Results show that rural hospitals will face financial sustainability and compliance challenges if they do not address provider pay disparities and overcompensation compared to productivity
Stroudwater Associates, the nation’s leading source for operational, financial, and clinical & quality strategy for rural and community healthcare, has released the results of The State of Rural Provider Compensation in 2025 in partnership with the National Rural Health Association (NRHA) and the National Organization of State Offices of Rural Health (NOSORH).
The State of Rural Provider Compensation in 2025 report details that most rural provider compensation is not tied to incentives and, therefore, not aligned with the organizations’ goals. Rural hospitals must address the current issues of provider compensation to maintain financial sustainability and avoid compliance challenges.
“In its third year, the report reveals that provider compensation in rural hospitals remains misaligned with best practices—creating both financial and compliance risks,” said Jeff Sommer, MPP, Managing Director of Stroudwater Associates. “As rural hospitals prepare for looming Medicare and Medicaid cuts, aligning compensation strategies with sustainable benchmarks has never been more critical.”
The State of Rural Provider Compensation in 2025 is based on Stroudwater Associates’ annual Rural Provider Compensation Survey, which received 197 responses across 41 states. Conducted in February and March 2025, the survey offers insight to help rural healthcare organizations make evidence-based decisions about physician and advanced practice provider (APP) compensation.
This year’s survey respondents ranged from independent hospitals with fewer than 10 staffed beds to rural systems with over 150 staffed beds. Unlike previous years, one independent hospital respondent reported having more than 150 staffed beds.
“This survey serves as a cornerstone in our mission to secure the future of rural hospitals,” said Alan Morgan, CEO of NRHA. “Understanding the unique compensation needs of rural healthcare providers is essential—not just for their success, but for the long-term sustainability of rural healthcare systems.”
Key results from the rural provider compensation survey include:
- Rural provider compensation is not tied to incentives for many rural hospitals.
- 43.7% of respondents pay providers a straight salary with no performance or quality incentives; compared to 2024 data, which reported 54.7% for this metric, this suggests that alternative base-plus-incentive models are being adopted.
- Compensation variability in primary care is narrowing compared to 2024, driven by increases at the lower end of the salary range—particularly among family medicine physicians without OB.
- While the average family medicine physician without OB’s total compensation is less than $343,000, the survey uncovered a rural spread of $240,287 to $465,000 across family medicine providers.
- No organization surveyed indicated using the current CMS physician fee schedule for determining wRVUs, and over half the organizations surveyed did not know which CMS physician fee schedule (PFS) they were using.
- 63.6% of the organizations surveyed were using the 2023 CMS physician fee schedule.
- Anesthesiologist and CRNA shortages exacerbated compensation growth.
- Anesthesiologist and CRNA compensation growth outpaced inflation; median adjustments from 2024 for anesthesiologists and CRNAs were a 14% increase and an 11% increase, respectively.
- Nearly half of the organizations surveyed did not require patient-facing hours.
- 42.4% of organizations do not have a requirement, and 38% of organizations have requirements that do not meet the industry standards.
Stroudwater Associates plans to update and distribute this survey annually at no cost to continue providing rural hospitals with information on physician and advanced practice provider compensation, and encourages rural organizations to participate in the 2026 survey to receive the full results.
To download the report, please visit here.
For those interested in learning more about the insights from the report, register for our webinar with the NRHA on December 3rd at 2pm EST.
