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Summary of FCC’s Rural Health Care Program 

The Rural Health Care Program, which includes the new Healthcare Connect Fund, 
provides funding to eligible health care providers (HCPs) for telecommunications and 
broadband services necessary for the provision of health care. The goal of the program is 
to improve the quality of health care available to patients in rural communities by 
ensuring that eligible HCPs have access to telecommunications and broadband services. 
Funding for the Rural Health Care Program is capped at $400 million annually.   
The Rural Health Care Program is currently made up of four programs: the new 
Healthcare Connect Fund, the Telecommunications Program, the Internet Access 
Program, and the Rural Health Care Pilot Program. 

I. 

THE HEALTHCARE CONNECT FUND 

Building on lessons learned from the Pilot Program, in December 2012 the Commission 
released a Report and Order that created the Healthcare Connect Fund, which will 
reform, expand, and modernize the Rural Health Care Program.  
http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-12-150A1.doc 
  The Healthcare Connect Fund provides support for high-capacity broadband 
connectivity to eligible health care providers (HCPs) and encourages the 
formation of state and regional broadband HCP networks.  
  Under the program, eligible rural HCPs, and those non-rural HCPs that are 
members of a consortium that has more than 50 percent rural HCP sites, will be 
able to receive a 65 percent discount on all eligible expenses.   
  Eligible expenses include broadband services and equipment, and, for consortium 
applicants, HCP-constructed and owned network facilities.   
  The order also establishes a new pilot program to test how to support broadband 
connections for skilled nursing facilities. 

Highlights of the Healthcare Connect Fund 

  Eligible HCPs.  The new program provides support to:   
o  Consortia of eligible rural and non-rural public/non-profit HCPs, and  
o  Individual rural public/non-profit HCPs. 
  Limitations on Non-rural HCP Participation.  Non-rural HCPs are eligible for 
support only if they belong to a consortium that has more than 50 percent rural 
HCP sites.  Support for non-rural hospitals with 400+ beds is capped at $30,000 
annually for recurring charges and $70,000 over a five-year period for non-
recurring charges.        
  Eligible Expenses.  Eligible HCPs may seek support for broadband services, 
network equipment, and (for consortium applicants) HCP-constructed and owned 
network facilities.  Only consortium applicants are eligible for upfront payments. 
 
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  Off-site Data Centers and Off-site Administrative Offices.  The new program 
provides support to HCPs for connections and network equipment associated with 
off-site data centers and off-site administrative offices.   
  Eligible Vendors.  Eligible vendors include any provider of equipment, facilities, 
or services that are eligible for support.   
  Discount Rate.  The new program provides a 65 percent flat-rate discount on all 
eligible expenses.   
  Application Process.   
o  The application process minimizes the administrative burden on 
participants while still protecting against waste, fraud, and abuse.   
o  Consortium applicants may file a single application. 
o  Program administered by the Universal Service Administrative Company 
(USAC) 
  Multi-year Commitments.  Applicants may seek a multi-year funding 
commitment for up to 3 years, thus avoiding the annual application filing 
requirement.   
  Competitive bidding process exemptions. 
o  Annual undiscounted cost of $10,000 or less 
o  Government Master Services Agreements (MSAs) 
o  MSAs approved under Rural Health Care (RHC) Pilot Program or 
Healthcare Connect Fund 
o  “Evergreen” contracts 
o  Contracts negotiated under USF Schools & Libraries Program 
  Timeline. 
o  Starting July 1, 2013, support will be available for existing Pilot projects. 
o  Starting January 1, 2014, support will be available for new consortia and 
individual HCP participants.  Competitive bidding process may start in 
late summer 2013. 
  Skilled Nursing Facility Pilot Program. 
o  Purpose.  The pilot will test how to support broadband connections for 
skilled nursing facilities.   
o  Timing.  The FCC will solicit input regarding design of the pilot program 
in 2013.  The pilot will get underway in 2014.   
o  Size.  Funding for the pilot is limited to $50 million in total support for all 
projects combined, spread over 3 years.   

II. 

THE TELECOMMUNICATIONS AND INTERNET ACCESS PROGRAMS 

Established in 1997, the Telecommunications Program ensures that eligible rural HCPs 
pay no more than their urban counterparts for telecommunications services.  Through this 
program, eligible rural HCPs can obtain rates for supported services that are no higher 
 
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than the highest tariffed or publicly available commercial rate for a similar service in the 
closest city in the state with a population of 50,000 or more people, taking distance 
charges into account.  The Internet Access Program, which the Commission created in 
2003, provides eligible rural HCPs a 25 percent discount off the cost of monthly Internet 
access for eligible rural HCPs. This program will not be available after June 30, 2014; 
current recipients may instead seek support from the Healthcare Connect Fund.      

III. 

THE RURAL HEALTH CARE PILOT PROGRAM 

The Commission established a three-year Rural Health Care Pilot Program in September 
2006 to provide funding for state or regional broadband networks designed to bring the 
benefits of telehealth and telemedicine services to areas of the country where the need for 
those benefits was most acute.  The Pilot Program provided funding for up to 85% 
percent of the costs associated with: (1) the construction of a state or regional broadband 
network and the advanced telecommunications and information services provided over 
that network; (2) connecting to Internet2 or National LambdaRail; and (3) connecting to 
the public Internet.  There are currently 50 active Pilot Projects in 38 states.  This 
program is closed to new applicants.  A list of the selected projects is available at 
http://www.usac.org/rhcp/about/participants.aspx, and a map of the currently active 
projects is available at http://www.fcc.gov/maps/rural-health-care-pilot-program.   
In 2012, the Wireline Competition Bureau released a staff evaluation of the Pilot 
Program, which summarized key observations from the Pilot Program and described the 
Pilot Projects, their broadband networks, and the financial and telehealth benefits 
generated by their broadband connectivity.  http://www.fcc.gov/document/rural-health-
care-pilot-program-evaluation-staff-report 

For More Information 

Contact USAC at 1-800-453-1546 or at rhc-assist@usac.org. 
February 2013 
 
 
 
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