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entitled 'Telecommunications: FCC's Performance Management Weaknesses
Could Jeopardize Proposed Reforms of the Rural Health Care Program'
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United States Government Accountability Office:
GAO:
Report to Congressional Requesters:
November 2010:
Telecommunications:
FCC's Performance Management Weaknesses Could Jeopardize Proposed
Reforms of the Rural Health Care Program:
GAO-11-27:
GAO Highlights:
Highlights of GAO-11-27, a report to congressional requesters.
Why GAO Did This Study:
Telemedicine offers a way to improve health care access for patients
in rural areas. The Federal Communications Commission’s (FCC) Rural
Health Care Program, established in 1997, provides discounts on rural
health care providers’ telecommunications and information services
(primary program) and funds broadband infrastructure and services
(pilot program). GAO was asked to review (1) how FCC has managed the
primary program to meet the needs of rural health care providers, and
how well the program has addressed those needs; (2) how FCC’s design
and implementation of the pilot program affected participants; and (3)
FCC’s performance goals and measures for both the primary program and
the pilot program, and how these goals compare with the key
characteristics of successful performance goals and measures. GAO
reviewed program documents and data, interviewed program staff and
relevant stakeholders, and surveyed all 61 pilot program participants
with recent participation in the program.
What GAO Found:
FCC has not conducted an assessment of the telecommunications needs of
rural health care providers as it has managed the primary Rural Health
Care Program, which limits FCC’s ability to determine how well the
program has addressed those needs. Participation in the primary
program has increased, and some rural health care providers report
that they are dependent on the support received from the program. For
example, a provider in Alaska has used program funds to increase the
use of telemedicine, which has reduced patient wait times and travel
costs. FCC has been successful in disbursing over 86 percent of all
committed funds. However, FCC has disbursed only $327 million in total
over the 12 years of the primary program’s operation—-less than any
single year’s $400 million funding cap. FCC has frequently stated that
the primary program is underutilized and has made a number of changes
to the program, including the creation of the pilot program.
Currently, FCC is proposing to replace portions of the primary program
with a new broadband services program. However, without a needs
assessment, FCC cannot determine how well the current program is
targeting those needs-—and whether the program is, in fact,
underutilized—-or ensure that a new program will target needs any
better.
FCC’s poor planning and communication during the design and
implementation of the pilot program caused delays and difficulties for
pilot program participants. FCC did not consult with the program’s
administrator, other federal agencies, or relevant stakeholders prior
to announcing the program, nor did it request public comment on its
design. In addition, FCC called for applications to participate in the
pilot program before it fully established pilot program requirements.
FCC added additional program requirements after the pilot program
began, and survey respondents indicated that program guidance was not
provided in an effective manner. Despite these difficulties, most
participants were positive about the assistance provided by program
officials and reported that the benefits they anticipate receiving
from the pilot program outweigh the costs of participating. However,
the entire program has been delayed and projects have struggled to
meet requirements that were not clearly defined at the beginning of
the program.
FCC has not developed specific performance goals for the Rural Health
Care Program and has developed ineffective performance measures. The
performance measures are limited for a number of reasons, the most
important of which is that FCC has set no specific performance goals
to which to link them. In addition, FCC has not evaluated the
performance of the primary Rural Health Care Program and has no
evaluation plan for the pilot program. Without reliable performance
information, FCC does not have the data that it needs to make critical
policy decisions about the overall Rural Health Care Program. If FCC
does not correct these deficits in performance management, it may
perpetuate the same performance management weaknesses in its
stewardship of the new rural health care programs that it has proposed.
What GAO Recommends:
GAO recommends that the FCC Chairman assess rural health care providers’
needs, consult with knowledgeable stakeholders, develop performance
goals and measures, and develop and execute sound performance
evaluation plans. In its comments, FCC did not agree or disagree with
the recommendations, but discussed planned and ongoing actions to
address them.
View [hyperlink, http://www.gao.gov/products/GAO-11-27] or key
components. Additional data on participation in the rural health care
pilot program is at [hyperlink,
http://www.gao.gov/products/GAO-11-25P]. For more information, contact
Mark Goldstein at (202) 512-2834 or goldsteinm@gao.gov.
