Arizona Rural Health Transformation Program Toolkit

Overview: The 870-page H.R. 1, also known as the One Big Beautiful Bill Act (OBBBA), was signed into law 7/4/25. The 17-page Title VII, Sec. 71401 of H.R. 1, details the Rural Health Transformation Program (RHTP). It stipulates $10 billion per year for five fiscal years 2026-30. Half will be distributed to states equally, $100 million/yr X 5, with the other half based on metrics such as % of a state’s rural population compared to other states and the nation. CMS encouraged states to submit their budget for $200 M/yr. X 5 ($1B). RHTP funding is in the mandatory side of the federal budget and administered by CMS (like Medicare), so funding is not subject to continuing resolution delays.

Arizona’s AHTP Plan: the Governor’s Office submitted its $200M/yr ($1B over 5 yrs) RHTP proposal 11/5/2025 as did each of the other 49 states. CMS announced the awards  on 12/29/2025. Arizona received $166,988,956 in funding for FY26, which ranked 22^nd of the states in terms of funding per rural resident, but the sixth lowest of all states overall. States will have 2 years to spend their Year 1 awards.

Next Steps: Arizona submitted its revised narrative (74-pagse) and budget on 1/30/2026. CMS has 30 days to modify and approve state proposals. State of Arizona will release notices of funding opportunity (NOFOs) or Requests for Proposals (RFPs) – likely starting in March/April.

% of $167 M Budget, Priority Area, and State Agency Responsible

I.    (28%) Rural Health Education & Training – Office of Economic Opportunity (OEO)

II.   (16%) Priority Health Initiative Grants

                       a.  (6%) Behavioral Health & Substance Use Disorder Grants (AHCCCS)

                       b.  (3%) Maternal Health Grants (ADHS)

                       c.  (7%) Chronic Disease Prevention & Management Grants (ADHS)

III.  (23%) Making Rural Health Care Accessible (AHCCCS)

                       a.  (10%) Telehealth, Digital Transformation

                       b.  (13%) Rural Health Innovation – Mobile Care, Satellite Sites

IV.  (23%) Making Rural Health Resilient – Medical Equipment, Technology (AHCCCS)

                       a.  (18%) Medical Diagnostic Equipment, Technology, EHR 

                       b.  (3%) Adopt Shared Services Consortiums

                       c.  (2%) Technical Assistance for Operational & Fiscal Performance

IDC Cap Mandated at 10% or less of the total award: State Agency (3%), Successful Awardee (7%)

As the State Office of Rural Health, the Arizona Center for Rural Health can offer resources, like letters of support, to organizations who are writing rural-focused grant applications. If you are interested in a letter of support from us, please submit the request form.