The RHTP is a five‑year, $50‑billion federal investment designed to help states redesign rural health systems rather than simply stabilize them. It requires states to submit multi‑year plans focused on prevention, chronic disease management, sustainable access, workforce pipelines, innovative care models and technology modernization, ultimately advocating for long‑term viability.
Cassling recently hosted a webinar, "Rural Healthcare at a Crossroads: What's at Stake and What's Next," with Siemens Healthineers to take a deep dive on the RHTP and examine some of the transformational issues affecting rural hospitals, including the evolution of telehealth and mobile imaging solutions, and how AI is reshaping the care conversation even in rural settings.
If you missed the live session hosted by Ali Murphy, Director of State and Local Government Affairs and Policy at Siemens Healthineers, it will be available on demand soon.
The Reality Against Rural Facilities
Across the country, rural hospitals are navigating unpredictable economics and mounting pressures. More than 720 hospitals nationwide (roughly one‑third of all facilities) are at risk of closure due to severe financial problems. In some states, 25% of rural hospitals are at risk, and in ten states, 50% or more face immediate danger.
Facilities most at risk share common traits:
At the same time, rural communities are experiencing workforce shortages, demographic pressures and gaps in modality access. The strongest rural hospitals are innovating under these pressures, and both states and the Centers for Medicare & Medicaid Servies (CMS) want to capitalize on that momentum.
Government Response to Rural Health Challenges
Last year, federal and state governments shifted decisively from emergency stabilization toward state‑led, federally funded transformation.
At the federal level, the centerpiece is the Rural Health Transformation Program and major restructuring of Medicaid beginning in 2027.
In response to the RHTP, states spent the last few weeks of 2025 in intensive planning, submitting multi‑year proposals focused on prevention, chronic disease management, sustainable access, workforce pipelines, innovative care models and technology modernization.
What's Changing in Medicaid in 2027
Medicaid will undergo significant restructuring in 2027, with several changes poised to affect coverage, administrative burden and state budgets:
These changes create substantial administrative and financial pressure, prompting the need for a “sweetener” to offset impacts on providers, hence the RHTP.
The RHTP appropriates $50 billion over five fiscal years, with $10 billion available each year and roughly $200 million per state annually; every state applied.
CMS established key pillars that states must address, including:
States submitted comprehensive plans in December 2025 and were notified of awards one day before spending began.
This created an extremely compressed first‑year window.
How the Money Moves
The funding flow is multi‑layered:
Because states had a limited amount of time to develop their initial budgets, CMS may reallocate funding if a state does not demonstrate sufficient progress or use the funds as intended.
Funding Amounts Vary Widely
States requested roughly $200 million each, but awards differed significantly:
Every state is using funds differently, and every state’s timeline is different.
Industry Priorities Emerging Across States
Despite variation, several themes are consistent across RFPs and state strategies:
Modality Refresh
States are emphasizing “best and brightest equipment” like with CT, mammography, ultrasound and other diagnostic upgrades. Iowa’s RFP, “Health Hometowns,” specifically focused on CT and mammography replacement and cancer prevention under their "Combat Cancer" initiative.
Mobile Care Models
Governors are highly interested in mobile solutions because they produce immediate, measurable population impact:
Mobile programs offer clear screening numbers and patient counts which are valuable for CMS reporting.
Radiology & Health AI
States are exploring telemedicine, teleradiology and AI‑enabled workflows while simultaneously introducing bills regulating AI use. This creates a tension between innovation and regulation that will intensify in 2027.
Although workforce is the top challenge for facilities, workforce RFPs are less common in year one because the first budget window was tight, workforce initiatives require longer runways, and upskilling programs take time to build. We can expect to see these innovations come through in years two through five.
Point‑of‑Care & Maternal Health
Mobile ultrasound and point‑of‑care OB solutions are gaining traction as states prioritize maternal health access.
2027 and Beyond
The next year will be shaped by:
Elections
The next year will also be shaped by changes in federal and state leadership following the 2026 elections. Elections for Congress, governors and state legislatures could influence how rural health programs are funded, implemented and overseen.
Depending on the office and authority involved, leadership change could:
These changes will not occur uniformly across states, but organizations should monitor both federal and state developments that could affect funding opportunities and implementation timelines.
Medicaid Funding Gaps
Reductions in the Federal Medical Assistance Percentage (FMAP).
The share of Medicaid costs paid by the federal government will increase the amount states must contribute to maintain Medicaid services. Because Medicaid represents a significant portion of most state budgets, changes in federal funding can create substantial pressure across the state’s entire budget.
Provider Shortage Legislation
Expect proposals around:
Certificate of Need (CON) Reform
States signaled willingness to revisit CON requirements as part of RHTP participation. Some may attempt rollbacks or streamlined amendment processes.
Health AI Regulation
States will continue introducing bills governing:
Several organizations are tracking the RHTP developments closely:
FAQ:
Q: Will some states lose RHTP funding next year?
A: Not entirely, but reallocation is likely. CMS may shift funds away from states that fail to demonstrate progress or spend appropriately.
Q: Will the program continue after the initial five years?
A: While future funding may not match the unprecedented initial levels, continuation is likely.
Q: Who applies for RHTP funding - facilities or patients?
A: Facilities. The RHTP targets sites of service: CAHs, hospitals, outpatient clinics, FQHCs, SNFs, labs and 501(c)(3)s.
Q: What’s the most important advice for rural facilities pursuing funding?
A: Two things:
Confirm eligibility criteria because every RFP is different.
Q: Could clawbacks happen?
A: States have not yet clarified clawback provisions. Facilities should assume accountability will be strict.
Q: How can technologists influence RHTP participation?
A: Raise awareness internally. RFP windows can be as short as two weeks, and frontline staff often spot opportunities leadership may overlook.