In light of the COVID-19 pandemic, Congress and the Federal Communications Commission (FCC) have ramped up efforts to subsidize the provision of the telecommunications and broadband services necessary to deliver telehealth solutions.  This includes steps to make it easier for eligible health care providers to secure funding under the FCC’s existing Rural Healthcare (RHC) program, developing procedures for tapping into a new $200 million COVID-19 Telehealth Fund, and launching a pilot program intended to help eligible health care providers deliver online (connected) care to a greater number of low-income patients and veterans.

The FCC’s Rural Healthcare Program (approx. 600-$700 million per year)

Recognizing that hospitals and other health care providers in rural areas face unique connectivity challenges, nearly 25 years ago Congress directed the FCC to establish its Rural Healthcare (“RHC”) program.

Under the RHC program, the FCC provides funding to eligible health care providers for the purchase of telecommunications and broadband services at substantial discounts compared to commercial rates.  Generally, eligible providers are not-for-profit or public providers located in rural areas, although funding also is available for consortia with membership of both rural and non-rural health care providers in some circumstances.

The RHC program has grown increasingly popular in recent years, with over $700 million in support committed for expenditures in 2019 alone.  Funds for the program come from fees that virtually all American consumers and businesses pay into the federal Universal Service Fund (“USF”), through assessments on certain forms of mobile and landline phone service.

COVID-19 Telehealth Program ($200 million)

The CARES Act appropriated $200 million that is funding a new COVID-19 Telehealth Program by the FCC.  Unlike RHC Program funding, funds under this new temporary program will be open to health care providers whether they serve urban or rural areas.  Funds can be used to support the purchase of telecommunications, broadband services, and connected devices to provide connected care services in response to the coronavirus pandemic.

The FCC anticipates providing up to $1 million per eligible provider that applies for funding, with funding awarded on a rolling basis until exhausted.  In a deviation from procedures for the RHC program generally, the FCC will not require providers to seek competitive bids for the services they buy with this funding.  On April 8, the FCC issued detailed guidance for prospective applicants and it announced today that the agency would begin accepting applications on Monday, April 13.

Connected Care Pilot Program ($100 million) 

At the same time that it established the COVID-19 Telehealth Program, the FCC took steps to establish a Connected Care Pilot Program under its existing universal service authority.  The Pilot Program will make $100 million available over three years to pay 85% of costs of broadband connectivity, network equipment, and other information services necessary for an eligible health care provider to provide connected care services—particularly to low-income households and/or veterans.  Application deadlines will be announced, and the process for distributing funding is not expected to occur as quickly as it will for the COVID-19 Telehealth Program.