AHA Urges CMS to Channel Rural Health Transformation Funds Toward Hospitals and Providers

The American Hospital Association filed formal comments with CMS on August 5, 2026, urging the agency to ensure the Rural Health Transformation Program channels a greater share of its resources to hospitals and other providers. The RHTP, created by the 2025 budget reconciliation law, makes 50 billion dollars available over five fiscal years, with 10 billion dollars allotted each year from fiscal year 2026 through 2030. States must apply and be approved to receive awards. In the program's first year, state awards averaged about 200 million dollars and ranged from roughly 147 million dollars in New Jersey to 281 million dollars in Texas, according to a December 2025 CMS announcement. Current CMS rules cap the share of RHTP funds that can go toward direct patient care at 15 percent of a state's total award, while investments in buildings and infrastructure are capped at 20 percent. The AHA argued those constraints leave too little for the emergency, obstetric, and behavioral-health services that rural residents most urgently need. The RHTP was designed in part to offset the impact on rural communities of an estimated 911 billion dollars in federal Medicaid spending reductions over ten years that are also contained in the same reconciliation law. CMS has not signaled whether it will adjust the allocation caps in response to the association's comments.