What This Paper Covers

Congress authorized and fully funded the Rural Health Transformation Program (RHTP), providing $50 billion over five years to transform the financing and delivery of health care in rural America. This paper reviews why many rural providers struggle, highlights key elements of CMS’s guidance, and outlines how states can best use these funds to address stand-by costs and promote sustainable, market-oriented reforms that expand access and improve care.

What This Paper Covers

The RHTP presents a historic opportunity for states to design and implement reforms that could be truly transformational for rural providers and patients—if done properly. CMS has outlined a creative set of options for how states can utilize the funds, including policies that reward states for removing barriers to care, expanding workforce utilization, and adopting sustainable payment reforms.

Yet success will depend on avoiding the mistakes of past programs, such as 340B and DSH, where funds were diverted to large hospital systems with little accountability. RHTP investments should be carefully targeted to rural communities, focused on sustaining essential services, and designed to reflect modern delivery models. Above all, reforms should account for the uncompensated “stand-by” costs rural hospitals face in keeping emergency and obstetric services available despite low patient volumes.

What We Recommend

• Target funds to rural providers: States should ensure that RHTP dollars go to rural communities, not urban systems that already benefit from federal subsidies.
• Ensure sustainability: Funds should support reforms that are financially viable beyond the five-year program window. They should not be ongoing subsidies.
• Address stand-by costs: States and CMS should develop innovative payment systems that recognize the fixed costs of maintaining essential 24/7 services and ensure that all payers contribute fairly.
• Improve access and maximize funding: States should fully utilize the range of licensed health professionals by allowing them to practice at the top of their licenses and repeal anti-competitive regulations, such as certificate of need (CON) laws, that restrict new facilities and services. These reforms would not only expand access and strengthen rural markets but also directly increase the amount of RHTP funding states receive through CMS’s scoring system.
• Leverage technology: States should expand telehealth and other cost-effective technologies, coordinated with existing federal broadband initiatives, to connect patients with needed specialty care.
• Invest in the pipeline: States should use funds to incentivize health professional students to complete rural clinical rotations, increasing the likelihood they will practice in rural areas after graduation.

Why It Matters

The RHTP represents the single largest investment in rural health care in U.S. history. If states use these resources wisely, they can create durable reforms that expand access, increase competition, and improve outcomes in rural communities. But if funds are poorly targeted or used to prop up inefficient institutions, rural providers will continue to struggle once federal dollars run out. By focusing on stand-by costs, access reforms, and sustainable financing, states can ensure that this initiative delivers lasting improvements in the health and well-being of rural Americans.

In creating the Rural Health Transformation Program (RHTP) in the One Big Beautiful Bill, Congress directed $50 billion over five years to improve the delivery of health care in rural areas. Legislators were particularly interested in addressing the reasons why small, stand-alone rural hospitals and independent physician offices have been at risk of closure, conversion, or service reductions. It is vital that the RHTP funds are targeted to the health care needs of rural Americans and are not siphoned off by large hospital systems that already benefit immensely from existing government programs and subsidies.

Ensuring the availability of health care in rural areas has been an ongoing challenge. To address this challenge, states should understand why maintaining and sustaining health care in rural communities has been difficult. While each rural community is unique—once you’ve seen one rural community, you’ve seen one rural community—the challenge of sustaining health care access is nationwide.

At the same time, rural health is a nationwide challenge. Since 2005, nearly 200 rural hospitals across the country have closed—despite the continued expansion of the Medicaid program. Many more rural hospitals remain financially vulnerable as they seek to deliver high-quality health care in areas that lack adequate population bases and serve patients with lower incomes.¹ There is some evidence that Medicaid expansion, instead of helping all hospitals, has actually been detrimental.² One explanation is that rural areas are less likely to be able to supplement their payer mix, and as a result, they do not receive the benefit of higher commercial rates nearly as much as their urban counterparts do.

Although there are certain shared challenges facing almost all rural communities, rural health care delivery is not monolithic. Issues in rural Oregon will be different than those in rural Idaho or rural Kentucky. And some states, such as New Jersey, have few if any areas classified as rural by the federal government.³

RHTP presents a historic opportunity for states to design and implement reforms that can truly be transformational for rural providers and patients—if done properly. RHTP investments should be carefully targeted to avoid propping up inefficient hospitals while sustaining those that provide essential services.

