The Federal Communications Commission has recently released a proposed rule and a final rule and order concerning an interim and a proposed rural rate setting methodology for the Rural Health Care (RHC) Program. The final rule and order consists of various interim decisions made that concern how to determine rural rates, capitation on satellite services, and the invoicing process between the RHC’s Telecom and Healthcare Connect Fund Programs.
The current rate methods are as follows until a new method can be determined:
- Method 1: The average of rates that the carrier charges for non-health care commercial
customers for the same or similar service in the rural area where the health care provider is located;
- Method 2: If there are no other commercial providers in the rural area, the average of tariffed and other publicly available rates charged by other service providers for the same or similar services provided over the same distance in the rural health care provider’s area;
- Method 3: If there are no such rates or the carrier reasonably determines that those rates would be unfair, a cost-based rate that is approved by FCC for interstate services.
FCC is proposing alternative sequential methods for determining rural rates:
- Method A: The median of publicly available rates charged by other service providers for the same or similar services over the same distance in the rural area where the health care provider is located.
- Method B: If there are no publicly available rates that would be used under Method A, the rural rate is the median of the rates that the carrier actually charges to non-health care provider commercial customers for the same or similar services provided in the rural area where the health care provider is located.
- Cost-based rates: If the rural rate cannot be determined from Methods A or B, FCC proposes that service providers use a cost-based method with certain evidentiary requirements.
- Capping the rural rate at the monthly rate in the contract or other agreement between the service provider and health care provider.
- Requiring service providers with multiyear or evergreen contracts to justify rural rates only in the first year of the contract.
The notice of proposed rulemaking can be found on this website and final rules can be found on this website.
This proposed rule is open for comments until April 24th, 2023 on this website.
Mississippi Rural Health Association 