On July 4, 2025, President Trump signed into law the bill he has dubbed, the “One Big Beautiful Bill” or “OBBB.” This legislation passed the Senate by means of a tie-breaking vote cast by Vice President, JD Vance. But there is a high likelihood that the OBBB would have died in Congress had it not been for the efforts of John Thune of South Dakota, Susan Collins of Maine, and Lisa Murkowski of Alaska. These Republican senators argued that the OBBB’s proposed Medicaid cuts, which amount to almost $1 trillion over the next ten years, would devastate rural health care in America if left unmitigated. They successfully lobbied for passage of the Rural Health Transformation Project (“RHTP”), a $50 billion fund that is intended to sustain and strengthen America’s rural health industry.
Distribution of RHTP Funds by CMS to States
RHTP funds are distributed to states under a two-part formula. One half of the funds are allocated on an equal basis among “approved” states. Since all states were deemed “approved” for the first year of funding, this portion of the formula resulted in each state receiving $100 million. The remaining half of the funds is allocated by the Centers for Medicare and Medicaid Services (“CMS”) based on a number of factors, such as the percentage of a state’s population that lives in rural areas and such other considerations as CMS deems relevant and appropriate.
In 2026, Texas and Alaska received the largest, total RHTP awards of $281,319,361 and $272,174,856, respectively. However, Texas, which has the highest rural population of any state, fared less well on a per capita basis. Each rural resident of Texas was allocated just $66—a mere fraction of the $6,305 allocated to each rural resident of Rhode Island.
Oregon and Washington both received slightly less than the average award of $200 million per state. Oregon was awarded $197,271,578; Washington pulled in $181,257,515. But each rural resident was allocated $172 in Oregon, and $162 in Washington—a small increase from the national average of $157.
Allocation of Funds from States to Rural Hospitals and Other Entities
RHTP funds can be used only for approved purposes. Many states have decided to channel the money they received from CMS toward programs that allow rural healthcare providers to work together more effectively and efficiently, make advanced electronic health records and similar technologies available to rural providers, prevent disease and manage chronic conditions in rural communities, strengthen the rural healthcare workforce, and support tribal health. For example, Oregon, Washington, and Alaska have identified the following initiatives:
- Promoting regional partnerships and system transformation
- Advancing healthy communities and disease
- Bolstering rural workforce capacity and resilience
- Facilitating technology and data modernization
- Supporting tribal health
- Igniting innovation in rural hospitals
- Preventing disease and managing care in community settings
- Investing in the health of native families
- Adopting technology and data solutions to enable health improvements
- Developing the workforce to support rural communities
- Expanding and sustaining the rural behavioral health system
- Strengthening maternal and child health as a foundation for healthy families, especially in rural areas
- Expanding and sustaining essential health services across the state’s road-connected and off-road communities
- Investing in preventative care and the root causes of poor health
- Promoting a shift from volume-based to value-based reimbursement models, especially for rural providers
- Building a resilient rural healthcare workforce
- Catalyzing innovation and the use of advanced technology to improve rural health
Applying for RHTP Funding
An organization interested in receiving RHTP funds must explain how its proposal will support one or more of its state’s listed initiatives. Per the RHTP Notice of Funding Opportunity and CMS FAQs, any type of entity—from a rural hospital, to a community-based organization, to a physicians’ clinic—may apply for a Catalyst Award, Regional Sustainability Award, or other available RHTP grant. Organizations may apply for funding on their own, in partnership with other organizations, or with the support of vendors, which are encouraged to add their names to state-maintained lists of vendors that are poised to assist organizations with transformation projects.
Funding application deadlines and requirements vary from state to state. In fact, Oregon recently announced that it will accept proposals for Catalyst Awards from now until May 26, 2026. Interested parties are encouraged to review the RHTP materials found on their state health agency’s website (see, e.g., the websites of Alaska, Oregon, and Washington) so they complete all application prerequisites and are otherwise ready to receive funding. For example, the Oregon Health Authority has pointed out that organizations will need to register with OregonBuys, the state procurement system, before they can receive RHTP funds. Alaska requires organizations to obtain a Unique Entity Identifier and register in SAM.gov before award issuance.
Preliminary indications are that interest in RHTP grants will be high. For example, Alaska’s first period for submitting letters of interest ended on March 11, 2026. Nearly 1,800 letters were sent in. The State Department of Health will be hosting a webinar series to discuss the impacts of this funding. The department has suggested that letters of interest will be accepted again in the future in order to award additional funding.
This article summarizes aspects of the law and opinions that are solely those of the authors. This article does not constitute legal advice. For legal advice regarding your situation, you should contact an attorney.
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