May 22, Dear Chairman Pai and FCC Commissioners:

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1 Main Office 7501 Wisconsin Ave. Suite 1100W Bethesda, MD Tel Fax May 22, 2017 Chairman Ajit Pai Commissioner Mignon Clyburn Commissioner Michael O Rielly Federal Communications Commission th Street, SW Washington, DC Division of Federal, State and Public Affairs 1400 Eye Street, NW Suite 910 Washington, DC Tel FAX Re: GN Docket No Request for Comment on Actions to Accelerate Adoption and Accessibility of Broadband Enabled Health Care Solutions and Advanced Technologies Dear Chairman Pai and FCC Commissioners: The National Association of Community Health Centers (NACHC) appreciates the opportunity to respond to the FCC s Request for Comment on Actions to Accelerate Adoption and Accessibility of Broadband Enabled Health Care Solutions and Advanced Technologies, GN Docket NACHC is the national membership organization for America s federally qualified health centers (FQHCs or health centers ). FQHCs are a backbone of the nation s health care safety net. They provide primary care to all individuals, regardless of insurance status or ability to pay, and specifically target geographic areas and populations that have been determined by the Federal government to be medically underserved. With over 9,800 sites nationwide, FQHCs provide high quality, comprehensive primary care to over 25 million medically underserved individuals, at least 10 million of whom reside in rural or frontier areas. Over 70% of FQHC patients have incomes below the Federal Poverty Level (FPL); if uninsured, these individuals pay no more than a nominal fee for their care. Another 20% of FQHC patients have incomes between 101% and 200% FPL; if uninsured, they are charged based on a sliding fee scale. For more information on the critical role that FQHCs play in America s health care safety net, please see the attachment. NACHC is responding to this RFC because rural FQHCs have serious concerns about recent developments in the Rural Health Care Program (RCHP), and the impact these developments will have on their ability to care for their medically underserved patients. We begin with a summary of our comments and recommendations, and then discuss each in detail.

2 SUMMARY The RHCP is critical to rural FQHCs ability to afford broadband access, and therefore their ability to serve as safety net providers to over 10 million medically underserved individuals living in rural and frontier areas. Over the past several years, NACHC and its member FQHCs have had growing concerns about several of the FCC s decisions regarding RHCP eligibility and funding, as we think these decisions have both expanded this program beyond Congress intent, and starting with the funding year resulted in reduced funding for the health care providers (HCPs) that the RHCP was designed to support. Specifically, we are concerned about FCC decisions to: Expand eligibility and funding to HCPs outside of rural areas: Expand eligibility and funding to non profit hospital emergency departments; Not adjust the $400 million funding cap to reflect increases in eligible providers, services, and costs; and Not allow carry over of unused funds from previous years. Now that the $400 million cap has been breached and eligible HCPs are facing reduced funding, it is imperative that the FCC take immediate action to ensure stable, adequate funding for those HCPs that Congress intended to benefit from the program. NACHC offer the following recommendations for achieving this outcome: 1. The FCC should revise funding amounts for the year to provide full funding for rural FQHCs and other HCPs that are clearly eligible under a plain reading of the statute. This can be achieved by either: Carrying over unused funds from previous years to offset shortfalls in , or Targeting funding to HCPs that are clearly eligible under a plain reading of the statute. 2. Starting with the funding year, the FCC should restructure the RHCP to: A. More closely align with Congressional intent, by: o Restricting eligibility to HCPs that are actually located in rural areas and are either public or non profit. o Defining Rural Health Clinics according to the statutory definition used by Medicare, Medicaid, and other HHS programs. o If total funding provided in a given year is less than the capped amount, permit the amount remaining under the cap to be carried forward into future years. o For years in which appropriate applications exceed available funding, establish a mechanism for prioritizing funding to: Rural safety net HCPs; Eligible HCPs with the highest costs; and Capital expenses for HCPs in areas with the lowest broadband availability.

