California’s Rural Health Transformation Program: What Counties, Providers, and CBOs Need to Know
California is receiving $233 million in federal funding to transform rural health care — and applications are open now, with most windows closing by the end of August. Given the program’s performance-contingent structure, strong evaluation and reporting is the mechanism through which California and its grantees will protect future funding.
This blog details what that means for counties, health districts, hospitals, and providers, and what evaluation and reporting support you’ll need.
The RHTP Opportunity
The federal Rural Health Transformation Program (RHTP) was signed into law in July 2025, authorizing a $50 billion, five-year investment administered by the Centers for Medicare & Medicaid Services (CMS). Available to all 50 states that apply, the program is designed to improve rural health access, quality, and outcomes through system-level transformation.
Critical Rural Health Transformation Program Parameters
- Not a supplement for existing coverage. Funding cannot be used to supplant lost or past Medicare or Medicaid funding or billings.
- No direct patient care payments. Funding cannot be used to pay for direct patient care from doctors, hospitals, or other providers.
- Time-limited spending windows. Funding is distributed in annual budget periods. Any FY2026 (Budget Period 1) grant funding must be fully spent by September 30, 2027.
- Performance-contingent. CMS developed a 23-factor scoring methodology to determine awards. Funding in years two through five is tied directly to demonstrated program performance. How well states and grantees execute in Year 1 directly affects future allocations.
California’s share for FY2026 is $233,639,308—making this one of the largest single federal investments in California’s rural health infrastructure. However, this figure also represents the lowest per capita allocation of RHTP funding across all 50 states.
This funding comes with accountability, making strong evaluation and reporting essential.
Learn more about the federal program and its nation-wide requirements.
CalRHT: California’s Approach
The California Rural Health Transformation Program (CalRHT) is led by the California Department of Healthcare Access and Information (HCAI). With 82.1% of California qualifying as a rural census tract, the state’s implementation footprint is substantial.
California’s strategy is organized around three interrelated initiatives:
- Transformative Care Model: redesigning how care is structured and delivered in rural communities by leveraging a hub-and-spoke model to create clinical partnerships between rural hospitals, clinics, and other providers, including tribal partners.
- Workforce Development: expanding the rural health workforce pipeline and retention.
- Technology & Tools: leveraging telehealth, data systems, and digital infrastructure to extend access.
A note for behavioral health partners: CalRHT fund permitted uses explicitly include behavioral health services and supports, including expanded access to opioid use disorder treatment, other substance use disorder services, and mental health care (See HCAI March 20, 2026 program briefing).
The Grant Programs
Transformative Care Model (TCM)
Accelerator Partner Program
Support for hospitals or other organizations in rural regions that demonstrate strong readiness and commitment to implement CalRHT’s Transformative Care Model (TCM) through regional care collaboratives and hub-and-spoke relationships that strengthen primary and maternity care in rural parts of the state. This program is looking for organizations willing to test new, cutting-edge care models: virtual maternity check-ins, tele-cardiology, shared on-call scheduling across a hub-and-spoke network.
- Funding: $39,010,000 allocated for Budget Period 1 (BP1). Estimated 5–25 awards, with an $8 million per-award ceiling.
- Procurement approach: Reviewed qualitatively across four components: Project Overview, Partnership Participants, Operations Capability, and Implementation. No fixed-point scoring rubric, giving HCAI more discretion in this category than in the others.
For more details: Accelerator Partner Program Grant Guide
Expand and Support Rural Workforce Capacity — Family Medicine Obstetrics (FM-OB)
Funds the creation or expansion of FM-OB Fellowship programs in rural California. The goal is to grow the pipeline of family physicians trained in obstetrics who can serve rural maternity care. Specifically, it funds the program infrastructure, not individual fellows.
- Funding: $6,500,000 available in BP1. Awards are expected to range between $150,000 and $500,000 per fellowship program per year (a fully loaded FM-OB fellowship slot runs roughly $200,000–$250,000/year; CalRHT covers only the programmatic and infrastructure share).
- Eligibility: Must be an aspiring or existing GME sponsoring institution and also one of: hospital (incl. Critical Access Hospitals (CAH)), Federally Qualified Health Center (FQHC)/Look-Alike, Tribal clinic/Native American health center, certified Rural Health Center, other comprehensive community health clinic, regional collaborative/consortium, health care district, or academic medical center/university. If the parent organization isn’t rurally located, a rural training partner is required.
- What it does not fund: No individual fellow support: no salary, stipend, housing, relocation, tuition, loan repayment, or sign-on/retention bonuses. Fellows who go on to practice at CalRHT participating sites become separately eligible for WDRR bonuses (below), so the two programs are designed to connect.
