One of the biggest misconceptions about RHTP is that it will work like the Provider Relief Fund. While both programs provide federal funding for rural healthcare, they were designed to solve different problems. The Provider Relief Fund helped hospitals weather the financial impact of the COVID-19 pandemic. RHTP, by contrast, focuses on helping states invest in long-term improvements in rural healthcare delivery.
The Provider Relief Fund distributed $135 billion directly to providers before ending new payments in 2023, including about $11 billion targeted specifically to rural hospitals and clinics. The Rural Health Transformation Program will provide $50 billion over five years beginning in 2026, with funding flowing through states, not directly to hospitals, to support transformation plans rather than reimburse past expenses.
Same rural health headline. Completely different rules for who applies, how the money can be used, and what CMS expects in return.
RHTP vs. the Provider Relief Fund: What Actually Changed
The Provider Relief Fund was designed for a crisis with an end date. Congress created it in March 2020; HRSA paid out claims for three years; and by 2023, the Fiscal Responsibility Act rescinded what remained. It’s closed. Reporting and audits still run, but no hospital is getting a new PRF check.
RHTP was built to address a persistent problem: rural hospitals operating on thin margins. Instead of reimbursing for what already happened, it funds what states plan to build next and hands the steering wheel to state agencies rather than individual providers. At the same time, the program arrives as broader federal policy is expected to reduce Medicare funding for many providers, leading some to view RHTP as a targeted investment intended to help rural hospitals adapt rather than replace lost revenue.
That shift from “provider applies, provider gets paid” to “state applies, state decides” is where much of the confusion begins.
The Differences Between RHTP and the Provider Relief Fund
1. Why each program exists
PRF existed to patch a hole the pandemic tore open. It covered documented COVID-related losses and expenses, and hospital-based health systems alone collected roughly $85 billion of the program’s $135 billion total, more than seven times the $11 billion earmarked specifically for rural hospitals and clinics.
RHTP isn’t patching anything specific. It’s built to fund lasting change, and CMS has called it the single largest rural health investment in over two decades.
One program answered, “What did COVID cost you?” The other asks, “What would actually fix this and create sustainability?“
2. Who actually receives the money
PRF paid hospitals directly. A hospital applied, HRSA reviewed it, and the check went to the hospital.
RHTP skips that step. Funding goes to states, and states design and run their own transformation plans rather than CMS paying providers one by one. A hospital’s share depends entirely on what its state decided to prioritize, not on an application the hospital itself submitted to CMS.
3. Eligibility is a state decision, not a federal one
This is the difference that trips people up most. RHTP dollars aren’t reserved for rural hospitals. They can also reach rural health clinics, FQHCs, mental health centers, even urban referral hospitals that are working on rural initiatives, and states can subaward funds to universities or provider associations.
PRF eligibility was federal and provider-specific. RHTP eligibility is whatever each state’s approved plan says it is.
4. What the money can and can’t be used for
PRF worked backward. A hospital had already incurred a cost or lost revenue, and the fund reimbursed it. Allowable uses were tied directly to the pandemic:
- Costs of COVID-19 testing, treatment, and prevention
- Lost patient revenue attributable to the pandemic
- Payroll and staffing costs during COVID-related disruptions
- Personal protective equipment, supplies, and equipment purchased in response to COVID-19
- Building or facility modifications made for infection control
If a hospital couldn’t tie a dollar to one of those categories, it wasn’t reimbursable, and unspent funds had to be returned to HHS.
RHTP works forward. There’s no loss to document, only a plan to propose, and CMS has cautioned the money isn’t meant to boost provider reimbursement. States must build their transformation plans around three or more approved use categories:
- Prevention and chronic disease management through evidence-based, measurable interventions
- Consumer-facing, technology-driven tools for disease prevention and management
- Payments to providers for specific health care items or services CMS has identified as priorities
- Workforce recruitment, training, and retention initiatives
- Infrastructure and technology investments, including EHR systems, telehealth, and remote patient monitoring
- Operational efficiency projects, like group purchasing arrangements that lower costs for facilities that couldn’t access them before
A hospital’s actual access to any of this depends entirely on which categories its state chose to prioritize in the approved plan, not on what the hospital itself would choose if it were applying directly.
