The Centers for Medicare & Medicaid Services (CMS) has created a new dedicated entity the Office of Rural Health Transformation (ORHT) to lead one of the largest federal investments ever in rural American healthcare. Effective December 18, 2025, and announced via a Statement of Organization, Functions, and Delegations of Authority in the Federal Register on December 19, the ORHT will serve as CMS’s primary liaison and driver of rural health policy nationwide.

At the heart of the ORHT’s mission is overseeing the $50 billion Rural Health Transformation Program (RHTP), a landmark, state-empowered initiative authorized under the One Big Beautiful Bill Act (Public Law 119-21). This decade-long program, with $10 billion allocated annually starting in federal fiscal year 2026, addresses longstanding rural healthcare disparities by enabling states to design and implement sustainable solutions for improved access, quality, outcomes, and infrastructure.

All 50 states submitted applications by the November 5, 2025, deadline, reflecting unprecedented national commitment. CMS will announce approved awardees by December 31, 2025, with half the funding distributed equally as baseline support and the remainder awarded based on application merit, rural impact factors, and alignment with program goals such as:

Expanding access to hospitals, providers, and services

Improving health outcomes for rural residents

Promoting innovative, sustainable care models

The ORHT’s Division of State Rural Engagement will act as the central coordinator, providing policy guidance, training, readiness assessments, monitoring, and quality/performance management. It will collaborate with states, providers, advocacy groups, and other CMS offices (including the Center for Program Integrity and Office of Acquisition and Grants Management) to ensure proper fund use, minimize waste/fraud/abuse risks, and leverage existing Medicaid/CHIP data systems for oversight and improvement.

This move comes amid ongoing rural health challenges, including provider shortages, long travel distances, limited technology access, and higher rates of chronic conditions. The RHTP encourages collaboration between rural facilities and regional systems for resource/technology sharing, workforce expansion (e.g., community health workers, pharmacists), and innovative care delivery.

Program officers from the ORHT will offer ongoing technical assistance to help states launch and sustain community-tailored initiatives, marking a shift toward dignity, prevention, and long-term sustainability in rural healthcare.