RURAL HEALTH TRANSFORMATION PROGRAM
The OBBBA establishes a Rural Health Transformation Program (RHTP). The RHTP will provide a total of $50 billion in grants to states from 2026 to 2030 to “strengthen rural communities across America by improving healthcare access, quality, and outcomes by transforming the healthcare delivery ecosystem.”
The OBBBA stipulates that half of the RHTP funds will be distributed equally across states with approved applications (e.g., $25 billion divided by 50 states equals $500 million per state between 2026 and 2030). The other half will be distributed across states based on rurality and quality of applications, as determined by the Centers for Medicare and Medicaid Services (CMS) Administrator.
In late Summer 2025, the Minnesota Department of Health (MDH) initiated an extensive stakeholder engagement to prepare a strong RHTP application.
On November 6, 2025, MDH submitted Minnesota’s 62-page RHTP application. The application asked for $1 billion total (i.e., $200 million per year for five years) with five overarching goals (p. 7), five general initiatives to achieve the goals (p. 16), and numerous specific activities to achieve each initiative (pp. 16-41).
One initiative in the application of particular relevance to the MMA is “Recruit and Retain Talent in Rural Communities.” Activities proposed to achieve this initiative include:
- Introduce more high school students to healthcare careers,
- Develop allied health pathways through “Earn and Train” programs,
- Expand rural clinical rotations,
- Develop rural clinical training opportunities by supporting medical student rotations in rural health systems,
- Develop a Technical Assistance Center (TAC) for Excellence in Rural Clinical Training,
- Pilot a Healthy Workplace strategy to reduce burnout and increase work satisfaction among rural health professionals.
The application also staggers activities across funding years. Year 1 focuses on efficient dissemination of funding to hospitals, federally qualified health centers (FQHCs), certified community behavioral, health clinics (CCBHCs), community mental health centers (CMHCs), and Tribal Nations, with some competitive grant funding available, and some expansion of existing MDH workforce initiatives. In Year 2, there will be a greater share of competitive grant funding toward strategic initiatives and continued support for providers, Tribes, and existing workforce initiatives.
On December 29, 2025, CMS awarded Minnesota $193 million in RHTP funds for fiscal year 2026 – just $7 million short of what was requested.
On January 28, 2026, MDH submitted a budget revision to CMS to reconcile its application with the actual award amount. MDH expects CMS to approve some portions of budget (i.e., for more immediately scheduled programs) by April 2026 and require MDH to resubmit additional information on other portions.
On March 18, 2026, MDH released its first round of subgrant opportunities, for which rural hospitals, rural FQHCs, Rural Tribal Nations, and rural mental health centers may apply. Applications are due May 15, 2026.
The MMA will continue to update its members on the status of Minnesota’ RHTP activities. For more information, see this MDH webpage or contact MMA staff.
The MMA will continue to update its members on the status of Minnesota’ RHTP activities. For more information, see this MDH webpage or contact MMA staff.