Rural Health Transformation Program

On July 4, 2025, P.L. 119-21, or HR 1, was signed into law. Among several provisions, it created the Rural Health Transformation Program (RHTP), a $50 billion fund for rural healthcare providers. All 50 states are eligible to apply for this funding. 

HFS submitted Illinois’ application for funding to the federal Centers for Medicare and Medicaid Services (CMS) on Nov. 5, 2025.

Illinois’ Rural Health Transformation Program is designed to deliver critical funding and drive sustainable change in our most underserved rural communities—because every resident deserves access to high-quality care, no matter where they live. 

Fast Facts

$1 Billion 

Illinois is applying for $200 million per year for five years, for a total of $1 billion. 

Stakeholder Engagement:

HFS held more than 38 stakeholder meetings, held a public listening session with nearly 300 attendees, received over 120 written comments and proposal, and held 46 follow-up meetings. 

1,915,300 

Illinois’ rural population is estimated to include about 1.9 million people and represents approximately 15% of the state’s population.  

Lack of Care  

34% of Illinois counties do not have any obstetric service.  

Application goals  

HFS developed a vision for the future of rural healthcare in Illinois based on the five strategic goals outlined by CMS.  

The RHTP application includes 3 categories of initiatives: (1) Transforming Rural Healthcare; (2) Overcoming Geographic Barriers to Care; (3) Building a Resilient Rural Workforce. The purpose of HFS’ RHTP is to (1) invest in infrastructure and innovative models of care to right-size care delivery in rural communities; (2) break down existing barriers to care by bringing healthcare into the rural communities; and (3) build a robust local workforce

Sample funding uses 

Funds will be used to support these initiatives through a combination of grants to and direct investments in providers. Together, funds will be used toward hospital transformation grants; primary care and behavioral health integration; value-based payment initiatives; chronic disease prevention programming; infrastructure in EMS, mobile health clinics, and mobile crisis units; investment in telehealth and technological innovation; scholarship and university program expansion; regional training and certification programs; expansion of community college programs; and expansion of high-school community outreach programs. 

Proposed Strategic initiatives  

Illinois proposes using Rural Health Transformation Funds to support eight key initiatives.   

1. Hospital Transformation  

1. Community Care Infrastructure  

1. Hospital Disease Prevention  

1. EMS and Mobile Healthcare   

1. Technology Innovation for Virtual Care  

1. Healthcare Workforce Expansion  

1. Training Healthcare Support Workers  

1. Rural Health Education Pipeline 

Next Steps 

• Federal CMS will make award announcements by December 31, 2025; 

• HFS will enter into budget negotiations with federal CMS; 

• Continued stakeholder engagement with grant partner entities, trade groups, and others;  

• Staff planning and implementation at HFS in partnership with other state agencies. 

More details on the federal Rural Health Transformation Program and Illinois’ application for funding can be found in HFS’ November 2025 RHTP Update to the Illinois General Assembly.

HFS Statement following RHTP application submission – Nov. 6, 2025

The Illinois Department of Healthcare and Family Services (HFS) has submitted an application for the federal Rural Health Transformation Program (RHTP) that is geared toward creating a stronger and more accessible healthcare system in the rural communities in our state. The Department looks forward to the federal Centers for Medicare and Medicaid Services’ (CMS) funding allocation announcement by the end of this year. HFS applied for a total of $1 billion, or $200 million per year over five years, as instructed by federal CMS, which instructed every state to apply for this same amount. 

Illinois’ application was informed by extensive stakeholder feedback about how to best support rural communities in the state. Before submitting the application, HFS engaged with other state agencies, provider associations, rural hospitals and health centers, community mental health centers, universities and community colleges, legislators and vendors. HFS also held a listening session with nearly 300 attendees and received over 120 written public comments and proposals.