Stakeholders Welcome Draft FCC FNPRM on RHC Rates

A draft FCC Further NPRM that would seek comment on rural healthcare program revisions would make needed changes to how the rates database is calculated and modernize funding cap rules, said experts in recent interviews (see 2201280065). The draft, if adopted during the Feb. 18 commissioners' meeting, would also seek comment on whether the agency should redefine rurality and how that affects program participation.

The FCC adopted its rural healthcare program’s rates database in 2019 and waived its use for FY 2021 and 2022 after the Wireline Bureau discovered anomalies and inconsistencies within the database. The information collected by Universal Service Administrative Co. “wasn't a true reflection of the real rates,” said Schools, Health & Libraries Broadband Coalition Executive Director John Windhausen. This proceeding will give the FCC the opportunity to revisit the database and determine a better alternative, he said.

There has “never been a very good median rate” in the database, said Community Hospital Corp. Vice President-Telecom Services Whittney Walker. “I have never supported the rates database” because “you can’t really pinpoint one area to the next,” Walker said, noting several CHC hospitals receive most of their rural healthcare program funding for their telephone lines: “We were seeing almost a 90% reduction in what they would be eligible for given the rates database for maximum rural rates” and urban rates. The American Hospital Association declined to comment.

Providers’ interest in the rural healthcare program "remains steady," emailed an FCC spokesperson: "This FNPRM seeks comment on how best to set rural and urban rates for the telecom program in the future given the issues identified with the rates database."

It’s “going to be really critical to do a good job of that rates database,” said Southern Ohio Health Care Network Project Coordinator Tom Reid, noting his consortium includes about 400 facilities participating in the rural healthcare program’s healthcare connect fund. Part of the problem with the database is how rural areas are defined, Reid said. It’s “not the most logical approach” and there are “preexisting better approaches,” he said. Previous justifications for maintaining the current definition of a rural area "remain applicable today," the draft FNPRM says, but would seek comment on whether there are any alternatives that would be "more appropriate."

“Having provided services to remote health care providers in Alaska for many years, we understand how important this program is to providing critical health services in rural Alaska," said Jim Gutcher, Alaska Communications vice president-strategy and product management, in a statement: "We are pleased the FCC is moving forward to clarify program rules for the long term."

The FCC’s definition of rural “ought to be looked at” because the current definition has “led to some results where some rural healthcare providers are shut out of getting funding even though they’re extremely rural,” Windhausen said. He noted about 60% of rural healthcare program applications come from SHLB members.

One problem with the current classification is the 25,000 population cap, Reid said, which is “not very hard” for a rural area to surpass. Another issue is that census tracts are used instead of census blocks, he said. A tract may include a block in a rural area that’s several square miles with a small corner touching an area considered urban, Reid said, making the entire census tract ineligible.

The Census’ designation of metropolitan and micropolitan areas “makes it much clearer” for those wanting to know if they’re qualified, Reid said: “It would potentially solve a lot of those issues with the rates database.” Walker suggested the telecom program could be “more efficiently utilized” if it were operated similarly to the E-rate program and provide percentages based on metrics of tiers. A percentage-based model would be “more equitable” if the FCC adopts “the right metrics.”

Demand for telehealth is “continuing to grow and expand” because of the COVID-19 pandemic and “efficiencies” that come from its use, Windhausen said, and the “current cap on the program overall needs to be addressed.” SHLB was “glad” to see the draft would include questions about the internal cap on multiyear commitments, he said, adding that the FCC should “start developing a plan to increase the overall cap on the program” because demand will likely continue to grow.