Rural Health Transformation Program

Five healthcare professionals smiling during a meeting

A Rare Opportunity to Reimagine Rural Health

The One Big Beautiful Bill Act (OBBA) established the $50 billion Rural Health Transformation (RHT) Fund, giving states a once-in-a-generation opportunity to strengthen rural healthcare.

By November 5, 2025, each state must submit a transformation plan to CMS. These plans must go beyond compliance; they must reshape rural health systems so they can thrive for the next decade.

Rural Transformation Fund Eligibility

In accordance with the authorizing statute, only the 50 U.S. states are eligible to receive an RHT Program award. The District of Columbia and U.S. Territories are not eligible.

How States Can Use Funds

States must apply RHT Program funds to at least three or more of the following approved categories:

Evidence-Based Interventions

Programs that improve prevention and chronic disease management with measurable outcomes.

Stroudwater solutions: 

  • Quality Infrastructure Evaluations: Comprehensive assessments of rural hospital quality programs to identify high-value opportunities, strengthen care coordination, align quality initiatives with value-based care, and build sustainable systems that improve outcomes and safety. 
  • Revenue Cycle Optimization: Training and program development for care management services (Chronic Care Management, Transitional Care Management, Alternative Payment Models, Remote Patient Monitoring) and goal management protocols, paired with revenue cycle assessments and KPI development to ensure these programs are implemented effectively, billed compliantly, and financially sustainable. 
  • Survey Readiness: Strategic support to help rural hospitals identify and resolve compliance vulnerabilities—strengthening QAPI, infection control, nursing services, and other high-risk areas—so organizations maintain accreditation, improve patient safety, and enter surveys with confidence. 
Provider Payments

Direct support for healthcare providers delivering care items or services, as defined by CMS.

Stroudwater solutions: 

  • Clerical & Clinical Operations: Assessments of front-end clerical functions (scheduling, registration, billing) and back-end clinical workflows to streamline operations, reduce denials, improve provider productivity, and strengthen financial performance—resulting in faster payment cycles, higher patient satisfaction, and stronger staff retention in Rural Health Clinics and hospital outpatient departments.  
  • Cost Report Reviews: In-depth assessments of Critical Access Hospital cost reports to ensure accuracy and compliance while identifying opportunities in areas such as overhead allocations, provider compensation reporting, and swing bed utilization—improving financial performance and maximizing reimbursement. 
  • Revenue Cycle Optimization: Comprehensive assessments, KPI development, and collaborative training to help rural hospitals strengthen revenue cycle performance, capture additional reimbursement, reduce denials, and ensure compliance—driving sustainable provider payments and financial stability. 
  • Strategic Financial & Operational Assessments: Comprehensive reviews of financial performance, revenue cycle processes, service line opportunities, cost report accuracy, and swing bed growth—helping Critical Access Hospitals and rural providers identify an average of $1.7M in improvements (≈8% of net patient revenue), strengthen compliance, and build sustainable provider payment models. 
Consumer-Facing Technology

Tools that support prevention and chronic disease management through accessible, tech-enabled solutions.

Stroudwater solutions: 

  • Revenue Cycle Optimization: Training on care management services—including Chronic Care Management (CCM), Transitional Care Management (TCM), Alternative Payment Models (APM), and Remote Patient Monitoring (RPM)—to help rural hospitals implement patient-facing technologies while ensuring compliant billing and sustainable reimbursement. 
Training & Technical Assistance

Support for adoption of advanced technologies—including remote monitoring, robotics, AI, and other innovations—to improve rural care delivery.

Stroudwater solutions: 

  • Cost Report Training: Hands-on training and advisory support to help rural hospital leaders and finance teams understand, prepare, and optimize Medicare cost reports—building internal capacity, ensuring compliance, and identifying opportunities to improve reimbursement and financial sustainability. 
  • Revenue Cycle Optimization: Training on care management services—including Chronic Care Management (CCM), Transitional Care Management (TCM), Alternative Payment Models (APM), and Remote Patient Monitoring (RPM)—to help rural hospitals implement patient-facing technologies while ensuring compliant billing and sustainable reimbursement. 
Workforce Recruitment & Retention

Initiatives to bring clinical professionals to rural areas with a minimum five-year service commitment.

Stroudwater solutions: 

  • Provider Compensation & Workforce Stability: Development of competitive, market-specific compensation models and talent pipeline programs that attract and retain providers in rural communities, supported by operational assessments that reduce burnout, improve efficiency, and create a more stable workforce. 
  • Medical Staff Development Planning: Comprehensive provider strategies that define specialty needs, align recruitment and retention efforts with organizational goals, and integrate compensation and succession planning into a five-year roadmap—helping rural hospitals address physician shortages, improve alignment, and build sustainable provider pipelines. 
  • Revenue Cycle Workforce Incentives: Support in designing incentive programs for revenue cycle staff to improve front-end collections of co-pays and deductibles, reducing reliance on outside agencies and strengthening in-house financial performance. 
Technology & IT Support

Investments in software, hardware, and cybersecurity enhancements to increase efficiency and improve outcomes.

System Right-Sizing

Identifying and aligning rural healthcare delivery across preventative, ambulatory, emergency, inpatient, outpatient, and post-acute services.

