The Rural Health Transformation Program (RHTP) is a $50 billion federal program funding rural health care in fiscal years 2026 through 2030. Pennsylvania received $193.3 million from CMS for the first of its 5 annual awards. Most Year 1 money is going to one-time Rapid Response payments for new equipment and facility upgrades, and in July 2026 the state authorized $42 million across 66 projects.
The larger share of the plan runs through 8 regional Rural Care Collaboratives, expected to be staffed and meeting by the end of 2026. Those collaboratives will set each region’s priorities. Rural hospitals that bring their own data to the table will have the most say in where the next 4 years of funding goes.
How the RHTP Money Moves
Pennsylvania built a 2-track system: the state funds near-term fixes directly, and 8 regional collaboratives decide the long-term spending. Most of the money is planned to go through the regional track.
The state track is the Rapid Response Access Stabilization Program, planned for Years 1 and 2. The Department of Health and Human Services has authority to manage these payments, including recovering funds for non-compliance. Direct payments to providers are capped at 15% of total funds, and DHS also states that RHTP money cannot replace federal dollars lost to other program changes.
The regional track runs through Pennsylvania’s 8 Partnerships for Regional Economic Performance (PREP) organizations. Each PREP convenes a Rural Care Collaborative (RCC) of providers, local officials, employers, schools, and patients. Funding is split among regions by a formula based on rural population in HRSA-defined census tracts and other CMS scoring factors.
Three provisions in the plan shape how much influence a single hospital has:
- Local hospital leadership sits on the RCC even when the hospital belongs to a larger system.
- Each RCC picks which initiatives to fund so that every region will look different.
- Each region names a hub organization to lead technology and AI adoption, with rural hospitals, clinics, and long-term care providers as spokes.
DHS’s March 2026 overview says the Rural Care Collaborative (RCC) should be staffed and meeting by the end of 2026.
How Pennsylvania Is Distributing RHTP Funding
Pennsylvania’s February 2026 plan organizes the work into six initiatives, with the largest share of projected funding directed toward technology. The estimates below come from the plan’s initiative summary tables and reflect Pennsylvania’s original $1 billion request over five years, not its actual Year 1 award of $193.3 million.
CMS approved Pennsylvania’s plan in December 2025. However, in its most recent announcements on July 23 and July 31, 2026, Pennsylvania DHS noted that the Year 1 award remained subject to CMS approval of the state’s revised budget.
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| Initiative | Estimated funding | What it pays for | One target to watch |
|---|---|---|---|
| Technology and Infrastructure | $241.5M | Pennsylvania Patient & Provider Network (P3N) upgrade to Fast Healthcare Interoperability Resources (FHIR), regional digital and AI hubs, mobile health units, community telehealth sites | More than 50% of rural hospitals and clinics sharing records through P3N via FHIR (77% participate in P3N today) |
| Maternal Health | $186.4M | Regional Maternal Health Hubs, remote blood pressure monitoring, birth centers, reopening select labor and delivery units | 2 hubs launched by 2028 |
| EMS and Transportation | $86.0M | Ambulance equipment, rural service bonuses, regional dispatch triage, MATP changes | 10 EMS agencies running paramedicine programs, up from 4 |
| Aging and Access | $77.1M | Community paramedicine, long-term care Quality Investment Program, nurse aide training hubs, PACE/LIFE expansion | 100 facilities in the Quality Investment Program, up from 25 |
| Behavioral Health | $60.6M | 988 outreach, TiPS psychiatric consults, Collaborative Care Model, a statewide SUD bridge clinic | 30 practices with formal Collaborative Care arrangements |
| Workforce | $237.4M | Rural training tracks, short-term housing for rotations, service-linked educational awards with 5-year rural commitments | A 10% drop in rural hospital vacancy rates for key direct care roles |
Two details are especially relevant for hospital finance teams. The plan cites rural hospital vacancy rates of 23% for PAs and MAs, 21% for RNs, and 29.6% for nurse anesthetists. It also reports that the elective surgery bypass rate in rural Pennsylvania averaged nearly 60% from 2016 to 2022.
