RHTP Funding Misaligned With Rural Mortality, Medicaid Losses

The current allocation of federal Rural Health Transformation Program (RHTP) funding may not align with rural health and access needs, according to a research letter recently published in JAMA.¹

RHTP Funding Alignment Remains Unclear

The RHTP is a landmark CMS initiative that will allocate $50 billion over 5 years to address health care access and quality gaps that have long impacted rural areas.² Officially launched in September 2025, the program aims to support rural health systems, address financial pressures facing rural providers, and offset reductions in federal Medicaid spending.

Specifically, this program allocates $10 billion annually from 2026 through 2030.¹ Half of the funds are distributed equally across states as baseline funding, while the remaining half is allocated as variable workload funding based on state characteristics and proposals.

The researchers noted that it is unknown whether RHTP funding allocations reflect states’ rural health needs, defined as clinical, access, and financial challenges. As a result, they carried out a study to examine associations between state-level RHTP funding and measures of rural health, access, and projected reductions in Medicaid spending.

The researchers conducted a cross-sectional analysis of RHTP funding allocations announced in December 2025 to assess whether the distribution of funds aligned with indicators of rural health need. Analyses were conducted between November 2025 and February 2026.

The investigators calculated total RHTP funding per state and per rural resident using 2020 Census tract and county-level data, along with stratified analyses of baseline and variable workload funding per state. Consistent with the program’s methodology, they defined rural residents using Census tract definitions from the Federal Office of Rural Health Policy.

The researchers evaluated associations between per-rural-resident funding and several state-level indicators aligned with RHTP goals, namely clinical need, rural health care access, and projected 10-year federal Medicaid spending reductions.

RHTP Funding Often Misaligned With Rural Health Needs Across States

Across states, total RHTP funding ranged from $147 million in New Jersey to $281 million in Texas. However, the distribution showed no clear relationship with the size of a state’s rural population.

Baseline funding per rural resident ranged from $23 in Texas, the state with the largest rural population, to $4307 in Rhode Island, the state with the smallest rural population. Variable workload funding also varied widely, from $35 per rural resident in Ohio and Michigan to $2268 in Rhode Island.

Several patterns emerged when the researchers examined correlations between funding levels and rural health indicators. For example, total RHTP funding per rural resident was negatively correlated with rural mortality (Pearson r = −0.46). States with the lowest rural mortality, like Hawaii, Massachusetts, and Colorado, received more than twice the per-rural-resident funding that states with the highest rural mortality, including Mississippi, Kentucky, and Louisiana, received.

Funding per rural resident was also negatively correlated with projected federal Medicaid spending reductions over the next decade (r = −0.15), suggesting that states expected to face larger federal funding losses did not necessarily receive greater RHTP support.

However, funding was positively correlated with changes in rural hospital bed capacity (r = 0.62), indicating that states that gained rural hospital beds received more funding per rural resident than states that experienced losses. In contrast, there was little correlation between funding levels and changes in rural physician supply (r = 0.03).

“The inverse association between rural mortality and per-rural-resident funding raises concerns that resources may not reach rural populations at greatest risk for poor health outcomes,” the authors wrote. “Without mechanisms to explicitly target clinical need, allocation strategies may potentially exacerbate existing rural health disparities—the opposite of RHTP’s goals.”

Gaps, Opportunities in RHTP Funding Evaluation

They concluded by acknowledging several limitations, including that many rural communities experienced hospital closures and workforce reductions before the study’s analysis period. The study also only examined the first year of RHTP funding. Based on these limitations, the authors noted that additional research is needed to assess future funding allocations.

“As policymakers refine future RHTP allocations, closer alignment with clinical needs and infrastructure loss may help the program and states better reach their goals,” the authors concluded.

References

1. Chatterjee P, Macneal E, Werner RM. Rural Health Transformation Program allocations and rural health needs in the US. JAMA. Published online March 5, 2026. doi:10.1001/jama.2026.1735
2. McNulty R. CMS launches $50 billion rural health initiative aiming to close gaps in care quality, access. AJMC^®. September 16, 2025. Accessed March 9, 2026. https://www.ajmc.com/view/cms-launches-50-billion-rural-health-initiative-aiming-to-close-gaps-in-care-quality-access