Stroudwater solutions: 

  • Market Assessments: Regional and system-level evaluations to ensure rural communities have the right mix of preventive, ambulatory, emergency, inpatient, outpatient, and post-acute services—identifying risks of access loss when hospitals close, quantifying populations impacted, and supporting the development of rural health delivery networks that keep care local and sustainable. 
  • Strategic Financial & Operational Assessments: Comprehensive reviews of financial performance, revenue cycle processes, service line opportunities, cost report accuracy, and swing bed growth—helping Critical Access Hospitals and rural providers identify an average of $1.7M in improvements (≈8% of net patient revenue), strengthen compliance, and build sustainable provider payment models. 
  • Strategic Master Facility Planning: Data-driven planning to help rural and community hospitals right-size delivery systems and make better decisions about phased capital investments. While RHT Grants preclude major capital expenditures, they can support planning efforts—creating an opportunity to align facility needs with community demand, financial constraints, and long-term sustainability. 
Behavioral Health & Substance Use Disorder Services

Expanding access to opioid use disorder treatment, other SUD care, and mental health services.

Stroudwater solutions: 

  • Behavioral Health in the ED: A 10-week, evidence-based improvement sprint that equips rural hospitals with tools, training, and expert guidance to strengthen ED workflows, embed trauma-informed care, improve outcomes, and enhance safety for patients and staff. 
  • Opioid Management: Evidence-based training and support for primary care clinics to improve chronic pain management, reduce reliance on long-term opioid therapy, standardize prescribing practices, and enhance patient safety. 
Innovative Care Models

Development of value-based care arrangements and alternative payment models tailored for rural settings.

Stroudwater solutions: 

  • ACO & Value-Based Care Modeling: Advisory support to evaluate and implement ACO participation, alternative payment models, and value-based care arrangements that drive better outcomes at lower cost. 
  • Behavioral Health in the ED: A 10-week, evidence-based improvement sprint that equips rural hospitals with tools, training, and expert guidance to strengthen ED workflows, embed trauma-informed care, improve outcomes, and enhance safety for patients and staff. 
  • Quality Infrastructure Evaluations: Comprehensive assessments of rural hospital quality programs to identify high-value opportunities, strengthen care coordination, align quality initiatives with value-based care, and build sustainable systems that improve outcomes and safety. 
  • Strategic Financial & Operational Assessments: Comprehensive reviews of financial performance, revenue cycle processes, service line opportunities, cost report accuracy, and swing bed growth—helping Critical Access Hospitals and rural providers identify an average of $1.7M in improvements (≈8% of net patient revenue), strengthen compliance, and build sustainable provider payment models. 
  • Swing Bed Optimization & Quality Reporting: Evidence-based programs that help rural hospitals strengthen swing bed operations, ensure regulatory compliance, benchmark outcomes, and expand post-acute care capacity—improving patient outcomes, keeping care local, and enhancing financial sustainability. 
Other Administrator-Approved Uses

Additional strategies that ensure sustainable, high-quality rural care.

Stroudwater solutions: 

  • Strategic Designation Support: Guidance on facility designation strategies to position for future growth, including financial analysis, training on Conditions of Participation, and evaluation of the pros and cons of various options to ensure long-term sustainability. 
  • Strategic Financial & Operational Assessments: Comprehensive reviews of financial performance, revenue cycle processes, service line opportunities, cost report accuracy, and swing bed growth—helping Critical Access Hospitals and rural providers identify an average of $1.7M in improvements (≈8% of net patient revenue), strengthen compliance, and build sustainable provider payment models. 
  • Strategic Partnerships: Advisory support to help rural hospitals quantify their full value in partnership arrangements—optimizing areas such as cost-based payment, cost report opportunities, 340B eligibility, swing bed programs, and referrals—so partnership terms reflect the true contribution of rural providers and drive long-term sustainability. 
  • Strategic Planning: Guidance for RHCs and hospital outpatient departments on service line expansion (e.g., behavioral health, telehealth), operational optimization, and regulatory compliance—building resilient, community-centered practices that meet evolving healthcare needs and ensure long-term viability. 
  • Survey Readiness: Strategic support to help rural hospitals identify and resolve compliance vulnerabilities—strengthening QAPI, infection control, nursing services, and other high-risk areas—so organ

Application Timeline

Key Dates

September 15, 2025

Application instructions released on grants.gov.

Late September 2025

Introductory webinars hosted by CMS.

October 2025

States form applications; CMS available for Q&A.

November 5, 2025

Application submissions due.

By December 31, 2025

Awardee decisions announced.

2026 Onward

Monitoring and CMS support begins.

How Stroudwater Helps States Succeed

With 40 years of experience advising rural hospitals, clinics, and health systems, Stroudwater helps states design transformation programs that are both visionary and grounded in proven results.

We partner with state leaders to:

Our Expertise Spans:

Financial Sustainability

New revenue streams, reimbursement optimization, LEAN and throughput improvement

Clinical Transformation

Reducing unnecessary transfer leakage, strengthening ED workflows, expanding post-acute options

Provider Solutions

Sustainable, compliant compensation models that retain workforce talent

Strategic Partnerships

Stronger alignment between rural hospitals and referral centers

Technology Integration

Dashboards, pricing strategies, KPIs, market share insights, and chronic disease analytics

Tools for Your State Office

Rural Health Insights for Each State & Congressional District

Understand the Landscape of Rural Health in the United States for Every State and Congressional District

The Rural Transformation Fund Team

MBA, CRHCP

Principal

Revenue Cycle Management

MPP

Managing Director

Partnerships & Affiliations

Partner with Stroudwater

At Stroudwater, we believe rural healthcare has the power to transform communities. If you need help accessing the right data or applying insights to your state’s application, we’re here to support you.

Connect with Stroudwater to build a plan that is compliant, compelling, and transformational.

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