FCC Votes to Release Order Overhauling Rural Telehealth Compensation

FCC Chairman Ajit Pai lauded the benefits of the USF program in helping improve healthcare access in the most remote parts of the country but said the need for a systematic overhaul had become evident.

The biggest concerns raised were about how a new median subsidy rate across several tiers of rural communities, based on difficulty of delivering broadband access to them, would hit outlier communities and most specifically off-road towns in Alaska (see 1907290049). A new tier especially for these remote Alaska communities was added to the order Wednesday, FCC officials said. Commissioner Jessica Rosenworcel said she wasn't reassured by the late addition, calling it "too last minute." She said the agency should have modeled the effect that the new rates would have on rural healthcare facilities because if the changes are done wrong, it could lead to closings. A data-driven agency should have new data before it makes changes in the way it sets rates to subsidize telehealth services, she said. "It would be cruel if as a result of our tinkering in Washington we shutter healthcare operations in some of our most remote communities," she said. Rosenworcel said she wanted the FCC to "put this out for review and comment" because it would have "given us time to get it right." She approved in part and dissented in part.

Commissioner Geoffrey Starks also dissented in part. "We at the commission must do a better job of gathering data," he said, because better data would lead to better decisions.

Commissioner Brendan Carr said new language was added that would start the application process earlier so it was no longer so close to the start of the program's funding year and healthcare providers could have more certainty. Carr asked his colleagues for the changes so the Universal Service Administrative Co. (USAC) could have 90 days to review the applications.

Commissioner Mike O'Rielly said he was dismayed by an ongoing decision to allow urban provider participation, and said he hopes the FCC will move to remove urban funding from the program as a next step.

The order should be finalized within the next few days, an FCC official said after the meeting.

Alaska's congressional delegation and Sen. Susan Collins, R-Maine, separately cautioned the FCC on the language in its rural telehealth order ahead of the Thursday vote. An earlier bipartisan appeal by 13 senators asked the FCC to delay a vote on the order. “The vast majority of stakeholder input” favors a delay of the order, with most concerns being “reflective of the lack of modeling, data, or relevant analysis underlying” the item, wrote Alaska's congressional members -- Sens. Lisa Murkowski and Dan Sullivan and Rep. Don Young, all Republicans -- in a letter to Pai we obtained. That information “is fundamental to good policy, and practically necessary for participants to calculate what participation” in the RHC program “will look like with a reasonable level of certainty.” Sullivan cited concerns about RHC funding certainty last year when placing a hold on Senate reconfirmation of Carr (see 1809130059). Pai committed to resolving those concerns, which led Sullivan to lift his block (see 1812140047).

The new rate setting mechanism created in the order has the “veneer of simplicity, calculability and transparency,” but “we find that further deconstruction yields numerous material questions that may ultimately deter participation in the program to the unacceptable detriment of end users,” Alaska's lawmakers said. “Alaska's landscape … is not reflected” in the proposed three tiers of rurality because “the state in almost its entirety is considered one category -- 'extremely rural.'” The “cost differentials” associated with the wide range of networks across the state “are not fairly captured by the three tiers of rurality” proposed in the order, the lawmakers said. (A fourth tier specific to remote areas of Alaska was added later Wednesday.) They also questioned the FCC's reliance on using available data to help USAC set rates and said the commission should revise the order to “include a thoughtful approach” to the proposed transition to new rules, noting the order doesn't contain any “discussion of multiyear contracts which could extend past the effective 2021 date for the new rules.”

Collins also sought postponing the vote, writing Pai that the order doesn't address existing “unnecessarily complex processes” for the RHC program and “may introduce new ones.” The FCC should use data gathered on its telehealth pilot program to “decrease the administrative burdens associated” with RHC, which will allow “for more-rapid deployment of emerging telehealth services,” she said in the letter we obtained.

AT&T said it supports the FCC's efforts to streamline the RHC program and help prevent waste, fraud and abuse, saying the changes "will offer much needed transparency to the process." The Schools, Health & Libraries Broadband Coalition said it's concerned that the order "adopts many new rules regarding the calculation of rates and the allocation of funding that have not been analyzed" and delegates "unprecedented" rate-setting authority to USAC.