A Turning Point for Rural Health: How States, Systems, and Digital Health Leaders Are Shaping What Comes Next
Rural America is in the middle of a rare and powerful moment of alignment. For decades, rural hospitals have been fighting a multidimensional battle: shrinking workforces, widening access deserts, aging populations with rising acuity, and tightening financial margins that make every operational decision existential.
This year, that burden meets an unprecedented opportunity.
Through the One Big Beautiful Bill Act, Congress authorized the $50 billion Rural Health Transformation Program (RHTP), a five-year infusion designed to help states rewrite the future of rural care delivery. States submitted their proposals to CMS in early November, and final funding decisions are expected by December 31, despite federal shutdown delays that required HHS to call furloughed reviewers back to keep things moving.
What happens next will determine whether this becomes a once-in-a-generation modernization of rural healthcare or another fleeting cycle of short-term relief.
Rural Health Needs are Urgent and Growing
Rural communities face higher rates of chronic disease, behavioral health needs, maternal health risks, and care access barriers. The workforce picture is equally stark:
About 20% of the US population lives in rural areas, but only 9-11% of the nation’s physicians practice in rural communities. 1
74% of rural hospital CEOs report needing more RNs. 2
RN staffing density is substantially lower in rural areas versus metro areas, with roughly 65 RNs versus about 100 RNs per 10,000 patients, respectively. 3
Some analyses suggest that a single transferred patient may represent a lost contribution margin of roughly $10,000, a financial reality that compounds the pressure to maintain local access.
Against this backdrop, telehealth stands out as one of the most consistently emphasized modernization levers. In fact, “telehealth” appears 36 times in the RHTP framework, a signal that virtual care is essential to achieving the program’s goals.
Early Signals: How States Plan to Use Funding
Several states have already taken the lead in publicly sharing their RHTP applications, demonstrating an unusual level of transparency for a grant program of this scale. Details from early applications and announcements include:
Maine proposes $200,942,115 over five years to expand telehealth access statewide. 4
Washington plans to allocate $15–18 million annually toward a statewide Provider Technology Fund. 5
Maryland, one of the first states to publish its proposal, emphasizes broad community engagement and technology-enabled care expansion. 6
These early examples show a common thread: states are prioritizing digital infrastructure, care innovation, and workforce sustainability, even though the strategies vary. In a review of 25+ state RHTP announcements, roughly 90% of states included telehealth hub or network language to advance specialist access through programs like tele-stroke, tele-ED, and tele-behavioral health. Workforce reinforcement and mobile telehealth access were also highlighted as key initiatives by many states.
Some may centralize funding through statewide contracts. Others will distribute funds through competitive grants, regional collaboratives, or direct sub-awards to rural facilities. This variation matters and hospitals that prepare early will have the most to gain.
What Rural Leaders Should Be Doing Right Now
During our recent National Rural Health Association (NRHA) webinar, four national thought leaders – Connor Communications Grant Strategist Angela Connor, MA; Caregility CNO Susan Kristiniak, DHA, MSN, RN, NEA-BC, AHN-BC; Health Recovery Solutions CEO Jason Comer, JD; and Equum Medical Chief Marketing Officer Karsten Russell-Wood, MBA, MPH – outlined a clear path forward for rural health organizations preparing for RHTP funding.
Here are the key themes they shared.
1. Prepare: Understand Your State’s Plan and Build Your Own
With RHTP approvals coming soon, Connor underscored the importance of early readiness, encouraging hospitals to:
Review their state’s posted RHTP application to understand priorities, timelines, and distribution models.
Contact their State Office of Rural Health, which will be central to coordinating sub-grants.
Define strategic needs now, rather than waiting for a grant window to open.
Build programs “as if budget weren’t the constraint,” to respond quickly and convincingly.
The takeaway: When states begin awarding funds, hospitals with clear, shovel-ready initiatives will be far ahead of those still brainstorming.
2. Repair: Rebuild Workforce Capacity with Connected Care Tools
Kristiniak brought the inpatient lens to the conversation: rural workforce strain isn’t theoretical. It shows up in fall rates, throughput challenges, safety risks, burnout, and rising overtime.
She emphasized how hybrid care models such as virtual nursing, virtual observation, remote specialist consults, and AI-enabled monitoring relieve both cognitive and physical burden on bedside teams. She highlighted data points rural hospitals can expect when leveraging virtual care:
Faster admissions and discharges
Reduced overtime
Lower fall and hospital-acquired infection rates
Shorter length of stay
Better HCAHPS and discharge readiness scores
These are not abstract possibilities; they’re real outcomes already documented across community and rural hospitals using connected care models.
