- RHT Program funding is tied to performance, not just participation
- Rural providers face growing financial pressure from coverage shifts
- Accurate risk adjustment coding is essential for fair reimbursement
- Missed HCCs can weaken quality scores and funding eligibility
- High-quality, interoperable data supports long-term rural sustainability
Today, many rural health systems operate on narrow margins, where even small changes in reimbursement can significantly impact financial performance. That reality makes policy shifts feel more immediate. The recent enactment of H.R.1 – commonly known as the One Big Beautiful Bill Act (OBBBA) – adds another layer of complexity. Under it, changes to Medicaid and Affordable Care Act marketplaces are expected to affect coverage levels in rural communities and shift more cost responsibility to providers.
At the same time, the OBBBA also established a $50 billion Rural Health Transformation (RHT) Program, providing an opportunity for rural communities to stabilize care delivery and invest in long-term growth. Together, these dynamics signal a shift in how rural healthcare will be supported and evaluated in the years ahead, with growing emphasis on value-based care, performance measurement, and data-driven accountability.
What the rural health transformation program signals
The RHT Program is designed to help rural providers strengthen care in underserved areas by investing in infrastructure, care models, and technology. At its core, the program is about access, quality, and long-term sustainability.
The funding will be distributed over five years, beginning in federal fiscal year 2026. All 50 states applied for the program, and in December, the Centers for Medicare & Medicaid Services (CMS) announced that every state will receive first-phase funding, with awards ranging from approximately $147 million to $281 million. States have already received 50% of their allocated funding, while the remaining portion will be awarded based on performance against state-defined metrics and program goals.
This structure underscores a critical point: future funding will not be tied solely to participation, but to measurable progress. As states move into later phases of the program, rural health systems will need to show results. That means demonstrating outcomes, readiness for value-based care, and the ability to support regional collaboration.
Performance measurement and risk adjustment coding
As states and health systems collaborate under the RHT Program, the ability to accurately capture and represent clinical complexity becomes increasingly important. Rural populations experience 1.48 times higher rates of multiple chronic conditions than their metropolitan counterparts, emphasizing the importance of risk adjustment models for fair reimbursement and performance measurement.
Incomplete capture of Hierarchical Condition Categories (HCCs) can compromise both clinical and financial goals. When conditions are under-documented, risk scores may be understated, quality metrics may not fully reflect the work being done, and health systems may struggle to demonstrate the impact required to qualify for additional program funding.
From a financial perspective, this is more than a coding issue – it’s a revenue integrity issue. Inaccurate or incomplete risk adjustment coding can reduce reimbursement while hospitals and physician groups are managing rising uncompensated care and administrative complexity. Without reliable documentation and risk capture, even well-designed value-based contracts and transformation funding can fall short of protecting rural hospitals from financial strain.
Our recent blog, Active documentation as a revenue strategy in 2026, explains this in more detail.
Technology, interoperability, and the next phase of rural care
The RHT Program also places strong emphasis on modernizing rural health infrastructure and technology. States are investing in tools that strengthen cybersecurity, improve interoperability, expand telehealth and remote patient monitoring, and reduce clinician burden through workflow optimization and emerging technologies, such as AI-assisted documentation.
These initiatives reflect a broader recognition that value-based care and performance-driven funding depend on high-quality, interoperable data. To manage populations effectively, rural providers must be able to exchange information across care settings, align clinical documentation with quality reporting, and ensure that data captured at the point of care supports downstream analytics and reimbursement.
In most cases, that work starts with getting the clinical story right in the electronic health record (EHR).
How IMO health supports rural health systems
IMO Health supports rural health systems as they work to meet the multiple goals of the RHT Program: advancing value-based care and modernizing health IT infrastructure.
IMO Health strengthens value-based care performance by surfacing actionable, real-time insights directly within the EHR problem list. Drawing on prior encounters, unstructured clinical notes, and payer data, our problem list tooling helps clinicians identify missing chronic conditions and HCCs, improve risk score accuracy, and reduce documentation burden without disrupting existing workflows.
Equally important, IMO Health’s clinical terminology – used by 89% of US clinicians – supports interoperability and data quality. IMO Health’s terminology enables clinicians to document what they mean using precise, clinically relevant language, while still mapping to required codes and standards to support interoperability initiatives like USCDI. That combination helps ensure that performance assessments and funding decisions truly reflect the care being delivered.
