The Rural Health Transformation Act Is OfficialWhat This Week’s Announcement Means for HIEs Across the Country

This week marked a major inflection point for rural healthcare in the United States. With the formal announcement and rollout guidance for the Rural Health Transformation Act (RHT Act), states now have clarity, funding, and a mandate to move from planning to execution. The law authorizes $50 billion in federal funding over multiple years to revamp rural healthcare delivery, with a clear emphasis on Medicaid transformation, behavioral health integration, workforce sustainability, and technology-enabled care.

Federal announcements from HHS and CMS made one thing clear: this is not a symbolic investment or a narrow pilot program. It is a structural initiative designed to force real change in how care is delivered, measured, and governed in rural communities. States are being asked to show progress, accountability, and measurable outcomes, not just vision decks or aspirational roadmaps, Official information and announcement.

While early headlines have focused on funding totals and state allocations, the deeper story is about data infrastructure. The RHT Act assumes that states can integrate clinical, behavioral, and social data, coordinate care across fragmented rural systems, and report results in a defensible way. For many states, and for many Health Information Exchanges, this assumption exposes long-standing gaps.

What the RHT Act Means for Health Information Exchanges

The RHT Act directly empowers states to invest in technology innovation, data infrastructure, care coordination tools, and workforce sustainability. For Health Information Exchanges, this is not a side effect of the law. It is central to its success.

HIEs are uniquely positioned to become key partners in state-led RHT initiatives. States need efficient, secure data sharing across rural hospitals, clinics, behavioral health providers, home health agencies, and community organizations. They need interoperability that works in practice, not just on paper. They need sustainable data systems that can support new care models and withstand federal oversight.

Under the RHT Act, HIEs can directly benefit from funding in several critical areas:

Funding for Technology and Data Infrastructure

HIEs can access funding to modernize aging platforms, strengthen data security, build digital health tools, and improve exchange infrastructure serving rural providers. This includes investments in real-time data ingestion, normalization, and analytics that many rural systems cannot build alone.

Care Coordination as a Core Requirement

The RHT Act promotes innovative care models across rural settings. HIEs will be central to coordinating care across hospitals, clinics, behavioral health, long-term care, and home health using shared, trusted data. Without strong HIE participation, these models cannot scale.

State-Driven Innovation with Local Flexibility

States have significant discretion in how they deploy RHT funding. This creates an opportunity for HIEs to propose initiatives aligned with local needs, such as regional data platforms, telehealth enablement, broadband-adjacent data services, and cross-county coordination tools.

Workforce Support and Long-Term Sustainability

Rural workforce challenges are not just about staffing. They are about efficiency and burnout. HIEs can support workforce retention by reducing administrative burden, improving care coordination, and enabling data-driven workflows that allow limited staff to do more with less.

Interoperability and Access to Care

At its core, the RHT Act is about access. Improved data flow is essential to that goal. HIEs become the connective tissue that links fragmented rural systems, ensures providers have a complete view of the patient, and expands access to care through coordinated, informed decision-making.

In essence, the RHT Act offers HIEs a once-in-a-generation opportunity to evolve from data repositories into strategic, technology-driven partners essential to transforming rural health ecosystems.

A Defining Moment for HIEs Nationwide

For HIEs across the country, the RHT Act represents both pressure and possibility. States will need partners that can help them modernize Medicaid data, integrate behavioral health, support whole-person care, and demonstrate progress quickly. In many cases, HIEs are the only entities capable of operating at that intersection.

At the same time, expectations are rising sharply. Batch-based reporting, delayed data availability, and inconsistent data quality will not meet the demands of RHT programs. States will need near real-time visibility and confidence that the data guiding decisions is accurate and defensible.

As Leo Pak, CEO of Interstella (and former CTO of one of the largest HIEs in the country), explains: “The RHT Act is a turning point for HIEs. States are no longer just asking for connectivity. They are asking for intelligence, accountability, and speed. HIEs that step up as data stewards and infrastructure partners will be indispensable. Those that do not will struggle to stay relevant.”

The opportunity is significant. The RHT Act creates a clear path for HIEs to expand their role from compliance utilities to strategic assets within state health systems. Those that can deliver clean, integrated, real-time data will shape the next generation of rural healthcare.

How Interstella Helps HIEs Succeed Under the RHT Act

This shift is precisely where Interstella is focused. Interstella was built to address the gap that the RHT Act now exposes: the difference between moving data and making data usable.

Interstella’s Linqsys platform functions as a real-time, AI-native data refinery for HIEs and Medicaid environments. Rather than replacing existing exchange infrastructure, Linqsys refines data upstream by normalizing, validating, and contextualizing it as it flows. This enables HIEs to improve data quality, support cross-domain visibility across clinical, behavioral health, and social data, and prepare their ecosystems for advanced analytics and future AI use cases.

For HIEs participating in RHT initiatives, this approach offers a pragmatic path forward. It reduces execution risk, shortens time to value, and allows HIEs to meet higher expectations without overextending teams or disrupting trusted relationships. Most importantly, it helps HIEs demonstrate measurable value to state partners at a moment when credibility, trust, and operational competence matter more than ever.

The RHT Act is not just a funding announcement. It is a structural reset. For HIEs willing to evolve, it represents a defining opportunity to become indispensable to state health strategy. For those that do not, it is a clear warning. The next few years will determine which role HIEs play in the future of rural healthcare.

Learn More

The Rural Health Transformation Act marks the beginning of a new era for state health systems, HIEs, and their partners. As federal programs increasingly intersect with AI, analytics, and accountability, success will depend on strong data foundations and trusted infrastructure. To learn more about how Interstella supports Health Information Exchanges, state governments, and integration partners in executing federal programs responsibly in the era of AI, please contact David Wetherelt at david.wetherelt@interstella.us. Conversations are welcome with HIE leaders, state agencies, advisors, and partners looking to translate policy ambition into operational reality.