Rural Broadband NPRM Contains Future Threat to Existing Rural Funding
In 1997, the FCC established the Rural Healthcare Telecommunications Program to ensure that rural healthcare providers pay no more than urban providers for their telecommunication needs. This program subsidizes rural provider telecommunications costs through various mechanisms[1], with total subsidies not to exceed an annual funding cap of $400 million. Program funding has never even approached full utilization. In 2009, the program provided $60.7 million in support to eligible rural providers.
In order to more fully utilize the funds available, the FCC has issued an NPRM that proposes making a number of changes to the current support mechanisms. The proposed changes include:
- Utilize $100 million (cap) annually to fund the deployment of healthcare networks through a new “Healthcare Infrastructure Program” that will expand funding to non-rural providers.
- Retain the existing Telecommunications Program that ensures rural/urban cost parity
- Replace the existing Internet Access Fund with a new “Broadband Services Program” that will fund 50% of a provider’s private dedicated connections or Internet access.
- Make rural skilled nursing and renal dialysis facilities eligible for funding.
- Make rural provider-controlled datacenters and administrative offices eligible for funding.
- Consider making telecommunications funding contingent on providers achieving CMS’s “meaningful use” designation.
As the rural community assesses these proposed changes, one important question to ask is how the new rules may expand or reduce funding available for the rural providers most in need of the telecommunications assistance—those that the program was originally created to support.
- On the issue of the network infrastructure program, funding for networks that address rural provider telecommunications needs is a positive. The NPRM contains language that prioritizes networks with a higher number of rural participants. However, the NPRM states that only networks that meet ownership, IRU or capital lease requirements will be funded. Smaller networks often utilize short-term (e.g. 5 year) telecommunications leases/contracts, which the NPRM proposes not to fund.
- The Broadband Services Program is likely to expand rural provider funding for those rural providers whose rural/urban cost differential is 50% or less. An even better idea would be to raise the support level to 85% (especially for construction and infrastructure deployment), which would allow many more rural providers (including those with higher rural/urban cost differentials) to participate.
- The inclusion of provider-controlled datacenters and administrative offices is also likely to expand funding to rural providers and should be supported. This eligibility change is long overdue and should be implemented as soon as possible.
- Unfortunately, the existing telecommunications program (which will continue to be the mechanism serving the majority of providers with high rural/urban cost differentials) has not been augmented to include any additional benefits.
- Most important, the proposal to make telecommunications funding contingent on meaningful use of electronic health records, if enacted, would dramatically reduce the funding available to rural providers since small and rural providers are the most likely not to achieve meaningful use. CMS’s Final HIT Incentive Rule estimates that between 40 and 75% of eligible professionals and 52% of critical access hospitals (the smallest rural hospitals) will not achieve meaningful use by 2016. These will generally be the providers with a higher rural/urban telecommunications cost differential. What could be the rationale for withholding basic telecommunications support from such a large group of disadvantaged providers (who by the way will already be paying penalties to CMS for their inability to meet the meaningful use standard)? This potential provision would be counterproductive and must be rejected.
RWHC will be developing detailed comments on the NPRM once it is officially posted in the Federal Register. Rural providers and their advocates will need to vigorously engage the discussion to ensure that the current rural healthcare support mechanism continues to have an appropriately rural focus.
[1] Three current rural support mechanisms: (1) The Telecommunications Fund subsidizes the telecommunications rates paid by rural providers to eliminate rural/urban price differences; (2) the Internet Access Fund provides a 25% flat discount on monthly Internet access fees; and (3) the Rural Healthcare Pilot Program provides support for up to 85% of the costs associated with deploying broadband health care networks that connect rural and urban healthcare providers in a state or region.