3 B. Revise the funding cap to more realistically reflect participation and costs, and to ensure a predictable funding stream for eligible HCPs. C. Adopt budgeting practices currently used in the E Rate program, including establishing an inflation index and allowing unspent funds that were previously committed to individual HCPs to be redirected towards HCPs with unmet needs in the current year. NACHC COMMENTS AND RECOMMENDATIONS FQHCs and the Rural Health Care Program (RHCP) Of the more than 25 million medically underserved individuals who receive care at FQHCs, at least 10 million of them reside in rural or frontier areas. As you know, populations in these areas experience significant disparities in both health status and their ability to access care, relative to residents of more populated areas. Technological innovations in clinical practice, mobile health applications, health information technology (HIT) and Electronic Health Records (EHR) all offer significant promise to help reduce these disparities. However, FQHCs ability to take advantage of these opportunities is directly dependent on their ability to access affordable, reliable broadband service. The Rural Health Care Program (RHCP) including both the Telecommunications Program and the Healthcare Connect Fund (HCF) plays a critical role in enabling rural FQHCs to afford broadband access, particularly at the speeds needed to take advantage of these new technologies. For these reasons, the RHCP is vitally important to rural FQHCs ability to fulfill their role as safety net providers to medically underserved and vulnerable populations. Concerns about Recent Programmatic Changes to the RHCP Over the past several years, NACHC and its member FQHCs have had growing concerns about several of the FCC s decisions regarding RHCP eligibility and funding, as we think these decisions have both: expanded this program beyond Congress intent, and starting with the funding year, resulted in reduced funding for the health care providers (HCPs) that the RHCP was designed to support. As you are aware, Section 254(h) states explicitly that the HCPs that are the intended beneficiaries of this program are those located in rural areas. (In contrast, eligible Educational providers and libraries are not limited to those in specific geographic areas.) Also, Section 254(h)(2)(A) states that the purpose of the RHCP is to enhance, to the extent technically feasible and economically reasonable, access to advanced telecommunications and information services for all public and nonprofit

4 elementary and secondary school classrooms, health care providers, and libraries (emphasis added.) NACHC is concerned the recent programmatic changes described below are inconsistent with the plain wording of the statute: Not limiting eligibility and funding to HCPs in rural areas. The FCC s decision to allow urban providers to receive RHCP funding as long as they are in a consortia with rural providers conflicts with a plain reading of the statute, which restricts HCP eligibility to those in rural areas. This concern is compounded by the fact that: o depending on the relative size and of the various consortia members, urban members of such a consortia can funding that is far larger than the amounts received by their rural partners. o there is no limit on the amount of funding that urban hospitals (in eligible consortia) with fewer than 400 beds can receive from the program. Not limiting eligibility and funding to public and non profit HCPs. The decision to make emergency departments of for profit hospitals eligible for HCP funding conflicts with a plain reading of the statute, which clearly limits eligibility to public and non profit HCPs. Not adjusting the $400 million funding cap to reflect increases in eligible providers, services, and costs. As stated above, the statute requires the FCC to enhance access to the degree to which it is economically reasonable. In the two decades since the statute was passed, FCC has never once raised the funding cap for this program, despite the fact that the appropriate demands for the funding have increased, due to the following factors: o The FCC s decision to add Skilled Nursing Facilities to the list of eligible providers starting in 2017 o The FCC s decision to adding construction and capital expenses to the types of services that are eligible for reimbursement o increases in the number eligible HCPs (within existing categories of eligible provider types) o increased costs per eligible HCPs (e.g., to support the adoption of EHRs.) It is not economically reasonable for the FCC to intentionally expand a program over two decades while simultaneously failing to increase funding for it particularly when this failure is resulting in lower funding to those HCPs that Congress clearly intended to benefit from the RHCP. Not allowing carry over of unused funds from previous years. For almost two decades, the RHCP has had unused funds left over at the end of each fiscal year. It is not economically reasonable particularly given the factors listed above to fail to carry over any of these unused funds into future years when demand exceeds the cap. Thus, NACHC believes that these programmatic changes have caused the RHCP to diverge from Congress original intent, and are the primary reason why in total applications exceeded the $400 million cap for the first time. Now that the cap has been breached and eligible HCPs are facing reduced funding, it is imperative that the FCC take immediate action

5 to ensure stable, adequate funding for those HCPs that Congress intended to benefit from the program. NACHC offer the following recommendations for achieving this outcome: 1. The FCC should revise funding amounts for the year to provide full funding for rural FQHCs and other HCPs that are clearly eligible under a plain reading of the statute. NACHC has serious concerns about the FCC s decision to make across the board reductions in payments to all HCPs who submitted applications after August 31, While this outcome was a predictable and avoidable result of recent FCC decisions, it will have significant, negative impacts on FQHCs and other safety net providers ability to provide appropriate care to medically underserved populations. For example, FQHCs in Alaska are receiving $4 million less in RHCP funding this year; given that FQHCs generally operate on margins of less than 1 percent, this loss will direct impact their ability to care for their patients. Fortunately, we think that the FCC has the discretion to revise its funding decisions for in one of the following ways: Carry over unused funds from previous years to offset shortfalls in As stated previously, the RHCP has underspent its allocated funding each year for almost two decades. A small portion of these unused funds should be carried over into the current year to make eligible HCPs whole. Target funding to give priority to HCPs that are clearly eligible under a plain reading of the statute. Making the same percentage cut to eligible HCPs who applied after August 31, 2016 is a very simplistic approach that implies that the merits of each HCP s application were equal. As stated above, some types of HCPs that the FCC has recently made eligible for the program (i.e., those in urban areas, ERs in for profit hospitals) do not meet the eligibility criteria explicitly outlined in the statute. For this reasons, all HCPs that are clearly eligible under a plain reading of the statute should be fully funded before any funding is provided to other HCPs. 2. Starting with the funding year, the FCC should modernize the RHCP to: A. more closely align with Congressional intent, B. revise the funding cap to more realistically reflect participation and costs, and to ensure a predictable funding stream for eligible HCPs, and C. adopt budgeting practices currently used in the E Rate program. As discussed above, recent programmatic changes to the RHCP combined with a failure to adjust the funding cap have resulted in large and unexpected funding cut to the HCPs whom Congress intended to benefit from the program. Given that SNFs will become eligible for RHCP funding starting in July 2017, NACHC is very concerned that future funding reductions will be even larger than those for the current year. To avoid this outcome, NACHC urges the FCC to restructure the program for the year in order to achieve the following three goals: More closely align program outcomes with Congressional intent Revise the funding cap and eligibility rules to be more consistent and realistic, and Adopt budgeting practices currently used in the E Rate program.

