The State of Arizona submitted an application to the Centers for Medicare & Medicaid Services (CMS) under the Rural Health Transformation (RHT) program requesting $200 million to support rural healthcare system stability and access. Arizona was awarded $167 million through the program. The state has indicated it will submit a revised budget to CMS reflecting the final award amount.
Arizona’s original application focused on two primary objectives: strengthening the rural health workforce and improving access to care in rural and frontier communities. A central component of the proposal was a Rural Health Workforce Development and Training Program, which requested approximately $57 million annually over five years. This program was designed to support recruitment and retention of clinicians and allied health professionals through high school and career and technical education pathways, expanded rural clinical rotations and residency programs, financial incentives such as stipends and relocation assistance, and training programs tied to rural service commitments. The application also identified workforce retention challenges related to long travel distances, housing availability, professional isolation, and burnout.
In addition to workforce initiatives, Arizona’s proposal included a Priority Health Initiative addressing behavioral health and substance use disorder services, chronic disease prevention and management, and maternal, fetal, and infant health. The application also proposed expanding telehealth capacity, supporting mobile and satellite care delivery models, and reducing administrative burdens for small rural providers through shared services such as electronic health record licensing and back-office support.
The application outlined a funding structure that would distribute resources through subawards and cooperative agreements to eligible rural hospitals, clinics, local governments, educational institutions, and community-based organizations. It also included planned investments in data systems, performance dashboards, and fiscal tracking tools to meet federal reporting and accountability requirements.
Oversight and implementation of Arizona’s RHT funds are assigned to the Arizona Office of Economic Opportunity, with coordination planned across state agencies that administer workforce and Medicaid-related programs. The proposal references collaboration with entities that have existing responsibilities for healthcare delivery, workforce development, and program compliance.
Arizona’s award of $167 million represents a partial allocation relative to the amount requested. At the time of reporting, the specific components reduced or modified as a result of the final award level have not been publicly identified. The state’s revised budget submission to CMS will reflect programmatic adjustments consistent with the awarded funding level.
