On December 29, 2025, the Centers for Medicare & Medicaid Services (“CMS”) announced that Oregon will be receiving $197 million under the Rural Health Transformation Program (“RHTP”) for 2026.[1] This amount is slightly less than the $200 million average amount awarded to each state by the federal program, and considerably less than the $281 million promised to the leading awardee, Texas.[2] The disparities in the RHTP’s first round of disbursements become even more stark when considered on a per capita basis. Each rural resident of Rhode Island is being allocated $6,305—more than 36 times the amount being allocated to each rural Oregonian.[3],[4] Oregon’s rural providers are therefore left with questions not only about fairness, but also about the adequacy of RHTP funds to help them remain viable in today’s challenging healthcare environment.
What is the RHTP, and why was it enacted?
The RHTP was passed in connection with H.R. 1, sometimes referred to as the “One Big Beautiful Bill.” Its purpose is to offset some of the damage to rural healthcare providers that is expected to result from the almost $1 trillion in Medicaid cuts embedded in the OBBB.[5] But the RHTP is not robust enough to make rural providers whole. The Kaiser Family Foundation has estimated that about $137 billion of the OBBB’s Medicaid cuts will be borne by rural communities.[6] Only $50 billion of this hole will be backfilled by the RHTP.[7],[8] The remaining losses will have to be managed through staff reductions, program closures, and other austerity measures.
What can RHTP funds be used for?
CMS has listed a number of “approved uses” of RHTP funds.[9] They include instituting prevention and chronic disease management programs, developing value-based care arrangements and alternative payment models, recruiting and retaining healthcare providers, implementing new technologies, and expanding access to substance use disorder and mental health treatment services.[10] To be eligible for funding, each state was required to submit to CMS a spending plan that identified at least three of these approved uses.
Oregon’s plan focuses on five initiatives: “Regional Partnerships & System Transformation,” “Healthy Communities & Prevention,” “Workforce Capacity & Resilience,” “Technology & Data Modernization,” and “Tribal Initiative[s].”[11] The state earmarked 10% of its RHTP funding for the last of these initiatives, which is intended to help Oregon’s nine, federally-recognized tribes “improve their own healthcare access and health outcomes. . . .”[12] An additional 10% was set aside to cover administrative expenses. Thus, 80% of the state’s allocation—or about $157 million—remains available to fund the first four initiatives.
One half of this subtotal will be awarded to rural hospitals, clinics, and other healthcare organizations through a competitive grant process.[13] The Oregon Health Authority anticipates distributing requests for grant applications in the spring of 2026.[14] Those applications will be due in the early summer of 2026, with awards being announced shortly thereafter.[15]
Will RHTP make a real difference to Oregon’s rural providers?
While $197 million is nothing to scoff at, Oregon’s rural healthcare providers have justification for their jaundiced view of RHTP funds. First, the additional money will offset less than half of the losses associated with the OBBB’s Medicaid cuts. Second, the funds can be applied only toward “approved uses.”[16] Third, RHTP dollars will be awarded only to rural healthcare providers that expend the time, energy, and resources to come up with compelling grant proposals.
At a time when the majority of Oregon’s hospitals are losing money providing patient care,[17] 7 of the state’s 34 rural hospitals are at risk of closure,[18] and many rural providers are reducing services in desperate attempts to restore profitability,[19] it is reasonable to ask: Are RHTP funds too little, too late, to allow providers to continue rendering safe, high-quality, and readily-available healthcare services to the 33% of Oregonians who live in rural areas?[20] [1] https://www.cms.gov/newsroom/press-releases/cms-announces-50-billion-awards-strengthen-rural-health-all-50-states
[2] https://www.kff.org/state-health-policy-data/first-year-rural-health-fund-awards-range-from-less-than-100-per-rural-resident-in-ten-states-to-more-than-500-in-eight/#:~:text=Texas%2C%20Alaska%20and%20California%20are,with%20relatively%20small%20rural%20populations. [3] Id. [4] 50% of RHTP funding will be distributed equally among all approved states. The remaining 50% will be distributed based on a variety of factors, including the rural population of the state, the proportion of rural healthcare facilities in the state, and so on. See https://www.cms.gov/priorities/rural-health-transformation-rht-program/overview. [5] Critics might add that another purpose of the RHTP was to limit the political fallout associated with the Medicaid cuts. While the OBBB was being debated, Republican Senator, Tom Tillis, from North Carolina, warned Senate Majority Leader, John Thune, that the drastic loss of Medicaid funding could cause Republicans to lose favor with rural voters and, in turn, result in loss of control of the House and Senate. See https://thehill.com/homenews/senate/5367877-tillis-republicans-mediticaid-cuts/. [6] https://www.kff.org/medicaid/how-might-federal-medicaid-cuts-in-the-enacted-reconciliation-package-affect-rural-areas/ [7] Id. [8] While there was initially considerable concern about the disproportionate negative effects of the OBBB Medicaid cuts on rural hospitals and providers, a study conducted by the Harvard School of Public Health and The New York Times found that some urban hospitals are likely to suffer worse than their rural counterparts. See https://hsph.harvard.edu/health-quality/news/medicaid-cuts-likely-to-affect-urban-safety-net-hospitals/. In particular, the study concluded that the cuts will be most harmful for safety-net hospitals with a high percentage of Medicaid patients and already-strained finances. Id. [9] See supra n. 4. [10] Id. [11] See https://www.oregon.gov/oha/HPA/HP/Documents/Oregon%20RHT%20Program%20Application_Budget%20Narrative.pdf. [12] See https://content.govdelivery.com/accounts/ORHA/bulletins/401f9c1. [13] See supra n. 11. [14] See https://www.oregon.gov/oha/hpa/hp/pages/rural-health-transformation.aspx [15] Id. [16] For example, no more than 15% of a state’s RHTP monies can be used to pay healthcare providers for rendering health care services. See “Rural Health Transformation Program: Allowable Use of Funds,” at https://www.oregon.gov/oha/hpa/hp/pages/rural-health-transformation.aspx. [17] See “Oregon Hospitals On the Brink,” at https://oregonhospitals.org/wp-content/uploads/2025/04/2025.04.25_Report_Oregon-Hospitals-on-the-Brink_FINAL.pdf. [18] See https://chqpr.org/downloads/Rural_Hospitals_at_Risk_of_Closing.pdf. [19] See, e.g., “Closure of Providence Seaside inpatient obstetric and newborn care services,” at https://blog.providence.org/regional-blog-news/providence-seaside-services; “Samaritan Health considers closing 2 Oregon maternity units,” at https://www.oregonlive.com/health/2025/05/samaritan-health-considers-closing-maternity-units-in-lebanon-lincoln-city.html. [20] See https://www.ohsu.edu/oregon-office-of-rural-health/about-rural-and-frontier-data.Source link
