FCC Updates Funding Program to Boost Rural Telehealth Adoption

January 12, 2024 - The Federal Communications Commission released the final rule updating the Rural Health Care Program to support virtual care access in rural America through funding efforts.

Established in 1997, the Rural Health Care Program funds telecommunications and broadband services for healthcare delivery. Healthcare providers eligible for the funding include community health centers or health centers providing health care to migrants, local health departments or agencies, community mental health centers, nonprofit hospitals, and rural health clinics. As of funding year 2017, the Rural Health Care Program grant total is capped at $571 million annually, adjusted for inflation.

The final rule released on Jan. 10 includes four updates to the program:

• Permitting conditional approval of eligibility for healthcare providers to allow them to begin competitive bidding and request funding.
• Moving back the deadline for providers to change their Service Provider Identification Number (SPIN) to align with the invoice deadline, giving participants more flexibility with deadlines.
• Eliminating the ‘standard urban distance’ component of the urban rate calculation rules to simplify the rate determination process.
• Permitting healthcare providers to request changes to their evergreen contract dates following a funding commitment.

The updates aim to improve provider participation in the program and ease administrative burden.

For instance, allowing conditional approval of eligibility aims to ensure that healthcare providers who expect to become eligible for the program in the near future do not miss out on much-needed funding.

Additionally, removing the ‘standard urban distance’ provision aims to simplify the process of calculating urban rates. The provision mandates that the urban rate for a service provided over a distance greater than the standard urban distance “is the rate no higher than the highest tariffed or publicly-available rate provided over the standard urban distance.” Standard urban distance is defined as “the average of the longest diameters of all cities with a population of 50,000 or more within a state.”

The agency noted in its final rule document that there is no evidence that eliminating the standard urban distance provision will adversely impact healthcare providers because few participants calculate urban rates using this distinction.

Going forward, all urban rate calculations will be based on rates provided in a city rather than over the standard urban distance.

Further, the FCC has established a deadline of July 1, 2024, for healthcare providers to submit invoices for unclaimed funds from the funding year 2019, and before, that did not have an invoice deadline. There is currently $22.2 million in unclaimed funding commitments from this period.

Access to telecommunications and broadband services is critical to telehealth adoption and use in the United States.

A study published last April shows that counties with the greatest broadband availability had 47 percent higher telehealth utilization compared to counties with the least broadband availability. Researchers examined merged county-level data on broadband capacity, telehealth use among Medicare Fee-for-Service beneficiaries from January through September 2020, and socioeconomic characteristics at the county level. The research also shows that rural counties had lower telehealth utilization than urban ones.

A report by the Southern Rural Black Women's Initiative for Economic and Social Justice further reveals that expanding access to broadband internet in 10 counties in the South could result in healthcare cost savings from telehealth interventions of almost $43 million annually.

Since the onset of the COVID-19 pandemic, the FCC has doubled down on efforts to expand connected healthcare services. It provided millions in funding to support virtual care services through its COVID-19 Telehealth Program and the Connected Care Pilot Program.