North Carolina has received $213 million from the federal Centers for Medicare & Medicaid Services (CMS) through the Rural Health Transformation Program (RHTP). The funding aims to improve health care access for people living in rural areas of the state. North Carolina applied for these funds in November with bipartisan support from its congressional delegation. The award is designated for 2026, and the state will be eligible for additional funding annually over the next five years.
Governor Josh Stein commented on the announcement, 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. 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) developed the plan by engaging with over 420 stakeholders such as rural hospitals, community health centers, local health departments, Tribal communities, community-based organizations, and faith-based organizations.
NC Health and Human Services Secretary Dev Sangvai said, “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. 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 holds the second-largest rural population in the United States after Texas. Its residents account for over 5 percent of all U.S. rural residents.
The state’s RHTP outlines six main strategies for transforming rural health care systems over five years: launching locally governed “NC ROOTS” hubs that link medical and social services; expanding programs focused on prevention, chronic disease management, maternal health, and nutrition; increasing access to mental health services including substance use disorder treatment; investing in workforce development; supporting providers as they move toward value-based care models; and enhancing technology use through artificial intelligence and broadband expansion.
Implementation will involve a coalition that includes state agencies, community organizations, academic institutions, private-sector partners, and healthcare providers. One planned initiative is a Rural Health Innovation Fund (RHIF), designed to help providers adopt new technologies. Upon receiving federal funds, NCDHHS plans to set up statewide governance structures and regional NC ROOTS hubs while involving stakeholders in decisions about funding allocation.
A statewide steering committee—featuring representatives from NCDHHS’ Office of Rural Health along with divisions of Medicaid, Public Health, Mental Health—and partners from universities and clinics will guide RHTP efforts.
NCDHHS leaders are scheduled to hold a virtual event on January 16, 2026 to discuss RHTP goals and upcoming steps. More details about this event will be provided soon.
The program is expected to benefit more than three million residents living in rural areas across North Carolina by supporting over 400 facilities and attracting significant federal investment over five years. Additional information about RHTP can be found at www.ncdhhs.gov/rhtp.
Despite this new funding opportunity under RHTP, North Carolina faces challenges due to recent federal reconciliation law H.R. 1 that could reduce Medicaid funding by nearly $50 billion over ten years along with other hospital support cuts. NCDHHS stated it would continue advocating for further resources for the state’s rural healthcare system while making full use of current opportunities.