Rural Health Transformation Program - Transforming Rural Healthcare Delivery, Hospital Transformation

Rural Health Transformation Program - Transforming Rural Healthcare Delivery, Hospital Transformation

The Rural Health Transformation (RHT) Program was designed to empower states to strengthen rural communities by improving healthcare access, quality, and outcomes through transforming the healthcare delivery ecosystem.

Illinois’ Rural Health Transformation Program will support rural communities across the State of Illinois in improving healthcare access, quality, and outcomes by transforming healthcare delivery. This program seeks to reshape healthcare delivery to better align with community needs and improve the sustainability of rural systems of care. Program Year 1 will support Planning Grants for awardees to develop a regionally tailored and data driven transformation plan that identifies delivery system gaps and unmet community needs and outlines strategies to transform service lines, deploy new models of care delivery, and test sustainable VBP (Value-Based Purchasing) methodologies. Planning awards will also be used to establish regional partnerships, participate in technical assistance and build initial infrastructure. Planning Grant awardees may apply for competitive Implementation awards for years 2-5. Implementation awards may be used to implement transformation plans, including supporting service line transformation; developing sustainable, high-quality care models through investment to establish regional partnerships; hiring clinical and non-clinical staff across hospitals and partnership entities to carry out the strategies identified in the transformation plan; and supporting limited capital expenditures for renovations to transition lines of service.

All RHT applicants must complete the Euna application. Once the completed application is received and approved, the Illinois Department of Healthcare and Family Services will collaborate with each subaward to complete the grant award process.

Note: Stevens Amendment
This funding opportunity is supported by the Centers for Medicare & Medicaid Services (CMS) of the U.S. Department of Health and Human Services (HHS) as part of a financial assistance award totaling $193,418,216.21 with 100 percent funded by CMS/HHS. The contents are those of the author(s) and do not necessarily represent the official views of, nor an endorsement, by CMS/HHS, or the U.S. Government.

The program is designed as a phased initiative that provides planning support to all eligible applicants in Year 1 and competitive implementation funding in Years 2–5. Illinois will award funding to eligible applicants in two phases:

Year 1: Funding supports Planning Grant awardees to complete foundational planning including submission of Transformation Plans, establishing regional partnerships, engaging with the Office of Medicaid Innovation (OMI), and establishing program infrastructure.

Years 2-5: Funding supports implementation of approved Transformation Plans that aim to improve access, quality, care coordination, and financial sustainability for rural communities in Illinois.

Details

• Awarding Agency: Healthcare And Family Serv
• CSFA Number: 478-00-3979
• CSFA Popular Name: RHTP-HT
• Funding Opportunity Number: 3979-20-26-RHTPHT
• Assistance Listings Number: 93.798
• Announcement Type: Initial Announcement
• Award Type: Competitive
• Total Funding Available: $28,191,393.00
• Expected Number of Awards: 97
• Funding Sources: Federal Or Federal Pass Through
• Capital Grant: No
• Indirect Costs Allowed: Yes
• Posted Date: 2026-05-19
• Award Period: 2026-07-01 – 2027-06-30

Funding Source Description

This grant program utilizes federal CMS Rural Health Transformation (RHT) Program funds. Total amount of funding expected to be awarded through this NOFO is up to $28,191,393.00, subject to continued funding and program approval. Funding in future years is subject to CMS’s continuation, review, and award of future Rural Health Transformation funding. The release of this NOFO does not obligate the Department to make an award.

The total amount of funding $28,191,393.00 will be allocated equally among eligible hospitals. If all 97 eligible hospitals apply, this will result in an award amount of approximately $290,000 per hospital.

HFS expects to distribute funds evenly among eligible applicants. However, if fewer eligible applicants apply than expected, HFS may increase award amounts for applicants that meet all requirements, up to the maximum allowable funding. All proposed budgets are subject to HFS review and approval and may be adjusted as needed.

Funding Restrictions

See Part 2: Funding Information

Indirect Cost Description

In order to charge indirect costs to a grant, the applicant organization must have an annually negotiated indirect cost rate agreement (NICRA).
There are three types of NICRAs:

a) Federally Negotiated Rate. Organizations that receive direct federal funding, may have an indirect cost rate that was negotiated with the Federal Cognizant Agency. Illinois will accept the federally negotiated rate. The organization must provide a copy of the federally NICRA.
b) State Negotiated Rate. The organization may negotiate an indirect cost rate with the State of Illinois if they do not have a Federally Negotiated Rate. If an organization has not previously established in indirect cost rate, an indirect cost rate proposal must be submitted through the GATA Grantee Portal no later than three months after receipt of a Notice of State Award (NOSA). If an organization previously established an indirect cost rate, the organization must annually submit a new indirect cost proposal through the GATA Grantee Portal within six months after the close of the grantee’s fiscal year.
c) De Minimis Rate. An organization that has never negotiated an indirect cost rate with the Federal Government of the State of Illinois is eligible to elect a de minimis rate of 15% of modified total direct cost (MTDC). Once established, the De Minimis Rate may be used indefinitely. The State of Illinois must verify the calculation of the MTDC annually in order to accept the De Minimis Rate.

All grantees must complete an indirect cost rate negotiation or elect the De Minimis Rate to claim indirect costs. Indirect costs claimed without a negotiated rate or a De Minimis Rate election on record in the GATA Grantee Portal indirect cost rate system may be subject to disallowance.

Restrictions on Indirect Costs

Yes

Citation Governing Indirect Cost Restriction

Section 71401 of Public Law 119-21

State Award Notices

Successful applicants will receive a Notice of State Award (NOSA) to initiate the grant agreement phase. During this phase, the selected applicant(s) will be contacted by the Department of Healthcare and Family Services to develop a Uniform Grant Agreement, which can be months long process depending on complexity, cooperation and conformity with all applicable federal and state laws. HFS reserves the right to issue a reduced award, or not to issue any award if it is in the Department’s best interest to do so. The NOSA is not an authorization to begin performance or incur costs.

Administrative and National Policy Requirements

In addition to implementing the funded project consistent with the approved project proposal and budget, agencies selected for funding must comply with applicable grant terms and conditions and other legal requirements, including the CMS Rural Health Transformation  Program funds, and GATA.

Additional programmatic and administrative special conditions may be required.

Reporting

Program objectives include reshaping and right sizing hospital service delivery by filling care gaps, transforming service lines, and shifting business models to better align with community needs and increase the number of rural patients served. This program will also increase access to care by improving the long-term financial viability of rural hospitals through testing of value-based payment models.

Recipients must submit periodic financial reports, periodic performance reports, final financial and performance reports, and, if applicable, an annual audit report in accordance with the 2 CFR 200 Uniform Guidelines. Future awards and fund drawdowns may be withheld if reports are delinquent.

Additional Information

https://hfs.illinois.gov/info/fedresctr/ruralhealthtp.html