FCC Creates an Annual $400 Million Healthcare Connect Fund for Health Care Providers
On Dec. 21, the FCC released its long-awaited Report and Order reforming its funding mechanisms for rural health care by creating a Healthcare Connect Fund (HCF) of $400 million annually. The purpose of the HCF is to expand broadband access to health care providers and to encourage state and regional broadband networks for health care. Health care providers should consider whether they may be eligible to receive funding from the HCF to improve broadband services and network infrastructures and, if so, should consider applying to the Universal Service Administrative Company (USAC).
The HCF will support the cost of (1) broadband and other advanced services; (2) upgrading existing facilities to higher bandwidth; (3) equipment necessary to create networks of health care providers, as well as equipment necessary to receive broadband services; and (4) health care provider-owned infrastructures where shown to be the most cost-effective option.
The following are significant aspects of the HCF:
- The HCF will allow eligible health care providers the option of purchasing services or designing and building networks if they can demonstrate that their choice is the most cost-effective option (the latter option is available only to members of a consortium).
- Infrastructure funding, which is capped at $150 million each year, may be used in combination with services purchased from commercial service providers.
- Funding will be “2 for 1”; specifically, health care providers will be required to contribute 35 percent towards approved services or infrastructure and the HCF will provide the remaining 65 percent of funding.
- Rural and non-rural health care providers may participate in the fund but non-rural providers must be part of a consortium and a majority of the consortium members must be rural, as defined by the FCC. Rural Health Care Pilot Program participants are grandfathered.
- Large health care providers (hospitals with 400 beds or more) are limited to $30,000 per year for recurring charges and $70,000 for non-recurring charges over a five-year period.
The FCC also simplified the application process, established goals and performance measures and created a new Pilot Program to test the technical feasibility and economic reasonableness of including skilled nursing facilities as HCF participants.
The FCC committed $50 million to the new Pilot Program over a three-year period and has directed USAC to establish a “filing window.” If the total of all such applications exceed the funding caps, the applications will be prorated. Nevertheless, “requests for funding may be submitted at any point during the funding year,” which will be processed and prioritized on a rolling basis until the cap is reached.
If you are interested in learning more about the HCF or the application process, please contact Randy Lowe, Jim Smith, or Richard Gibbs.