As Secretary of Health and Human Services Robert Kennedy noted when rolling out the implementation plan, “This $50 billion program is about delivering dignity and dependable care to rural communities, making sure every American has access to affordable, high-quality treatment.”⁴ This noble goal should be at the heart of all funding decisions.

The Centers for Medicare and Medicaid Services (CMS) and states should approach the RHTP with the view that the funds available are temporary. The plans and changes adopted by the states should be sustainable beyond the five-year window, and states should examine the policies and legislation in place that may affect or stifle long-term transformation.

The primary goal of the RHTP should be to ensure that individuals who live and work in rural areas have timely access to the care they need. Several studies have found that even in the presence of full-scale health delivery services, residents in rural areas still choose to travel to alternative sites of care in urban areas at large health systems.⁵ It is also the case that many types of services are not provided in rural facilities, in part because most specialists work in urban or suburban areas, and many patients bypass rural facilities to go to larger facilities in urban areas. Funds and opportunities within the RHTP should consider this reality and focus on right-sizing rural care for maximum impact. This means that the fund should reflect 21st century health care workforce and delivery models while remedying long-standing issues associated with rural health delivery.⁶

Rural hospitals should focus on delivering the services patients need access to on a timely basis: emergency care, general surgery, pregnancy and obstetrical care, diagnostic imaging, substance abuse services, and mental health. Many specialized services are not well-suited to small, rural hospitals.

In applying for these funds, governors should work with their state offices of rural health and rural communities to determine what services are needed in different areas and which providers are best equipped to cost-effectively deliver those services. For many specialized services, the goal should not necessarily be to replicate full-service lines in rural hospitals but to ensure that patients have reliable avenues to access those services through referral networks, telehealth, or regional partnerships. In this way, RHTP funding can both sustain local primary care and emergency capacity while connecting patients to higher-level or specialty care when needed.

It is critical that the RHTP funds be spent in rural areas. This is not only important for ensuring that the money goes to those for whom it is intended; it also increases the likelihood that the solutions will be appropriate for the communities that Congress intended to support.

The amount of funding authorized and approved—$50 billion over five years—is the single largest investment in rural health care in American history. Congress identified multiple options for how states can target the RHTP funds. Some will have a greater impact on stabilizing and improving care access and quality in rural communities. If done right, the RHTP initiative can deliver the type of innovative, long-term, sustainable change in the way health care is financed and delivered in rural areas. The end result should be affordable, accessible, quality health care for individuals living and working in rural America. Of vital importance, the “H” in RHTP does not stand for hospital but health. It is imperative that reforms go beyond the walls of these institutions.

It is also important that in implementing this initiative, the failures of past government efforts—such as the 340B and disproportionate share hospital (DSH) programs—are not repeated. Programs such as 340B and DSH were intended to support safety-net providers but instead became riddled with weak oversight, misaligned incentives, and resource diversion. Instead of strengthening rural health care delivery, funds were frequently absorbed by large hospital systems with little accountability, leaving many rural providers and patients no better off. Future policy should ensure that support is targeted, transparent, and measurable—actually reaching the rural communities it is designed to serve.

The United States spent $1.5 trillion in 2023 on hospital services, and hospitals account for around a third of national health spending.⁷ Some hospitals are extremely profitable (regardless of their tax status), while others—particularly small and rural hospitals—face more challenging economics. There are just over 1,400 small rural hospitals in the United States and more than 5,000 federally certified Rural Health Clinics (RHCs).⁸ As the Figure 1 from the Center for Healthcare Quality and Payment Reform (CHQPR) shows, small rural hospitals—defined as those with less than the median amount of annual expenditures for rural hospitals ($45 million in 2024)—represent approximately one-fourth of the nation’s total acute care hospitals but comprise only about 2 percent of hospital spending.

Developing and maintaining health care delivery in rural America has been an ongoing challenge. Beginning with the enactment of the Hill-Burton Act in the 1940s, which provided grants and loans to build hospitals and other health care facilities in rural communities, through the 1970s with programs to increase the availability of primary care providers—such as the National Health Service Corps and the Rural Health Clinic Services Act—to major changes in the 1980s in how inpatient and outpatient services are paid for, many ideas have been tried to improve rural health delivery, but little seems to change. The discrepancy between the financial challenges of rural hospitals and their large urban counterparts has never been clearer.

The following chart reflects the problem facing many rural hospitals—low or no margins.

