What RHTP Funds Can (and Can't) Be Spent On for Workforce

The short answer

Yes — workforce is one of the central things the Rural Health Transformation Program is designed to fund. The $50 billion, five-year CMS program exists to build durable rural health capacity, and you can’t transform care without transforming the workforce that delivers it.

But there’s a critical catch that trips up most first-time applicants: RHTP funds flow through your state’s approved plan. CMS distributes the money to states; states decide which activities their plan covers. So the real question isn’t “what does RHTP allow?” — it’s “what did my state propose, and what did CMS approve?” Two neighboring hospitals in different states can have different answers.

With that framing, here’s how workforce spending typically breaks down.

Commonly fundable workforce activities

These are the workforce uses most aligned with the program’s transformation intent — the kind of activities state plans frequently include:

Category	Examples
Recruitment	Sourcing and hiring net-new clinical staff; relocation programs to bring clinicians into hard-to-staff markets; filling roles that reduce traveler dependency
Retention	Onboarding and integration programs, mentorship, career ladders, and other structures that keep funded staff beyond 24 months
Grow-your-own	Apprenticeships, earn-to-learn models, tuition and training partnerships that develop local people into clinicians
Workforce technology	Tools that make existing staff more effective — including AI agents for HR and recruiting and workforce analytics
Capacity building	Technical assistance that upgrades a provider’s own recruiting and retention function

The common thread: each is a structural investment that leaves the organization more self-sufficient, with staff who stay.

Where spending gets questioned

Some workforce spending is harder to defend as “transformation,” even when it feels necessary day to day:

• Ongoing traveler and agency contracts. Using transformation dollars to extend premium-labor dependency is the clearest contradiction of the program’s purpose.
• Backfills you’d have hired anyway. Reviewers look for net-new, RHTP-attributable roles — not routine replacement hiring relabeled as transformation.
• One-time bonuses with no retention design. Signing bonuses alone tend to attract short-term movers; without a retention structure around them, they read as a non-transformational patch.
• Pure operating-expense smoothing. Money spent to balance this year’s budget rather than build five-year capacity invites scrutiny.

The test reviewers apply: does this dollar build durable workforce capacity, or does it just buy coverage for now?

The documentation that makes workforce spend defensible

Whatever your state’s plan allows, fundable isn’t the same as defensible under audit. To keep workforce spending clean, map each dollar to:

• A specific, net-new FTE by role and location
• A retention projection (24- and 36-month) for that role
• A clear link to a workforce goal in your state’s approved plan

This is where most applications are thin — they have a strong narrative but no traceable connection between dollars and durable roles. We wrote about that gap in the hidden risk your RHTP application ignores.

What to do next

1. Read your state’s plan first. Your allowable-use answer lives there, not in general program language.
2. Classify your intended spend against the two lists above — fundable-and-defensible vs. likely-to-be-questioned.
3. Build the documentation trail before you submit, not after.

If you want help mapping workforce spending to your state’s plan — and proving durability to reviewers — Applichat Labs does RHTP strategy, grant writing, and delivery. Get in touch and we’ll help you pressure-test your workforce budget.