Issue Brief
Rural Health Transformation Program (Part 2): What Moms & Babies Really Need

June 2026
ACA | Maternal Health | Medicaid

By Kiera Peoples

The Rural Health Transformation Program (RHTP) is a five-year $50 billion federal investment in rural health created by H.R.1 – the so-called “One Big Beautiful Bill Act” that cut almost $1 trillion from Medicaid. Although this program is framed as an initiative dedicated to reshaping the rural health landscape, it fails to target one of the largest crises in rural areas: maternal health. It takes a broad approach to rural health transformation that overlooks the unique challenges facing pregnant and postpartum people.

Addressing these gaps requires a fundamentally different approach, centered on sustained financing, workforce investment, and community-driven models, rather than short-term funding. As outlined in Part 1 of this series, the funding level, structure, and flexibility of the RHTP limit states’ ability to address the underlying drivers of rural health system instability.

The Centers for Medicare and Medicaid Services Must Strengthen Accountability and Oversight of the RHTP

The current RHTP structure lacks the necessary guardrails to ensure that funding is prioritized for communities most impacted by H.R.1 cuts. The following measures should be prioritized to ensure greater transparency and accountability:

  • Standardized reporting and transparency requirements about how RHTP funds are utilized at the state levels. This includes a list of downstream subrecipients, such as specific counties or organizations, to ensure funding reaches high-need rural populations.
  • Dedicated funding guardrails within cooperative agreements that require a fixed percentage of state RHTP allocations be directed towards maternal health stabilization and rural obstetric workforce development.
  • Standardized accountability benchmarks to ensure state initiatives result in measurable reductions in overall rural health disparities.

Policy Recommendations

The following strategies reflect what rural communities need to improve access to care and maternal health outcomes.

Workforce Recruitment and Retention

Sustained access to care requires a stable workforce. Rural areas face persistent shortages of obstetric providers, including OB-GYNs, midwives, and nurses due to low patient volume, high financial losses, and difficulty retaining staff. The high stress environment paired with low revenue contributes significantly to provider burnout and high turnover. Many of the RHTP workforce initiatives focus on training current staff or providing technological approaches to allow further reach of their staff, but fail to address the need to recruit more providers where there are significant shortages. Effective strategies to bolster the rural maternal health workforce include:

  • Cross-training diverse care and support providers in maternal mental health, including obstetricians, midwives, pediatricians, nurses, home visitors, and doulas, to recognize, screen, and refer for maternal mental health concerns, implementing a “no wrong door” approach to improving maternal outcomes.
  • Implementing interdisciplinary care models that provide medical, social, and behavioral health services in one setting.
  • Removing barriers that prevent full practice authority by Advanced Practice Registered Nurses, including Certified Nurse Midwives, and allow nurses to practice at the top of their license.
  • Expanding pathways to strengthen the community and peer support workforce to improve physical, mental, and behavioral health (e.g., peer support for substance use disorder, doulas, patient navigators, and community health workers).
  • Improving rural broadband networks to support telehealth and remote patient monitoring initiatives, a particularly valuable tool in areas with workforce shortages and long distances to specialty care.
  • Providing financial incentives for providers to practice in rural areas and developing training pipelines that prioritize rural placement.

Continuous Medicaid Coverage

Continuous Medicaid coverage is critical for perinatal and postpartum health, as disruptions are associated with delays in prenatal care and increased risk of adverse maternal and infant health outcomes. Administrative barriers and eligibility system gaps frequently result in incorrect disenrollment. To maintain stable access to care, effective strategies include:

  • Streamlining eligibility processes by reducing administrative burdens and eliminating unnecessary work or income verification requirements.
  • Leveraging existing data sources, such as claims data or self-attestation, to proactively identify and maintain coverage for exempt populations.
  • Preserving optional maternal health benefits, such as non-nurse midwifery and doula services, as a baseline for state Medicaid programs.
  • Maintaining postpartum coverage to one full year after delivery to provide consistent access to care through recovery.

Sustainable Financing for Obstetric Services

Rural maternity care requires stable, predictable funding mechanisms that account for the unique financial challenges of providing care in low-volume settings. Many of the current investments from the RHTP focus on technological innovation, such as telehealth expansion and modernizing equipment, but overlook the substantial ongoing operational costs associated with maintaining obstetric services. The following mechanisms could be utilized to promote financial viability:

  • Enhance Medicaid reimbursement rates for essential services like obstetric care to better reflect the fixed costs of maintaining low-volume services.
  • Implement specialized payment models that shift reimbursement from volume-based to cost-based, which provides a safety net for rural maternity units.
  • Adopt global budget models, like the Pennsylvania rural health model or all-payer global budgets in Maryland, to provide hospitals with a fixed annual payment. Evaluations of these models have shown that they have helped participating hospitals avoid closure and maintain key service lines, like labor and delivery units.
  • Establish dedicated federal and state stabilization funds for rural obstetric services that provide ongoing support to hospitals and birthing centers to maintain L&D capacity.

Expand Midwifery and Birth Center Care Models

Alternative models of maternity care, including midwifery-led care and birth centers, have demonstrated effectiveness in improving maternal health outcomes and patient experience, especially for those enrolled in Medicaid. These models can expand access to maternity services in rural areas by offering lower cost care and reducing reliance on hospitals obstetric services. Effective strategies to scale and sustain these efforts include:

  • Leveraging the Transforming Maternal Health (TMaH) modelThe states participating in the TMaH model include Alabama, Arkansas, California, Illinois, Kansas, Louisiana, Maine, Minnesota, Mississippi, New Jersey, Oklahoma, South Carolina, West Virginia, Wisconsin as well as the District of Columbia. (2025-2034), which supports 15 state Medicaid agencies in expanding access to birth centers, midwives and community health workers while supporting whole-person care delivery.
  • Ensuring Medicaid reimbursement parity for midwives to increase availability and sustainability of midwifery-led care.
  • Scaling care coordination programs, like the Maternal Opioid Misuse (MOM) model (2020-2025). This model has shown success in addressing social drivers of health for pregnant and postpartum women with behavioral health needs.

Targeted Federal Maternal Health Legislation

Federal policy solutions specifically designed to preserve and expand rural obstetric care are essential.

  • The Keep Obstetrics Local Act (KOLA) aims to prevent the closure of L&D units through increasing Medicaid payments and investing in the rural maternal healthcare workforce. Rural hospitals face unique challenges to keep L&D units open as they have fewer births that occur and higher proportions of births covered by Medicaid than urban hospitals.
  • The Midwives for MOMS Act aims to address maternity care shortages, specifically in rural and underserved areas, by increasing the number of trained and certified midwives through investments in education and workforce development programs. It also promotes the integration of midwives into the broader health care system.
  • The BABIES Act expands access to freestanding birth centers through improving federal support and medicaid reimbursement for birth center services. This legislation aims to provide safe, lower-cost alternatives to hospital births.

Conclusion

Short-term investment efforts will continue to fall short if infrastructural challenges of rural maternal health are not addressed. Policymakers, advocates, and public health leaders must closely monitor how RHTP funds are allocated and used at the state level. Ensuring accountability is critical to maximize the program’s impact. There also must be continued advocacy for policies that provide sustained, long-term investment in rural health systems and prioritize the needs of communities most at risk. Elected officials should engage state Medicaid agencies, the public health department, advocates and community leaders to address RHTP implementation gaps and champion the role Medicaid plays in the communities they serve.

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