This blog series takes a closer look at targeted health priorities being advanced by states in their Rural Health Transformation program (RHTP) applications. As authorized under the One Big Beautiful Bill Act (OBBBA), the Centers for Medicare and Medicaid Services (CMS) will provide states with $50 billion over 5 years to strengthen and modernize health care in rural communities. Each state developed a plan in their applications to expand health care access, strengthen workforces, build infrastructure and technology, and support care delivery innovation within rural communities. CMS has awarded RHTP funds to states for the first year, ranging from $147 to $281 million.
Rural Health Resources
Community Health Workers (CHW) are an essential, community-based workforce routinely recognized by state, federal, and local governments and health system partners for their unique role in connecting communities to health and social resources. States are actively incorporating CHWs into their policy strategies to improve whole person and family health. This includes responding to maternal and child health needs, preventing chronic disease, improving health literacy and linkage to care, and addressing the needs of aging communities, people with disabilities, and others.
Over the past several years, states have significantly increased activity in CHW employment, training, and certification. States have also sought coverage and payment of CHW services through Medicaid reimbursement, grant funding, and other public and private partnerships. For more information about state CHW policy, including Medicaid reimbursement approaches, please refer to NASHP’s 50-state CHW policy tracker.
The Centers for Medicare and Medicaid Services Rural Health Transformation Program (RHTP) provides a new opportunity for states to continue to increase access to CHW services in multipronged efforts to improve outcomes in rural communities.
Key Takeaways
- Based on NASHP’s scan of publicly available applications, at least 32 states included CHW-related initiatives primarily focusing on workforce development and addressing chronic disease management.
- CHW initiatives centered around workforce development and focused on topics such as CHW apprenticeship, training, and certification programs; CHW employment; primary care integration; and chronic disease management and reduction.
Rural Health Transformation Program
In the RHTP Notice of Funding Opportunity, CMS identified CHWs as a key workforce primed to address the health needs of rural America due to their unique knowledge of their communities, citing this workforce as an example of how states could use awarded funds.
The following examples illustrate some of these key initiatives. At the time of publication, states are still in discussion with CMS and awaiting final budget approvals for their proposals. NASHP will continue to track state CHW strategies as RHTPs are implemented. For detailed information about CHW proposals across each state, please see the scan of state RHTP proposals below.
State Examples
Arizona
Through its Key Health Initiatives/Priority Initiatives Grant Portfolio , the state would use funding to train CHWs and provide well-being support to reduce burnout. Counties would also be able to bill for CHW services based on needed approach and will receive assistance from the Arizona Department of Health Services and Arizona Health Care Cost Containment System, which runs the state’s Medicaid program.
Arizona reimburses for CHW services through a Medicaid State Plan amendment and 1115 demonstration waiver. The state also has a CHW certification program.
Iowa
Through the proposed Communities of Care initiative, CHWs will be part of a co-located service-delivery model and will enhance care coordination and chronic disease prevention. RHT Program funds will also be used to pay CHW salaries, and at least one CHW per site will receive training on Medicaid and Medicare to support dually eligible beneficiaries.
Iowa does not currently directly reimburse for CHW services through Medicaid.
Nebraska
As part of the proposed Regionalized Rural Access and Navigation initiative, the state will support development of a state CHW association, pursue legislation to establish a state CHW certification, develop a hub model where CHWs will work through local health departments, and collect data and metrics to develop a state plan amendment for to reimburse for CHW services through Medicaid.
Nebraska does not currently directly reimburse for CHW services through Medicaid.
Wisconsin
Through the proposed Rural Talent Recruitment and Retention initiative, the state will develop a CHW pilot to demonstrate return on investment to ultimately develop a State Plan amendment to reimburse for CHW services in 2028. This initiative will also support the Wisconsin CHW Association.
Wisconsin does not currently directly reimburse for CHW services through Medicaid.
Future Outlook
States have made significant steps to integrate elements of CHW financing through current Medicaid strategies and community-based partnerships. While Medicaid remains one key approach, RHTP funding is an additional opportunity to address the needs of rural populations by further employing and developing the CHW workforce.
NASHP will continue to support states throughout the implementation of their RHTP plans.
Note: The examples highlighted here are taken from publicly available state RHTP applications prior to December 29, 2025. These strategies may continue to evolve, as states finalize plans and begin implementation of activities in the coming months.
CHW Scan of State RHTP Applications
*To view the table in full-screen mode, hover over it and click the icon in the top right corner. Or download/view a PDF of the table here.
Other blog posts in this series:
Acknowledgments
Support for this work was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the foundation.
