Montana launches rural health overhaul backed by $233 million federal investment

BOZEMAN, Mont. — Montana health leaders are racing to roll out a sweeping overhaul of rural health care, backed by a historic $233 million federal investment, after more than 600 people gathered Thursday for the first Rural Health Transformation Program Stakeholder Advisory Committee meeting at Montana State University in Bozeman.

The advisory committee, created to guide the state’s new Rural Health Transformation Program, met to review goals and gather public feedback on how to stabilize and modernize care in frontier and rural communities. No funding decisions were made at the meeting, which was open to the public, though some portions were closed.

In December 2025, Gov. Greg Gianforte and Department of Public Health and Human Services Director Charlie Brereton announced Montana had secured about $233 million in first-year funding from the Trump administration through the Centers for Medicare & Medicaid Services’ Rural Health Transformation Program, or RHTP. The state is slated to receive up to $1.2 billion over the five-year life of the program, the fourth-largest award among all 50 states.

“I think it’s a historic opportunity for the state,” Brereton said.

Brereton noted that only Texas, Alaska and California received larger first-year allocations.

Under federal rules, states must submit revised budgets aligned with their announced awards by Jan. 30, forcing Montana to quickly prioritize “high-impact programs with the capacity to absorb additional funding,” DPHHS officials said.

Montana originally submitted a $200 million budget but received $233 million, requiring a supplemental plan to detail how the extra $33 million will be used. Brereton said DPHHS is building an internal RHTP unit of about 20 state positions to manage implementation and oversight.

For the first $233.5 million dollars in funding, Montana must submit its initial federal progress report by August 2026 and then file annual and quarterly reports through 2030.

“That is a tight timeline to start spending these funds,” Brereton said.

The money flows from a $50 billion national RHTP fund created under President Donald Trump’s Working Families Tax Cuts legislation, which runs through 2030 and is designed to help states stabilize and restructure rural health systems. Congress established the program in H.R. 1, a 2025 law that set aside $10 billion a year for five years.

KFF Health news has reported that every state is guaranteed at least $100 million a year from the fund, with additional dollars distributed based on rural population, facilities and a technical score for each state’s proposal. Awards range from $147 million for New Jersey to $281 million for Texas in the first year.

Brereton emphasized that RHTP dollars will be subject to standard state of Montana procurement rules. Meaning DPHHS cannot simply pick and choose winners or sole-source most contracts.

Competitive grant applications through platforms such as Submittable, which many organizations used during the COVID-19 pandemic.

The state expects its first round of RHTP-related procurements to open in the second quarter of federal fiscal year 2026, roughly March 2026, with updates posted at ruralhealth.mt.gov and on the state’s eMACS procurement system.

DPHHS also plans regular updates to the Legislature through standing and interim committees, as well as frequent reports to CMS on spending, outcomes and progress toward program goals.

Montana’s approved rural health transformation plan is built around five core initiatives: workforce development, sustainable access, innovative care models, community health and prevention, and technology innovation.

DPHHS leaders said the plan is all in part due to public engagement before the state applied to CMS. The department conducted weeks of outreach to hospitals, more than 20 rural health stakeholders, all eight tribal nations and Urban Indian Organizations, and other agencies, drawing on a 900-person webinar and more than 300 formal responses to a request for information.

KFF Health news reporting describes the national program as an effort to give states space to be creative in how they fix systemic gaps in rural health care. Federal officials will begin reviewing states’ progress this summer and will announce 2027 funding levels by the end of October, based on performance and compliance.

Roughly $20 million of Montana’s first-year allocation will go toward a comprehensive workforce strategy led by the Department of Labor & Industry, which is partnering with DPHHS under the first initiative.

“I have always been proud to be from Montana, and I’ve long known that Montana punches above its weight class, but this is an incredible opportunity,” Labor & Industry Commissioner Sarah Swanson told the audience.

The workforce initiative has three sub-initiatives:

• About $15 million for recruiting and retaining rural health care workers, including a statewide talent-attraction campaign, scholarships and tuition assistance, and a major expansion of registered apprenticeship from entry-level roles to registered nurses.
• Just under $4 million to expand clinical training capacity, adding residency slots, exploring new rural residencies, and building rural training tracks for physicians, advanced clinicians and dental providers.
• About $1.1 million for retention and upskilling, including relocation support, wellness programs, community integration for new clinicians, and advanced training delivered virtually so rural workers don’t have to leave their communities.

Swanson said the state intends to train and upskill 700 Medicaid expansion enrollees into health care jobs, build a pipeline through middle and high school programs such as HOSA, and support the development of up to 400 new rural preceptors within a year.

All workforce investments will carry a five-year service commitment to work in Montana’s health care system and cannot be used for construction or to replace existing funding.

The initiative will be measured against eight key metrics, including year-over-year 5% growth for five years in the number of nurse practitioners, physicians, registered nurses, dental hygienists, EMTs and physician assistants. That translates into annual statewide targets such as about 23 new nurse practitioners, 27 physicians, 258 registered nurses, 24 dental hygienists, 34 EMTs and 21 physician assistants. Two additional measures, rural turnover rates and clinician burnout, are still being sorted out.

