Federal Communications Commission Chairman Ajit Pai has sent a draft order to FCC colleagues increasing the annual funding cap by $171 million for the Rural Health Care Program, which provides telecommunications and broadband services to rural communities supporting telemedicine.

Pai’s order would increase the annual cap from $400 million to $571 million, and it would take immediate action to address a funding shortfall and improve telemedicine in rural areas, according to the FCC.

“As the son of two doctors in rural Kansas, and having visited telemedicine projects from Alaska to Florida, I understand the critical role that broadband plays in giving patients in rural areas high-quality healthcare services,” said Pai in a written statement. “This money will help healthcare providers get the connectivity they need to better serve patients throughout rural America. Demand for funding has been outpacing the program’s funding cap, so I also believe that the increased cap should apply to the current funding year so that rural healthcare providers can be fully reimbursed.”

Ajit Pai
Ajit Pai

Congress in 1996 mandated that the FCC use the Universal Service Fund to provide support for both telecommunications and advanced information services for eligible providers in rural communities to enable telemedicine, transmit health records, and conduct other telehealth activities. However, the cap for the Rural Health Care Program—which was set in 1997—was never indexed for inflation, and recent “demand for funding under the program has outpaced the budget, creating uncertainty for patients, healthcare providers and communications companies alike,” states the FCC’s announcement.

Pai’s order “would apply the increased cap to the current funding year to immediately address a critical funding crisis and enable rural healthcare providers to continue offering telemedicine services,” while also giving these providers “long-term certainty about universal service funding by adjusting the cap annually for inflation and allowing unused funds from prior years to be carried forward to future years.”

Last month, 31 senators sent a letter to Pai warning him that “unless the spending cap is raised appropriately to account for current needs and future growth, healthcare providers in rural areas will encounter severe rate increases for their broadband services, making it even harder for rural healthcare practitioners to engage in life-saving telemedicine.”

Also See: 31 senators call on FCC to increase $400M cap for Rural Health Care Program

“This is an important step to allow these providers to continue offering critical telemedicine services in their rural communities,” added Pai. “Healthcare has become increasingly reliant on connectivity over the past two decades, and this proposal reflects the need to keep pace with this evolution. I hope my colleagues will support my plan without delay.”

The American Hospital Association contends that the Rural Health Care Program must be updated to meet the growing connectivity needs of healthcare providers.

“We greatly appreciate the action and commitment by Chairman Pai to meet the broadband connectivity needs of rural healthcare providers,” said Tom Nickels, AHA’s executive vice president. “This funding is critical to improve the lives of rural Americans now more than ever since innovations in healthcare demand connectivity for telehealth, remote monitoring, patient engagement and daily operations.”

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