On October 11, 2019, the Commission published in the Federal Register the Report and Order (“Order”) in the Promoting Telehealth in Rural America proceeding, which revises certain aspects of the Rural Health Care Program (“RHC Program”) and its Telecommunications Program (“Telecom Program”) and Healthcare Connect Fund (“HCF”) Program (WC Docket No. 17-310). This item was voted upon and approved in the August Open Meeting.

The Order is effective November 12, 2019, with the exception of the following rule sections which require OMB approval and will be approved at a later date: § 54.622(d) (competitive bidding bid evaluation criteria); §§ 54.622(e)(2), (4), and (5) (request for service aggregated purchase details, declarations of assistance, and requests for proposals); §§ 54.623 (a)(2) – (a)(4) (requests for funding contracts, competitive bidding documents and cost allocations); § 54.624 (site and service substitutions); § 54.626(b) (deadline extensions for non-recurring service delivery); § 54.627(b) (invoice deadline extensions); and § 54.631(d) (obligations of service providers for recordkeeping).

  • The following rules will take effect in funding year 2020: rules for prioritizing funding if demand exceeds the available funding; rules governing majority-rural requirement for the HCF Program; consortia certification rules; competitive bidding rules; uniform invoicing rules; site and service substitutions and SPIN change rules; service delivery deadline and extension rules; gift rules; and rules governing use of consultants and other third parties.
  • The following rules will take effect in funding year 2021: rules for determining urban and rural rates in the Telecom Program; rules providing additional time to complete the competitive bidding process; and the application filing window rule.

The Order takes the following steps to reform the Telecom Program in an effort to minimize wasteful spending, fraud and abuse resulting from the current rate determination process:

  1. Clarifies the scope of similar services for rate determination, and places the burden of identifying such similar services on the Administrator;
  2. Defines the geographic contours of urban (i.e., using urbanized area designations) and comparable rural areas (i.e., three tiers of rural areas: extremely rural; rural; less rural) for rate determination;
  3. Reassigns to the Administrator the task of determining urban and rural rates for similar services from health care and service providers;
  4. Reforms such determination of rates to be based on the median of all available rates for functionally similar services;
  5. Directs the Administrator to create a publicly available database for the posting of urban and rural rates;
  6. Eliminates the limitation on support for satellite services; and
  7. Eliminates distance-based support.

Additionally, the Order:

  • Implements a rural prioritization system when funding requests submitted during a filing window exceed the amount of available funds. This new system will prioritize funding based on the rurality of the site location and whether the area is considered medically underserved and will replace the current proration rules;
  • Eliminates the current three-year grace period for RHC program consortia to come into compliance with the majority-rural requirement and instead requires all consortia to comply with this rule by 2020;
  • Revises the competitive bidding rules for each RHC program;
  • Streamlines the administrative processes for these programs to ease application burdens and funding decisions. Examples include:
    • adopting a uniform invoicing rule;
    • establishing program-wide site and service substitution and SPIN change procedures;
    • eliminating individual service delivery deadlines by establishing June 30 of the funding year as the delivery deadline;
    • authorizing the Administrator to grant a one-year extension of the service delivery deadline for non-recurring services;
    • prohibiting an RHC program applicant and/or consultant from directly or indirectly soliciting or accepting gifts from a service provider participating or seeking to participate in the RHC Program, with exceptions;
    • continuing to permit applicants to use a consultant or other third party to file FCC Forms and supporting documentation on their behalf, with new requirements to ensure the integrity of the program.
  • Directs the Administrator to open an initial application filing window with an end date no later than 90 days prior to the start of the funding year (i.e., no later than April 1).

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