Swanson tied the work to “406 Jobs,” a Gianforte executive order issued last August that aims to align education and workforce systems and insists that solutions be industry driven and community led, especially in rural and tribal communities. She said the RHTP effort must be shaped by hospitals, physicians and local leaders from places like Fort Peck and Livingston.

Under the program’s innovative care models initiative, Montana plans to shift more rural providers from fee-for-service to value-based care, expand emergency medical services, and broaden the role of community pharmacies.

“This will look at transitioning more rural health care providers to value-based care models which focus on reimbursing for the quality of the care provided as opposed to simply the number of services,” said Rebecca de Camara, Medicaid and Health Services executive director.

De Camara said the state has already been revamping primary care case management and evaluating options for dual-eligible residents who have both Medicare and Medicaid, including whether the PACE model would fit Montana.

De Camara said officials are also looking at authorizing Treat-in-Place, allowing EMS providers to deliver reimbursable on-site care when appropriate, rather than requiring transport to qualify for payment. That would require changes to Medicaid billing codes and significant upgrades to ambulances and related equipment.

Currently, EMS providers receive no Medicaid reimbursement when they respond to a call but do not transport a patient, a situation she described as financially unsustainable. Building on an ongoing legislative interim study of the EMS system, the state will examine how to expand community paramedicine, modernize dispatch and retrofit or replace ambulances.

Another priority is expanding rural pharmacy services by allowing pharmacists to work at the top of their license, including prescribing some medications, providing basic primary care and managing chronic diseases. The state plans to create pharmacist point-of-care testing sites, draft a Medicaid state plan amendment to allow reimbursement, and use these changes to ease pressure on clinics and emergency departments.

Metrics for this initiative include:

• Holding average monthly costs for dual-eligible members at about $305 per person.
• Increasing use of EMS treat-and-no-transport billing codes while reducing avoidable emergency department transports for high utilizers.
• Raising the share of pharmacists who prescribe for Medicaid enrollees.
• Shifting a greater share of Medicaid spending from inpatient to outpatient care, building on broader hospital transformation work.

Other pieces of Montana’s RHTP plan focus on community health and infrastructure, including behavioral health services, child and family care, and local nutrition and prevention projects.

Amanda Harrow, a DPHHS project manager, said the state will support the expansion of crisis safe spaces. These are alternatives to hospitalization for people in behavioral health crises.

Through Certified Community Behavioral Health Clinics, and fund minor renovations and repairs for rural and tribal facilities. The initiative will invest in community spaces that support healthy lifestyles by funding one-time projects like food system action plans, farmers markets that also benefit local producers and school nutrition efforts designed by local communities.

By the time of its first CMS report, the state aims to:

• Finalize subrecipient grants and oversight models for school-based care, mobile health vans and tribal programs.
• Expand Montana State University’s “Care for Your Own” nursing program, which supports American Indian students and has strong retention and graduation rates.
• Evaluate community pediatric programs for long-term sustainability.
• Initiate procurement for rural infrastructure projects, including safe-space build-outs and minor facility repairs.
• Launch community nutrition and health grants by late 2026 or early 2027 after stakeholder convenings.

Harrow said the state will track progress with a broad suite of metrics, including:

• Increasing the number of crisis safe spaces statewide to 11 by the end of the five-year grant.
• Improving preventive health measures such as well-child visits in the first 30 months of life across rural counties, A1C control for residents with diabetes, and blood pressure control among those with hypertension.
• Monitoring body mass index data and behavioral health emergency department admissions per 1,000 residents, with an eye toward reducing hospitalizations as safe spaces expand.
• Lowering suicide rates and cutting by 10% the share of students reporting mental health-related risk behaviors.
• Boosting the number of certain behavioral health providers to about 200 over the life of the program.

KFF Health news has noted that total RHTP awards vary widely on a per-rural-resident basis and that states governed by Republicans tended to score higher on the discretionary technical portion of the funding formula, although federal officials have denied politics played any role. Analysts and researchers are watching closely to see how states deploy the money, and whether they adopt administration-backed policies such as broader fitness testing, SNAP food restrictions or changes to certificate-of-need laws.

In Montana, state leaders say their focus is squarely on rural realities from long travel distances and workforce shortages to strained behavioral health systems and limited training capacity.

During the gathering on Thursday, attendees asked what happens in five years when this unique funding is gone. Brereton said when they designed the plan with one use funds in mind.

“Sustainability was absolutely top of mind for DPHHS so that we’re not establishing or creating cliffs everywhere we turn,” he said. “Our plan is centered on one time only investments that get provider organizations, communities and others to the place that they need to be in order to continue services into the future.”

Providers, local officials and residents are encouraged stay engaged via ruralhealth.mt.gov and attend stakeholder meetings as the transformation effort unfolds.