What it takes to get RHTP compliance right

Every state racing to stand up its Rural Health Transformation Program (RHTP) has the same deadline pressure. Not every state is making the same mistake.

The Centers for Medicare & Medicaid Services (CMS) ties funding directly to a state's own reporting: it recalculates each state's RHTP allocation annually based on that reporting, and will announce fiscal year 2027 funding by October 31, 2026. 

Many states are still working to launch RHTP infrastructure before that date arrives. But launch isn't the finish line—RHTP runs five budget periods through fiscal year 2030 under continuous federal scrutiny, and what actually determines whether a state's program holds up isn't how fast it opened. It's what got decided before it did.

I asked Carson Phillips, a senior manager on CohnReznick's government and public sector advisory practice, what states get wrong before they've ever opened an application. Her answer comes down to four decisions, all settled before the first application opens. 

• Build flexibility into the agreement.
• Have more than one lever for noncompliance.
• Decide your evidence and thresholds in advance.
• Plan for guidance changes to reach every tier of the program.

Here's what each one looks like in practice.

Build flexibility into the agreement

"You need to make sure that in your agreement, you have enough flexibility for the changing regulations that are going to happen," Phillips says. Without it, an award agreement creates an easy out for recipients down the line: you never told me I had to do that. 

CMS guidance for a brand-new program like RHTP will keep shifting over its five-year life—Phillips has seen this pattern before. CohnReznick worked through it on the State and Local Fiscal Recovery Fund and Emergency Rental Assistance programs, where, in her words, "the guidance for those was limited at the beginning and changing throughout." That's not counting changes to Uniform Guidance itself, the government-wide rulebook CMS's own guidance sits inside.

It's tempting to assume this risk lives mostly with small, first-time recipients like a rural clinic that's never managed grant funding before. But a large hospital system can carry just as much exposure. 

One small change to an accounting practice at a large hospital doesn't just touch the grants team; it ripples through finance, a board, and sometimes an executive layer of governance, before it's actually implemented. Flexibility has to be built in either way.

Have more than one ‘carrot,’ more than one ‘stick’

"It's just making sure you have some defined carrots and defined sticks for changing behaviors that might need to be changed," Phillips says. 

One of the most common consequences she sees written into agreements is withholding payment for noncompliance. That’s not the deterrent it sounds like, especially for first-time recipients who aren't yet submitting reimbursement requests or invoicing. 

Meanwhile, states are under real pressure to show that money is moving and programs are making progress. A compliance plan with exactly one lever isn't a plan—it's a bluff that some recipients will call.

Decide your evidence, and your thresholds, before you need them

States need to define upfront what counts as evidence for each milestone, and how they'll actually collect it—often as an aggregate of data from subrecipients rather than something they can pull themselves.

One new CMS reporting metric for RHT programs is the percentage of rural facilities using AI-assisted documentation tools. This new metric doesn’t come with definitions or guardrails. Does one person trialing the software count? A single test division? States have to set that threshold themselves, publish it consistently across every subrecipient, and be able to defend it in front of an auditor. 

The same metric hides a second trap. If a group starts at five providers and one stops offering services, the remaining four can show a higher percentage of "use" with no actual change in adoption. The number moved because the denominator moved, not because anything got better. States that haven't built in a way to catch that will report a number they can't actually stand behind.

Plan for guidance to change—and for that change to reach every tier

States don't just have to track when CMS updates RHTP-specific guidance. They have to track the rulebook underneath it.

The Office of Management and Budget oversees Uniform Guidance (2 CFR Part 200), the government-wide framework RHTP administration runs on. OMB proposed a major overhaul of Uniform Guidance earlier this year.

In September 2026, Congress passed a stopgap spending bill—the Continuing Appropriations and Extensions Act, 2027—that blocks OMB from finalizing that overhaul until December 12, 2026 at the earliest. Current rules stay in effect until then. The risk didn't go away—it just moved to a new date.

A shift from OMB or CMS, a change in governorship, or a change in the prime recipient agency tends to land first at the state level. Failure happens when the change never makes it down to second- and third-tier recipients, or the intake form at the provider level never gets updated to capture the new data point the state now needs. 

It doesn't matter what system a state is running; Phillips notes that CMS itself is still managing parts of this in Excel. The tooling doesn’t determine whether a change reaches the smallest subrecipient. Someone being responsible for it does.

It's worth building in technical assistance for new recipients too, and building it for how they'll actually access it. 

Telehealth and virtual technical assistance both depend on connectivity that a lot of rural recipients don't reliably have. Recorded sessions and flexible formats aren't a nice-to-have here; they're part of making sure a guidance change actually reaches the people carrying it out.

Questions worth asking before your first application opens

• Evidence: Have you defined what counts as proof for each milestone—and who's actually responsible for providing it?
• Consequences: If a recipient misses a deadline, what happens besides "we withhold payment"?
• Change management: If CMS updates a requirement tomorrow, does that change reach your smallest subrecipient, or stop at the state level?
• Ownership: Who's responsible for communicating a change downstream, not just implementing it?
• Thresholds: Could you defend your metric definitions to an auditor today?

Getting this right isn't a technology problem or a people problem

It's both. Some of Submittable's customers were already running grant programs on the platform before RHTP funding existed—when the money arrived, they duplicated an existing program and launched without calling anyone. That's not luck. It's what happens when the compliance thinking and the technology were both already in place before the first application came in.

Catching a risk early, defending a decision months later, reporting without scrambling—none of that happens by accident.

CohnReznick has advised on more than $67 billion in federal award funding, and Submittable already supports states running RHTP today. You can reach out to learn more about working with our teams here.

And if you want the longer version of this conversation, Phillips and I covered all of this and more in a recent joint webinar—worth a watch.