On April 2, 2020, the FCC announced plans for a $200 million COVID-19 Telehealth Program (the “Program”) to support health care providers responding to the pandemic.  (FCC 20-44).  The Program will use funds allocated by the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide broadband connectivity services and devices that will improve and expand current telehealth capabilities in areas hit hardest by the virus.

 Coronavirus, Pilot Program

In addition to addressing the immediate needs of the COVID-19 pandemic, the FCC also established the more long-term $100 million Connected Care Pilot Program (the “Pilot Program”).  The three-year Pilot Program is intended to help establish and improve telehealth services for low-income and veteran patients.

Both before and during the COVID-19 pandemic, health care providers have faced barriers to delivering effective telehealth services, including, among others, costs of implementation and data usage, access to broadband Internet services for low-income and otherwise vulnerable patients, and other connectivity issues.  In light of the COVID-19 pandemic, the Program and Pilot Program have been put in place to try to alleviate these barriers.

While the Program and Pilot Program are a step in the right direction, there are a number of open questions and uncertainties surrounding both the Program and the Pilot Program. The FCC has not released copies of the applications for either the Program or the Pilot Program.  This article focuses on eligibility and application requirements for health care providers under the Program and Pilot Program, and highlights certain of the questions and uncertainties that exist with each program.

I. The Program

The Program is intended to provide funding to health care providers to purchase telecommunications services, information services, and monitoring devices necessary to enable provision of connected care services related to the pandemic, on a temporary basis.  Selected providers are generally expected to receive no more than $1 million each.

While the FCC has not yet established an application process, the Program is intended to address the urgency of the pandemic and necessity of services.  Once ready, the FCC will select applications on a rolling basis until funding is exhausted.  This means that funding will be on a first come first serve basis.  While applicants are encouraged to target proposed services to high-risk and vulnerable patients, the Program does not impose specific patient, condition, or geographic requirements.  Further, the Program is not restricted to treatment of COVID-19 patients, but can be used to promote social distancing and other protective measure or remotely treat other conditions in order to free up more physical resources for COVID-19 treatment.

Eligible Healthcare Providers Under the Program

The Program is limited to nonprofit and public health care providers falling within the categories of health care providers in 47 U.S.C. § 254(h)(7)(B):

  1. Post-secondary educational institutions offering health care instruction, teaching hospitals, and medical schools;
  2. Community health centers or health centers providing healthcare to migrants;
  3. Local health departments or agencies;
  4. Community mental health centers;
  5. Not-for-profit hospitals;
  6. Rural health clinics;
  7. Skilled nursing facilities; or
  8. Consortia of healthcare providers consisting of one or more entities falling into the first seven categories.

Health care providers must be deemed eligible by the Universal Service Administrative Company (“USAC”).  Health care providers that have not already been deemed eligible under other FCC programs can obtain an eligibility determination by filing FCC Form 460 with the USAC; however, providers submitting new eligibility forms may still apply to the Program while their USAC determinations are still pending.  Form 460 requires basic information about the health care providers, including a brief explanation of why the provider is eligible under the statute.

Application Process and Requirements

While the Program application is not yet available, on April 8, 2020 the Wireline Competition Bureau published additional guidance as to how health care providers can best ready themselves for filing.  (DA 20-394).  In addition to initiating an eligibility determination with USAC, potential applicants should also obtain an FCC Registration Number (“FRN”) and register with the System for Award Management.  Some health care providers may already have an FRN and/or have registered with the System for Award Management, but those who have not should follow these simple steps.

First, to receive an FRN, applicants should set up an account with the Commission Registration System and select the “Register New FRN” option after verifying their account.  Applicants will need to provide their taxpayer identification number as well as other identifying information.

Next, to register with the System for Award Management, applicants will need to provide their (1) DUNS number; (2) Taxpayer Identification Number or Employment Identification Number; (3) bank routing number and bank account type.  Applicants must register with the System for Award Management in order to receive Program funding.  Health care providers should fulfill these requirements now so that, upon publication, they can submit applications as quickly as possible.

Once the application is released, health care providers should (1) submit the application electronically, and (2) email a courtesy copy of their application to emergencytelehealthsupport@fcc.gov.  Applications should contain the following information:

  • Contact information for health care provider applicants and lead healthcare providers for applicants involving multiple providers;
  • A description of the anticipated connected care services to be provided, conditions to be treated, and goals and objectives, including a brief description of how COVID-19 has impacted the provider’s geographic area, patient population, and estimated number of patients to be treated. For health care providers intending to use Program funds to treat non-COVID-19 patients, providers should describe how funds would free up resources for COVID-19 treatment or otherwise respond to the pandemic;
  • A description of estimated number of patients to be treated;
  • A description of telecommunications services, information services, or enabling devices requested, including overall requested funding and a monthly breakdown of funding; description of requested connected devices and use;
  • Supporting documentation for application costs, including quotes or invoices; and
  • A timeline for deployment of proposed services and summary of factors helping to measure the impact of proposed services and/or devices.

Health care providers will also be required to certify compliance with HIPAA, Program record retention policies and other privacy, reimbursement, and licensing laws and regulations.

Applications will be evaluated with particular consideration given to whether applications target high-risk areas, where support will have the most potential impact, and funding sought compared to the total amount available.  The Report and Order also addresses various administrative considerations.  Importantly, the Program does not require participants to undergo regular competitive bidding processes or Administrative Procedure Act notice and comment procedure.

