FCC Seeks Comment on Modifications to Rural Health Care Telecom Program FCC Proposes Revisions to Rates Database, Funding Caps, and Invoicing

Comments and Reply Comments Due 30 and 60 days after Federal Register Publication

On February 22, 2022, the Federal Communications Commission (“FCC” or “Commission”) released a Further Notice of Proposed Rulemaking in the Promoting Telehealth in Rural America docket, which seeks comment on revisions to the Rural Health Care Telecom Program (“Program”), the Rates Database (“RD”), and alternative rate determination mechanisms to improve the accuracy of urban and rural rates in the Program.

In 2019, the FCC adopted the Promoting Telehealth Report and Order, which included a RD for the Program that listed median urban and rural rates for eligible services by state. The FCC has discovered, however, that there were anomalies and inconsistencies within the RD, making the determination of rates susceptible to fraud and abuse. The FCC also found that the RD did not consistently produce reasonably comparable urban rates, and that the lack of consideration of competitors’ offerings in averaging rates of identical or similar services led to artificially inflated rural rates. As a result of these findings, the Wireline Competition Bureau waived the required use of the RD for Funding Year (“FY”) 2021 and FY 2022. Pursuant to the waiver, Health Care Providers (“HCPs”) may use urban and rural rates approved in the previous three FYs, or may determine urban and rural rates using previous rules. The requirement to use the RD for urban and rural rates will be restored in FY 2023.

Specifically, the new Rulemaking seeks comment on:
how to determine urban and rural rates, focusing on inputs to the rurality classification and categorization of eligible services, including whether and how to redefine rural areas;
whether to maintain the existing standard for comparability, specifically that there is a sufficiently large range of functionally similar services found in services advertised at 30 percent above or below the speed of service requested by an HCP;
non-bandwidth components of services that may be a source of irregular behavior of the RD, and whether that results in inappropriate grouping of rates within a bandwidth or rurality tier;
alternative rate determination mechanisms, such as regression models, discounted rates, and cost curves;
reform of its funding cap rules to better handle internal caps on multi-year commitments and upfront payments;
allowing underlying contracts associated with multi-year requests that are not fully funded to be designated as evergreen, exempting applicants from having to complete the competitive bidding process; and
eliminating Health Care Provider Support Schedules in the TP and aligning the invoicing process with that used for the Healthcare Connect Fund Program, specifically requiring invoices for services actually provided using Form 463.

Please contact Robin Tuttle ([email protected]) or Clare Andonov ([email protected]) if you have any questions regarding this Rulemaking.