Governor Mills Statement on Rural Health Transformation Program Award

State of Maine's strong application results in Federal award of more than $190 million for FY2026

Governor Janet Mills today welcomed anannouncement by the U.S. Centers for Medicare and Medicaid Services (CMS) that it will award Maine more than $190 million in Fiscal Year 2026 from the federal Rural Health Transformation Program (RHTP) to strengthen rural health care across the state.

In November, the Mills Administration applied for funding under the $50 billion Federal initiative focused on improving the health of Maine people through expanded access to affordable, quality health care, investing in rural health care providers and workers, and accelerating technological innovations.

The Mills Administration's strong application was supported by all four members of Maine's Congressional Delegation and leading organizations representing health care providers, public health, consumers, employers, higher education institutions, community health workers, tribal entities, emergency medical services, and health technology.

"This award through the Rural Health Transformation Program is a testament to the strength of Maine's application and the numerous partners who contributed their ideas and insights into a compelling proposal for strengthening health care in Maine's rural communities," said Governor Janet Mills. "Maine will use this funding for new investments in rural health care providers, workers, and technologies to improve the health of people across our state."

"This award will support Maine's work to expand access to care, strengthen the health care workforce, advance technology, improve the health of Maine people, and promote the long-term sustainability of rural health systems statewide," said Maine Department of Health and Human Services Commissioner Sara Gagné-Holmes. "We look forward to engaging with the U.S. Centers for Medicare and Medicaid Services to finalize Maine's budget and begin implementation in 2026."

The Mills Administration crafted Maine's strong application following a robust public engagement process prioritizing the perspectives of rural people and communities, led by the Maine Department of Health and Human Services in collaboration with the Governor's Office of Policy Innovation and the Future. A detailed summary proposed investments through the application is available on https://www.maine.gov/dhhs/ruralhealth.

About the Rural Health Transformation Program

The RHTP was created within the Federal budget reconciliation bill, H.R. 1, signed into law on July 4, 2025. The law makes significant and permanent cuts to health care funding, which are expected to increase the number of uninsured individuals and costs to provide health care over the next several years, particularly in rural areas. One-time funding provided by the RHTP is likely to be only a fraction of the $5 billion that Maine is estimated to lose under the law.

Governor Mills has repeatedly warned that H.R. 1 "will have devastating consequences for our hospitals, our rural communities, our economy, our energy costs, and our balanced state budget."

Total funding for the RHTP is $50 billion nationally, to be allocated to approved states over five fiscal years, with $10 billion available each fiscal year, beginning in fiscal year 2026 and ending in fiscal year 2030. The $50 billion will be distributed by the U.S. Centers for Medicare & Medicaid Services (CMS) to all 50 states, using two allocations of the funding:

• The first $25 billion will be distributed equally among all states.
• The second $25 billion will be distributed by CMS over the next five years to a limited number of states with approved plans based on a variety of factors, including rural population, the proportion of rural health facilities in the state, the situation of certain hospitals in the state, and other factors.

As part of the application process, CMS directed states to plan for a hypothetical $200 million annual allocation. With the award today, Maine will revise its budget to reflect the $190 million award today and engage with CMS to finalize a plan for implementation.