In the most recent competitive grant cycle (FY2015-17), the Flex Program included an optional new program area focused on rural health system innovations—Program Area 5: Integration of Innovative Health Care Models (Innovative Projects)—to address needs not covered by the other core areas of the grant program. The Flex Monitoring Team (FMT) has undertaken an evaluation of the states participating in this new program area, with a particular focus on activities involving the transition to value-based care, telehealth, care coordination, quality improvement, and system delivery in rural communities. This report provides background on the Flex Program and the Innovative Projects program area. With a focus on the projects and implementation experiences of seven states participating in the Flex Monitoring Team evaluation, we describe the states’ projects and desired outcomes, and discuss initial evaluation observations.