The North Carolina Department of Health and Human Services and the North Carolina Department of Information Technology today announced the launch of the Rural Health Innovation Fund. This statewide investment fund will distribute approximately $20 million per year for up to five years to help rural providers modernize their infrastructure, making it easier for them to care for patients and operate their practices.
“North Carolinians need access to high-quality health care no matter where they live,” said Governor Josh Stein. “This investment will help rural health care providers use technology to connect patients to the care they need closer to home and deliver better health care in their communities.”
“Launching the Rural Health Innovation Fund directly aligns with the Department's core priorities to transform rural health care and improve access to care," said NC Health and Human Services Secretary Dev Sangvai. "This fund lets providers leverage technology to make it easier for people to get the care they need, no matter where they live."
Rural providers often face obstacles including more limited funding, fewer staff, and reduced access to the necessary technical infrastructure to keep pace with changing digital health care tools. Testing new solutions can be costly and risky for smaller providers. The Rural Health Innovation Fund will help providers identify, test, and implement digital solutions that strengthen their practices and support better care.
“Rural health care providers know their communities and the challenges they face to find care,” said NCDIT Secretary and State Chief Information Officer Nate Denny. “The Rural Health Innovation Fund will give providers the opportunity to explore promising digital solutions, learn what works and put the right tools to work for their patients and communities.”
In its first year, the Rural Health Innovation Fund is open to primary care providers, federally qualified health centers, community health centers, and safety net providers that meet certain federal health center requirements. Applicants need to demonstrate how they serve rural residents even if their county is not designated as rural.
Eligible applicants may apply for funding to test and scale new digital solutions to improve care, ease operational challenges, and help patients stay connected to their care provider. Projects can include telehealth expansion, AI-enabled clinical decision support, electronic health record upgrades, cybersecurity enhancements, and other activities that are scalable, sustainable, and improve quality of care for rural communities.
To apply for the first round of funding, providers will need to complete an online assessment, gather quotes, and submit an application through the NCDIT grant portal by 11:59 p.m. Nov. 16, 2026. Awards are anticipated to be announced in January 2027. The funding is reimbursement-based, and projects will need to be completed by July 30, 2027.
This Rural Health Innovation Fund is part of North Carolina’s Rural Health Transformation Program, which aims to improve health care in rural communities, help people get better care, and make sure rural health services are available for years to come. North Carolina has the second-largest rural population in the country. Many rural communities face health challenges, including insufficient numbers of health care providers, hospital closures, high rates of chronic health conditions, and differences in access to care and health outcomes.
The federal government created the Rural Health Transformation Program to help states improve health care in rural communities. States can use the funding to improve technology, strengthen the health care workforce, and develop new ways to provide care. In December 2025, U.S. Centers for Medicare & Medicaid Services (CMS) awarded North Carolina more than $213 million for the first year. North Carolina will be eligible for more funding each year for the next five years.
North Carolina is eager to maximize the funding awarded by the Rural Health Transformation Program, but the state will need to overcome significant funding losses as a result of federal reconciliation law H.R. 1, including the loss of nearly $50 billion in federal funds for North Carolina’s Medicaid program over the next 10 years and critical funding for hospitals in our state. NCDHHS will take advantage of the available funding while continuing to advocate for more funding for NC’s rural health care system in the future.
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Stevens Amendment Disclosure: This news release is supported by the Centers for Medicare & Medicaid Services (CMS) of the U.S. Department of Health and Human Services (HHS) as part of a financial assistance award totaling $213,008,356.47 with 100% funded by CMS/HHS. The contents are those of the author(s) and do not necessarily represent the official views of, nor an endorsement by, CMS/HHS or the U.S. Government.