Both have implications beyond access to care. Staffing shortages can limit a hospital’s ability to maintain or expand services, while high bypass rates can mean more patients and revenue leaving the community. Both challenges are reflected in the RCC targets.
RHTP Funding Rounds That Opened in 2026
Five funding rounds opened between May and October 2026, and all of them pay for tangible, one-time items: equipment, renovations, EHR systems, and training.
On July 23, DHS authorized $42 million for 66 projects, with distribution pending CMS approval of each project. The Philadelphia Inquirer reports that all but $2 million of that first $42.2 million went to technology and infrastructure, from new CT and X-ray units to roofs, HVAC systems, and a collapsed sewer line.
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| Round | Application window | Funding available | Per-award limit | Who could apply |
|---|---|---|---|---|
| Long-Term Care Quality Investment Program | Sep 1 to Oct 1, 2026 | About $2.75M | $2,500 per licensed bed, up to $250,000 | Skilled nursing, personal care homes, assisted living, ICFs |
| Rapid Response Stabilization, Round 2 | Aug 17 to Aug 24, 2026 | $35M | $1M per eligible location | Rural health facilities and providers in eligible regions |
| EHR and HIO Modernization | Jul 27 to Aug 14, 2026 | $25M | Not stated on the listing | Hospitals, nursing facilities, home health, behavioral health, community homes |
| FQHC and Look-Alike EHR and HIO | Jul 27 to Aug 7, 2026 | $1.8M | $300,000 (6 awards) | FQHCs and FQHC look-alikes |
| Rapid Response Stabilization, Round 1 | May 1 to Jun 1, 2026 | $25M | $10,000 to $1M | Hospitals, providers, and rural health facilities in eligible regions |
Source: DHS RHTP Funding Opportunities.
Both EHR rounds require the money to go toward certified EHR technology and full onboarding to P3N through one of the state’s 5 certified HIOs.
DHS lists more rounds to come:
- Rapid Response funding: community paramedicine, rural EMS, maternal remote monitoring, digital and AI infrastructure, and workforce programs
- Other payments: mobile health units and a family medicine OB fellowship
The calendar is tight. According to DHS’s Year 1 webinar slides:
- August 30, 2026: The state’s first annual report was due. CMS used it for Year 2 rescoring.
- October 30, 2026: Year 1 funds must be obligated.
- October 31, 2026: CMS awards Year 2 funding.
- September 30, 2027: Year 1 spending deadline.
What the Plan Leaves to Hospitals
Rural Health Transformation funds will pay for infrastructure, workforce pipelines, and new care models, but operating margin stays the hospital’s responsibility. The Medicaid cuts will only make that job harder starting in 2028.
Human Services Secretary Val Arkoosh has put the state’s federal Medicaid loss at $20 billion between 2028 and 2038. If Pennsylvania’s award holds steady, RHTP brings in about $965 million over 5 years. The state also drew a smaller share than its size: the Pennsylvania Health Law Project calculates that Pennsylvania has about 4% of the U.S. population and received about 2% of first-year funding.
Geisinger offers one example of what these investments can look like at the system level. Its 10 hospitals serve central and northeastern Pennsylvania, and the system expects to lose more than $180 million in revenue next year. Through Round 1, Geisinger received $3.7 million for a new X-ray machine at Bloomsburg, CT units at Jersey Shore and Lewisburg, and a compounding pharmacy upgrade in Danville. It applied for another $3 million in Round 2, bringing its total to about $6.7 million from Pennsylvania’s first-year award.
That investment comes against a much broader financial challenge for rural hospitals across the state. Pennsylvania’s plan reports that more than half of its rural hospitals have negative operating margins, while most of the remaining hospitals are operating near zero. The plan also points to a lesson from the earlier CMMI Pennsylvania Rural Health Model: financial incentives alone were not enough to create lasting changes in care delivery or long-term financial stability.
What hospitals can control in the meantime:
Michael Topchik, executive director of the Chartis Center for Rural Health, framed the open question for WVIA: the funding brings capital, but hospitals have to stay stable while it takes effect. Until it does, hospitals can work on the revenue they already earn, and for many rural hospitals, a chargemaster review is a great place to start.
What We're Seeing in Rural Hospital Revenue
Grant funding can help rural hospitals make important investments. But some of the greatest financial improvements come from finding revenue within the care a hospital is already providing.
