The Ovatient Rural Health Transformation Playbook

Rural health care in the United States is in crisis. According to recent analysis from Chartis, 182 rural hospitals have closed or converted to models that no longer offer inpatient care since 2010, while nearly 46% of remaining rural hospitals operate with negative margins. For roughly 46 million Americans living in rural communities, this means expanding “care deserts” with less access to essential services like primary care, behavioral health, and substance use disorder treatment.

Against this backdrop arose the Rural Health Transformation (RHT) Program, created by Congress in 2025. It is a $50 billion, five-year federal investment—$10 billion annually from 2026–2030—intended to strengthen rural health infrastructure and build enduring systems of care. All 50 states have submitted applications. But $50 billion divided 50 ways over five years means states will need to make hard decisions on what to invest in now that will pay off in the future.

This article outlines how states and their health system partners can leverage funding from the RHT program to create virtual-first and EHR-integrated care models that serve as the backbone of their rural health networks and large care transformation strategies.

Step 1: Build a Virtual-First Strategy

The RHT Program is framed as a “catalytic investment” to help states strengthen rural health infrastructure and “build enduring systems of care.”

The funding available is large. But it’s also temporary. Cuts to Medicaid and other federal supports that rural hospitals rely on are on the horizon. That creates an unforgiving design challenge: How do states and health systems use RHT funds to build programs that can persist after federal funding ends?

Many states recognize that telehealth will play an important role in their RHT programs. In fact, most applications mentioned it and many rural communities already have local telehealth strategies, whether it is direct-to-consumer urgent care, behavioral health or other specialty services. Those services and models have value, but they are typically fragmented and episodic, offering disconnected patient visits, not longitudinal relationships with providers. To maximize the impact of RHT funding, states and health systems must evolve their approaches and set a new standard in telehealth by adopting virtual-first care models.

With a virtual-first care model, patients proactively choose to start and manage their health journeys online by establishing long-lasting relationships with a care team that excels in understanding how to deliver care virtually – and maybe just as importantly – how to coordinate care, like labs, imaging and higher levels of acuity between in-person and virtual care settings.

To put it differently, virtual-first does not mean virtual only. And to be successful and build trust, it requires providers and care team keep their services connected and coordinated with local health systems and community resources. That seamless coordination between virtual and in-person care delivers better outcomes and stronger patient loyalty.

Effective virtual-first care strategies are built on three core components.

1. Virtual-first patient-centered medical home (PCMH)

For a patient, a virtual-first PCMH means their first touchpoint and every ensuing touchpoint is via an easy-to-access virtual doorway—not a confusing maze of portals and vendors. For health systems and states, this enables seamless care continuity, better chronic disease control, and more efficient care service utilization.

• Serves as the entry point to the health system and quarterback for care for rural residents across multiple payers (Medicaid, Medicare, commercial, uninsured).
• Offers longitudinal primary care, integrated behavioral health, and chronic disease management primarily via virtual modalities (video, phone, asynchronous, remote monitoring), with in-person visits where clinically appropriate.
• Anchors each patient in a single EHR record that can be viewed and acted on by local hospitals, clinics, and rural health centers.

2. Virtual multispecialty practice connected to local systems

Instead of each rural hospital trying, and often failing, to recruit full-time specialists, a shared virtual practice that can be leveraged by multiple health systems creates capacity that rural communities can access without diluting quality or fragmenting records.

• Provides scheduled virtual access to specialists (e.g., endocrinology, cardiology, neurology, rheumatology, psychiatry) who may be scarce or nonexistent in rural areas.
• Integrates directly into the same EHR instance or tightly connected health information exchange, allowing local PCPs and hospitals to refer, co-manage, and receive consult notes in real time.
• Uses standardized order sets, care pathways, and remote monitoring protocols that align standards.

3. EMR-integrated, interoperable digital backbone

Virtual-first care becomes system-level infrastructure when it is deeply integrated with existing health IT applications and infrastructure. Benefits include:

• Virtual encounters, referrals, lab and imaging orders, e-prescribing, and remote monitoring data are all documented in a core EHR and/or connected health information exchange.
• Patient-facing tools are branded and experienced as extensions of local health systems and payers, not as generic telehealth brands.
• Data flows support population health management, quality outcomes, risk stratification, and value-based payment models.