Rural hospitals and providers often operate on razor-thin margins and face unique financial pressures. Services such as emergency care, obstetrics, and mental health in rural areas may generate positive reimbursement on a per-service basis, but the revenues rarely cover the fixed costs of staffing and 24/7 readiness. Low patient volumes make it difficult to spread these high fixed costs.

For rural hospitals and RHCs, Medicare is the largest payer. The same is not true for Federally Qualified Health Centers (FQHCs), where Medicaid is the largest payer. However, FQHCs see far fewer Medicare patients relative to rural hospitals and RHCs.

Table 1 displays the payer mix characteristics for rural hospitals, RHCs, and rural FQHCs.

RHCs and rural hospitals are heavily dependent on government payers for their financial survival, as 64 percent of RHC patient visits are either Medicare or Medicaid, and 72 percent of rural hospital revenues come from Medicare or Medicaid. Rural FQHCs, while less dependent on Medicare and Medicaid payments than either RHCs or rural hospitals, provide care to a higher percentage of uninsured patients (17 percent versus 6 percent and 9 percent, respectively). However, FQHCs are the only rural providers that receive federal grant money to provide care to the uninsured, totaling more than $4.4 billion in 2024.⁹

The largest difference in the payer mix of rural hospitals and rural health clinics compared to rural FQHCs is that rural hospitals and RHCs have much greater reliance on Medicare as a payer source, but the Medicaid percentages for RHCs and FQHCs are similar (30 percent and 32 percent, respectively).

Failure to adopt permanent changes in how health care is financed and delivered in rural areas will mean that in five years, rural hospitals, independent rural clinicians, and RHCs will still be struggling financially.

The Problem of Stand-By Costs

The fundamental challenge is uncompensated “stand-by” time—that is, hospitals with an emergency department making their services available 24/7 even though demand is sporadic and unpredictable.¹⁰ Currently, third-party payers (Medicare, Medicaid, and commercial) pay for services on a transactional basis: When a hospital or clinic provides a service, a predetermined amount for that service is paid based on various factors. Even under capitated payment, rates are based on average utilization and do not reflect the added cost of simply keeping services available in rural areas.

The payment systems do not account for the stand-by time, which is required by a combination of state laws and Medicare conditions of participation. This payment approach means that the cost of keeping essential services available—especially in low-volume rural areas—is rarely recognized or built into standard reimbursement rates. Rural provider margins are often too small to make up for the difference, putting the hospital in serious financial jeopardy.

Avoiding Past Policy Mistakes

The creation of the RHTP and the resources it makes available give policymakers an opportunity to learn from programs such as 340B and DSH to avoid problems that have resulted in mistargeted funds.

The 340B Drug Pricing Program was created to provide safety-net providers access to discounted outpatient drugs. However, 340B has evolved from a modestly sized program at inception to the second-largest drug-purchasing program in the United States, with drug purchases totaling $66.3 billion in 2023. Despite the intent of this program, many urban hospitals have been successful at getting designated as “rural” for purposes of qualifying for the 340B program. As a result, wealthy urban hospitals are increasingly subsidized through the 340B program. They benefit from the discounts of the government’s negotiation and purchases, but they seldom pass discounts to patients. The result is higher prices for consumers and fewer resources for rural providers. A 2024 study in the JAMA Health Forum articulates the problem:

340B hospitals are expanding in wealthier neighborhoods by acquiring clinics (child sites), which gain the [necessary 340B] designation of the parent hospital. In these areas, 340B institutions can generate greater returns by delivering drugs to a largely insured population. A similar trend is evident with respect to the contract pharmacies, as retail pharmacies participating in the 340B program favor high-income neighborhoods and avoid disadvantaged neighborhoods.¹¹

The DSH designation program has experienced similar problems, further showing how government programs designed for safety net hospitals are used to profit wealthy systems. The Medicaid and CHIP Payment and Access Commission (MACPAC) in March 2024 lamented the distortion caused by DSH:

MACPAC continues to find no meaningful relationship between DSH allotments to states and the following three factors that Congress has asked the Commission to study: (1) the number of uninsured individuals; (2) the amount and sources of hospitals’ uncompensated care costs; and (3) the number of hospitals with high levels of uncompensated care that also provide essential community services for low-income, uninsured, and vulnerable populations.¹²

In June 2022, MACPAC went even further to say, “Public teaching hospitals in urban settings received more than half of total DSH funding.”¹³ Although changes to programs such as 340B or DSH would ultimately fall to Congress, a review by states could inform Congress on how or if these programs are truly helping the populations for whom they are intended.