6 NACHC recommends the following strategies for achieving these three goals: A. More closely align program outcomes with Congressional intent. Restrict eligibility to HCPs that are actually located in rural areas and are either public or non profit. Such eligibility rules would be consistent with a plain reading of the statute. Consider defining Rural Health Clinics according to the statutory definition used by Medicare, Medicaid, and other HHS programs. Section 254(h)(7)(B)(vi) lists rural health clinics as one of the categories of HCPs that are eligible for the RHCP. For all purposes within the Federal Department of Health and Human Services (DHHS) including the Medicare and Medicaid Programs a rural health clinic (RHC) is a provider that meets the definition at Section 1861(aa)(2) of the Social Security Act. This definition, which was initially established in 1977 as part of the Rural Health Clinic Services Act (Public Law ), includes requirements around location, services, and types of providers. While the Telecommunications statute does not explicitly reference Section 1861(aa)(2) when discussing RHCs, it is reasonable to expect that Congress intended the FCC to use the same long standing definition established in statute and used throughout HHS. NACHC s understanding is that the FCC is using a much looser definition of RHC, which is resulting in additional HCPs becoming eligible for the program. Therefore, using the same RHC definition as HHS will not only create consistency across Federal programs, but also reduce demand on the RHCP. 1 Finally, as will be discussed below, the FCC s budget justification for its $400 million cap includes an estimate of the number of RHCs that will be eligible. (See Healthcare Connect Order December 21, 2012, Footnote 266, part (vi). This estimate was obtained from HHS staff based on the number of RHCs officially registered with CMS (and then adjusted downwards to remove those RHCs that are for profit.) This shows that the FCC based its budget estimates on the HHS definition of an RHC, even though it has granted RHCP eligibility to a broader range of clinics. If total funding provided in a given year is less than the capped amount, permit the amount remaining under the cap to be carried forward into future years. For years in which appropriate applications exceed available funding, establish a mechanism for prioritizing funding to: safety net HCPs; eligible HCPs with the highest costs; and capital expenses in rural areas with the lowest capacity. Once the FCC modernizes both the eligibility rules and funding cap, 1 For more information on RHCs, as defined by HHS, see Medicare Learning Network Fact Sheet on Rural Health Clinics.

7 NACHC hopes that the RHCP will once again be able to fully fund all applications from eligible HCPs. However, in the event that the cap is again breached, NACHC strongly urges the FCC to establish a system for prioritizing applications, and to fully fund high priority application before starting to fund lower priority ones. NACHC recommends that the following three types of applications be given priority, as doing so is consistent with Congress intent of increasing access among rural HCPs who have the most difficulty affording broadband: 1. Rural safety net HCPs: While this category includes rural FQHCs, it is broader, encompassing all those providers that serve predominantly lowincome, medically underserved individuals. Safety net providers are also known as Essential Community Providers (ECPs) and this term is defined in statute in Section 340B of the Public Health Service (PHS) Act and section 1927(c)(1)(D)(i)(IV) of the Social Security Act (SSA). For more information on ECPs, see this article from the Kaiser Family Foundation. 2. Eligible HCPs with the highest costs: For example, HCPs in remote areas that have the highest costs and the fewest other organizations with whom to share the costs should be given priority. 3. Capital expenses for HCPs in areas with the lowest broadband availability: As shown on the FCC s Connect2Health webpage, Mapping Broadband Health in America, many rural and frontier areas still have relatively low fixed broadband availability. HCPs in these areas particularly those who have yet to achieve speeds of 10mb download/3mb upload should be given priority for funding of capital expenses. B. Revise the funding cap to more realistically reflect participation and costs, and to ensure a predictable funding stream for eligible HCPs. As previously stated, the RHCP funding cap has not been increased since it was first established in Order , despite the following factors: The number of eligible providers has increased significantly, and will expand even further in For example, in addition to the eligibility expansions discussed earlier, the number of FQHCs has increased significantly since the last estimate was done as part of Order The costs incurred by each HCP have increased by more than a factor of ten in the 20 years set the cap amount was set. With regards E Rate (RHCP s companion program supporting broadband access for schools and libraries), in Order the FCC described a 10 fold increase in costs in just the first 13 years of the program (1997 to 2010): We note that when the E rate program began in 1997, basic Internet connectivity required a phone line and dial up Internet service, which might have cost a total of less than $50 per month. Today, for basic Internet connectivity capable of supporting common applications and learning tools such as educational video content, a school or library needs broadband at speeds of at least several megabits per second, which might cost upwards of $500 per month (e.g., for a T 1 line), plus the costs of necessary internal connections.