For more details: Expand and Support Rural Workforce Capacity Grant Guide
Technology & Tools
EHR Modernization
Funds rural facilities to adopt a first-time certified EHR or replace an existing EHR. This is the foundational layer, as a separate follow-on program (Technology and Tools Improvement Grants, Years 2–5) will later fund tools built on top of the EHR, such as telehealth, e-Consult, cybersecurity, and analytics.
- Funding: $11,650,000 in BP1. Up to 18 grants, capped at $2,000,000 per subaward. One application per organization per cycle. No joint or consortium applications.
- Eligible organizations: Same rural core list as WDRR, plus two additional categories: Skilled Nursing/Long-Term Care Facilities and County-Operated Health/Behavioral Health Facilities.
- Scoring is the most granular of the four programs: a 100-point rubric where Feasibility & Vendor Readiness alone is worth 30 points. Applicants with a named vendor or letter of intent will score meaningfully better than those without one.
For more details: EHR Modernization Grant Guide
Workforce Development
Workforce Development Recruitment and Retention Program (WDRR)
Funds eligible rural organizations to provide recruitment and retention bonuses to Health Professionals at qualifying rural California sites.
- Funding: $54,170,000 available for BP1. HCAI aims to fund up to 40 organizations/collaboratives and up to 400 Health Professionals.
- Every bonus carries a uniform 5-year rural service obligation.
- Award caps: $1,000,000 per individual facility; $2,000,000 per consortium /collaborative/system; $150,000 per Health Professional (recruitment or retention bonus); up to 10% of total award allowed as a “program costs allowance” (in place of indirect costs).
- Eligible organizations: Rural hospitals (incl. CAHs), FQHCs/Look-Alikes, RHCs, Tribal clinics/Native American health centers, other comprehensive community health clinics, regional collaboratives/consortia, health care districts — all physically in HRSA-defined rural California.
- Eligible Health Professionals: Primary care, maternity care, nursing, and community-based direct care roles are highest priority; behavioral health only counts if integrated into primary/maternal care teams (behavioral-health-only roles are excluded); oral health is secondary priority.
For more details: Workforce Development Recruitment and Retention Program Grant Guide
Key CalRHT Milestones
Each program has its own application window, but they converge on the same federal backstop: all Budget Period 1 funds must be obligated by October 30, 2026, and fully spent by September 30, 2027. As of this blog publication, the application deadlines are set to close within the next couple of days and weeks.
Source: Rural Health Transformation Program FAQs: Compliance & Reporting
How to Apply
CalHCAI has created application portals so that applicants can apply for all grant programs online. Access all Application Portals here.
What CalRHT Reporting & Evaluation May Look Like
CMS has established a structured reporting framework that all state grantees—and by extension, their sub-grantees—will need to meet.
Federal program parameters and signals from other states’ procurement processes indicate that California grantees should expect to:
- Develop five-year evaluation plans, updated annually
- Build logic models and performance measurement frameworks linking goals, interventions, outputs, and short-, medium-, and long-term outcomes
- Establish baseline measures in Year 1 and track performance against them in subsequent years
- Develop and execute data collection processes, including grantee and vendor surveys
- Produce quarterly progress reports
- Provide actionable mid-course correction recommendations to program leadership
- Translate findings into materials suitable for CMS, state agencies, and community stakeholders
- Produce a final evaluation report at grant conclusion
CMS expects states to track against work plans, timelines, and outcomes using both process and impact measures. Ongoing monitoring may also include desk reviews, site visits, and collaboration with CMS project officers.
State-Level CMS Reporting Requirements
How EVALCORP Can Help
EVALCORP has deep experience in program evaluation, needs assessment, and strategic planning for publicly funded health and human services programs, including behavioral health, Medi-Cal, and complex federal grant initiatives. As California counties and eligible organizations prepare to apply, evaluation and reporting capacity will be essential at every stage, from the application itself through five years of performance-contingent funding.
We can help your organization:
- Develop a CalRHT evaluation plan aligned with CMS scoring criteria and California’s initiative-level priorities
- Design performance measurement frameworks, including logic models, baseline metrics, and outcome tracking systems
- Build data collection and reporting infrastructure, to collect metrics and meet both HCAI and CMS requirements
- Prepare quarterly and annual progress reports to demonstrate results and support continued funding eligibility
- Provide implementation science support to identify what’s working, where adjustments are needed, and how to document your program’s impact
Integrating RHTP with the BHSA Transition: For counties already navigating the Behavioral Health Services Act (BHSA) transition, CalRHT represents both an opportunity and an additional layer of accountability. Coordinating evaluation capacity across both frameworks, ensuring your reporting systems are built to serve both, is exactly the kind of integrated support EVALCORP is positioned to provide.
Now is the time to get ready. Contact us to learn more about how EVALCORP can support your CalRHT evaluation and reporting needs.
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