FCC Proposes Changes to Rural Health Program Rate Calculations

The Federal Communications Commission on Friday approved a proposed rule that would change how the agency sets rates for its rural healthcare program.

The Rural Health Program, launched in 1997, provides rural healthcare providers with funding to cover the cost of acquiring broadband and telecommunications services, in part by subsidizing the difference between rural telecommunications tariffs and those for similar services in rural areas. . nearby urban areas.

That proposed rule asks for comment on the revised bidding methods for the Rural Health Program Telecommunications Program following problems with the process adopted in 2019.

In 2019, the FCC commissioned Universal Service Administration Co., an independent non-profit organization designated by the FCC to manage telecommunications funding, to develop a database of average urban and rural rates for various telecommunications services by state. Federal Communications Commission refused using these rates for funding for 2021 and 2022 after identifying inconsistencies in the database.

These “anomalies” included cases where median rates were lower in more rural areas compared to less rural areas in the same state, and cases where median rates for higher capacity services were lower than for lower capacity services. throughput. in similar areas, according to the draft proposed rule.

The proposed rule requires comments on the updated definitions of the classification of rural areas and comparable telecommunications services in order to improve the quality of program data.

It also asks for comments on whether the database should be kept with such changes, and if so, what approach to determine speed should be used. The proposal describes a regression model that can be used to determine the monthly rate that the provider will pay based on variables such as bandwidth, type of service, rural area of ​​the region and state, according to the project.

“We ask for comment on whether the modifications to the levels of rural areas and service categories discussed in this supplementary notice, or any further modifications indicated by commentators, will adequately address these anomalies,” it says.

The proposed rule was unanimously passed by the FCC chairman and three commissioners at the agency’s February monthly meeting on Friday.

“The Telecom program is a lifeline that supports telemedicine efforts in some of the most remote parts of the country,” said FCC Chair Jessica Rosenworsel, Democrat. “We must get our reforms right.”

FCC Commissioner Brendan Carr, a Republican, spoke about a telemedicine program he saw at a clinic in Manokotaka, Alaska, in a village a few miles from the nearest hospital in Dillingham.

“Life-saving telemedicine connections like this are often only possible with the support of the FCC Rural Health Care Program,” Carr said. “We must ensure that the program provides providers with the confidence they need year after year as demand for these types of services continues to grow.”

The US Federal Communications Commission has noted in recent years that demand for the Rural Health Program exceeds available annual funding. In 2018, the agency increased funding allocated to the program, which has remained unchanged at $400 million a year since the program’s launch in 1997. The funding cap for the Rural Health Program has now been adjusted for inflation.

The FCC has separately awarded $450 million to healthcare organizations purchasing telecommunications equipment, IT services, and telehealth devices as part of its COVID-19 telehealth program.

Last year, the FCC also launched Carr’s Connected Care pilot program, which plans to allocate up to $100 million toward broadband costs that provide telemedicine to low-income Americans and veterans. Unlike the Rural Health Program, the pilot project is for projects that connect patients with healthcare services outside the healthcare facility.