Preheat oven to 350 degrees. Spray a 2-qt. baking dish with nonstick cooking spray. Set aside.
Cook white rice according to package directions. Remove from heat and set aside.
In a large skillet, over medium-high heat, cook hot Italian sausage until browned and no longer pink inside, stirring with a wooden spoon to break up the sausage. Using a slotted spoon, remove sausage from skillet to a bowl. Drain fat from skillet.
In the same skillet, over medium-high heat, melt the butter. Add the onion and mushrooms and cook for 5-7 minutes, until soft. Add the green chiles and garlic and continue to cook for one minute.
Stir in the chicken broth, heavy cream, salt and pepper until well combined and bring to a simmer, about 7-10 minutes. Add 3/4 cup of the shredded cheese and mix until cheese is melted. Add the sausage and rice. Mix until well combined. Pour into prepared baking dish. Sprinkle with remaining 1/4 cup shredded cheese. Bake for 30-35 minutes until bubbly.