Inside the first 90 days: The state playbook for modern rural health transformation
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COMMENTARY | The Rural Health Transformation Program will require states to completely rethink how they deliver services. Here are four moves they can make right now for long-term viability.
The $50 billion Rural Health Transformation Program is more than a funding opportunity — it’s a modernization mandate.
For states, the first 90 days are a test of whether government can move with the clarity, coordination and the operational discipline required to deliver visible progress across rural communities.
This is not business-as-usual public health work. RHT requires states to rewire procurement processes, break down agency silos, manage complex federal reporting expectations, and stand up the infrastructure needed to execute dozens of initiatives at once.
Here are four modernization moves states can make now to set the program — and rural communities — on a trajectory for long-term viability.
1. Stand up a Transformation Management Office
To deliver a multi-year, multi-agency transformation, states need more than a steering committee. They need a centralized transformation management operating structure — a TMO — with the authority to set priorities across agencies, eliminate duplication and sequence projects so they reinforce one another rather than compete with one another.
Notably, a TMO must also move with speed while embedding compliance into day-to-day operations — ensuring transformation doesn’t outpace risk controls. This isn’t a traditional project management office; it requires a more strategic, cross-functional skill set capable of driving complex change at scale.
A TMO modernizes how government organizes complex work: it builds coherence across Medicaid, public health, procurement, IT, legal and rural health offices; it drives accountability; and it prevents initiative sprawl. Without this orchestration, even the best ideas get mired in competing timelines, ambiguous ownership and unclear reporting pathways.
2. Rapidly Expand and Modernize Procurement Capacity
RHT compresses years of procurement into months. Sub-awards must comply with federal Uniform Guidance, carry county level metrics, move quickly enough to unlock future program year funding and uphold expectations of fairness, transparency and sound conflict‑of‑interest practices. That level of operational pressure demands a modernization of procurement capacity.
States can consider ways to immediately assess staffing gaps, bring in dedicated buyers, contract managers, and legal support, and use external grants management capacity to handle volume. Modern sourcing approaches — including invitations to negotiate, prequalified vendor lists, cooperative purchasing vehicles and amendments to existing agreements — can accelerate deployments without compromising compliance.
3. Focus the State’s Portfolio to Avoid Transformation Theater
With new funding, the instinct to build long project lists is strong — but broad portfolios rarely deliver meaningful transformation. States can focus on modernizing how they prioritize by evaluating overlap across programs, consolidating initiatives where possible and channeling dollars into the projects most likely to deliver measurable outcomes.
This is about focusing impact. A narrower, better sequenced portfolio is easier to manage, easier to communicate, easier to measure and far less likely to trigger reporting gaps or procurement delays.
4. Modernize Contracting and Grants to Reward Outcomes and Performance
Traditional government contracting centers on hours and effort. RHT requires contracts designed around outcomes: clear requirements, solution demonstrations, milestone-based payments and performance frameworks that meet new expectations from the Centers for Medicare and Medicaid Services.
Outcome‑driven contracting gives states leverage to set and enforce measurable performance expectations, ensures vendors can scale solutions across rural communities and creates a clearer pathway to demonstrating progress for federal partners.
It also helps align providers, technology partners, and state agencies around shared, outcome‑focused goals instead of disjointed deliverables.
The real story of the first 90 days
What states do in this early period will determine whether RHT becomes:
- a modernized, outcomes-driven program that accelerates rural health improvementor
- a fragmented set of projects caught in procedural delays, compliance risks, and diluted impact
The opportunity is real. So is the pressure.
States that modernize governance, procurement, prioritization, and contracting now will be the ones that turn federal dollars into meaningful, durable improvements for rural communities.
James Case is principal for health and government operations at KPMG US.
The views expressed are the author’s alone and do not necessarily represent those of KPMG LLP.