After months of planning and applications, Tennessee’s Rural Health Transformation Program is officially moving from plans on paper to projects in rural communities.
And we’re finally getting a look at what that transformation will look like.
In September, the Tennessee Department of Health announced the first 53 projects funded through the program, reaching 44 counties statewide. It’s the first round of awards tied to Tennessee’s approximately $206.9 million initial RHTP award, and it’s only the beginning.
Several other RHTP funding decisions are still ahead. At the same time, Tennessee’s FY27 budget includes a separate, approximately $125 million investment in TennCare Shared Savings to support rural healthcare transformation.
Between the federal RHTP funding and this additional state investment, a lot is happening for rural healthcare across Tennessee, and plenty more to watch as these investments begin taking shape.
So, we did some digging. Here’s where Tennessee’s RHTP stands today, what we can learn from the first round of projects, and what rural healthcare leaders should have on their radar next.
Tennessee Has $206.9 Million to Put to Work
Tennessee received approximately $206.9 million from CMS for Budget Period 1 of the federal Rural Health Transformation Program.
That funding is part of a five-year federal program running through federal fiscal year 2030, and Tennessee has until September 30, 2027, to spend its Budget Period 1 funds.
What Happens This Year Helps Shape What Comes Next
One important thing to know about RHTP is that Tennessee isn’t automatically getting another $206.9 million next year. Future funding will depend on several factors, including progress reporting, compliance with approved uses of funding, redistribution of unspent dollars, and CMS’s scoring methodology.
That makes these first projects an important starting point, but it also makes the work that comes next incredibly important.
Much attention has focused on how much funding states received and where those dollars might go. Now we can start seeing what those investments can make possible in rural communities.
For rural healthcare organizations, that means thinking about measurement early. If funding helps expand a service, introduce new technology, improve access, or change how care is delivered, what does that look like a year from now?
Success could mean more patients receiving care close to home, a stronger service the community depends on, more time back for an already stretched team, or better data to guide future decisions.
Whatever success looks like, knowing where you started makes it much easier to see how far you’ve come.
The First 53 Projects Give Us an Early Look
On September 3, Tennessee announced its first 53 RHTP-funded projects, reaching 44 counties statewide.
All 53 fall under Healthy Active Rural Tennessee (HART), which focuses on nutrition, physical activity, and creating environments that make healthy choices easier in rural communities.
Of those first awards:
- 31 went to county or municipal governments
- 22 went to community-based nonprofit organizations
- Several are reaching economically distressed counties, including Scott, Cocke, Clay, Hancock, and Lauderdale
It’s encouraging to see the first round of funding begin moving into rural communities, especially because this is only one piece of Tennessee’s larger RHTP plan.
There’s Much More to Come
HART focuses primarily on community health and prevention, while several other funding opportunities connect more directly to healthcare delivery, hospital operations, service lines, maternal and child health, and technology.
Those awards haven’t all been announced yet, which means the picture of Tennessee’s RHTP investments is still taking shape.
For rural hospital leaders, the next several announcements should give us a clearer idea of how the state plans to support care across its rural communities.
More RHTP Awards Are Still Ahead
Tennessee opened nine competitive RHTP funding opportunities, with application deadlines stretching through August:
- Perinatal and Pediatric Behavioral Health Teleconsultation and Education
- Healthy Active Rural Tennessee (HART)
- Healthcare Resiliency Program: Maternal Child Health
- Chronic Disease Prevention
- Healthcare Resiliency Program: Service Line and Co-Location
- Memory Care Assessment Network (MCAN)
- Health Tech Innovation
- Healthcare Resiliency Program: Make Rural Tennessee Healthy Again (MaRTHA)
- County Health Council CARE Grants
All nine application windows have closed, but HART was the first to announce recipients publicly.
What We’re Excited to Watch
For rural hospitals, we’ll be paying particularly close attention to the awards around service line expansion and co-location, maternal and child health, and health technology.
These are areas that can have a real impact on how care is delivered in rural communities. We’re especially interested to see what organizations choose to prioritize, how those ideas take shape in practice, and what they ultimately make possible for the communities they serve.
Funding is starting to move, and soon we’ll see what rural organizations build with it.
Tennessee Has Some Big Goals for RHTP
Tennessee has also given us a sense of what it hopes these investments will accomplish.
By 2031, the state aims to:
- Have 80% of rural residents within 30 minutes of care
- Connect 500 healthcare providers to a statewide health information exchange
- Create 250 rural residencies
- Achieve zero net loss of Critical Access Hospital services
Together, those goals give us a clearer picture of what Tennessee hopes this investment can mean for rural healthcare over the long term.
