This is an exclusive BHB+ story.
The federal Rural Health Transformation Program (RHTP) promised substantial monetary support for behavioral health and addiction treatment providers in some of the most remote parts of the country. Yet, early recipients of the funds are concerned it paves a runway that ends at a steep cliff with no parachute.
The program is close to concluding the first leg of its five-year trajectory, which aims to pump $50 billion into rural healthcare by 2030. The Trump administration just announced the year-two award amounts for all 50 states, with half receiving funding decreases and half receiving increases compared to year one.
Even with federal funding to begin addressing the access, resources and financial barriers that rural providers face, many industry leaders told Behavioral Health Business it is unlikely to be enough to sustainably move the needle forward on care outcomes long-term.
“RHTP funds the setup, not ongoing operations,” Alex Yarijanian, CEO of Carenodes, told BHB. “A grant can open a rural behavioral health clinic, but reimbursement keeps it open. If clinicians aren’t credentialed and contracted with Medicaid managed care plans and commercial payers, the program disappears when the money does.”
Carenodes is a healthcare administrative services organization that supports more than 600 clinical providers in 48 states with contracting, credentialing and network enrollment. In his role as CEO, Yarijanian will be involved in deciding alongside the providers which rural behavioral health programs survive after the grant funding runs out.
“The best use of RHTP dollars in behavioral health is making programs reimbursable by year three, so they can sustain themselves when the funding ends,” Yarijanian said.
Right now, there are 160 million Americans who live in federally designated rural mental health professional shortage areas and about 90% of rural regions lack methadone medication-assisted treatment (MAT) for addiction care.
In RHTP planning documents compiled by the Centers for Medicare & Medicaid Services (CMS), behavioral health and addiction treatment are cited verbatim as core priorities in 31 states; all 50 states include a scope of behavioral health improvements in some form.
The program’s impetus was partially to quell concerns about the lives impacted and funding lost from the One Big Beautiful Bill’s changes to Medicaid. The Congressional Budget Office estimated previously that because of the bill’s passage, by 2034 the number of uninsured Americans will climb by an additional 11.8 million. Some estimates placed the impact of rural health funding’s deficit at $137 billion over the next 10 years.
“I think it’s a great start,” Morgan Hension, senior director at Ascension Recovery Services, told Behavioral Health Business. “When we look at rural healthcare in West Virginia, we look at lack of transportation, lack of internet service, also lack of health literacy … and so being able to just bring more access to those areas is going to be great.”
Ascension Recovery Services develops and manages integrated behavioral health and substance use disorder care systems. It has opened 70 new SUD treatment programs across 35 states in recent years.
As part of the program, CMS has authority to allocate $10 billion per fiscal year from fiscal year 2026 through 2030, but the funding is not distributed evenly. It’s also challenging and confusing to access, depending on which state a company may be in, some providers told BHB.
In West Virginia, where Henson secured $1.5 million from the state’s RHTP year one award pot of close to $200 million, she described the process as unclear and difficult to plan around. From this past August through Oct. 9, Henson said the Ascension team received questions from the state about their application, without being told whether or not they would receive anything.
They were granted the funding award on Oct. 9, but RHTP first-year funding must be planned out for each recipient organization’s priorities by Oct. 30, 2026, and fully spent by Sept. 30, 2027. Throughout the five years, CMS will redistribute any unused funding. All funds must be spent by the end of the 2032 fiscal year.
“It would be nice if there was at least some type of, ‘Hey, you’ve been selected as the awardee. We’re still going through the formal pieces, but start thinking about how you want to run this,’” Henson said of the communication process around Ascension’s selection.
Still, it is money on the table that is up for grabs, and both providers and investors have turned their attention to figuring out how to secure a slice of it from their respective states.
“These funds are a great tool for organizations to get programs up and going and provide more access, like help make them sustainable long-term,” Henson said.
