FCC Votes on Possible Changes to the Rural Health Care Program

- Revising the RHC Program Cap. The FCC seeks comment on whether and how it should raise the cap for the RHC Program. In particular, the FCC seeks comment on adjusting the cap based on inflation, or whether the Commission should roll over unused funds committed in one year into a subsequent funding year. The NPRM also asks whether potential waste in the Telecom Program should factor into a decision about increasing the cap, as well as how increasing the cap would affect other Universal Service Fund (USF) programs.
- Prioritizing Funding if Demand Reaches the Cap. The NPRM seeks comment on whether the Commission should change how it prioritizes funding of eligible RHC Program requests. In particular, the FCC poses questions about the following potential approaches: prioritizing based on rurality or remoteness; prioritizing based on type of service; prioritizing based on RHC program (Telecom v. HCF); and prioritizing based on economic need or healthcare professional shortages. The focus on prioritizing based on rurality or remoteness is consistent with the FCC’s recent order and NPRM on the Lifeline program, which also seeks to prioritize service in rural areas.
- Targeting RHC Support. The NPRM seeks comment on “several proposals to direct proportionally more funding to rural healthcare providers, including healthcare providers on rural Tribal lands.” Specifically, the FCC asks commenters to weigh in on several issues related to healthcare consortia that include both rural and non-rural healthcare providers.
- Establishing a Benchmark and Review Process for RHC Program Support Requests. The FCC proposes to “establish objective benchmarks to identify outlier funding requests” in the Telecom Program and subject such outlier requests to enhanced review by the Universal Service Administrative Company (USAC) before issuing funding commitments. To carry out this proposal, the NPRM seeks comment on how to calculate the benchmark and the appropriate procedures for the enhanced review process for outlier requests. It also seeks comment on a potential alternative approach that would cap funding for outlier requests at the benchmark level.
- Reforming the Rules for Calculating Support in the Telecom Program. The NPRM proposes “more detailed requirements about how the urban and rural rates are determined in the Telecom Program to minimize potential variances and rate manipulation.” The FCC seeks comment on calculating support based on the average of relevant publicly available rates, and asks commenters to provide feedback on a number of issues and questions related to such an approach, including how to collect data to inform the calculations. It also asks whether it should retain the cost-based approach to support calculation. Additionally, the NPRM seeks comment on changing the Commission’s interpretation of “similar services” for purposes of calculating comparable urban and rural rates, as well as eliminating the use of distance as a proxy for the appropriate support amount.
- Redefining the “Cost Effectiveness” Standard Across the RHC Program. The NPRM notes that under current RHC Program rules, funding recipients can select services that exceed the healthcare provider’s needs, thereby wasting program funds. The FCC seeks comment on how it can revise the definition of “cost effectiveness” to address this inefficiency. With the USF contributions rate hitting 19.5% this quarter, all USF programs will be under increased scrutiny and budgetary restrictions as the Commission tries to avoid hitting the 20% mark.
- Improving Oversight of the RHC Program. The FCC seeks comment on establishing rules related to the use of consultants in connection with RHC funding requests (including disclosure of certain information about the consultants), as well as applying specific restrictions with respect to the receipt of gifts in connection with funding requests, similar to the existing rule in the E-rate program. It also proposes to harmonize various filing deadlines within the program.
- Streamlining RHC Program Processes and Administration. The NPRM proposes to reduce the number of forms associated with the RHC Program, with an aim toward improving the efficiency of the application process while reducing the administrative burden on applicants.
- Bolstering the Competitive Bidding Rules. The NPRM proposes and seeks comment on potential changes to harmonize the competitive bidding rules for the Telecom and HCF components of the program.