Past government-driven attempts at shoring up resources for rural hospitals have been taken over by large, urban hospital systems due to inadequate definitions and a lack of oversight. In rolling out the RHTP initiative, policymakers should avoid repeating these mistakes.

Many non-rural providers assert that they “serve” rural populations and therefore should be considered “rural” providers for purposes of eligibility for rural-designated funds.¹⁴ Perhaps the most egregious example of this is the 2016 federal-court-mandated designation by CMS of hundreds of “urban” hospitals simultaneously as rural for purposes of accessing rural-designated funds. As a result of this court mandate, 425 urban hospitals—including academic medical centers—are simultaneously designated as both “urban” and “rural” hospitals.¹⁵

Some examples of urban hospitals receiving dual classification as rural:

• New York-Presbyterian Hospital: a large, urban teaching hospital in New York City
• Cleveland Clinic Hospital: a major urban teaching hospital, located in Cleveland
• Cedars-Sinai Medical Center: a large, urban academic medical center in Los Angeles
• AdventHealth Orlando: a large urban hospital in Orlando

These facilities are not rural hospitals by any reasonable definition and should not—along with the other hospitals simultaneously designated as both “urban” and “rural”  hospitals—be primary recipients of RHTP funds.

Congress provided little guidance on how CMS should distribute the RHTP funds, permitting CMS flexibility in how it designed the program. Half of the funds—$25 billion—will be distributed equally among all 50 states over the five-year period ($5 billion per year). This will result in each state getting $100 million per year, or $500 million over the five years this money is to be distributed.

On September 15, CMS released guidance for how it will evaluate state applications to distribute the other $25 billion, which will be distributed based on the “content and quality” of the application as well as rural “factors.” Half of this portion depends on demographics and the rural make-up of the state, and the other half depends on states’ relevant health policies. If a state does not spend its allotment in a given year, it can be rolled over to the next fiscal year. All funds distributed to the states must be spent by October 1, 2032. Any money not spent by this date must be returned to the U.S. Treasury.

CMS’s guidance provides context for how the equally distributed and discretionary funds will be spent. There are six key features of the guidance. First, states are directed to use funds in ways that make long-term, sustainable changes. Second, states should make changes that will be sustainable over the long term. Third, states should focus efforts on improving and expanding the rural health workforce by not only increasing the supply of health professionals but ensuring that those who do practice in rural areas can “practice at the top of their license.” Fourth, states should be innovative and test new models of care delivery that meet their own unique challenges. Fifth, states should explore new payment methods that can improve care while lowering costs. Sixth, states should use technology to promote efficient care delivery while ensuring the safety and security of patient information.

Beyond the traditional and expected guidance, CMS will take into account key areas of state policy and regulation when determining discretionary grant amounts. In the guidance, CMS indicates that there is a severe primary care provider shortage in rural areas and that counterproductive state policies inhibit rural health care access. (Of note, a previous Paragon paper explained that most of the shortages identified exist because the physician associates and nurse practitioners who are practicing in these areas are not counted.¹⁶)

CMS’s guidance is a welcome move, as it is important to account for state policies that either promote or detract from health care access. This guidance may even prompt state action to remove or scale back anticompetitive policies such as counterproductive CON laws and restrictive scope of practice requirements. Table 2 shows the factors that CMS will use.

States Should Ensure They Receive Maximum Available Funds

The RHTP gives states a strong incentive to reform policies that restrict health care supply and limit rural residents’ access. One-quarter of the funding is tied directly to state health policies, meaning states that already have better policies—or commit to improvements—receive more money.

At the time of application, states may pledge to adopt reforms and receive partial credit worth half of the available points. CMS recalculates these technical policy metrics annually, allowing states to improve their scores and unlock additional funding. Most reforms must be fully implemented by the end of 2027 to qualify for full credit. Importantly, if a state fails to deliver on its commitments, CMS can claw back funds initially awarded on the basis of partial credit.

Expanding Scope of Practice

To strengthen the rural workforce, policymakers should fully recognize the contributions of physician associates (PAs), nurse practitioners (NPs), and a broad range of mental health professionals—including marriage and family therapists, master’s-level psychologists, pastoral counselors, and others. Expanding the role of these providers will not replace physicians but free up physician time for patients and services requiring their expertise.

The first Trump administration’s report Reforming America’s Healthcare System Through Choice and Competition¹⁷ identified the failure to fully utilize non-physician providers as a barrier to access. CMS should encourage states to review this report and use discretionary funds to reward states that have expanded access to non-physician care.

