The FCC this week adopted a Report and Order that will change the way the Rural Health Care Program is administered. The goal of the changes is to distribute funds efficiently and equitably, promote transparency and strengthen safeguards against waste, fraud and abuse.
The revisions are designed to simplify how the urban rate (the amount paid by health care providers) and the rural rate (the amount that service providers receive). Other changes include:
- Target funding to rural areas in the most need of health care services. The goal is to ensure that when demand exceeds funding eligible rural providers continue to benefit by prioritizing support based on rurality and if the area is medically underserved.
- Reform competitive bidding in the program with the goal of making it a more productive mechanism for health care providers to find cost-effective service.
- Adopt a series of program-wide rules and procedures to simplify the application process for program participants and provide more clarity regarding program procedures.
There has been a dramatic increase in health care provider participation in the FCC Rural Health Care Program, which squeezes program funding. In June 2018, the FCC increased the annual cap on program spending to $571 million, which was a jump of almost 43%, and reversed the across-the-board spending cuts driven by the old cap.
This week’s Report and Order enables the program’s $150 million cap on multi-year and upfront payments to be adjusted annually for inflation. The Report and Order, in an effort to provide consistency between Rural Health Care programs, also provides more time for the competitive bidding process and creates a more efficient application filing window. In addition, it provides ways to work through deadline extension requests for invoicing and service delivery.
In June, the FCC adopted a notice of proposed rulemaking that could lead to the adoption of an overall cap on the Universal Service Fund (USF) program. The program has four subprograms: high-cost (broadband/voice), Lifeline (low-income), E-Rate (schools and libraries) and rural healthcare.