FCC Launches Review of its Rural Health Care Program

The Federal Communications Commission launched a review of its Rural Health Care Program to ensure that all communities have access to advanced telehealth services. The FCC is seeking comment on the appropriate level of the RHC Program funding cap. It also explores ways to more efficiently distribute RHC Program funds and combat waste, fraud and abuse. In addition, the FCC waives the RHC Program’s annual cap on a one-time basis for funding year (FY) 2017 to address the impact of the funding cap on RHC Program participants.

The FCC also makes some immediate changes for FY 2017:

• Waives the RHC Program’s annual cap on a one-time basis by instructing the Universal Service Administrative Company (USAC) to carry forward any unused RHC Program funds from prior funding years for use in FY 2017, which runs from July 1, 2017 to June 30, 2018.
• Enables service providers to voluntarily reduce their rates for qualifying FY 2017 requests while keeping the support amount provided by the Universal Service Fund constant.

To address sustainability of the Program and review Program rules, the FCC's Notice of Proposed Rulemaking seeks comment on: 

• Increasing the RHC Program’s $400 million annual cap and creating a prioritization mechanism in the event of demand exceeding the cap.
• Establishing a process for evaluating outlier funding requests and reforming the calculation of urban and rural rates in the Telecom Program to improve fairness and transparency.
• Defining the “cost-effectiveness” standard across the RHC Program to encourage more efficient purchasing and fairer competitive bidding.
• Ensuring sufficient funding for rural and Tribal healthcare providers, while maintaining the participation of rural-urban provider consortia.
• Simplifying Program participation and enhancing oversight.