All 50 states received $100 million in base funding. The additional RHTP funds were decided via a formula that evaluates the state’s rural characteristics, the size of the patient population that is dual eligible for Medicaid and Medicare, the quality of a state’s Medicaid data and the strength of its RHTP proposal plan from the application. After receiving the money from CMS, each state agency must distribute it to local entities through legacy procurement rules. That means providers are the primary applicants submitting requests for proposals for the funding in each state.
Thus far, 11 states have finalized agreements across all of their year one proposals, 31 states have multiple active proposals across different stages of development with some awards already finalized, and 8 states have proposals that are still in early stages of review, per data tracked by the National Rural Health Association.
Once an organization applies and is approved, they are locked into the RHTP reporting. As long as they continue to meet program requirements, the organization can receive more funding in subsequent years.
The promise and the pitfalls
Shortly after securing $1.5 million in West Virginia, Henson said the company was asked to cut its budget by $500,000. It was confusing. At the time, she said they hadn’t officially received the award.
“While we were going through this process of back-and-forth questions, we got a request to cut our budget by $500,000,” Henson said. “On one hand, it’s like, ‘Okay, we’re still getting a really nice chunk of money to do some amazing things with, but on the other hand, now, [the state] wants these revisions back by [the] end of the day, cutting out $500,000? What is this going to look like?’”
Even after the award process moved forward, access continued to be delayed due to administrative and state logistics. So even while Ascension allocated the funds for their RHTP plans in West Virginia, it couldn’t initially access the funding to start the work.
Still, Henson said that one of Ascension’s priorities now through the end of the five-year RHTP program will be to identify how to make what they build sustainable.
Ascension Recovery Services’ plan is to put some of the funding toward mobile services. She sees the responsibility of maintaining program and investment viability as partially on the provider and partially on the government.
Dr. Max Doshay, co-founder and CEO of KMN Psych, a comprehensive mental health and neuropsychic evaluation center located in San Diego which serves surrounding rural residents, told BHB that smaller providers also face issues in obtaining RHTP funds.
“Smaller rural clinics are typically very knowledgeable about the needs of their local community,” Doshay said. “However, they are also likely to be short on professional full-time employees who would be able to devote time to developing/submitting grants as well as completing all the required financial planning and reporting documentation.”
Smaller and independent providers make up a sizable chunk of the rural behavioral health and addiction treatment workforce. Doshay added that clinicians who fit these descriptions are also more likely to face hurdles in documenting, reporting and submitting applications or reports even after receiving the funding.
“This could lead to the very organizations with the most need having the least ability to take advantage of available funds,” Doshay said.
The fix
Year one of the RTHP focused on award distribution for projects and organizations that plan to use the capital to improve infrastructure, workforce recruitment, interoperability of technology systems and to build out behavioral and crisis access points.
Year two aims to further build on those priorities with an additional focus on reporting for those already involved in the program, deepening implementation, broadening the scale of care and crafting plans for long-term sustainability.
While CMS pitches this as a way to test and innovate value-based care arrangements, it still puts the onus on the provider groups to find sustainability long term.
“The number one pitfall is that it’s temporary,” Yarijanian said. “I think it would have been very, very important for this program to have some [parameters such as] ‘okay, here’s your one-time funding,’ and in order to get that funding, there should be some demonstration of a plan to be sustainable after.”
Lacking that framework, Yarijanian fears the RHTP funding will lead providers off a well-paved cliff by the end of year five. Particularly for providers who perhaps make investments in new programs or equipment with the funding. After year five, they still have to find ways to maintain it, service it and bill for it.
If part of the funding could be set aside for technical assistance or experts who can work with recipient organizations on how to maximize the funding through and beyond the RHTP’s five-year program, it would have been a game changer, Yarijanian added.
Additional applications for rural organizations that did not apply during year one, but want to during year two, are expected to open between January and February 2027.
The post ‘RHTP Funds the Setup, Not Ongoing Operations’: Bridging the Gap in Rural Behavioral Health appeared first on Behavioral Health Business.