On August 20, 2019, the Federal Communications Commission released a Report and Order reforming the Rural Health Care (RHC) Program to promote transparency and predictability, and to further the efficient allocation of limited program resources while guarding against waste, fraud, and abuse. Read the Report and Order here
While the Report and Order includes a number of changes to the RHC Program, the overall structure of the Program will remain the same. As before, the RHC Program will still have two sub-programs: the Healthcare Connect Fund (HCF) Program and the Telecom Program. Further, applicants will still be required to seek eligibility, submit requests for funding, requests for services, and invoicing forms.The changes initiated by the Report and Order will apply to Funding Year (FY) 2020 and beyond, and will not affect FY2019. This page captures the major changes that affect applicants and what they should be aware of when applying for FY2020 funding but, does not cover every change impacting the RHC Program. We recommend reading the Report and Order in its entirety.
As the new rules are implemented in the RHC Program and My Portal, the RHC Program staff will communicate all changes in advance and provide training and guidance.
|Prioritization of Support and Rurality
Rural and Urban Rates
|Competitive Bidding and Requesting Services
The RHC Program will continue to use the same definition of "rural area" under the Commission’s rules. In the case where demand exceeds available funding, USAC will prioritize funding based on the following rurality tiers and those areas in a Medically Underserved Area/Population (MUA/P).
What does this mean for you?
Since the rural definition has not changed, health care providers (HCPs) currently approved as “rural” will retain their rural status. The RHC Program will assign your rurality tier and should funding demand exceed available funding, USAC will first fully fund all eligible requests by HCPs consistent with the FCC’s priority schedule that considers an area’s rurality and access to healthcare professional services.
Beginning in FY2020, all current and new HCF Program consortia must be "majority rural." The Report and Order eliminates the three-year grace period for consortia to become majority rural; there will also be no grandfathering of prior Pilot Program consortia or other existing consortia. "Majority rural" means that more than 50% of participating HCPs in a consortia must be rural. For example, if a consortia has five participating HCPs, at least three of those HCPs must be in a rural area for the consortia to be deemed "majority rural." The "majority rural" consortia percentage requirement will automatically increase by 5% for the following funding year whenever RHC Program demand exceeds the funding cap (up to a maximum of 75%). Funding requests filed by consortia that are not in compliance with the “majority rural” threshold at the time the funding request is submitted will be denied.
For FY2021 and forward, the competitive bidding period will commence on July 1 of the prior calendar year. So, for FY2021, applicants may begin the competitive bidding period on July 1, 2020.
Starting in FY2020, Telecom Program applicants may use the following competitive bidding exemptions currently available in the HCF Program: government master service agreements, evergreen contracts, master service agreements approved in other RHC programs, and master contracts approved in E-Rate. The HCF Program competitive bidding exemption when requesting less than $10,000 in undiscounted support does not extend to Telecom.
Currently, an HCP must develop weighted evaluation criteria (i.e., scoring worksheet or matrix) that demonstrates how the HCP will choose the most cost-effective bid before submitting its request for service. Starting in FY2020, HCP must specify on its bid evaluation worksheet and/or scoring matrix the requested services for which it seeks bids, its minimum requirements for the specified criteria, and each service provider’s proposed service levels for the specified criteria. The HCP must also specify its disqualification factors, if any, that it will use to remove bids or bidders from further consideration.
The Report and Order eliminates distance-based support, use of a cost-based study to identify the appropriate rates, and the limitation of support on satellite services.
Beginning in FY2021, USAC will determine the urban and rural rates for each eligible service in each state and include the rates in a database publicly available on its website. The first set of urban and rural rates will be posted to USAC’s website no later than July 1, 2020.
Rural Rate: The rural rate will be determined using the following tiers in which an HCP is located:
The rural rate will be the median of all available rates for the same or functionally similar service offered within the rural tier, applicable to the HCP’s location within the state.
Urban Rate: The urban rate will be the median of all available rates identified by USAC for functionally similar services in all urbanized areas of the state where the HCP is located to the extent that urbanized area falls within the state.
What rates will you use?
The service delivery deadline for recurring and non-recurring services is currently the funding end date, no later than June 30, as indicated on an applicant’s funding commitment letter (FCL). There are instances in which USAC has issued an FCL with a funding end date prior to June 30 to coincide with a contract end date. Effective 2020, the service delivery deadline is June 30 of the funding year for which the program support is sought. Applicants can receive a one-year extension of the deadline for non-recurring services if they meet the following criteria:
Under current FCC rules, the Telecom Program has no invoicing deadline, and the HCF Program invoicing deadline is six months from the funding commitment end date. Effective FY2020, the invoicing deadline will be four months (120 days) from the service delivery deadline or the date of a revised FCL approving a post-commitment request or a successful appeal of a previously denied or reduced funding request, whichever comes later, in both RHC Programs.
The Order also adopts a rule permitting a single 120-day extension of the invoicing deadline should the HCP be prevented from meeting the invoicing deadline for any reason, if submitted prior to the original invoicing deadline.
The HCF Program currently permits site and service substitutions. Effective FY2020, site and services substitution procedures are allowed in the Telecom Program. Applicants will be required to submit all site and service substitution requests by the applicable service delivery deadline.
The scenarios under which SPIN changes can be requested under the HCF and Telecom Programs have now been formalized. All SPIN changes must be requested by the service delivery deadline.
In FY2020 and subsequent funding years, the $150 million cap on multi-year commitments and upfront payments in the HCF Program shall also be increased annually to take into account increases in the rate of inflation similar to the overall cap for the RHC Program.
If an HCP uses a consultant or outside expert, it must provide information for the consultant or outside expert in a declaration of assistance. Required information includes: the consulting firm name, street address, city, state, and zip code; consulting firm telephone number; and consulting firm email address. The HCP must also describe the nature of the relationship it has with any consultant or other outside expert identified in its declaration of assistance.
Have questions about the Report and Order? Please reach out to the RHC Help Desk at (800) 453-1546 or RHC-Assist@usac.org.