3. Care: Extend the Continuum Beyond the Hospital Walls
Comer spoke to the reality that modern rural care must extend beyond the inpatient setting. Longitudinal virtual care models such as Transitional Care Management, Remote Patient Monitoring, Chronic Care Management, and Advanced Primary Care Management are essential to the RHTP goals of keeping patients healthier, at home, and connected to their care teams.
He shared emerging success in areas like:
Maternal health: early detection of cardiac complications and reduced postpartum risk
Oncology: fever flagging, renal monitoring, and symptom tracking
Cardiology and endocrinology: continuous, data-driven chronic condition management
These models are reimbursable, scalable, and aligned with RHTP’s emphasis on high-quality care as close to home as possible.
4. Solve the Specialist Gap with Fractional Coverage and Rural Networks
Russell-Wood highlighted a critical reality: many rural hospitals lose patients because they lose specialists. Recruitment cycles stretch 12 months or more, and locums can cost 1.5 to 2X the cost of a permanent hire.
Fractional models for specialties such as neurology, cardiology, pulmonology, and beyond allow hospitals to “subscribe” to the exact specialist time they need. Combined with regional telehealth collaboratives, this creates:
Faster access to expertise
Reduced unnecessary transfers
Higher revenue retention
Stronger local clinical confidence
These models directly support RHTP goals around sustainability, care access, and innovative delivery.
The Bigger Picture: Rural Health Is Entering a New Era
If there is a single takeaway from the NRHA panel, it’s this:
Rural hospitals cannot succeed in isolation. This is a moment for connected strategy, connected technology, and connected care.
For many rural leaders, this is the first time in their careers that strategic vision, federal investment, workforce innovation, and community need have aligned so clearly. The organizations that use RHTP funding to build durable, tech-enabled care models rather than one-off pilots will define what rural care looks like for the next decade.
Ready to Build Your RHTP-Aligned Roadmap?
Caregility partners with rural hospitals and state agencies to design sustainable virtual care programs aligned to the five strategic pillars of RHTP, from regional telehealth hubs to support specialist access to inpatient virtual nursing and AI-assisted observation.
If you’d like to explore how connected care can support your rural hospital’s transformation strategy, set up a discovery call today.
The Fight for Permanent Telehealth Policy Continues
On March 14, Congress passed a Continuing Resolution that pushed the expiration date on telehealth flexibilities out to September 2025. The stopgap funding measure extends COVID-era waivers that:
Allow Medicare patients to receive telehealth services from home
Remove geographic restrictions related to site-of-service
Eliminate in-person visit requirements for virtual behavioral health
The protections brought a sigh of relief to patients and healthcare providers, though telehealth has yet to reach a point of permanency. Organizations like the Center for Telehealth & e-Health Law (CTeL) continue to advocate for telehealth as an essential element in modern, equitable care delivery. The policy research institution and others like them argue that the lack of permanent telehealth policies hinders investment in innovative health technologies, potentially compromising advancements in patient care.
Just days before the Continuing Resolution passed, CTeL was on Capitol Hill to host the 2025 Digital Health Tech & AI Showcase, offering Congressional staff an opportunity to see evidence of real-world innovation in telehealth and health AI firsthand. Caregility and roughly two dozen other CTeL member organizations and sponsors were on site to share solutions that ranged from AI-assisted patient safety monitoring to handheld medical screening devices. Vendors and providers alike – including UVA Health, UCSF Health, and Novant, as well as Caregility clinical service partner VirtualAlly, to name a few – came together to promote the benefits of AI and telehealth innovation.
Caregility CNO Susan Kristiniak, MSN, RN, and Chief Experience Officer Pete McLain attended, showcasing Caregility’s computer vision, ambient listening, and radar-based AI capabilities for inpatient and outpatient virtual care. “These digital health tools are helping us overcome key issues in healthcare, from offsetting clinical staff shortages and burnout to elevating patient safety and satisfaction,” said Kristiniak. “We are building a foundation for more efficient, modern workflows that reduce costs and improve access.”
CTeL Executive Director Christa Natoli underscores the long-term economic value of telehealth, noting that “peer-reviewed research shows that telehealth is a cost-effective substitute, not an added expense to the federal budget.” Building on this, McLain highlights the importance of forward-thinking policies: “As healthcare organizations step into the next frontier of innovation, policies related to telehealth and AI will be paramount. We’re proud to support CTeL as champions of health policy that responsibly expands the art of what’s possible in healthcare delivery.”