Access to primary care is too often equated solely with access to a physician. This outdated model ignores the significant federal and state investments in training other qualified professionals who can meet rural patients’ needs.¹⁸ Unfortunately, Medicare and Medicaid payment policies have not kept pace with modern delivery models and should be updated to reflect 21st-century care.

Expanding the number and types of providers available in rural communities is central to long-term sustainability. CMS rightly emphasized the need to maximize the entire workforce, and states should remove barriers so all qualified professionals can practice to the top of their licenses.

Rescinding CON Laws

In the 1970s, under federal mandate, states used ill-conceived certificate of need (CON) laws to determine where or what type of health care facilities or services were appropriate for a particular community.¹⁹ These laws essentially enabled existing hospitals to block competitors from coming into their markets by requiring new facilities to gain approval from boards comprised of incumbent providers. These laws impeded the establishment of new facilities and expansion of services, particularly in growing communities.²⁰

By the late 1980s, CON laws were stifling necessary construction of new facilities and services, leading to a repeal of the federal mandate. States were still permitted to have CON laws, but they were no longer required. Today, 35 states still have some form of CON laws, although they are more limited in scope.²¹ Research overwhelmingly shows that CON laws reduce quality of care, reduce health care access, and raise spending.²² The RHTP gives states a timely opportunity to repeal CON laws, expand access, and improve their eligibility for discretionary funding. Doing so not only will expand access and lower costs but will result in more funding for states through the RHTP.

Other Sensible Reforms

States should consider other policy reforms to both improve their government health policies and maximize available funds through the RHTP, including (1) expanding short-term, limited-duration health insurance²³; (2) obtaining a waiver to prohibit government coverage of junk food and soft drinks; and (3) encourage strategic partnerships that are rural based and rural focused.

With applications due November 5, 2025, and awards announced by December 31, 2025, states must act swiftly. Governors should certify stakeholder engagement (with state offices of rural health and rural providers) as required by CMS while prioritizing proposals that score high on rural factors such as population density and provider shortages. This section outlines ways that states could optimize funding that they receive through the program, focusing on sustainable reforms that target real problems and promote more market-based solutions.

By statute, the state must develop and submit a plan for all five years. The state must submit a detailed transformation plan to carry out three or more of the activities described in the statute. Table 3 highlights the 10 options available to the states and the assessment of the level of priority that should be given to each of the options.

Funds Should Go to Rural Providers and Improve Rural Health Care Access

If clear requirements that RHTP funds be directed to rural communities are not implemented, academic medical centers, teaching hospitals, and large urban systems will use their influence to divert resources away from the rural providers the program is meant to support. Keeping funds in rural areas is essential not only to preserve access but also to build sustainable systems of care that reflect the unique needs of rural populations.

Use Funds to Sensibly Address Rural Hospitals’ Stand-By Costs

States should target payment reforms to the most financially vulnerable rural providers in their state. CHQPR provides some realistic and actionable ideas.²⁴ States should review CHQPR’s analysis and recommendations as part of their plan development, review, and approval process. Addressing stand-by costs is the most pressing reform to stabilize vulnerable rural hospitals.

To operationalize stand-by cost reform using existing RHTP authority, states should consider using a portion of their RHTP funding to stabilize emergency and obstetric services in small rural hospitals. Specifically, states could target funds to small rural hospitals with less than $45 million in annual expenses (as defined by CMS’s Healthcare Cost Report Information System data).

States would submit applications that distribute funds based on service deficits and patient volume. This ensures that hospitals with greater shortfalls and higher patient volumes receive proportionate support while discouraging arbitrary or politically influenced allocations. To promote fiscal accountability, states should include a risk corridor structure. Under this model, RHTP funds would fully cover hospital losses that fall within the average negative margin for small rural hospitals in the state. Losses exceeding that average by up to 50 percent would be partially covered, while any further losses would be the responsibility of the hospital, encouraging both sustainability and cost discipline.

This structure would allow states to apply RHTP funding toward a strategic financial buffer that sustains emergency and obstetric care. Critically, this model supports cost transparency and ensures that limited federal resources are directed toward the hospitals most in need rather than subsidizing inefficiency or directing funds to large systems that are better positioned to absorb deficits.

