FCC Adopts Rules to Improve Support for Rural Health Care Providers

By: Andrew Regitsky

In an Order on Reconsideration, Second Report and Order and Second Notice of Proposed Rulemaking (Order) released on January 27, 2023, in Docket 17-310, the FCC implemented rules to improve industry support for health care providers serving rural areas. The Rural Health Care (RHC) program

supports rural health care providers with the costs of broadband and other communications services so that they can serve patients in rural areas that may have limited resources, fewer doctors, and higher rates for broadband and communications services than urban areas. Telehealth and telemedicine services, which expanded considerably during the COVID-19 pandemic, have also become essential tools for the delivery of health care to millions of rural Americans. These services bridge the vast geographic distances that separate health care facilities, enabling patients to receive high-quality medical care without sometimes lengthy or burdensome travel. The RHC Program promotes telehealth by providing financial support to eligible health care providers for broadband and telecommunications services. (Order at para. 1).

The RHC Program consists of two component programs: (1) the Telecom Program; and (2) the Healthcare Connect Fund (HCF) Program. The Telecom Program was established in 1997 and subsidizes the difference between the rates in the health care provider’s rural area and rates for comparable services available in urban areas within that state. The HCF Program was created in 2012 to promote the use of broadband services and facilitate the formation of health care provider consortia that include both rural and urban health care providers by providing a 65 percent discount on an array of advanced telecommunications and information services.

In the Order, the Commission takes the following actions:

It grants petitions for reconsideration to restore the prior rate determination rules and eliminate rules requiring the Rates Database for the Telecom Program.

Section 254(h)(1)(A) of the Communications Act requires that Telecom Program support must be based on the difference between the urban rate, which must be “reasonably comparable to the rates charged for similar services in urban areas in that State,” and “rates for similar services provided to other customers in comparable rural areas,” i.e., the rural rate. Because the Rates Database was deficient

in its ability to set adequate rates, we find that restoration of the previous rural rate determination rules, which health care providers have continued to use to determine rural rates in recent funding years under the applicable Rates Database waivers, is the best available option pending further examination in the Second Further Notice, to ensure that healthcare providers have adequate, predictable support. (Id., at para 10).

Under the reinstated rules, healthcare providers may use one of three methods for calculating the rural rates in the Telecom Program, depending on the circumstances.

1. The average of rates that the carrier charges to other non-health care provider commercial customers for the same or similar services provided in the rural area where the health care provider is located;

2. If the carrier does not have any commercial customers in the health care provider’s rural area, the average of tariffed and other publicly available rates charged by other service providers for the same or similar services provided over the same distance in the rural health care provider’s area; or

3. If there are no such rates or the carrier reasonably determines that those rates would be unfair, a cost-based rate that is approved by the Commission for interstate services (or the relevant state commission for intrastate services). A carrier seeking approval of a rural rate under Method 3 will be required to provide “a justification of the proposed rural rate that includes an itemization of the costs of providing the requested service.

Additionally, the Commission amends the RHC Telecom Program invoicing processes to eliminate the Health Care Provider Support Schedule and move invoice submission until after services have been provided. It harmonizes the invoicing process between the Telecom Program and the HCF Program by having participants in both programs invoice the Administrator for services provided using the FCC Form 463 (Invoice and Request for Disbursement Form).

Separately, in the Second Notice of Proposed Rulemaking, the Commission proposes to fine tune the rules for determining rural and urban rates in the RHC Telecom Program, reinstating the cap on support for satellite services in the Telecom Program that existed before the adoption of the Rates Database; and making it easier for health care providers to receive RHC Program funding as soon as they become eligible. Industry comments are due 30 days after the Second Notice appears in the Federal Register.