Rural Health Transformation Program

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Rural Health Transformation Program - Overview

H.R. 1 Section 71401, the One Big Beautiful Bill Act (OBBBA), enacted on July 4, 2025, establishes a new federal grant program called the Rural Health Transformation Program. This program provides $10 billion per year for federal fiscal years 2026 through 2030 for a total of $50 billion. The new federal grant program is designed to mitigate some of the effects of changes to Medicaid financing for rural hospitals and providers resulting from the legislation. 

To receive these new funds, states must submit an application with a detailed rural health transformation plan on how the state will use these new federal funds to improve access to community providers and ultimately improve health outcomes in rural areas over the next five years. 

The state anticipates that the Centers for Medicare & Medicaid Services (CMS) will announce the process for states to apply sometime in September. The OBBBA requires that CMS finalize this grant program including awards for states no later than December 31, 2025.

The federal application process will be a one-time opportunity. If a state’s application is denied, the state is ineligible to receive funding for the duration of the 5-year grant program.

How Much Could Nevada Receive?

The new federal bill outlined the rules regarding the distribution of funds to states who receive federal awards. First, the funds will be divided into two pools: (1) the first pool contains 50 percent of funds and must be distributed to states with an approved application; and (2) the second pool contains the remaining 50 percent of funds that will be provided in addition to the first pool of funds to at least a quarter of states eligible under a methodology that prioritizes states with more rural areas and challenges. 

 

What must be in a state’s Rural Health Transformation Plan?

States must include strategies to:

•Improve access to hospitals, other providers, and health care items and services furnished to rural residents.

•Improve health care outcomes of rural residents of the state.

•Prioritize the use of new and emerging technologies that emphasize prevention and chronic disease management.

•Initiate, foster, and strengthen local and regional strategic partnerships between rural and other health care providers to promote quality improvement, increased financial stability, maximize economies of scale, and share best practices and care delivery.

•Enhance economic opportunity for, and the supply of, healthcare clinicians through enhanced recruitment and training.

•Prioritize data and technology solutions that help rural hospitals and providers furnish high quality services near a patient's home.

•Outline strategies to manage long-term financial solvency and operating models of rural hospitals in the state.

•Identify the specific causes driving the accelerating rate of standalone rural hospitals becoming at risk of closure, conversion, or service reduction.

What Will Nevada Use These New Federal Funds For?

Like other states, Nevada is still in the process of determining how best to use these funds. And we need the help of our stakeholders and community partners in the process! 

From August 20, 2025 to September 22, 2025, the Nevada Health Authority will be gathering public comments and feedback on how best to prioritize these funds for the state’s application. To provide feedback, please use the survey link here: Nevada OBBBA Rural Health Transformation Survey

The Nevada Health Authority does intend to prioritize concepts that will help avoid state or local fiscal cliffs at the end of the 5-year grant and result in sustainable solutions to longstanding problems affecting access to care in rural Nevada, including those related to securing a sufficient health care workforce in rural and remote areas of the state.

The state must also include in its federal grant application to CMS details on three or more of the following activities for which the state elects to use the funds if awarded: 

•Promoting evidence-based, measurable interventions to improve prevention and chronic disease management. 

•Providing payments to providers for the provision of health care items as specified by CMS. 

•Promoting consumer-facing, technology solutions for the prevention and management of chronic diseases. 

•Providing training and technical assistance for the development and adoption of technology-enabled solutions that improve care delivery in rural hospitals, including remote monitoring, robotics, artificial intelligence, and other advanced technologies.

•Recruiting and retaining clinical workforce talent to rural areas, with commitments to serve rural communities for a minimum of five years.

•Providing technical assistance, software, and hardware for significant information technology advances designed to improve efficiency, enhance cybersecurity capability development, and improve patient health outcomes.

•Assisting rural communities to right-size their healthcare delivery systems by identifying needed preventive, ambulatory, pre-hospital, emergency, acute inpatient care, outpatient care, and post-acute care service lines.

•Supporting access to opioid use disorder treatment services (as defined in SSA Section 1861(jjj)(1)), other substance use disorder treatment services, and mental health services.

•Developing projects that support innovative models of care that include value-based care arrangements and alternative payment models, as appropriate.

•Additional uses designed to promote sustainable access to high quality rural healthcare services, as determined by CMS.

How to get involved

  1. Sign up to receive updates through the Nevada Health Authority Listserv: Listserv Sign Up 
  2. Complete the survey before September 22nd .  
  3. Attend the virtual community workshop scheduled for October 2, 2025 at 2:00PM. To join the public workshop via Microsoft TEAMs Join Meeting Meeting ID: 221 750 270 530 8, Dial in by phone: +1 775-321-6111,,580838260# United States, Reno Find a local number Phone conference ID: 580 838 260#