Transforming Rural Healthcare: What GME Leaders Need to Know About the RHT Program

In an effort to improve healthcare access and equity, the Centers for Medicare and Medicaid Services (CMS) has launched the Rural Health Transformation (RHT) Program, authorized under Public Law 119-21, Section 71401 (also known as the One Big Beautiful Act). With $50 billion in funding allocated over five years (2026–2030), the RHT Program marks a historic investment in strengthening rural healthcare delivery and infrastructure.

Program Overview

Each fiscal year, $10 billion will be distributed to participating states. Half of the funds will be divided equally among all approved states, while the remaining half will be awarded based on factors such as rural population density, state policy alignment, and application quality. Every state submitted its initial application in November 2025, covering the full five-year program. Annual performance reviews will determine continued eligibility and guide future allocations.

In December 2025, CMS announced that all 50 states were approved to participate. First-year awards ranged from approximately $147 million to $281 million per state, with an average award of around $200 million. One-page abstracts summarizing each state’s application and strategy are available here.

A Strategic Opportunity for GME Programs

While the RHT Program does not create new Medicare-funded GME cap positions or payments, it presents a significant opportunity for states and institutions to support Graduate Medical Education through strategic workforce development initiatives.

CMS explicitly highlights the importance of training, recruitment, and retention in rural areas, making this funding stream a valuable resource for expanding and sustaining rural GME capacity. Funds may be used to support:

• New or expanded rural training sites

• Infrastructure investments for teaching health centers and community-based GME

• Incentives for rural residency recruitment and retention

• Non-Medicare GME cost offsets

Looking Ahead

States will submit periodic performance and financial reports, with the ability to use funds through the end of the second fiscal year after each annual award. Beginning in 2028, unspent funds may be redistributed based on CMS-determined criteria.

At Germane Solutions, we see the RHT Program as a promising pathway to workforce expansion and a chance to invest in long-term solutions to rural physician shortages. If your institution is exploring how to leverage this funding to support your mission, our team is here to help you develop a strategic and sustainable approach.