Building Something That Lasts
The goal of this funding isn’t simply to get new projects off the ground. It’s to help create improvements that continue benefiting rural communities well beyond the initial investment.
Take Tennessee’s goal of zero net loss of Critical Access Hospital services.
Keeping those services available means understanding the full picture: how patients use them, what they cost to operate, how they’re reimbursed, where revenue may be getting lost, and what the community needs.
That’s where financial sustainability and transformation start to come together.
When rural organizations can pair new investments with a clear understanding of their data, they’re in a much better position to build something that works for their hospital and their community over the long term.
Turning an Award Into Action
Receiving funding is a big milestone. The next step is turning those dollars into something that works in practice.
Tennessee’s RHTP grants operate on a reimbursement basis, which means subrecipients generally incur eligible expenses first and then submit the required documentation for reimbursement.
For rural hospitals, understanding that timing early can help teams plan and build a smoother path from award to implementation.
A Few Funding Details to Know
Federal parameters also govern how RHTP dollars can be used.
Administrative costs are capped, certain provider payments are limited, and funding cannot replace existing federal, state, or local funding or pay for clinical services already reimbursable through another source.
Once those pieces are in place, the focus can turn to making the project work within the organization.
A new service line or technology investment has to fit into existing workflows. Teams need the tools and resources to put it into practice, and patients need to access it.
Those practical pieces can make a big difference in how an investment takes shape once it moves from a plan into day-to-day operations.
How Tennessee’s Separate $125 Million Rural Health Investment Fits In
And RHTP isn’t the only investment worth watching.
Tennessee’s FY27 budget dedicates approximately $125 million in TennCare Shared Savings to support rural healthcare transformation. This is a separate state investment from the $206.9 million federal RHTP Budget Period 1 award.
Taken together, it’s a significant investment in what rural healthcare across Tennessee can look like in the years ahead.
Where Is That Money Going?
Of the approximately $125 million:
- About $104.4 million is allocated to the Tennessee Department of Health, primarily through the Rural Healthcare Access Modernization Program (RAMP)
- Another $20.6 million will be administered separately by TennCare to support Rural Health Clinic sustainability
RAMP is especially interesting because it creates another way to address some of the physical and operational needs of rural healthcare organizations.
The largest piece is $100 million for rural capital investments, which can support renovations, facility expansions, and new construction.
Another approximately $4.4 million is available for rural primary care seed grants. The program can also use a portion of its capital investment funding to extend projects aligned with Tennessee’s RHTP priorities.
So, while RHTP and RAMP aren’t one big pool of funding, they can support different pieces of the same larger goal: helping rural communities build stronger, more sustainable healthcare systems.
And although the state funding comes through the FY27 budget, RAMP’s grant period extends through June 30, 2031.
So, What Happens Next?
There’s still plenty to watch in Tennessee.
More RHTP awards are coming, and projects will begin moving into implementation. Rural organizations will start seeing what works, where adjustments are needed, and what these investments can make possible for their communities.
Over time, the conversation will naturally shift from where the funding went to what changed because of it. Those results will ultimately give us a much clearer picture of what rural health transformation looks like in practice.
Our Take: Start With the Baseline
One of the most valuable things a rural healthcare organization can do right now is understand where it’s starting.
Think about a hospital planning to expand a service line.
What does volume look like today? Where are patients currently going for that care? What does the payer mix look like? Where are denials occurring? What is reimbursement today? What does the service cost to operate?
Now imagine coming back to those same questions a year after implementation.
That before-and-after picture gives leaders something incredibly useful: a way to see what changed.
It can help show whether more patients are receiving care locally, whether revenue is growing, where processes are improving, and where there may still be room to make the project even stronger.
Turning Data Into Something Useful
This is where REDi Health sees a real opportunity to help.
Rural hospitals and facilities already have a lot of valuable information sitting in their data. The challenge is finding the time and resources to bring it together, make sense of it, and turn it into something teams can actually use.
That’s where we can help do some of the heavy lifting.
We work alongside rural and Critical Access Hospitals to establish meaningful baselines, find the story in their data, and track what changes as new initiatives take shape.
Because when a rural hospital receives an investment like this, we want leaders to be able to look back and say more than we spent the funding.
We want them to be able to show what it made possible for their organization, their team, and their community.
That’s the kind of rural health transformation worth building toward.
Contact REDi Health to start the conversation.