II. The Pilot Program

The Pilot Program is intended to provide “universal service support to help defray health care providers’ qualifying costs of providing connected care services,[1] with a primary focus on providing these services to low-income or veteran patients.”  The Pilot Program will distribute $100 million over a three-year period and will cover 85% of eligible broadband connectivity, network equipment and information services costs for selected participants.  Health care providers must contribute the remaining 15% of costs from eligible sources, such as the applicant themselves, other eligible health care providers, participating patients, or state, federal, or Tribal funding or grants. Ineligible sources include direct payments from vendors or service providers.  The three-year period will also include six month ramp-up and ramp-down periods.

Health care providers are to design their own projects focused on treating public health epidemics, opioid dependency, mental health conditions, high-risk pregnancies, or chronic or recurring conditions that require extended treatment.

Eligible Health Care Providers, Patients, and Service Providers

The Pilot Program limits eligible rural and non-rural health care providers to the same eight statutorily-enumerated categories as the Program.  The FCC expressed a “strong preference” for providers that have either (1) prior experience providing telehealth or connected care services beyond using electronic health records, or (2) partnered with another entity with such experience to implement their pilot project.

Unlike the Program, the Pilot Program favors pilot projects demonstrating that they will primarily benefit low-income or veteran patients.[2] Pilot Program participants may receive funding for qualifying broadband service from any broadband provider and are not limited to eligible telecommunications carriers.

Eligible Services and Equipment

The Pilot Program will cover 85% of participant costs, including:

  • Patient broadband Internet access services. Health care providers will be able to purchase mobile or fixed broadband Internet access service for participating patients who do not otherwise have sufficient service necessary to participate in the pilot project.
  • Health care provider broadband data connections.  Funding will also allow participants to purchase broadband data connections necessary for providing connected care services directly to patients.[3]
  • Other connected care information services. The Pilot Program further covers other related information services which have a primary purpose of capturing, transmitting, and/or storing data to facilitate connected care.
  • Certain network equipment. Eligible network equipment includes routers and servers necessary to make a supported service functional and/or manage, control, or maintain a supported broadband service.
  • Prohibitions.  The Pilot Program does not cover costs for end-user devices, medical equipment, or administrative matters associated with Program participation.

Application and Evaluation Process

Pilot Program applicants must also obtain eligibility determinations from USAC by submitting an FCC Form 460 and supporting documentation, but may not submit Pilot Program proposals until after the USAC has made its determination.  Applicants should thus submit eligibility forms as soon as possible.  Following USAC approval, eligible participants must submit a proposal describing its pilot project, showing how its project meets applicable criteria and outlining a “clear research and evaluation strategy for meeting health care needs” through connected care services and how the proposed project will accomplish such objectives.  The FCC will not consider applications that fail to demonstrate more than a de minimis of estimated low-income or veteran patients.  Pilot Program applications are due 45 days from the effective date of the Pilot Program rules or 120 days from April 2, 2020, whichever comes later.  Health care providers should (1) submit applications electronically, and (2) email a courtesy copy of their application to conncarepltprog@fcc.gov.

Applicants will be expected to describe their prior experience with providing telehealth services, pilot program proposal plans and strategies, and conditions to be treated, and provide certain financial and partnership information and certifications.  (See FCC 20-44 for full application requirements.).

Administrative Matters

Selected participants must conduct a procurement process to solicit and select eligible services and/or equipment before requesting funding.  The Pilot Program will apply the same bidding requirements as the Healthcare Connect Fund Program and as such participants may be exempted from seeking competitive bids in some circumstances. (47 C.F.R. § 54.622, § 54.609, § 54.610).  Participants must conduct competitive bidding for non-exempt services and equipment pursuant to 47 C.F.R. § 54.622.

Participants may also be subject to reporting requirements as determined by the FCC along with other administrative provisions.

Given the speed with which COVID-19 has prompted government action, this analysis represents our best interpretation of where things currently stand.  There is little additional guidance and uncertainty remains, but we will continue to monitor and update the situation.

III. Uncertainties and Open Questions

While the Program and Pilot Program will hopefully provide welcome relief for health care providers attempting to establish effective telehealth services, the programs nonetheless raise certain questions and concerns.  Ineligible health care providers, including for-profit hospitals, physician practices and other for-profit telemedicine providers may face similar difficulties in getting telehealth programs up and running, but appear not to be entitled to immediate assistance under the Program.  Without further FCC guidance, it is also unclear whether funds from each program can be used to support pre-existing telehealth services, costs and expenses.

This article is not an unequivocal statement of the law, but instead represents our best interpretation of where things currently stand.  This article does not address the potential impacts of the numerous other local, state and federal orders that have been issued in response to the COVID-19 pandemic, but which are not referenced in this article.

We will continue to monitor and update Program administration and requirements.

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[1] In the context of the Pilot Program, telehealth is defined as “the broad range of health care-related applications that depend upon broadband connectivity, including telemedicine; exchange of electronic health records; collection of data through Health Information Exchanges and other entities; exchange of large image files (e.g. X-ray, MRIs, and CAT scans); and the use of real-time and delayed video conferencing for a wide range of telemedicine, consultation, training, and other health care purposes.”
[2] Selected participants should maintain documentation demonstrating low-income and veteran patients.  The Report and Order provides tools for determining whether a patient should be considered low-income or a veteran.
[3] Participants may not receive funding for broadband data connections for which they already receive funding through other federal programs or for connections between health care providers.

*This alert is provided for information purposes only and does not constitute legal advice and is not intended to form an attorney client relationship.  Please contact your Sheppard Mullin attorney contact for additional information.*