Titusville Area Hospital, a 25-bed critical access hospital in northwest Pennsylvania, is a good example. A chargemaster review identified approximately $200,000 a year in projected new net revenue. Unlike a one-time grant, that revenue can continue year after year.
Titusville funded the review through a partnership with the Pennsylvania Office of Rural Health, but the work itself no longer depends on that grant. It is important to note that hospitals can also fund a review through their operating budgets, creating another path to strengthen revenue while larger funding programs like RHTP move forward.
How Titusville Identified $200,000 a Year
Titusville, part of the Meadville Medical Center system, had gone more than a decade without a full chargemaster review. When the hospital worked with REDi Health through the Pennsylvania Office of Rural Health, its payer mix quickly became an important part of the analysis.
About 80% of Titusville’s patients are covered by Medicare. Because critical access hospitals are reimbursed differently, simply raising charges on high-Medicare services would have limited impact on net revenue.
So the team looked elsewhere.
REDi Health compared Titusville’s charges with the fee schedules of its two largest commercial payers. Many commercial contracts pay the lesser of the billed charge or the contracted fee schedule rate. That meant when Titusville’s charge fell below the payer’s fee schedule, the hospital could be leaving revenue on the table for that service.
The difference was significant. Titusville’s CEO had said he would be satisfied with an additional $50,000 a year. The review identified roughly four times that amount in projected annual net revenue, and the new charges took effect August 1, 2026.
Jill Neely, VP of Revenue Cycle, described it as “found money” and pointed to investments such as OR equipment and newer X-ray technology that additional revenue could help make easier to justify (Titusville’s Path to $200k in “Found Money”, August 2026).
That is also what makes this kind of work relevant to the RHTP conversation. The analysis gives hospital leaders a clearer picture of where revenue is being missed and what those dollars could support, information that can also help inform conversations about future priorities and investment.
Get Ready Before Your RCC Sets Priorities
The 2026 RHTP rounds rewarded hospitals that had a shovel-ready equipment list. The next 4 years will reward hospitals that walk into their Rural Care Collaborative (RCC) with numbers.
Several of the plan’s own baselines are still marked TBD, including appointment access, telehealth and FHIR adoption, and rural hospital partnerships with community health centers. The hospitals that supply those numbers will help set the targets their region is measured against.
Four things are worth doing this quarter:
- Get a seat. DHS’s Year 1 slides invite nominations to the RCCs and the statewide Advisory Council, and call RCC convenings the place for engagement. The plan guarantees local hospital leadership a seat even when the hospital belongs to a larger system.
- Know your baseline on the RCC metrics. Bring your own vacancy rates by role, your P3N and FHIR status, your CHC partnerships, and your wait times for routine and urgent visits.
- Put a dollar figure on outmigration. The plan cites a rural elective surgery bypass rate near 60%. Your service-line leakage, in dollars, is the case for the collaborative care and specialty arrangements the RCCs are charged with building.
- Match your capital list to the rounds still coming. DHS has signaled Rapid Response funding for paramedicine, EMS, maternal remote monitoring, digital infrastructure, and workforce, plus mobile health unit payments. Each project has to tie back to one of the 6 initiatives.
Pennsylvania put regional voices at the center of its long-term RHTP strategy for a reason. As Rural Care Collaboratives begin setting priorities, hospitals that understand their own data will be better prepared to show where the greatest needs are, what is driving them, and where investment could make a meaningful difference.
That is the kind of work we care about at REDi Health. Whether we’re helping a hospital find recurring revenue through a chargemaster review, get to the root of preventable denials, build stronger analytics, or give staff the tools to use data more confidently, the goal is bigger than any single project. It is helping rural hospitals build improvements that can continue long after the initial funding is spent.
For hospitals preparing to participate in their RCC, having a clear baseline is a good place to start. It gives your team a clearer picture of where you are today and helps you make a stronger case for where resources could have the greatest impact.
RHTP creates an incredible opportunity to invest in rural healthcare. The real value will be in what those investments make possible for years to come.
If you’re thinking about which projects could create that kind of lasting impact, reach out to our team.
