In a significant move to bolster rural healthcare, North Carolina has secured a $213 million award from the Centers for Medicare & Medicaid Services (CMS) under the Rural Health Transformation Program (RHTP). This funding aims to enhance healthcare access for the state’s rural residents. With the state’s application for these funds submitted in November, accompanied by bipartisan support from its congressional delegation, North Carolina is set to receive funding for 2026 and will remain eligible for additional allocations annually over the next five years.
Governor Josh Stein emphasized North Carolina’s leadership in rural healthcare innovation, stating, “North Carolina has long been a leader in advancing rural health care solutions, and we are excited about how this new program can support innovations to help make rural communities healthier.” The governor highlighted the unique healthcare challenges faced by rural communities and the potential of this grant to connect residents with high-quality healthcare services.
The North Carolina Department of Health and Human Services (NCDHHS) swiftly crafted the state’s plan, engaging over 420 stakeholders, including rural hospitals and community organizations. NC Health and Human Services Secretary Dev Sangvai expressed anticipation for ongoing collaborations, noting, “We look forward to continuing the collaborative effort needed to make sure everyone has access to affordable, high-quality, patient-centered health care while reducing the burden on rural health providers.”
North Carolina, having the second-largest rural population in the U.S. after Texas, represents a significant portion of the national rural demographic. The state’s RHTP outlines six strategic priorities for transforming rural healthcare over the next five years, including the creation of local “NC ROOTS” hubs, expansion of chronic disease management and maternal health programs, and enhancement of mental health services.
- Establishing locally governed “NC ROOTS” hubs to integrate medical, mental health, and social support services
- Expanding programs for prevention, chronic disease management, maternal health, and nutrition
- Boosting access to mental health services, including treatment for substance use disorders
- Investing in the rural healthcare workforce
- Transitioning more rural providers to value-based care models
- Advancing healthcare technology through AI and improved broadband access
These initiatives will be driven by a coalition of state agencies, academic institutions, and private-sector partners. A proposed Rural Health Innovation Fund (RHIF) aims to provide rural healthcare providers with access to technology to support their practices. Upon receipt of federal funding, NCDHHS will set up a governing structure, initiate NC ROOTS hubs, and engage stakeholders for funding decisions.
The RHTP will be guided by a statewide steering committee, comprising NCDHHS’ Office of Rural Health and various divisions, in collaboration with educational institutions and local partners. A virtual event on January 16, 2026, will present the program’s goals, statewide impact, and the importance of federal collaboration in addressing healthcare challenges. More details about the event will be released soon.
The RHTP is expected to improve healthcare for over 3 million rural North Carolinians, supporting 400+ rural health facilities and attracting substantial federal investment over the next five years. For more information, visit www.ncdhhs.gov/rhtp.
Despite the promising RHTP funding, North Carolina must navigate the fiscal challenges posed by federal reconciliation law H.R. 1, which results in the loss of nearly $50 billion in federal funds for the state’s Medicaid program and hospital funding over the next decade. NCDHHS plans to leverage available funds while advocating for additional support for the state’s rural healthcare system.
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