$50 Billion for Rural Health: What CMS and States Must Get Right

Congress has authorized historic resources for rural communities. How this $50B investment is implemented will make all the difference for patients.

The urgency is clear. Rural communities face persistent access gaps, fragile hospital finances, workforce shortages, and long travel distances for essential services. The Health Resources and Services Administration (HRSA) has found that more than 100 million Americans live in federally designated Health Professional Shortage Areas (HPSA), where the supply of primary care, mental health, or dental providers does not meet population demand. As of December 2025, 63.1% of Primary Care HPSAs were located in rural areas and another 9.6% were in partially rural areas. 

What Is the Rural Health Transformation Program (RHTP) — and Why Is Delivery Complex?

RHTP is structured as a state-driven transformation effort with federal guardrails. It allows states to design and implement transformation plans. The federal Centers for Medicare & Medicaid Services (CMS) maintains oversight and can withhold or recover funds if goals are not met.

States need flexibility to tailor interventions to local realities, while CMS needs defensible oversight and outcomes. 

That balance is complex because rural markets vary widely. Some communities lack basic primary care infrastructure. Others depend on a single hospital operating with limited administrative capacity. Any payment reform must align with available workforce and data systems that many providers do not yet have in place.

At the same time, funding cannot move faster than readiness. Contracting, governance, data infrastructure, and reporting systems must be established before dollars scale. Measurement frameworks must demonstrate progress without overwhelming providers already stretched thin.

This is an operational challenge. It requires aligning payment design, workforce strategy, governance, and data systems in communities with constrained capacity, while maintaining transparency and fiscal stewardship.

Why Funding Alone Will Not Stabilize Rural Health                       

More than 150 rural hospitals have closed since 2010. Financial pressure is real, but closures rarely result from funding shortages alone. They stem from structural issues: workforce scarcity, reimbursement complexity, service mix misalignment, and governance gaps.

Telehealth offers a useful example. CMS expanded telehealth flexibilities during and after the COVID-19 public health emergency. The Government Accountability Office noted that its long-term sustainability depends on infrastructure, licensure alignment, billing clarity, and workforce capacity. Telehealth access does not expand because it is funded. It expands when workflows, referral agreements, staffing models, and billing processes are aligned. The same principle applies to rural transformation at scale.

What Does Effective Rural Health Implementation Require?

Successful rural transformation requires clarity and structure:

• Clear problem definitions tied to specific populations.
  Rural America is not monolithic. Access gaps vary by region, demographic profile, and service mix.
• Interventions grounded in workforce realities.
  HRSA data show widespread primary care, behavioral health, and specialty shortages across rural counties. Fixing these shortages requires structured workforce pipelines, scope-of-practice alignment, and retention strategies.
• Verification before funds are released.
  Confirm operational readiness before scaling funding disbursement.
• Defined governance and accountability.
  Clear decision rights, escalation pathways, and oversight structures should precede implementation.
• Measurement frameworks that show progress without overwhelming providers.
  Metrics should demonstrate access expansion, service continuity, and financial stability, not simply compliance.
• Rapid learning cycles.
  Small breakdowns should trigger structured course correction before becoming systemic failures.
• Integrated care delivery.
  Primary care, behavioral health, and maternal care must operate as coordinated systems; integration reduces administrative duplication and improves care coordination.

How Can CMS and States Balance Flexibility with Accountability?

States face compressed timelines. The five-year funding cycle requires rapid program standup while building sustainable infrastructure. This demands clear federal guidance on allowable uses, reporting requirements, and compliance standards from the outset. 

Structured technical assistance will also be critical. States need support in governance design, data system configuration, and provider engagement to move quickly while maintaining accountability and operational rigor..

Abt partners with federal and state leaders to design and operationalize transformation efforts of this scale. We bring experience in program design, payment reform, workforce strategy, and implementation oversight. 

We welcome the opportunity to work alongside you to maximize this opportunity for rural communities.

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