The American Hospital Association has urged CMS to lift funding caps in the Rural Health Transformation Program.
In an Aug. 5 letter to CMS Administrator Mehmet Oz, MD, the AHA asked the agency to remove the program’s 15% cap on provider payments and 20% cap on infrastructure funding for years 2 through 5 of the five-year, $50 billion initiative.
Molly Smith, AHA group vice president of public policy, wrote the letter on behalf of nearly 5,000 member hospitals and health systems, more than 270,000 affiliated physicians and 2 million nurses. Ms. Smith said the caps are not required by statute and limit the program’s ability to modernize rural hospitals, many of which date to the 1947 Hill-Burton Act.
The AHA also asked CMS to work with Congress to give states more time to spend obligated funds and to let states revise applications, noting that states had less than two months to prepare them. That compressed timeline echoes concerns raised earlier in 2026 about whether RHTP funds will reach the rural providers the program was designed to stabilize.
On administrative process, the AHA asked CMS to publicly post state-reported funding data, confirm hospitals will not have to front project costs before reimbursement, and clarify that funds cannot be held by recipients for more than three working days. The group also requested technical assistance centers to help rural providers apply for funding, one of several access barriers rural hospital leaders have raised as RHTP dollars begin reaching states.
The AHA also asked CMS to create dedicated lines on the Medicare cost report’s Worksheet G-3 so hospitals can report RHTP funds separately, without skewing cost and reimbursement figures. The letter arrives as CMS continues distributing funds from the first year of the five-year, $50 billion program to states.
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