FCC Rural Health Care Programs

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FCC Rural Health Care Programs

by Geoff Keston

Docid: 00011462

Publication Date: 2106

Report Type: TUTORIAL


The US government offers funding and other support to improve the
availability of health care for rural patients. These programs help
providers build or connect to broadband data networks that can be used for
delivering telehealth services. For patients, telehealth is a means to
easily and more affordably access services that are not available locally.
For providers, it is a means to expand their own offerings or to reach
patients outside their normal territories.

Report Contents:

Executive Summary

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In many rural areas of the US, a full range of health care services is
unavailable or is inconvenient to access.

Related Faulkner Reports
Telemedicine Technology Tutorial
eHealth Exchange Tutorial

The rural health care programs of the US Federal Communications
Commission (FCC) aim to improve health care in these regions by giving
select hospitals and other providers money for building broadband networks
or for accessing existing telecommunications services. These high-speed
networks expand the range of services available by connecting the
information and diagnostic systems in rural hospitals to more
sophisticated systems at other facilities and by providing a convenient
way for rural patients to receive consultation from specialists at other

The health care organizations that have been selected to participate in
the programs are solely responsible for designing, planning, and managing
their broadband networking initiatives. The FCC does not dictate decisions
to the participants. To carry out a successful project,
participants should select a limited number of services to implement,
targeting those that have a proven track record and those for which the
hospital lacks the financial and technical resources to implement
in-house. Such medical services could include teleradiology, remote
consultations with doctors, telesurgery, and home monitoring of patients.
Another helpful strategy is to work with other health care organizations
in the same geographic area — particularly regional health information
organizations, or RHIOs — to connect to pre-existing broadband

Urban and suburban hospitals have a stake also. Many provide services to
rural facilities. As a result, they must know how to assess the value
and costs of new sources of revenue and adapt to new methods of providing
medical services to patients. In addition, they must manage relationships
with a wider range of third-party doctors and facilities.


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Judged by quality and availability, health care services in the rural
United States often lag behind those offered in more populated areas. Some
of the data about medical services in rural America is startling. For
instance, research by the Agency for Healthcare Research and Quality
(AHRQ) has shown that the US population living in these areas are more
likely than other citizens to

  • Describe their health as fair or poor
  • Not have private insurance
  • Have difficulty accessing care
  • Face childhood poverty
  • Receive specialty care by a doctor outside of his or her specialty

And during the coronavirus pandemic, the distance of many rural patients
from hospitals appears to have had a direct impact on elevated death rates
in rural areas in October 2020, according to one government report.1

For many rural hospitals, using telecommunications to provide new medical
services is often more efficient and cost-effective than implementing the
services in-house, which typically involves adding staff and buying new
equipment. Telemedicine technology has matured significantly over the past
several years — and it has become much more affordable. Likewise,
high-bandwidth networking has become commonplace in addition to becoming
more reliable and affordable. These developments have made a wider variety
of telemedicine applications feasible to implement, even for hospitals that
historically would not have had the financial or technical resources to do

The FCC’s three primary rural health care programs aim to bridge the gap
between health care services offered in rural areas and those offered in
suburban and urban areas:

  • The Rural Health Care Telecommunications Program – The
    Rural Health Care Telecommunications Program, which has operated since
    1997, aims to ensure that rural health care organizations aren’t charged
    more than urban providers. It bases comparative rates on “a similar
    service in the closest city in the state with a population of 50,000 or
    more people, taking distance charges into account.” 
  • Rural Health Care Pilot Program – Introduced in 2007
    and run by the FCC through the Universal Service Administrative
    Company, the program gives health care providers funding to build
    or link to broadband data networks. The networks are intended to be
    dedicated to health care applications in order to maximize their
    reliability and available capacity. The program also provides money to
    connect broadband networks to the Internet2. The FCC assesses the
    results of the pilot program and then, as appropriate, revises how it
    distributes funds.