5. Reporting and compliance look nothing alike
PRF’s compliance record is worth stating plainly: HHS OIG reviews found that some hospitals in the audited sample had claimed unallowable expenditures in the tens of millions and misreported lost revenue in the hundreds of millions. RHTP compliance runs through the state first. Per CMS FAQs, states and subrecipients must document that costs comply with federal cost principles, and funds can’t duplicate money a program is already receiving elsewhere.
6. Timeline: one program is closed, the other is just starting
No new PRF payments have gone out since 2023, and reporting spanned seven separate periods across years, with a Decision Review process available to providers who missed a deadline. It was slow by design.
RHTP moves at a different speed entirely. States had to submit their transformation plan applications by November 5, 2025, and CMS was required by statute to award funding by year-end. It did: all 50 states were approved by December 29, 2025, with year-one awards ranging from roughly $147 million to $281 million per state. Budget Period 1 runs from December 31, 2025 through September 30, 2026, with each subsequent budget period starting on October 31 through FY2030.
That federal calendar is just the outer layer. Inside it, each state opens its own funding windows, and those windows move fast. Pennsylvania’s RHTP opportunity ran May 1 to June 1, 2026, or until the funding cap was reached, whichever came first. Alaska opened its full application portal June 1 and closed it three weeks later, on June 22. Colorado’s current window closes August 3, 2026.
A hospital used to PRF’s multi-year reporting periods and built-in appeal process is watching the wrong clock. There’s no federal deadline to track here, only a state-specific window that can close in three weeks and may not reopen until the next program year.
Where the Confusion Actually Costs Hospitals
PRF gave providers months to sort out documentation. Attestation periods ran for weeks, reporting periods stretched across quarters, and a hospital that missed one deadline usually had a decision review process to fall back on.
RHTP doesn’t work on that clock, and that’s the part catching hospitals off guard. The money doesn’t sit waiting for a hospital to apply for it. It moves through a state timeline that’s already running: a state gets its CMS allocation, opens a funding opportunity or RFP, and closes the window, often in a matter of weeks. North Dakota’s own RHTP tracker shows this in practice: separate funding opportunities for breast cancer screening, workforce training, and school-based grants, each announced within weeks of each other across 2026, each with its own deadline.
A hospital that treats that first RFP notice the way it treated a PRF attestation, as something to review carefully and respond to when the finance team gets to it, can watch the window close before the allocation decision ever gets made. There’s no reimbursement clock to fall back on if a hospital’s ask doesn’t make it into the state’s plan. The state decides how its share is split and asks only once.
The fix isn’t more caution. It’s the opposite: hospitals need a position on how they want RHTP funds allocated before their state opens the next opportunity, not after.
How REDi Health Can Help You Navigate RHTP
The hospitals that get burned by RHTP will be the ones who ran the whole thing through PRF-era instincts: wait for the notice, document the case, and expect a reimbursement clock that no longer exists.
For most states, the window to shape this year’s RHTP plan has already closed. What matters now is what a hospital does inside the initiatives that plan already funds.
Much of REDi Health’s work maps directly onto those initiatives already: financial sustainability, care delivery redesign, technology adoption. We help hospitals apply into the initiatives their state has already approved, then document the actual outcomes as that work happens. That’s the same discipline we’ve built over five years, turning data into insights and insights into action plans hospitals can run, aimed at financial stability, better clinical outcomes, and operational efficiency.
We can also help hospitals get ahead of next year’s cycle: giving feedback on their state’s plan and helping shape which initiatives get included before that window opens again.
If your hospital is trying to figure out which of your state’s RHTP initiatives you can apply into, how to document outcomes once you’re in, or how to weigh in on next year’s plan, that’s a conversation worth having now.
Talk to our team about your state’s RHTP initiatives.