While this approach offers immediate stabilization, it should be designed as a temporary, transitional mechanism—providing states with critical data and insight to inform long-term rural health policy. By tracking utilization, cost trends, and outcomes associated with emergency and obstetric services during the funding period, states can evaluate which hospitals are essential access points and where alternative care models (e.g., freestanding emergency departments, regional maternal health hubs, or telehealth-integrated triage systems) may offer more sustainable solutions. As RHTP funding is time-limited by design, this initiative could serve as a pilot framework to guide future, permanent investments in rural health infrastructure—ideally blending state dollars, payer participation, and community-based partnerships to ensure continuity of care after federal transformation funds expire.

Use Funds to Incentivize Health Professional Students to Train in Rural Areas

States should dedicate funds to incentivize health professional students to complete rural clinical rotations, a proven way to increase the likelihood of rural practice. Studies show that recruiting students who grew up in rural areas and exposing those who grew up in more urban areas to rural practice during their education substantially increases the likelihood that they will choose to practice in rural settings upon completion of their education and training.²⁵

Such funding would address the challenges of students attending urban-based education programs (as most health professional programs are) doing clinical rotations in rural areas. The challenges include where a student would live while doing a rotation in a rural community and the financial costs of such a rotation. Failure to address these challenges will likely result in fewer students taking advantage of rural rotations.

One program that shows promise is directly paying students for certain expenses. The National Association of Rural Health Clinics Research and Education Foundation (co-founded by the author) recently began an innovative program to provide stipends to PA and NP students to do clinical rotations in rural health clinics. The unrestricted money goes directly to the student, and it is intended to cover housing, transportation costs, and other living expenses. A $3,000 stipend for a six-week rotation is not lavish, but it removes a potential financial barrier that many students face. This program is an example of way to increase the likelihood that new health professionals will choose to practice in a rural area upon graduation.

Use Funds to Facilitate Expanded Telehealth

Because most specialists tend to concentrate in more urban areas, expanded telehealth is an important way to ensure access to certain services. Though it is not always an appropriate substitute for in-person care, telehealth can make a range of important specialty services—such as mental health services—available to rural patients. Unlike other areas of medical care, telehealth for mental health and substance use treatment is consistently more utilized in rural areas than in urban areas.²⁶

Telehealth can also help address the challenge of too few clinicians practicing in rural areas. Properly implemented, telehealth can match care delivery more closely to actual patient demand—an especially important consideration where patient volumes are often low or unpredictable. With the right infrastructure, local providers can collaborate in real time with off-site specialists, enhancing diagnostic accuracy and continuity of care while avoiding unnecessary repeat procedures.

While telehealth is a flexible and low-cost tool for providing care, substantial startup costs in technology and infrastructure have often hampered implementation. States could use a portion of RHTP funding to overcome these upfront barriers.

Making telehealth and portable medicine viable requires high-speed internet connectivity. However, states should avoid using RHTP funding to expand broadband itself, as Congress has already dedicated billions for this purpose. Instead, states should coordinate telehealth investments with these federal broadband programs. Demonstrating how RHTP investments complement programs such as the Broadband Equity, Access, and Deployment initiative would ensure that new internet infrastructure directly supports improved rural health care access.

Smart telehealth investments meet CMS’s guidance for RHTP funds: They are one-time in nature, create measurable improvements in access, and avoid duplicating other federal initiatives. Most importantly, they enable rural facilities to acquire “practice from anywhere” capabilities—cutting patient travel time, reducing duplication of services, and expanding access to specialists within existing rural health infrastructure.

RHTP is a historic opportunity to reform how care is delivered in rural America. States have the chance to implement long-term, sustainable solutions that reflect their unique challenges while avoiding the mistakes of past federal programs.

For the program to succeed, funds should remain targeted to rural providers and used to address the systemic problems that have long undermined rural health care. RHTP is temporary by design, and states should treat it as a catalyst for lasting reform rather than another open-ended grant program. Key priorities include:

• Modernizing workforce policies. States should remove outdated rules and expand scope-of-practice authority so the full range of licensed professionals can deliver cost-effective, high-quality care.
• Leveraging technology. Rural communities need appropriate, cost-effective technology that extends access to specialty care, complements in-person services, and maximizes telehealth’s potential without duplicating existing federal broadband investments.
• Reforming payment for stand-by costs. States should develop payment systems that account for the fixed costs of maintaining essential services such as emergency and obstetric care, ensuring that all payers contribute their fair share.

By focusing on these priorities, states can ensure that RHTP funds drive meaningful, market-oriented reforms that strengthen rural care long after the program expires.