Issues & Insights

FCC Aims To Improve Rural Health Care Program

The Federal Communications Commission looks to revamp parts of its Rural Health Care Program to improve delivery of broadband and tamp down on waste, fraud and abuse while still delivering much-needed telehealth services.

Commissioners voted unanimously on Feb. 18 to approve draft regulations and seek comment on changes in the program’s telecom rules. That program, established in 1997, offers funding to rural health care providers to pay for broadband services and help facilitate telemedicine. It subsidizes the difference between rural and urban rates for internet since rural areas often pay more due to the increased cost to service those regions.

The FCC looks to change the funding formula, as well as improve reporting requirements. Its notice of proposed rulemaking seeks comments on these issues. 

“In recent years there has been an explosion in demand for telehealth services, a trend accelerated by the COVID-19 pandemic, that has increased the bandwidth needs of rural health care providers,” the FCC points out in its request. 

The commission notes that rural areas tend to have more limited resources, fewer doctors and higher broadband costs than urban areas.

“For doctors to stay connected to their patients, rural health care providers must have high-quality broadband services,” Commissioner Geoffrey Starks said in his statement included with the proposal.   

The FCC notes that the commission in 2019 adopted a data-based method to use in determining levels of support available in the telecom program, but “anomalies and inconsistencies in the levels of support generated by the Rates Database” resulted in the FCC’s Wireline Competition Bureau waiving the use of that database for funding years 2021 and 2022.

Starks pointed out that he and then-Commissioner Jessica Rosenworcel (now the chairwoman) expressed concerns in 2019 that the changes could adversely affect rural health care providers.

“As I’d done in other proceedings, I called for the commission to collect and utilize the best available data and raised specific questions about how we would compare rates between urban and rural communities,” Starks said. “Then-Commissioner Rosenworcel shared my concerns, and we both urged that the commission conduct additional notice and comment.  Unfortunately, our concerns were not taken up, and as we feared, implementation of the new rules revealed serious problems with the data used to calculate support.”

Starks said he hopes the renewed look at the program will help “reduce fraud and make the program more effective and efficient.”

In her statement, Rosenworcel said the FCC got the telecom portion of the rural health care program wrong in its recent reforms, particularly the rates database. She provided as example a rate for a dedicated transmission service in the “extremely rural” tier in Alaska that was lower than the rate for the same service in the “less rural” tier. And in California, the database showed that a connection with a download speed of 50 Megabits per second was cheaper than a 20 Mbps connection. 

“This doesn’t make sense,” Rosenworcel said. “So for the last two years of this program, the FCC waived the use of this database. Now I think we need to fix it for good.”

The FCC under the rulemaking offers a revised database of rural and urban rates, and a regression model developed by the commission’s Office of Economics and Analytics.

“We need a system that works for the communities that depend on the Telecom Program because it provides essential healthcare in places that need it most,” Rosenworcel said.

In his statement, Commissioner Brendan Carr pointed out that getting the program right is a statutory obligation of the FCC – a goal he said the commission has failed at.

“In the past, the FCC’s support mechanism has led to unpredictable funding levels and inconsistent rates,” he said. “Demand for funding has outstripped the program’s annual budget. And the process of administering the program and processing funding requests has led to backlogs and delays.”

The FCC is looking to improve its Rural Health Care Program to increase effectiveness and reduce waste is a positive development. Taxpayer money is a finite resource that should be spent as efficiently as possible in the quest to close the digital divide.

Johnny Kampis is director of telecom policy for the Taxpayers Protection Alliance.

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