RALEIGH, NC – North Carolina has been awarded more than $213 million in federal funding to expand and strengthen health care services in rural communities across the state.
The Centers for Medicare & Medicaid Services (CMS) announced the award through its Rural Health Transformation Program (RHTP), with funding designated for Fiscal Year 2026. The award positions North Carolina to receive additional funding annually for the next five years, potentially bringing hundreds of millions of dollars in federal investment to rural health systems statewide.
Governor Josh Stein praised the announcement, highlighting North Carolina’s leadership in rural health innovation.
“North Carolina has long been a leader in advancing rural health care solutions, and we are excited about how this new program can support innovations to help make rural communities healthier,” Stein said. “Our rural communities face unique health care challenges, and this grant will connect more people to more high-quality health care.”
The North Carolina Department of Health and Human Services (NCDHHS) developed the state’s RHTP plan in partnership with more than 420 stakeholders, including rural hospitals, community health centers, local health departments, Tribal communities, faith-based groups, and community organizations.
NC Health and Human Services Secretary Dev Sangvai said the program will build on collaboration already underway across the state.
“We look forward to continuing the collaborative effort needed to make sure everyone has access to affordable, high-quality, patient-centered health care while reducing the burden on rural health providers,” Sangvai said.
North Carolina has the second-largest rural population in the nation, with more than 3 million residents living in rural areas across 85 counties. That population represents more than five percent of the total rural population in the United States.
The Rural Health Transformation Program outlines six core strategies to improve care over the next five years, including launching locally governed “NC ROOTS” hubs to connect medical, mental health, and social services; expanding prevention, maternal health, nutrition, and chronic disease management programs; increasing access to mental health and substance use disorder treatment; investing in the rural health care workforce; supporting providers’ transition to value-based care models; and enhancing health care technology through artificial intelligence and expanded broadband access.
As part of the initiative, the state plans to establish a Rural Health Innovation Fund to help rural providers access technology needed to modernize their practices. NCDHHS will also create a statewide governing structure and begin developing regional NC ROOTS hubs once federal funding is received.
The program will be guided by a statewide steering committee that includes NCDHHS divisions of Medicaid, Public Health, Mental Health, and the Office of Rural Health, along with universities, community colleges, rural hospitals, clinics, and local partners.
On January 16, 2026, NCDHHS leaders will host a virtual event to outline the program’s goals, next steps, and statewide impact. Additional details will be released in the coming weeks.
Congressman Don Davis (NC-01) welcomed the announcement, calling the funding critical for rural families.
“This award is vital for improving health outcomes for rural North Carolina families,” Davis said.
Davis previously led members of North Carolina’s congressional delegation in urging CMS to fully fund the state’s application, citing the state’s large rural population. The $213 million allocation ranks as the tenth-highest RHTP award in the nation. Additional funding announcements are expected for fiscal years 2027 through 2031.
While state leaders celebrated the funding, NCDHHS officials noted that North Carolina continues to face significant challenges due to anticipated federal funding reductions, including potential Medicaid losses over the next decade. State officials say they will maximize available RHTP funds while continuing to advocate for long-term investment in rural health care.
The Rural Health Transformation Program is expected to improve care for more than 3 million rural North Carolinians and support more than 400 rural health facilities statewide. More information is available through the NCDHHS website.
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