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FCC to Award Additional $249+ Million in Funding for COVID-19 Telehealth Program

On March 29, 2021, the Federal Communications Commission (“FCC” or “Commission”) adopted an Order establishing rules and procedures for Round 2 of the COVID-19 Telehealth Program (the “Program”) to continue supporting telehealth services, which have proved to be so vital during the COVID-19 pandemic. In a News Release accompanying the Order, FCC Acting Chairwoman Jessica Rosenworcel highlighted that “[t]his past year has proven, without a doubt, that telehealth technology is critical to helping address inequities in access to health care services” and that Round 2 of this program will help address these challenges “head on.”

Round 2 of the Program will provide $249.95 million dollars to fund telehealth and connected care services provided by eligible providers. The additional funds were approved by Congress in the Consolidated Appropriations Act, 2021 (“Appropriations Act”), and will build on the initial $200 million the FCC awarded under the CARES Act. Despite industry requests to expand eligibility to receive the funds in Round 2 of the Program, the Commission declined to allow for-profit entities to apply.

COVID-19 Telehealth Program Overview 
As we’ve previously discussed, the Program is intended to support health care providers’ use of telehealth services so patients can continue to access vital care during the COVID-19 pandemic. The funds may be used to purchase telecommunications services, information services, and connected devices to provide connected care services in response to COVID-19. 

Round 2 Highlights 
The application and eligibility requirements for providers to receive Round 2 funding are similar to those for Round 1 with a few changes noted below. The Commission will also utilize a single application filing window and a points-based metric system to award funding. The Universal Service Administrative Company (“USAC”) will administer the Program, with oversight by the FCC’s Wireline Competition Bureau (“Bureau”) and the Office of Managing Director. 
 
Timing 
In a change from last year, there will be a single 7-day window to submit applications for Program funding in Round 2. Last year, the Bureau evaluated applications on a rolling basis, ultimately awarding the $200 million to 539 applicants between April 16, 2020 and July 8, 2020 in 14 rounds of award-making. For Round 2, the FCC received “overwhelming” support from commenters in favor of a single application window, and believe the abbreviated 7-day application period will help place all applicants on equal footing, but still allow the FCC to implement Congressional intent of providing funds quickly to worthy applicants. 

The Bureau will provide at least two weeks advance notice before the application filing window opens, which is expected to occur by the end of April. 

Award Recipients and Caps on Awards
In the Appropriations Act, Congress instructed the FCC to ensure that at least one applicant in each of the 50 states and the District of Columbia receives funding under the Program at the conclusion of Round 2, if it is feasible. Last year, applicants from 47 states, the District of Columbia, and Guam received Program funds. The FCC is committed to equitably awarding Program funds nationwide, and the single application window noted above will allow USAC to collectively review applications to ensure that at least one applicant from each state ultimately receives Program funds, while still prioritizing an equitable distribution. 

The FCC encourages eligible providers that unsuccessfully submitted applications last year to reapply in Round 2. These return applicants will receive an increase in points when their Round 2 applications are evaluated. Providers who did receive funding last year can also apply in Round 2, but there is no corresponding increase in points under the evaluation metrics USAC will use to rank the applications.

In Round 2, the FCC will continue to cap individual awards at $1 million. However, the cap applies to Round 2 funds only, so eligible applicants who received funds last year could still receive up to $1 million in Round 2.

Eligibility Determination and USAC Form 460
One process change for Round 2 is that each applicant must obtain a health care provider (“HCP”) number from USAC before it can submit an application. The FCC determined that USAC needs a clear basis to determine applicant eligibility for the Program, and the FCC Form 460 process is a clear-cut way to make the determination. Providers who already have an eligibility determination do not need to file again unless their information has changed. And providers applying for funding at multiple locations only need to complete the FCC Form 460 application for the primary site (not for each site), but must certify that each site covered by the application would meet the eligibility criteria under the Form 460 application process. 

Ability to Supplement Application
Round 2 funds will be awarded in two phases. USAC will award at least $150 million dollars to the highest ranked applicants during the initial commitment phase. Applicants that do not receive an award in this initial phase will have 10 days to supplement their applications, and after that period, USAC will re-rank the remaining applications to award the rest of the funds.

No Changes to Categories of Eligible Entities
The FCC concurrently released an Order on Reconsideration dismissing the Petition for Reconsideration filed by the American Hospital Association, which urged the FCC to expand eligibility for the program to include “all types of hospitals and other direct patient care facilities regardless of their size, location or for-profit or not-for-profit status.”  The FCC explained that Congress gave it authority to rely on its existing rules and the Communications Act – which limit eligibility to public, non-profit, and certain other health care providers – to implement the program and relying on that limitation would ensure that the funds are targeted to those that need it most. It added that, unlike other aspects of the program, Congress did not modify the eligibility requirements in the Appropriations Act, further demonstrating Congress’ intent not to expand the categories of eligible applicants. 

Action Items for Eligible Providers

  • Register with SAM. Only entities that are registered in the System for Award Management (“SAM”) will be able to receive reimbursement from the Program.
  • Obtain an HCP number.  If you don’t have an HCP number already, submit your FCC Form 460 now, and indicate that you will be applying for COVID-19 Telehealth Program funds to expedite your FCC Form 460 application.
  • Prepare your Application. Start gathering materials and preparing your Round 2 application (or review and update your application from Round 1)!
  • Stay plugged in for updates on process and timing. The FCC has directed the USAC to coordinate with FCC’s Connect2Health Task Force to provide educational outreach to stakeholders and to respond to questions from health care providers about Round 2. 

All applicants should carefully review Program requirements and existing guidance from the FCC and USAC.  If you have any questions, don’t hesitate to reach out to your trusted Mintz advisors!
 

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Authors

Angela Y. Kung draws on significant knowledge of the wireless regulatory landscape and experience at the FCC to advise clients on FCC rules and procedures. With particular expertise on spectrum use policies and auction procedures, she has shepherded Mintz's clients through several FCC auctions related to next-generation 5G wireless technologies and routinely advocates on behalf of clients to help ensure that the agency’s rules align with their interests.
Rachel Irving Pitts is an Associate at Mintz. Her practice involves transactional and regulatory matters, including mergers and acquisitions, regulatory compliance review, telemedicine issues, and provider and service contracting matters. Rachel's clients include health care providers and payors.