Caregility would like to congratulate CTeL 2025 Tr“AI”lblazer Award winners Congresswoman Doris Matsui (CA-7) and Dr. Andrew Taylor, Director of Artificial Intelligence for the Department of Emergency Medicine at Yale School of Medicine, for their recognition and support of health policy and responsible AI advancements in healthcare.
The announcement came on the heels of the December 2022 passing of the Consolidated Appropriations Act of 2023, the 2023 omnibus spending bill that extends many – but not all – of the telehealth flexibilities introduced during the pandemic.
In light of these developments, here is a breakdown of how the telehealth policy roadmap is shaping up for the next two years.
Permanent Telehealth Changes for Medicare Patients
Removal of geographic restrictions for the delivery of behavioral telehealth services to patients, including coverage of both in-home and audio-only services.
Temporary Telehealth Extensions (Through December 31, 2024)
Healthcare providers may continue to bill Medicare for telehealth services authorized in the Calendar Year 2023 Medicare Physician Fee Schedule with no geographic restrictions, including engagement in the patient’s home and with audio-only communication accepted for select services.
FQHCs and RHCs may act as distant-site providers of non-behavioral telehealth.
Removal of in-person visit requirements for behavioral telehealth.
Expansion of telehealth coverage to include physical therapy, occupational therapy, and speech-language pathologist services.
Extended coverage of Acute Hospital Care at Home care models.
Approval of the use of telehealth to recertify patient hospice eligibility.
Telehealth Flexibilities Expiring at the End of the PHE (Through May 11, 2023)
Use of non-public-facing applications to communicate with patients without risk of federal penalty if the application is not HIPAA compliant.
Telehealth’s protection as an excepted benefit.
Worth noting: In February 2023, House representatives introduced the bipartisan Telehealth Benefit Expansion for Workers Act, which aims to provide American workers with access to employer-sponsored standalone telehealth benefits that are separate from traditional health plans, similar to how vision and dental plans operate.
Provider ability to prescribe controlled substances without an in-person examination.
Worth noting: A February 2023 proposed rule by the Substance Abuse and Mental Health Services Administration (SAMHSA) and the Department of Health and Human Services is seeking to permanently allow providers to prescribe buprenorphine for opioid use disorder treatment without the requirement of an initial in-person visit.
These changes focus on putting safeguards around telehealth. Additional regulatory efforts are expected ahead of the waiver extension expiration on December 31, 2024.
In the meantime, two additional questions remain on the future of telehealth:
1) How will interstate telehealth services play out when temporary geographic flexibilities expire at the end of 2024?
Interstate telehealth services were temporarily allowed across state lines during the PHE, waiving state licensure requirements. As of February 7, 2023, 21 U.S. states have solidified interstate telehealth as a permanent or long-term option. You can learn more about state-by-state variation in telemedicine restrictions here.
2) Will payment parity for home-based telehealth services stick beyond 2023?
Flexibilities introduced during the pandemic reimburse telehealth visits with patients at home at a rate that is on par with in-person visits. As Healthcare Finance News reports, the current telehealth payment parity runs through the end of 2023. The annual physician fee schedule set by CMS will determine whether payment parity for home-based telehealth services will be extended into 2024. The 2024 draft proposal is anticipated in July 2023. Among commercial insurers, it’s estimated that roughly half of U.S. states have passed payment parity laws.
Regulatory waivers for telehealth services began after theDepartment of Health and Human Services (HHS) declaredthe first COVID-19 Public Health Emergency (PHE)on January 27, 2020. Relaxing restrictions around reimbursement, provider licensing, and HIPAA requirements supported contact-free care and remote patient monitoring. It also made quality healthcare available to Americans in rural areas and other underserved communities. The combination of pandemic circumstances and regulatory waivers contributed to the rapid growth of telehealth utilization by providers and patients of large health systems and smaller practices across the country.
Although utilization has fallen since the height of the pandemic, telemedicine has become an integral aspect of patient-centered care. Unless new laws are put in place, pre-pandemic Medicare telehealth laws will be restored when the PHE expires. The previous regulations date to theBalanced Budget Act of 1997, when the healthcare landscape looked very different and connected health technology was in its infancy.
Since late 2020, bipartisan groups of federal lawmakers have, overwhelmingly, called for regulatory changes and introduced legislation designed to keep many telehealth services accessible past the current pandemic. At the State level, private payer mandates and out-of-state provider licensing requirements continue to evolve.
HHS againextended the PHE in January, now set to end on April 16, 2022. But the PHE will probably expire sooner rather than later. Current federal and state initiatives will determine what the post-pandemic telehealth regulatory landscape looks like as COVID-19 is treated as endemic in the U.S.
