North Carolina Awarded $213 Million for Rural Health Transformation Program

The federal Centers for Medicare & Medicaid Services (CMS) today awarded North Carolina $213 million through the Rural Health Transformation Program (RHTP). These funds will improve health care access for rural North Carolinians. In November, North Carolina submitted its application for these funds with bipartisan support from the state's congressional delegation. These funds are awarded for 2026, and North Carolina will be eligible for more funding each year for the next five years.

"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," said Governor Josh Stein. "Our state's rural communities are wonderful places to live and raise a family but face unique health care challenges. This grant will connect more people to more high-quality health care."

The North Carolina Department of Health and Human Services (NCDHHS) worked quickly to develop the state's plan through extensive engagement with more than 420 stakeholders, including rural hospitals, community health centers, local health departments, Tribal communities, community-based organizations, and faith-based organizations.

"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," said NC Health and Human Services Secretary Dev Sangvai. "The North Carolina Rural Health Transformation Program is one part of our efforts to support the more than 3 million people in North Carolina who live in rural communities."

North Carolina has the second-largest rural population in the country, second only to Texas. The rural population of North Carolina represents more than 5 percent of the entire U.S. rural population. North Carolina's Rural Health Transformation Program outlines six key strategies to transform rural health care systems over the next five years.

These strategies include:

• Launching locally governed "NC ROOTS" hubs to connect medical, mental health and social supports
• Expanding prevention, chronic disease management, maternal health, and nutrition programs
• Increasing access to mental health services, including substance use disorder treatment
• Investing in the rural health care workforce
• Supporting more rural providers in transitioning to value-based care models, where providers are paid based on keeping people healthy and out of the hospital rather than on how many services are provided
• Enhancing technology in health care through artificial intelligence and expanded broadband access

These initiatives will be implemented through a broad coalition of state agencies, community-based organizations, academic institutions, rural providers, and private-sector partners. As an example of innovation and collaboration, North Carolina proposes to create a Rural Health Innovation Fund (RHIF) that will help rural health care providers get access to technology that will support their practices. As soon as the federal funding is received, NCDHHS will establish a statewide governing structure, start building regional NC ROOTS hubs, and engage stakeholders in funding decisions.

North Carolina's RHTP will be guided by a statewide steering committee, including NCDHHS' Office of Rural Health and divisions of Medicaid, Public Health, and Mental Health, in collaboration with universities, community colleges, community health centers, rural health clinics, small rural hospitals, school-based clinics, and local partners.

On January 16, 2026, NCDHHS leaders will hold a virtual event to highlight the NC RHTP goals and next steps, the program's statewide impact, and the importance of federal partnership in addressing root causes of disease. The overall goal for the first year of the NC RHTP is to expand the reach of existing statewide efforts that align with RHTP initiatives as North Carolina works to set up strong foundations for long-term sustainability. NCDHHS will share more information about the event in the coming weeks.

The RHTP will improve health care delivery for more than 3 million North Carolinians in rural communities, support more than 400 rural health facilities, and bring hundreds of millions of dollars in federal investment to the state over the next five years. North Carolinians are encouraged to learn more about the Rural Health Transformation Program by visiting https://www.ncdhhs.gov/rhtp.

North Carolina is eager to maximize the funding awarded by the Rural Health Transformation Program, but the state will need to overcome significant funding losses as a result of federal reconciliation law H.R. 1, including the loss of nearly $50 billion in federal funds to North Carolina's Medicaid program over the next 10 years and critical funding to hospitals in our state. NCDHHS will take advantage of the available funding while continuing to advocate for more funding for NC's rural health care system in the future.

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