Rural Health Transformation Program
NCDHHS will apply to receive funding from the federal Rural Health Transformation Program (RHTP). RHTP is part of H.R. 1, a federal reconciliation bill signed into law in July that includes significant cuts to Medicaid. RHTP is designed to address the gaps in rural health care that will increase due to those cuts. Funding for RHTP is temporary; the program provides $50 billion to be distributed in 10 payments to states over the next five years. It is not recurring funding.
To opt into the program, NCDHHS will submit its plan for the funding to CMS. The plan will outline how the State will:
- Improve access to rural hospitals and other health care providers;
- Improve health care outcomes for rural residents;
- Foster partnerships between rural providers; and
- Strengthen the rural health care workforce.
Provider Feedback
Providers are encouraged to give feedback on what should be considered for North Carolina’s application. NCDHHS will hold several opportunities for partner input in the fall. NCDHHS will submit its application to the Centers for Medicare and Medicaid Services, and approval is expected by Dec. 31, 2025.
Once the application is approved, a public notice will be issued to let providers and hospitals know when they are able to apply for a portion of the funding. NCDHHS will provide more information about the funding application process in early 2026.
More on RHTP
Cuts to the Medicaid program due to H.R. 1 will result in approximately $1 trillion in losses nationwide in the next 10 years, including $49.9 billion in North Carolina alone, disproportionately impacting rural health care.
The first $25 billion from RHTP will be split evenly between all 50 states and will equal about $100 million each year for the next five years for North Carolina. The second $25 billion will be split at CMS discretion among all 50 states over the next five years.