Consider Rural Health Care Funding

One of the sources of the Universal Service Fund that often is forgotten is the Rural Health Care Program. The FCC recently carried forward $83.2 million that was unspent in 2018 into the 2019 funding pool. In June Chairman Ajit Pai proposed to raise the annual cap on this fund from $400 million to $571 million. That’s where this fund would have been today had the original fund been indexed by inflation since it was started in 1997. He also proposes that the cap on this Fund grow by inflation in the future.

I have a lot of clients who help their customers benefit from the Schools and Libraries Fund, but many of them never think about doing the same thing with the Rural Health Care Fund.

The Rural Health Care Program provides funding to eligible health care providers for broadband and voice services. Eligible health care providers must be either a public or a non-profit entity. The funds can be used for entities such as 1) educational institutions offering post-secondary medical instruction, teaching hospitals and medical schools; 2) community health centers providing care to migrants; 3) local health departments; 4) community mental health centers; 5) non-profit hospitals; 6) rural health clinics; 7) skilled nursing facilities; and 8) consortiums of providers that include one or more of the preceding list.

This program is comprised of two programs: The Healthcare Connect Fund Program and the Telecommunications Program. The Healthcare Connect Program provides support for high-speed broadband connections. Eligible entities can receive as much as a 65% discount on monthly broadband bills for services like Internet access, dark fiber, or traditional telco data services. This works a lot like the E-Rate program for Schools and Library program. The health care facility pays the reduced rate for service and the partner ISP can collect the discount from the Universal Service Fund.

The health care providers can also ask for assistance with telecommunications equipment and can use the funds to help pay for the construction of fiber facilities. This funding can be an interesting way for a rural ISP to get some assistance for paying for a fiber route to reach a health care facility (and then use that fiber to also serve other customers).

The Telecommunications Program works a little differently. In that program the health care facility can buy broadband and telecommunication services at rates that are reasonably comparable to rates charged for similar services in nearby urban areas. That’s likely to mean discounts smaller than the 65% in the Healthcare Connect program. Functionally this still works the same and the ISP can collect the difference between the urban rates and the rural rates.

Just like with E-Rate, the health care provider must apply for this funding. But also like E-Rate, it’s typical for an ISP to help prepare the paperwork. The paperwork will feel familiar to any ISP already participating in an E-Rate situation.

It’s obvious that since $83.2 million is being carried over from 2018 that rural health care providers are not all taking full advantage of this program. I see articles all of the time decrying a crisis in rural health care due to the high costs of providing services in rural America. This program can bring subsidized broadband connection to health care facilities at a time when that is likely a welcome relief.

This funding has been available for a long time, yet I rarely hear clients talking about it. I’m guessing most rural ISPs have never participated although there are likely eligible health care facilities nearby. This likely will require some training for potential customers. School and library associations have done a good job at alerting their members that this subsidy exists – but I’m guessing the same has not been done with rural health care providers. An ISP willing to tackle the filings can gain a great customer while also benefitting their community.

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