March 26, 2019

March 26, 2019

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March 25, 2019

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Proposal To Increase Rural Health Care Funding Receives Majority Support At FCC

Majority Of Federal Communications Commission (FCC) Supports 40%+ Annual Increase In Rural Health Care Program Funding – Following on a proposal to review annual funding for the FCC’s Rural Health Care Program (RHCP), which currently provides $400 million in annual subsidies for telecommunications and broadband services to eligible rural healthcare providers (HCP), a majority of the Commission now support a proposed 40+% increase to $571 million per year.

RHCP Components – The telecommunications component of the RHCP, established in 1997, allows eligible providers to obtain rates on telecommunications services in rural areas that are reasonably comparable to rates charged for similar services in corresponding urban areas. The broadband component, established in 2012 and known as the Healthcare Connect Fund (HCF), provides a flat 65% discount on services such as Internet access, dark fiber, business data and private carriage services. Both components include a competitive bidding process.

Need For Increased Program Funding Levels – During the last two funding years, the Program has been oversubscribed at the $400 million level, requiring proration of support available. To address that development, the FCC authorized carry forward of unused funds from prior funding years to ameliorate these cutbacks for funding year 2017. In addition, in December, the FCC sought comment on increasing the current $400 million cap. Thereafter, the Schools, Health and Libraries Broadband Coalition sought emergency relief because of the potential funding cuts affecting health care providers as a result of oversubscription.

FCC Chairman Reacts – Faced with creating continued uncertainty for patients, health care providers and communications companies, the Chairman has proposed adding $171 million to the fund annually and applying the additional funding to the current funding year “to immediately address a critical funding crisis and enable rural health care providers to continue offering telemedicine services.” The proposal also would adjust the $571 million cap annually for inflation and allow unused funds from prior years to be carried forward to future years. That could mean even more resources available.

Majority Support and Next Steps – Since releasing the proposal, Commissioners Carr and O’Rielly have joined in voting for the initiative, which means it will ultimately be formally approved. Congressional and other reaction has been highly positive. The Executive Vice President of the American Hospital Association noted that the increase was “critical to improve the lives or rural Americans…since innovations in health care demand connectivity for telehealth, remote monitoring, patient engagement and daily operations.”

The increase in funding resources should offer additional opportunities for eligible entities who would seek RHCP support to “help health care providers get the connectivity they need to better serve patients throughout rural America.”

Entities interested in taking advantage of the enhanced Rural Health Care Program should follow these and other developments that the FCC is considering closely so that they are fully informed as to their options.

© Copyright 2019 Squire Patton Boggs (US) LLP

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About this Author

Paul Besozzi, Squire Patton Boggs, telecommunications attorney
Senior Partner

Paul Besozzi concentrates in the wireless, broadband and emerging technology areas. His extensive experience of more than 30 years in the telecommunications field includes regulatory, transactional, legislative and litigation matters for clients ranging from wireless service and infrastructure providers to resellers of long-distance service, including cellular, personal communications services, specialized mobile radio, point-to-point microwave, advanced wireless services and other emerging wireless technologies.

Paul represents clients before the federal and...

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John E. Wyand, Squire Patton Boggs, Healthcare Lawyer, UK
Partner

John Wyand, a Partner in our Healthcare policy practice group in Washington DC, focuses on advising healthcare and life sciences companies and providers on legal, policy and regulatory issues. Additionally, he regularly assists hospitals and physician groups in developing strategies for hospital/physician alignment, mergers and acquisitions, and fraud and abuse compliance.

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