State of Maine Applies for Federal Rural Health Transformation Program Funding

State application proposes innovative investments to bolster rural health care, with broad support from leaders and insights from people across Maine

The Mills Administration announced today that the State has filed its application for the Rural Health Transformation Program (RHTP), a new Federal initiative to bolster health care in rural communities.

The RHTP was established to provide states with funding to adopt innovative solutions to improve rural health care. Maine's application for the $50 billion program, filed with the U.S. Centers for Medicare and Medicaid Services (CMS) this week, focuses 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 application follows 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.

Maine's application is 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. A detailed summary of the application is available on https://www.maine.gov/dhhs/ruralhealth.

"With this application, Maine is taking bold steps to expand access to health care through innovative technology to improve the health of Maine people and by investing in rural health care providers and workers," said Governor Janet Mills. "I thank everyone who contributed their ideas for our application, and I look forward to making the delivery of health care more efficient and effective in our rural areas."

"By the conclusion of this work, Maine's rural health system will be more resilient, integrated, and accessible," said DHHS Commissioner Sara Gagné-Holmes. "These investments will help ensure consistent, high-value care and health outcomes not only for rural Mainers, but for people across Maine."

"Maine's application for the Rural Health Transformation Program presents a balanced, thoughtful approach to transforming health care delivery in our rural state," said Steven Michaud, President of the Maine Hospital Association. "The Mills Administration has proposed collaborative and innovative projects that we look forward to pursuing in partnership with the State. Together, we can sustain and strengthen rural health care for the people of Maine."

"With this application, Maine has a once-in-a-lifetime opportunity to improve health care access, quality, and outcomes for people living in rural Maine," said Darcy Shargo, Chief Executive Officer of the Maine Primary Care Association. "Maine's Federally Qualified Health Centers constitute the beating heart of Maine's rural health ecosystem, positioning us to tackle many of the proposed initiatives. We look forward to partnering with the Mills Administration to meet Maine's rural health care challenges head on."

"Maine's RHTP application presents a unique and timely opportunity to improve health care access, quality, and outcomes for residents of rural Maine," said Patrick Woodcock, President and CEO, Maine State Chamber of Commerce. "Maine businesses are concerned about rising health care costs and the fragile economic condition of rural hospitals, which are foundational for a successful economy. These proposed investments will lead to a healthier population and healthier economy for Maine. We are particularly pleased to partner with the State to expand partnerships with employers to expand wellness programs and telehealth opportunities that will efficiently improve health outcomes in Maine's rural communities."

"Maine people and Maine's health care infrastructure will greatly benefit from the initiatives proposed in Maine's RHTP application," said Ann Woloson, Executive Director of Consumers for Affordable Health Care. "We stand ready to support the State's work to enable Mainers to access affordable care, expand and strengthen the rural health care workforce, and foster innovations and efficiencies to ensure a sustainable rural health ecosystem in Maine."

"Maine's RHTP application represents an important opportunity to improve health care access, quality, and outcomes for people living in rural Maine," said Rebecca Boulos, Executive Director, Maine Public Health Association. "We welcome the partnership with the Mills Administration to pursue this scalable and replicable framework for addressing rural health challenges."

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. The RHTP would provide one-time funding to support rural health care, though it is likely to be only a fraction of the $5 billion that Maine is estimated to lose under the law.

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 states with approved applications, using two allocations of the funding:

• The first $25 billion will be distributed equally among all states with a CMS-approved RHTP plan, which would amount to $100 million annually for Maine for five years.
• 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 to be specified.

The full extent of the State's investment under RHTP will be determined by its final award amount from CMS. As part of the application process, CMS directed states to plan for a hypothetical $200 million annual allocation. CMS has said it will announce funding decisions by Dec. 31, 2025.