may allocate up to 10 percent of awarded funds for administrative expenses, such as grant management and program oversight—allowing Hagerty’s support to be funded directly through the program.
