CMS Shares Rural Health Fund Details

On Sept. 15, the Centers for Medicare & Medicaid Services (CMS) shared how states can apply for the Rural Health Transformation (RHT) program. The $50 billion fund, created by H.R. 1, intends to improve rural health outcomes.

States have until Nov. 5 to apply for funding, which will be disbursed over five years. In a new frequently asked questions document, CMS clarifies that rejected and late applicants will have no recourse or opportunities to reapply for the RHT program.

CMS outlines five strategic program goals, grounded in the statutory obligations outlined in H.R. 1:

• Supporting rural health innovations and new access points
• Improving efficiency and sustainability of rural health care providers
• Attracting and retaining health care workers to rural communities
• Developing new and growing existing innovative care models
• Fostering innovative technologies to promote efficient care delivery

CMS outlines further outlines and restrictions in the accompanying Notice of Funding Opportunity (NOFO). Specifically, states may not use RHT funds for new construction, to replace payments that could be reimbursed by insurance, and for intergovernmental transfers. States also must describe how they plan to sustain successful initiatives when RHT funding expires after fiscal year 2031.

H.R. 1 requires CMS to distribute funds via two mechanisms. Half of the $10 billion available each year shall be distributed equally among all approved states. The remaining half will be distributed based on the number of rural patients, the state's share of national rural health facilities, and the status of rural health facilities in the state.

The NOFO also describes how CMS will calculate the latter 50% share. In addition to the measures outlined in statute, CMS also will evaluate states' shares of frontier ZIP codes, the overall rurality of the state, and the number of hospitals in the state receiving Medicaid disproportionate share hospital payments. CMS describes how these measures will be evaluated in detail in the NOFO's appendix.

Contact Policy Analyst Evan Schweikert at [email protected], or 202.585.0124 with questions.