FAQ: CMS Rural Health Transformation Program

CMS is instructing States to develop a budget narrative as a part of their application for illustrative purposes, budgeting $200 million per year over five years across the States' proposed initiatives.

• States' budgets should reflect "best estimates" of the cost to operate each proposed initiative, and States will have the opportunity to revise them in their annual reports to CMS. Actual award amounts may be larger or smaller than $200 million per year based on CMS's review of applications.
• The sheer number of projects does not cap tech innovation projects under the Rural Health Transformation Program (RHTP). Still, there are specific financial caps and limitations on certain types of technology-related expenditures and on overall funding distribution.
  • Ex. CMS places a 5% cap on replacing HITECH-certified electronic health records (EHRs), so States are likely to focus on enhancements or add-ons (including AI-enabled tools) rather than wholesale system overhauls. Comprehensive AI integration may require newer platforms.
  • CMS allows upgrades, enhancements, and the addition of modules, interfaces, or functionality to existing EMR/EHR systems as allowable uses of funds and are not subject to the 5% limitation. Furthermore, providers may substitute G10-certified modules to meet their needs, and this substitution is not subject to the 5% limitation. These upgrades, enhancements, and additions of modules, interfaces, or functionality to existing EMR systems should be aligned with CMS's Health Technology Ecosystem criteria (including the CMS Interoperability Framework) and ASTP/ONC criteria, as applicable to the contemplated use of funds.
    • G10 is a critical compliance requirement under the 21st Century Cures Act Final Rule, issued by the Office of the National Coordinator for Health IT (ONC). It mandates that certified health IT systems expose FHIR R4-based APIs using SMART on FHIR protocols, enabling secure, standards-based access to patient and population health data.

Yes! Rural Health Transformation Program (RHTP) funds can be used to develop a health information exchange. The RHTP encourages technological innovation and includes provisions for activities that support and strengthen health information exchange capabilities in rural areas. According to CMS, Specific eligible uses that support health information exchange include:

• Investing in technology, telehealth, and cybersecurity: Funds can be used for software, hardware, and technical assistance for "significant information technology advances" designed to improve efficiency, enhance data security, and improve patient health outcomes.
• Improving data sharing: One of the program's goals under "Tech innovation" is to foster innovative technologies that "support access to remote care, improve data sharing, strengthen cybersecurity, and invest in emerging technologies."
• Strengthening connectivity and interoperability: The program is a chance to "strengthen connectivity”, improve interoperability, and ensure that rural patients are not left behind in the digital health era. Better data exchange means safer care, stronger outcomes, and more equitable access."
• Developing standards-based platforms: Funds can be used for the development of platforms that integrate and store patient health data from various sources (e.g., remote monitoring devices and existing health records), enabling seamless exchange.

Yes, Rural Health Transformation Program (RHTP) funds can be used for an EHR system, but there are some limitations. 

The funds are intended for "significant information technology advances" and "EHR upgrades," but not for replacing a system that is already fully functional and HITECH-certified. Further, CMS has outlined some restrictions related to EHR/EMR systems:

• Replacement of Existing HITECH-certified Systems: No more than 5% of the total RHTP funding awarded to a state in each budget period may support the replacement of an existing HITECH-certified EMR system that was in place as of September 1, 2025.
• Clinical Services Reimbursement: Funds cannot be used to replace payments for clinical services already reimbursable by Medicaid, Medicare, or other federal programs.

Connected diagnostic (Dx) technologies are increasingly integrated into programs like the CMS RHTP (Remote Health Testing Program) to enhance remote care delivery.

• An example use case for the RHTP may include home-based diabetes or hypertension monitoring devices that transmit data automatically.
• CMS has shown increasing support for telehealth and remote diagnostics, including reimbursement policies for remote monitoring, which encourages broader adoption.
• HIMSS will follow the RHTP program to identify states where Dx is incorporated in the state plans. However, the trend is toward significant growth in reliance on connected Dx tools, especially for visual imaging and digital reporting.

The Rural Tech Catalyst Fund Initiative is a component of the Rural Health Transformation Program (RHTP) that specifically directs funds towards technology and digital health projects to improve rural healthcare access, efficiency, and quality, and to encourage the development and adoption of consumer-facing, technology-driven solutions for prevention and chronic disease management in rural populations.

• Focus: Primarily on advancing technology, innovation, or broadband connectivity in rural areas.
• Goals: To support rural communities in adopting new technologies, improving digital infrastructure, and fostering innovative ecosystems.
• Activities: Funding for technology startups, infrastructure projects, digital skills training, and other initiatives aimed at bridging the digital divide in rural regions. CMS also encourages technology-driven solutions (including those that support evidence-based, measurable interventions) for prevention and management of chronic diseases where traditional government funding sources and private commercial incentives have proven inadequate or insufficient to drive development and innovation.
• Funding for the "catalyst fund" is capped at the lesser of 10% of a state's total RHTP award (up to $200 million/yr can be budgeted) or $20 million per budget period.
• States should consider addressing how data will flow across health systems, pharmacies, and state agencies (interoperability, consent, eligibility engines), and any digital health infrastructure needs could be resolved, thus ensuring that every rural resident can access tech-enabled care through the use of the "catalyst fund."

According to CMS, States may also sub-award or contract RHTP funds to eligible partners, such as universities, local health departments, and provider associations, to carry out approved activities. Therefore, public health and community health (CHWs) workforce needs can be addressed through the RHTP, and it is encouraged to improve rural health outcomes.

• Specifically, consider how public health, community health, Medicaid, and behavioral health workers can support the initiative's primary aims and extend providers' reach.
• Professional Development: Providing funds for ongoing professional development, training, and certification for the existing workforce, including support for supervisors of CHWs and other extenders that may include public health specialists.
• Further, the RHTP funding allows for investment in health information technology (IT) and technical assistance, which can alleviate workforce burdens and improve efficiency:
  • Telehealth and Remote Monitoring: Implementing telehealth platforms and remote patient monitoring systems, enabling providers to expand access to care and reduce unnecessary hospital admissions.
  • Efficiency-Enhancing Technology: Providing software and hardware for IT advances that improve workflow efficiency and reduce provider burnout. AI and other enterprise solutions can help coordinate care and reduce administrative burden.

CMS requires the Governor's office to submit the state's RHTP application, along with a letter of endorsement and a commitment to aligning health and economic policies to ensure the program's success.

• Note, States must submit descriptions of current state policy — and CMS may reward States that shape future legislative or regulatory action—across a disparate list of policy domains, including state telehealth laws, scope-of-practice regulations, etc.
• Further, the National Conference of State Legislators (NCSL) identified several examples in which state legislators have either introduced (North Carolina and Pennsylvania) or enacted (California, Michigan, and Utah) legislation addressing the Rural Health Transformation Program. Most of these bills establish a dedicated fund for the RHTP once it is awarded and distributed, or they provide the necessary approvals for state agencies to receive large federal awards.