Step 2: Establish Core Design Principles

There are many ways to approach the design of virtual-first care models, including partnering with companies like Ovatient or adopting platforms and other technology solutions to do it on your own. Regardless of your path, you should establish a core set of design principles. Here’s what we recommend:

1. Virtual-first, not virtual-only
   Design care pathways where virtual modalities are the default when it is safe and effective, with clear handoffs to in-person care when needed. This keeps patients engaged while recognizing the indispensability of physical services.
2. Sustainability beyond the grant
   From the outset, develop a glidepath in which ongoing operating costs are covered by base reimbursement and value-based incentives, not continued grant dependence. It’s almost a certainty that these dollars will not be renewed.
3. Shared digital front door
   Invest in a unified, connected patient portal or app experience that is ideally EHR-native and that patients recognize as being connected to part of their local health system, not as a standalone telehealth brand.
4. One connected health record
   Require that all virtual encounters, orders, and messages can be shared and seen by a local care team as part of a longitudinal clinical record, not relying on providers to manually pull in information or search PDFs and extracts.
5. Multi-specialty, team-based design
   Build virtual care around team-based workflows: primary care, behavioral health, care management, and other specialists working from a common plan of care.
6. Payment alignment from day one
   Map virtual services to current and anticipated payment models (FFS, APMs, Medicaid directed payments, infrastructure payments, CMS’s new ACCESS model) so that RHT dollars are catalytic, not the sole revenue source.
7. Measurement and reporting built in
   Define a concise set of metrics – avoidance of unnecessary ED visits, chronic disease control, behavioral health engagement, postpartum care completion, no-show reduction—that tie directly to RHT reporting and to the state’s broader value-based strategy.

Step 3: Demonstrate Success

States and health systems that receive RHT funding should expect rigorous oversight and will be required to report quality measures to ensure funding is making a positive impact. This is where virtual-first care models shine, enabling you to demonstrate measurable improvements across all five of the RHT program’s strategic goals.

Below are outcomes you can expect to see when utilizing virtual-first care models—mapped to the RHT program’s goals.

Goal 1: Making rural America healthier

• Shifting from episodic to proactive care by using remote monitoring, secure messaging, and frequent virtual touchpoints to manage chronic disease and mental health.
• Expanding access to preventive and behavioral health services in communities that have lost local capacity.
• Addressing social drivers like transportation, work constraints, and caregiving responsibilities that make in-person care difficult.

Goal 2: Ensuring sustainable access points

• Reducing demand pressure on rural hospitals by offering a scalable online solution that complements in-person care. When access is defined not solely by inpatient facilities but by a network of virtual and in-person services, states gain more options than “keep every hospital open or lose access.”
• Creating multiple doors, like home, community sites, schools, and workplaces, while maintaining one clinical record.
• Allowing states to prioritize limited capital dollars for services that truly require brick-and-mortar (e.g., emergency care, obstetrics) while delivering much of primary, behavioral, and chronic care virtually.

Goal 3: Building and retaining the rural workforce

• Making it possible for a distributed workforce of clinicians to serve rural populations without physically relocating through licensure compacts and streamlined credentialing, explicitly rewarded in RHT scoring.
• Virtual care teams handling routine follow-up, triage, and remote monitoring, enabling local clinicians to focus on complex, hands-on care.
• Pooling demand across multiple states, rural counties or health systems, making it economically viable to support specialty services virtually that would be unsustainable locally.

Goal 4: Testing innovative care and payment models

• Tying per-member care management payments or virtual infrastructure payments to actual engagement metrics (e.g., chronic disease control rates, remote monitoring adherence, medication adherence, post-discharge follow-up).
• Embedding virtual care into Accountable Care Organizations, shared-savings arrangements, or global budgets, with telehealth activity reflected in the same EHR data used for quality and cost reporting.
• Piloting hybrid bundles that combine in-person episodes (e.g., maternity care, joint replacement) with virtual pre- and post-episode supports.

Goal 5: Advancing tech innovation with accountability

• Integrating with EHRs and HIEs can help avoid “data exhaust” that never reaches the point of care.
• Exchanging data securely across systems and states via standards like FHIR and TEFCA-aligned networks.
• Breaking down barriers to care with improved language access, broadband workarounds (e.g., telephone options, community access points), and other accessibility features.

Make Virtual Care the Backbone of Your RHT Strategy

The RHT program is arriving at a precarious moment: rural hospitals are financially distressed, Medicaid cuts loom, and telehealth continues to rely on emergency waivers. Virtual-first, integrated care models can help you build a sustainable path forward and are a powerful tool that increases access to high-quality care, improves care continuity and drives improved efficiency.

The stakes are high. But so is the opportunity. If states and health systems leverage the RHT program to establish virtual-first care models as backbone infrastructure, the program can do more than slow the decline of rural health—it can fundamentally change its trajectory.