On December 15, 2004, the Federal Communications Commission (FCC) changed regulations to help provide additional financial support for rural telemedicine. When Congress enacted the 1996 Telecommunications Act, it included a provision that created a fund to help pay for telecommunications services for rural healthcare providers. The statute gives the FCC responsibility for writing the regulations about how the money is dispersed. The money is collected from telecommunications companies, most of whom pass on the charges to businesses and consumers. The Universal Service Fund (USF) collects several billion dollars per year. The rural healthcare portion of the fund is allocated $400 million per year. This year, the rural healthcare program spent a record $71 million. The FCC noted that the rural health program was not being fully used by rural healthcare providers, and two years ago it started to reexamine its regulations in the hope of making changes that would expand access to the rural health subsidy.

Rural healthcare providers are eligible to file the proper forms and seek financial subsidies for the telecommunications services they need. The list of eligible applicants includes public health clinics and non-profit healthcare providers in rural areas. Most of the telecommunications services are used for telemedicine links to urban health centers. According to the statute, the program was set up to create parity between the prices paid for telecommunications services by urban health centers and the significantly higher costs paid by rural healthcare providers. This led to the creation of the subsidy program to help lower the costs of telecom services in rural areas. The subsidy can reduce the cost paid by a rural health provider by as much as 90%.

I offer up my opinion, as a participant in the process, as to what the rule changes might mean – and I believe the FCC got it right:

In the most recent regulatory actions, the FCC has made two significant changes: first, it has adopted a new definition of what a rural area is, and second, it has expanded the types of services that can be subsidized. In expanding the definition of rural, the FCC has selected a standard that is tied to census tracts. The FCC goal was to be properly inclusive, not add too many communities nor exclude too many. Dozens of documents were filed by hospitals, health centers, public health departments and others commenting on what the proper definition was. Perhaps the most persuasive of the commentators was the Office of Telemedicine at the University of Virginia. Two FCC commissioners toured the telemedicine facilities at UVA in November 2003. While there, they saw some of the potential benefits of linking a major medical center to underserved rural health communities and their local health clinics. The stories that were shared by UVA, in conjunction with the state attorney general and a congressional representative, helped to illustrate the reasons why the FCC should change its rules to ensure that remote, rural, and underserved communities are included in the program.

In its press release, the FCC cites the example of Dungannon, Virginia as a location that was improperly considered urban under the previous regulations and that will now be considered rural. For the people in Dungannon, VA, this new regulation will result in the community having access to funds that will defray costs needed to install telemedicine links with the University of Virginia Health Sciences Center in Charlottesville. Without inclusion in the rural healthcare program, these services were too expensive to use. The regulatory change allows Dungannon, and many other communities, access to health experts without requiring the citizens of this village to drive over an hour through the mountains to get to a doctor.

For me, the most exciting change to the rural health program was the expansion of the rural health program to pay for satellite services for mobile health clinics operating in rural areas. The FCC regulations were written with the idea that a rural healthcare provider would need to install a wired service to access their urban counterparts. Yet, convergence and scarce resources make it practical to share equipment and staff and cover a greater geographic area through the use of mobile health clinics. The original regulations would have resulted in the absurd circumstance where mobile health clinic could install 25 T1 lines and receive subsidies for each one, but the same clinic could not receive support from the universal service fund for a less-costly, more efficient satellite link that would serve the clinic everywhere it visits. The FCC has corrected this anomaly in its regulations.

From now on, mobile health clinics serving eight or more rural locations will be presumed eligible for a subsidy to help lower the amount the mobile clinic would have to pay for satellite services. A project being developed by the Indian Health Service in the Dakotas will be one of the first to try out this new regulation. This project was the one that became the example helping the FCC to change this portion of its regulations. The Indian Health Service has put a digital mammography machine in a mobile clinic to tour eight Indian reservations across the Dakotas. The mobile clinic is expected to visit several small communities on each of the reservations, bringing valuable women’s health screenings to the local women.

To realize the potential of using a mobile clinic and digital imaging, the Indian Health Service (IHS) wanted to transmit the digital mammograms to a remote radiology office and receive a report back on the mammogram while the patient is still at the mobile clinic. The health clinic program was designed to ensure that patients do not suffer anxiety by waiting for weeks for a report, and should there be need for follow up care, the patient will be able to receive counseling and assistance in making follow up appointments before she leaves the mobile clinic – because the images and report were transmitted in real time. The immediate feedback envisioned by this mobile project mirrors the best practices of care that are available to women in urban areas. Because the FCC has changed its regulations, this IHS project will pay about $8500 per year for satellite services, but without the change, IHS would have paid $85,000 – a cost that would have prohibited real-time transmission.

According to the FCC, it will be considering some further changes to its regulations as well. It has subsidized the cost of Internet access at the rate of 25% of the price paid by rural health providers. The FCC is asking whether that rate is sufficient to be of use to rural healthcare providers. Also, the FCC is asking what sort of regulations it might need to write to help rural healthcare providers to access wireless services other than satellite services.

Anne Linton, Partner, Washington Federal Strategies (WFS), worked with the Indian Health Service to promote regulatory changes to support mobile telemedicine. Prior to founding WFS in 1997, Anne served for more than five years as an attorney-advisor at the FCC. For more information on the current rules or to learn more about future changes, contact Anne @ 301-951-7062 or by e-mail at alinton@wfsllc.biz.