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%)

The Centers for Medicare & Medicaid Services (CMS) approved the State of Arizona’s Rural Health Transformation revised Plan Narrative (74-pages) and detailed budget (78 pages). Those documents, as well as a two-page summary, and 18-slide PPT webinar are published on the AHCCCS RHTP website at: https://www.azahcccs.gov/AHCCCS/Initiatives/RHTP/

The AHCCCS RHTP website will post the NOFOs, RFPs by the 3 state agencies identified by the Governor’s Office assigned to administer the priorities (AHCCCS, OEO, ADHS).

You can stay up to date on the AZ RHT implementation and register for the Center for Rural Health’s 52^nd Annual Rural Health Conference at the NAU High Country Conference Center is here:

https://crh.arizona.edu/events/52nd-annual-arizona-rural-health-conference. 

We invited the 3 lead state agencies to present (OEO, AHDS, AHCCCS) at the conference June 2-3 in Flagstaff.

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