The rules of the pilot program allow the
following types of providers to receive funding:

  • Teaching hospitals
  • Medical schools
  • Community health centers, including mental health centers
  • Local health organizations
  • Not-for-profit hospitals
  • Rural health clinics
  • Groups of health care providers consisting of one or more entities
    described above

Ineligible providers can connect to networks
built as part of the program, but they cannot receive funding to do

  • Healthcare Connect Fund – The Healthcare Connect Fund
    provides organizations such as rural clinics, medical schools, and
    not-for-profit hospitals with discounted networking equipment and
    telecommunications services. One of the fund’s goals is to “reform,
    expand, and modernize the FCC’s existing universal service health care
    programs.” It was created in 2012 based on findings from the pilot

In addition to these FCC programs, there are other efforts to make broadband
networking available to rural health care providers. Rural providers have
alternatives for achieving the goals of providing telemedicine and sharing
digital information such as patient records and diagnostic imaging results:

  • The School, Health, and Libraries Broadband Coalition aims to
    enhance the availability of broadband networking, with one area of focus
    being rural communities. Specifically, rural healthcare is a major focus
    of its advocacy work. For example, the organization has written several
    letters to the FCC to identify shortcomings of the Rural Health Care
  • The Affordable Care Act includes provisions that help rural patients.
    These include the establishment of more primary care providers, more
    funding for community health centers (which are popular in rural areas),
    and limits on out-of-pocket costs.3 (Some observers in the
    industry believe that the potential repeal of the Affordable Care Act
    would hurt rural providers.4)

These efforts are alternatives, as well as complements, to the FCC’s work.
There are some private sector efforts as well. For example, in 2017,
Microsoft announced the Airband Initiative to provide funding and technology
support for efforts to increase broadband availability in rural areas.5
And in December 2018, the company announced that is was raising its target
for the number of people to be covered to 3 million by mid-2022.6 While
not specifically targeting health care, the improved services would be
available to hospitals and other providers.


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Over the past few years, a concern has been that demand for assistance from
rural providers would exceed the FCC’s budget for rural health care
programs. In fiscal 2015, $378 million of the $400 million budget was
allocated.7 (By contrast, in 2013, just $179 million was
allocated, and in 2014, $239 million was allocated.) The limited budget
created concerns that with more competition for funding, some providers
wouldn’t receive enough support.8 But in 2018, the FCC increased
the programs’ budget to $571 million, somewhat relieving the pressure.9

The FCC’s support for rural health care assistance appears to be strong
— and growing. In 2018, the FCC established a new program, the Connected
Care Pilot Program, that aims to increase services for “underserved
populations,” including people in rural regions.10 The program
will offer $100 million to fund the technology-based remote delivery of
health services. In 2020, the FCC reported that it would allocate that
funding over the subsequent three years.11 And in September of
2020, the FCC agreed to partner with the U.S. Department of Health and
Human Services and the U.S. Department of Agriculture to promote
telehealth access in rural America.12


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Organizations that receive funding from the FCC’s rural health care
programs will need to do significant planning to achieve their goals. The
programs only provide funding – they do not provide instructions on
which telecommunications provider to use or how to establish services.
Consequently, the success of a given initiative is in the hands of the
health care organization itself.

A telemedicine program’s chances of success will be better if an
organization selects a particular target application or a small set of
applications. Taking the opposite approach – installing high-speed
networking with the expectation that it will be used to handle any and all
types of services – will likely cause problems such as budget
overruns and ineffectively implemented projects. Some of the
telemedicine applications on which an organization could focus include the

  • Teleradiology – Digital images can be acquired by a
    technologist and then sent to a remote doctor for diagnosis. This is
    useful for facilities where a radiologist is not readily available,
    which is particularly likely during off-hours. Even when on-site
    radiologists are available, the use of teleradiology may help to reduce
    costs because remotely located doctors may charge lower rates. The
    Digital Imaging and Communications in Medicine (DICOM) standard is
    almost universally supported by today’s radiology equipment, which makes
    teleradiology much easier than it once was.
  • Remote Consultations with Doctors – High-bandwidth
    applications such as videoconferencing can link patients to doctors,
    particularly specialists, when an office visit would not be feasible or
  • Telesurgery – Telesurgery applications allow surgeons
    to remotely control a robotic arm to perform surgery. Yet this
    technology is still relatively new and not a likely candidate for most
    rural hospitals participating in the program.
  • Home Monitoring – Letting a patient who requires
    regular oversight stay at home provides that person with added comfort
    while also reducing costs. A videoconferencing system can enable a
    patient to routinely communicate with health care providers without
    traveling to a remote facility, which can be particularly useful for
    accessing specialists.

