The Rural Health Transformation Program is starting to move from plans on paper to actual projects in rural communities.
Created in 2025, the five-year, $50 billion program gives states significant flexibility to rethink how rural healthcare is delivered. The Centers for Medicare & Medicaid Services (CMS) will distribute $10 billion annually from fiscal years 2026 through 2030. States can use the funding for a wide range of purposes, including workforce recruitment and retention, technology and cybersecurity, mental health and substance use disorder treatment, chronic disease prevention, innovative models of care, and efforts to “right size” rural healthcare delivery systems based on the services communities actually need.
That’s a big mandate. It’s also a broad one.
Now that states are beginning to put those plans into action, we’re getting a clearer picture of what rural health transformation might actually look like on the ground. And if the first round of investments tells us anything, it’s that there isn’t one answer.
One Program, Very Different Investments
In August, Alabama announced 138 grants totaling more than $144 million through its Rural Health Transformation Program. The projects range from electronic health record and cybersecurity upgrades to mental health services, workforce initiatives, and broader efforts to improve access to rural healthcare.
Kansas is taking another approach. The Kansas Department of Health and Environment recently awarded more than $1 million to seven rural healthcare organizations to implement or expand programs pairing community health workers with Food Is Medicine initiatives. The goal is to better connect rural residents with healthcare, social services, and clinical nutrition.
Georgia has issued awards for point-of-care telepods and workforce-retention technology as part of its Rural Health Transformation strategy.
And the examples are continuing to come quickly. On September 3, Tennessee announced its first 53 awards, reaching 44 counties. Those projects focus on nutrition, physical activity, and community supports. More than half of the recipients are county or municipal governments, with the remaining awards going to community-based nonprofit organizations.
These investments look very different from one another. That’s the point.
“Rural Health” Isn’t One Problem
A rural hospital struggling to recruit clinicians doesn’t necessarily need the same intervention as a community where residents have limited access to behavioral healthcare. Neither has the same problem as a community struggling with transportation, outdated technology, chronic disease, or fragmented care.
The federal program reflects that reality. The range of allowable investments is intentionally broad.
But a long list of allowable investments doesn’t answer the most important local question: Which investments will make the biggest difference here?
That requires understanding more than whether a project qualifies for funding. It requires understanding who lives in the community, what services are already available, where gaps exist, what prevents people from accessing care, and what local organizations realistically have the capacity to sustain.
Some states are making that kind of assessment and community engagement part of the transformation process itself.
Ask Before You Invest
Oklahoma offers a particularly interesting example.
Before finalizing its Rural Health Transformation plan, the state conducted extensive outreach to understand rural health needs and priorities. That included more than 400 responses to a statewide Request for Information, four regional listening sessions, input from provider and professional associations, Tribal consultation involving more than 60 representatives, and more than 40 interviews with rural providers, educators, community groups, and experts.
According to the Oklahoma State Department of Health, those conversations pointed to workforce shortages, technology gaps, transportation barriers, chronic disease, and the need for better coordinated care. The state says those findings helped shape its final Rural Health Transformation plan.
Other states are building assessment directly into individual initiatives.
Rhode Island’s Rural Health Transformation plan includes an initiative to establish 24/7 behavioral health and crisis stabilization centers in two rural areas of the state. The first stage of implementation is to conduct a needs assessment and develop site-selection criteria before moving forward with procurement and implementation.
Georgia is taking a similar approach to some of its technology and access investments. Its implementation plan calls for assessments of care needs, geography, and sustainability to help guide investments in point-of-care telepods, mobile clinics, and telehealth enhancements.
The specifics differ, but the idea is remarkably simple: before deciding exactly what to build, understand the problem you’re trying to solve.
Behavioral Health Is Part of the Rural Health Conversation
Behavioral health is also showing up repeatedly in Rural Health Transformation plans and funding opportunities.
The Kentucky Department for Public Health, for example, has created funding opportunities for Community Mental Health Centers to support follow-up care and coordination within the behavioral health crisis system. The state is also investing in a statewide telebehavioral health hub, with nonprofit behavioral health organizations participating as regional partners to support psychiatric consultation, care coordination, and connections to primary care and crisis services.
North Carolina’s plan includes behavioral health as one of six interconnected initiatives. Planned investments include expanding Certified Community Behavioral Health Clinics (CCBHCs), crisis services, mobile outreach, school-based care, and mental health and substance use disorder services.
We’re seeing this interest firsthand at Crescendo, too. In recent months, we’ve heard from organizations exploring how Rural Health Transformation funding might support behavioral health initiatives, including organizations considering CCBHC certification.
For an organization considering that kind of expansion, the question isn’t simply whether funding is available. Becoming a CCBHC, expanding a service line, opening a new access point, or developing a regional partnership all raise questions about community need, service gaps, workforce capacity, existing resources, and the population an organization is prepared to serve.
A community needs assessment can help answer those questions before an organization commits significant time and resources to a particular strategy.
Transformation Has to Outlast the Funding
There’s another important thread running through state implementation: sustainability.
Rural Health Transformation funding is substantial, but it is also time-limited. The federal program runs through fiscal year 2030. That gives states and communities several years to build something meaningful, but it also makes the question of what happens after the funding ends important from the beginning.
For example, Oklahoma has identified several ways projects could continue after Rural Health Transformation funding ends, including billable services, provider-assumed costs, ongoing government or private funding, and one-time investments that create lasting improvements.
That’s an important distinction. Transformation isn’t simply about funding a new program for five years. Ideally, the investment changes something about how rural communities access care long after the initial funding is gone.
The Rural Health Transformation Program Is Becoming Local
When the Rural Health Transformation Program was first announced, $50 billion was the headline.
Now the more interesting story is what happens to those dollars once they reach states and communities.
In one place, transformation may mean expanding behavioral health services. Somewhere else, it may mean telehealth, mobile care, stronger community health worker programs, workforce development, better technology, or closer coordination among providers that already exist.
The opportunity is unusually broad. But that flexibility also puts more responsibility on states, healthcare organizations, municipalities, and community partners to understand the problems they’re trying to solve before deciding what to build.
The strongest rural health investments may not begin with the question, “What can we use this funding for?”
They may begin with a much simpler one: “What does this community need?”
If your organization is exploring how Rural Health Transformation funding could support your community, Crescendo can help you understand local needs, identify gaps, and determine where your efforts could have the greatest impact. Contact us to learn more.