What is a Consortium?
A consortium is a group of two or more health care providers (HCPs) that choose to request support through a single application. Non-rural eligible HCPs may participate in the RHC Program only as part of a consortium consisting of a majority of rural HCP sites.
Both rural and non-rural sites are eligible for funding as part of a consortium as long as a majority (i.e., more than 50%) of the consortium members are rural sites. For example, if a consortium has five sites, at least three must be in rural areas.
Applicants can participate in both the Telecom Program and the HCF Program as either an individual HCP or as a consortium member HCP as long as they do not request duplicate funding for the same services in both programs.
In addition, ineligible HCP sites may participate in a consortium and take advantage of lower contract prices often associated with consortia bulk-buying, but they will not receive universal service support.
Roles within a Consortium
The consortium leader is the lead entity for the consortium. The consortium leader is legally and financially responsible for all consortium activities supported by the HCF Program. The consortium leader may be one of the following entities:
- The consortium itself if organized as a legal entity;
- An eligible HCP member of the consortium; or
- An ineligible state organization, public sector (government) entity (including a Tribal government entity), or
- A nonprofit entity that does not participate as a potential service provider during the competitive bidding process.
An eligible HCP can serve as the consortium leader and also receive support. Program rules prohibit an ineligible HCP serving as the consortium leader from receiving universal service funding.
Consortium leader responsibilities include:
- Designating a project coordinator to serve as the point of contact with USAC and the FCC,
- Responding to inquiries from USAC and the FCC on behalf of the consortium members,
- Submitting all forms and certifications,
- Ensuring compliance with requirements,
- Managing allocation of costs and discounts,
- Overseeing the invoicing process,
- Keeping records as required,
- Coordinating site visits, and
Coordinating audit inquiries.
Legal and Financial Responsibility for Supported Activities
The consortium leader is legally and financially responsible for the activities supported by the HCF Program. If there is an audit or other investigation by USAC or the FCC that shows the consortium violated Program rules or requirements, the consortium leader is, by default, the responsible entity (Note: individual consortium members are jointly and severally liable for the violation if the consortium leader dissolves, files for bankruptcy, or otherwise fails to meet its obligations).
However, consortia may instead choose to allocate legal and financial responsibility as they see fit, provided that this allocation is memorialized in a formal written agreement between the parties (i.e. the consortium leader, and the consortium as a whole and/or its individual members), and the written agreement is submitted to USAC for approval with or prior to the FCC Form 461 (Request for Services Form). The agreement should clearly identify the party(ies) responsible for repayment if USAC is required, at a later date, to recover disbursements to the consortium due to violations of Program rules.
Although not required, the consortium may wish to constitute itself as a legally recognized entity, for example, to simplify contracting with service providers.
The project coordinator is the person who serves as the point of contact with the FCC and USAC for all matters related to the consortium. The project coordinator must be an officer, director, or other authorized employee of the consortium leader. They are responsible for responding to FCC and USAC inquiries on behalf of the consortium members through the application, funding, invoicing, and post-invoicing period.
Identify Consortium Participants and Obtain Authorizations
Consortium leaders should familiarize themselves with HCF Program eligibility requirements and the application process before organizing a consortium.
Letter of Agency
The letter of agency (LOA) provides written authorization to the consortium leader to act on behalf of each participating HCP that is not owned or controlled by the consortium leader. The LOA should be written by the participating HCP and addressed to the consortium leader.
An LOA can also serve as a third party authorization (TPA) between consortium members and third parties by including the following language:
- “[HCP Name] hereby authorizes [Consortium Leader Name] and its agents to act on its behalf…”
- “[HCP Name] authorizes [Consortium Leader Name] and its agents to: [HCP Name] authorizes [Consortium Leader Name] and its agents to submit the FCC Form 461…”
- “By this Letter of Agency, [HCP Name] authorizes [Consortium Leader Name] and its agents to make the certifications included in the FCC Form 461…”
The material on these webpages is provided for general information only and should not be relied upon or used as the sole basis for making decisions without consulting the RHC Program rules, orders, and other primary sources of information. Applicants and service providers are ultimately responsible for knowing and complying with all RHC Program rules and procedures.