FCC Releases Decision on New Funding Program for Rural Health: Broadband Connectivity Prioritized and the Expansion of Telemedicine and mHealth Continues

Federal Communications Commission (FCC; the "Commission") decision making continues to be active in the area of telemedicine. Recently, on December 21, 2012, the agency released a lengthy decision updating its rules and policies for its rural healthcare program (In the Matter of Rural Health Care Support Mechanism, FCC 12-150, at para. 45). The changes are designed to promote access to, and the deployment of, broadband networks supporting rural healthcare providers, enabling these providers to expand the reach of telemedicine and mHealth (mobile health) capabilities.

Since the late 1990s, the FCC has administered policies intended to subsidize the provision of telecommunications services for nonprofit and public rural healthcare providers (HCPs). One program has supported the delivery of telecommunication services at rates "reasonably comparable" to those paid in urban areas. Another program has supported rural HCP access to Internet service at a 25-percent discount off the costs of monthly access. More recently, the FCC has supported pilot projects designed to facilitate the construction of state or regional healthcare broadband networks, and connections to the Internet. This program provided a subsidy of up to 85 percent of the costs of these activities.

Drawing on its experience with the pilot program, under which rural HCPs have been able to obtain higher bandwidth connections than under prior policies, the Commission has adopted a comprehensive new program known as the Healthcare Connect Fund. This program supersedes the Internet access program (the telecommunications subsidy program continues to be in effect). According to the FCC's Order:

[A] primary focus of the Healthcare Connect Fund will be encouraging the growth or formation of statewide, regional, or Tribal broadband health care networks . . . . Benefits of such networks include access to specialists; cost savings from bulk buying capability and aggregation of administrative functions; efficient network design; and the transfer of medical, technical, and financial resources to smaller HCPs.

The Healthcare Connect Fund will match the cost of broadband services or facilities on a two-for-one basis, i.e., healthcare providers participating in the program will be required to contribute 35 percent of the costs. Unlike the telecommunications and Internet access programs, non-rural HCPs will also be eligible for support, but with limitations intended to preserve a focus on rural needs. For example, non-rural HCPs may apply for support only as part of consortia (i.e., they may not submit individual applications), and a majority of members' sites must be rural. Eligible healthcare providers must continue to be nonprofit or public entities.

The FCC's new policies will, among other things, support the purchase of broadband service from a variety of communications providers or, in the alternative, allow healthcare providers to build their own networks when that is shown to be the most efficient choice. They will also provide funding for upgrades to higher speed service.

The FCC has maintained the preexisting $400 million ceiling on the program. It anticipates savings from the new program to cut the costs of rural broadband networks for healthcare providers by 50 percent. The agency anticipates it will not begin accepting applications from the new consortia until 2014 given the time allowed for the organization of such entities.

Finally, the Commission has initiated a new pilot program directed at skilled nursing facilities. This program is to determine whether it is technically feasible and economically reasonable to include broadband connectivity for these facilities within the Healthcare Connect Fund program.

For Further Information

If you have any questions regarding the decision or the FCC's various activities in the area of telemedicine and mHealth, please contact Ken Keane in our Washington office or any member of the Information Technologies and Telecom Practice Group. If you have any questions regarding Medicare reimbursement and other healthcare law issues related to these and other telemedicine and mHealth services, please contact Lisa Clark or Mitch Goldman in our Philadelphia office or Michael A. Swit in our San Diego office or any member of the Health Law Practice Group. Please also contact the Duane Morris attorney with whom you are regularly in contact if you have any questions about this Alert.

Topics:  Broadband, Digital Health, FCC, Healthcare, mHealth, Rural Health Care Program, Telemedicine

Published In: Communications & Media Updates, Health Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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