A participant in the program needs to determine which types of services
will use the new network. (Starting with just one service, then adding
others as feasible, will be a good approach in many cases.) In making this
decision, participants should favor telemedicine applications that are
well-established and that have been proved to facilitate high-quality
medical services at affordable prices. Funding from the FCC is intended to
facilitate the delivery of services that a rural hospital could not
otherwise provide, and it is best used in this way. For instance,
videoconferencing to provide consultation with specialists should only be
done when an equivalent specialist is too far away to be accessible, not
simply when that person is at another facility in town. If using
telemedicine for a service that could be offered in-house significantly
reduces costs, however, it can be considered.

Technological improvements have made implementing telemedicine programs
easier and more affordable, but organizations should still pause to
consider legal and procedural issues. For instance, what malpractice
issues arise, and who is at fault, if a problem occurs during a
telesurgical operation? Likewise, if a patient is receiving consultation
via videoconferencing from a doctor at another facility, what
responsibility does the hospital that facilitates that communication have
for the patient’s treatment? An additional consideration is medical
licensing — many state licensing laws address telemedicine. Hospitals and
doctors need to ensure that they clearly understand the licensing issues
that any particular telemedicine service involves.

Hospitals with the types of resources that rural facilities seek access
to via telemedicine need to consider in which ways, if any, to participate
in the program. Offering services remotely to patients at other facilities
occupies resources – doctors and medical equipment – that are also
needed to provide local services, and doing so is not without risk.

Fortunately for participants in the program, over the past several years
there has been a fair amount of work done toward interconnecting hospitals
using broadband networks. The FCC encourages program participants to
piggyback their own efforts on these pre-existing infrastructures. In
particular, organizations can look to regional health information
organizations (RHIOs), which are collaborative efforts among health care
facilities, technology equipment companies, technology service providers,
and other organizations. RHIOs aim to develop techniques and procedures
for the standardized exchange of medical data among multiple stakeholders.
(They are funded either by the US federal government’s United States
Department of Health & Human Services, by a state government, by
private organizations, or by a combination of these parties.) Some of the
techniques and procedures that are already developed may prove useful in
the work being done by participants in the FCC’s rural health care


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1  John Cromartie, Elizabeth A. Dobis, Thomas P. Krumel,
Jr., David McGranahan, John Pender. “Rural America at a Glance.” USDA.
2 For example, see

School, Health, and Libraries Broadband
Coalition. “Notice of Ex Parte Filing:  WC Docket No. 17-310, CC
Docket No. 02-60.” School, Health, and Libraries Broadband Coalition.
March 15, 2019.

3 Centers for Medicare and Medicaid Services. “Rural
Americans and the Affordable Care Act.”
4 Rachel Roubein. “Groups Warn of Rural Health ‘Crisis’
Under ObamaCare Repeal.” The Hill. April 19, 2017.
5 Dina Bass. “Microsoft Pushes Fast Internet for U.S.
Heartland to Bridge Broadband Gap.” Bloomberg. July 11, 2017.
6 Microsoft. “Microsoft Increases Commitment to Eliminate the US
Rural Broadband Gap.” Microsoft. December 4, 2018.
7 Universal Service Administrative Company. “Funding
Information.” Universal Service Administrative Company. June 30,
8 Jeffrey A. Mitchell. “Request for Short-Term Emergency
Relief Rural Health Care Program $400 Million Funding Cap WC Docket No.
02-60” (letter to the FCC). Luka, Nace, Gutierrez & Sachs.
November 30, 2016.
9 FCC. “FCC Increases Funding for Rural Telehealth.” FCC.
June 25, 2018.
10 Eric Wicklund. “FCC Approves Connected Care Program Featuring
Telehealth, RPM.” mHealth Intelligence. August 3, 2018.
11 Jasmine Pennic. “FCC Releases Guidance for $100M Connected
Care Pilot Program.” HIT Consultant. September 3, 2020.
12 Jeff Lagasse. “HHS Partners with FCC and USDA on Rural
Telehealth Initiative.” Healthcare Finance. September 2, 2020.

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About the Author

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Geoff Keston is the author of more than 250 articles that
help organizations find opportunities in business trends and technology. He
also works directly with clients to develop communications strategies that
improve processes and customer relationships. Mr. Keston has worked as a
project manager for a major technology consulting and services company and
is a Microsoft Certified Systems Engineer and a Certified Novell

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