8 The unexpected reductions in funding for many HCPs in , and the anticipation of even larger cuts in , clearly show that RHCP funding is no longer predictable for HCPs. Not only does this unpredictability make it challenging for eligible HCPs to enter into long term contracts or investments, but it also directly contradicts the FCC s own state understanding of the statute, as outlined in Order : Recognizing that section 254 requires that universal service support mechanisms be specific, predictable, and sufficient, we establish support subject to a $400 million annual cap. (emphasis added) To address these concerns, NACHC strongly urges the FCC to conduct a new analysis to update the spending cap as appropriate to ensure a predictable funding stream for eligible HCPs. This analysis should: Incorporate the most recent data on actual costs. Ensure that consistent definitions are used both to determine eligibility and to estimate the number of eligible providers. (See discussion of RHCs, above.) To the extent possible, be based on data on the number, types, and locations of HCPs actually participating in the program. Ensure that the new cap provides a stable funding stream, at a minimum for the three categories of high priority HCPs outlined above. In addition, after the cap is updated, NACHC recommends that the FCC continue to collect data on the number, types, and locations of HCPs participating in the program and adjust the cap as appropriate based on this information. Adopt budgeting practices currently used in the E Rate program. Specifically, the FCC should o Establish an inflation index to automatically increase the funding cap in future years, as has been done for E Rate since (See First and Second E Rate Modernization Orders.) o Allow funds that were committed to individual HCPs in previous years but not used to be redirected towards HCPs with unmet needs in the current year. On behalf of rural FQHCs across the nation, we thank you for your consideration of our comments. We would be happy to provide any further information that would be helpful. Sincerely, Colleen P. Meiman, MPPA Director, Regulatory Affairs National Association of Community Health Centers

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10 Attachment A: OVERVIEW OF FEDERALLY QUALIFIED HEALTH CENTERS For 50 years, Health Centers have provided access to quality and affordable primary and preventive healthcare services to millions of uninsured and medically underserved people nationwide, regardless of their ability to pay. At present there are over 1,400 health centers with more than 9,800 sites. Together, they serve over 25 million patients, including nearly eight million children and more than 1 in 6 Medicaid beneficiaries. Health centers provide care to all individuals, regardless of their ability to pay. All health centers provide a full range of primary and preventive services, as well as services that enable patients to access health care appropriately (e.g., translation, health education, transportation). A growing number of Health Centers also provide dental, behavioral health, pharmacy, and other important supplemental services. To be approved by the Federal government as a Health Center, an organization must meet requirements outlined in 330 of the Public Health Service Act. These requirements include, but are not limited to: Serve a federally designated medically underserved area or a medically underserved population. Some Health Centers serve an entire community, while other target specific populations, such as persons experiencing homelessness or migrant farmworkers. Offer services to all persons, regardless of the person s ability to pay. Charge no more than a nominal fee to patients whose incomes are at or below the Federal Poverty Level (FPL). Charge persons whose incomes are between 101% and 200% FPL based on a sliding fee scale. Be governed by a board of directors, of whom a majority of members must be patients of the health center. Most 330 Health Centers receive Federal grants from the Bureau of Primary Health Care (BPHC) within HRSA. BPHC s grants are intended to provide funds to assist health centers in covering the otherwise uncompensated costs of providing care to uninsured and underinsured indigent patients, as well as to maintain the health center s infrastructure. Patients who are not indigent or who have insurance, whether public or private, are expected to pay for the services rendered. In 2015, on average, the insurance status of Health Center patients is as follows: 49% are Medicaid or CHIP recipients 24% are uninsured 17% are privately insured 9% are Medicare recipients No two health centers are identical, but they all share one common purpose: to provide primary health care services that are coordinated, culturally and linguistically competent, and community directed, to uninsured and medically underserved people.