FCC Reforms Rural Health Care Program

The Federal Communications Commission reformed the Rural Health Care Program (RHC) aiming to ensure limited program funds are disbursed efficiently and equitably, promote transparency and predictability in the program’s administration, and strengthen safeguards against waste, fraud, and abuse. The action takes a number of steps to reform the distribution of RHC funding, in particular by revising the rules governing the Telecom Program to simplify calculation of the urban rate—the amount health care providers pay—and the rural rate—the amount that service providers receive. In addition, the Report and Order outlines a number of program reforms to:

• Target funding to rural areas in the most need of health care services and ensure that, when demand exceeds available funding, eligible rural health care providers continue to benefit from RHC Program funding by prioritizing support based on rurality and whether the area is medically underserved.
• Reform competitive bidding in the RHC Program to make it a more productive mechanism for health care providers to identify and select cost-effective service offerings available to them in rural areas; and
• Adopt a series of Program-wide rules and procedures to simplify the application process for program participants and provide more clarity regarding the RHC Program procedures.

The Report and Order provides for the Program’s $150 million cap on multi-year and upfront payment requests to be adjusted annually for inflation. Additionally, the Report and Order includes several measures to ease the burden on applicants while establishing consistency between the RHC Programs, including providing additional time for the competitive bidding process, establishing a more efficient application filing window, and creating mechanisms for USAC to address deadline extension requests for invoicing and service delivery.