Federal Telehealth Regulatory News
Lawmakers and Advocacy Groups Take Action
On January 28, Senators Brian Schatz (D-Hawai‘i) and Roger Wicker (R-Miss.)sent a letter to Senate and House leadership. Signed by 45 members of Congress, the letter calls for an extension of the telehealth services expanded by the COVID-19 PHE.
A few days later, theAlliance for Connected Care, the American Telemedicine Association, and HIMSSco-led another letter, signed by 336 organizations. The letter urges Congress to extend current telehealth waivers through December 31, 2024. It also asks Congress to analyze the impact of telehealth and to subsequently pass and implement permanent telehealth legislation by the end of 2024.
CY2022 Medicare Physician Fee Schedule
Released on November 2, 2021, and updated January 14, 2022, the 2022 Medicare Physician Fee Scheduleextends coverage for some telehealth services through 2023. It includes a permanent extension of virtual mental and behavioral health care, allows mental health services via audio-only technology, and qualifies rural health centers (RHCs) and federally qualified health centers (FQHCs) to provide virtual mental health visits.
Recently-Introduced Federal Telehealth Bills
Telehealth Extension and Evaluation Act (2/7/22)
Introduced by Senators Catherine Cortez Masto (D-NV) and Todd Young (R-IN),this bill would extend some waivers for two more years and expand Medicare telehealth payments. It also lifts geographic restrictions, so patients don’t have to live in a specific area to access virtual care. The bill includes a commission to study the impact of telehealth flexibilities during the pandemic.
Cures 2.0 (11/15/21)
Reps. Diana DeGette (D-CO) and Fred Upton (R-MI) introduced this 173-page bill, that would facilitate biomedical research and the delivery of groundbreaking treatments and healthcare innovations.Cures 2.0would expand access to telehealth services under Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). It removes location restrictions, requires coverage for more healthcare providers and services, and permanently allows hospice face-to-face recertification via telehealth.
Expanded Telehealth Access Act (11/5/21)
This bill, introduced by Senators Jerry Moran (R-Kan.), Steve Daines (R-Mont.), Tina Smith (D-Minn.), and Jacky Rosen (D-Nev.),would make Medicare reimbursement permanent for telehealth servicesprovided by physical therapists, audiologists, occupational therapists, and speech-language pathologists.
CONNECT for Health Act (4/29/21)
First introduced in 2016, Senator Brian Schatz reintroduced the Creating Opportunities Now for Necessary and Effective Care Technologies (CONNECT) for the Health Act of 2021 last spring. This popular bill proposes removing all geographic restrictions on telemedicine services and permitting federally qualified health centers, rural health clinics, Indian Health Service, and Native Hawaiian healthcare facilities to provide virtual care. It also allows virtual recertification of hospice beneficiaries and several other provisions.
State Telehealth Regulatory Summary
Medicaid Reimbursement Policies
Medicaid programs in all states and the District of Columbia currently reimburse for live video services. Some state Medicaid programs cover remote patient monitoring and other connected care applications.
Private Payer Reimbursement
Forty-three states and Washington, D.C. now require private insurers to reimburse for telehealth services if they cover the same service in person. A2021 study by Foley & Lardnershowed that 22 states now mandate payment for specific telehealth services, up from 16 in 2019.
Payment Parity
Many states with specific telehealth mandates also require payment parity, meaning providers must be reimbursed the same amount whether a service is provided in person or virtually. Payment parity is a controversial issue. Advocates argue that it incentivizes providers to utilize and invest in virtual care technology, while critics believe such mandates undermine cost savings.
State Telehealth Waivers
As of January 19, COVID-19 telehealth waivers currently remain in place in 23 states. Many of these include licensing waivers so providers can provide virtual care to patients in other states.
An alternative to legislation, theInterstate Medical Licensure Compactexpedites the licensing process so physicians can practice in multiple states. Thirty-four states, D.C., and Guam currently participate in the Compact.
Conclusion
These state and federal policy initiatives aim to make the benefits of virtual care readily available to providers and patients for the foreseeable future, however COVID waxes and wanes. Time will reveal which current bills can withstand the legislative process, but there’s no doubt that permanent changes to national and regional telehealth laws are coming soon.
For a list of the most recent developments in federal and state telehealth policy, see thisexecutive summaryor visitthis trackerfor state-by-state telehealth policy information.
In the meantime, virtual care continues to expand and improve within the current policy framework. Caregility’s HIPAA-compliant, end-to-end solutions increase access and streamline continuous and intermittent patient observation, patient check-ins, assessments and specialty consults, care team planning and coordination, and managing patients through transitions of care. Caregility’s suite of innovative tools can enable and support any virtual care program. To learn more,visit our solutions page.