[End of section]
Contents:
Letter:
Background:
FCC Has Not Performed the Analysis Necessary to Ensure That the
Primary Rural Health Care Program Meets the Needs of Rural Health Care
Providers:
FCC's Poor Planning and Communication during the Design and
Implementation of the Pilot Program Caused Delays and Difficulties:
FCC Has Not Followed Key Performance Management Practices, Thus It
Lacks the Performance Data to Make Effective Policy Decisions and
Implement Program Reforms:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: 2008 Commitments to Applicants, by State and Territory:
Appendix III: Comments from the Federal Communications Commission:
Appendix IV: Comments from the Universal Service Administrative
Company:
Appendix V: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Funds Committed and Disbursed to Applicants, by State and
Territory (1998-2009):
Table 2: Requirements Rated "Very Difficult" or "Somewhat Difficult"
by More Than Half of Survey Respondents That Provided an Opinion
(Listed in Order of Overall Difficulty Rating):
Figures:
Figure 1: Components of the Current Rural Health Care Program:
Figure 2: Current Rural Health Care Program and Proposed Rural Health
Care Program, as of November 2010:
Figure 3: The Primary Rural Health Care Program Processes:
Figure 4: Cumulative Primary Rural Health Care Program Disbursements
(1998-2009):
Figure 5: Applicants, by Type of Eligible Primary Rural Health Care
Program Provider (2008):
Figure 6: Number of Primary Rural Health Care Program Applicants (1998-
2009):
Figure 7: Number of Funding Commitments, by Type of Service Requested
(1998-2008):
Figure 8: Total Dollar Amount Committed for Funding Year 2008, by ZIP
Code:
Figure 9: Status of Pilot Projects as of July 31, 2010:
Figure 10: Issues That Delayed Pilot Projects:
Figure 11: Survey Respondents' Satisfaction with Program
Communications:
Figure 12: Respondents' Ratings of Pilot Program Resources:
Abbreviations:
APA: Administrative Procedure Act:
FCC: Federal Communications Commission:
HHS: Department of Health and Human Services:
HRSA: Health Resources and Services Administration:
IT: information technology:
KANA: Kodiak Area Native Association:
MOU: memorandum of understanding:
NECA: National Exchange Carrier Association:
NOI: Notice of Inquiry:
NPRM: Notice of Proposed Rulemaking:
OMB: Office of Management and Budget:
PATS: Packet Tracking System:
RFP: request for proposals:
SIDS: Simplified Invoice Database System:
USAC: Universal Service Administrative Company:
USDA: U.S. Department of Agriculture:
Telecommunications: Information on Participation in the Rural Health
Care Pilot Program (GAO-11-25SP), an E-Supplement to GAO-11-27:
[End of section]
November 17, 2010:
Congressional Requesters:
Some of the most promising technologies to arise out of our nation's
transition to broadband[Footnote 1] involve "telemedicine,"
particularly for patients in rural areas of the country. Telemedicine
technologies can allow rural patients to receive, through remote
access, medical diagnosis or patient care, often from specialists who
are located in urban areas or university hospitals. Increased use of
video consultation, remote patient monitoring, and electronic health
records[Footnote 2] enabled by telemedicine technologies hold the
promise of improving health care quality, safety, and efficiency. The
Federal Communications Commission's (FCC) Rural Health Care Universal
Service Support Mechanism--or Rural Health Care Program--was created
pursuant to the Telecommunications Act of 1996[Footnote 3] (1996 Act)
and enables rural health care providers to receive (1)
telecommunications services[Footnote 4] at rates comparable to that of
their urban counterparts and (2) access to the advanced
telecommunications and information services necessary for health care
delivery. Access to reasonably priced telecommunications services and
Internet access services affords rural health care providers the
ability to provide important telemedicine technologies that can
improve the care of patients while maximizing limited resources.
Despite these benefits, FCC has stated that its Rural Health Care
Program is underutilized, in part, because rural health care
providers' needs have shifted away from discounted telecommunications
and Internet services, and toward the broadband networks and
facilities needed to support advanced telemedicine applications. Thus,
in 2006, FCC established a separate pilot program within the Rural
Health Care Program to provide funding for broadband infrastructure
and services.[Footnote 5] Also, in March 2010, at the direction of
Congress, an FCC task force developed and released a National
Broadband Plan[Footnote 6] to provide a road map for attaining
universal access to broadband capability. As a result of
recommendations in the National Broadband Plan, FCC is currently
reviewing its design of the Rural Health Care Program and has proposed
two new rural health care programs--the Health Broadband Services
Program and the Health Infrastructure Program--in a July 2010 Notice
of Proposed Rulemaking (NPRM).[Footnote 7] FCC sought comment on these
and other reforms, which could be implemented by the beginning of the
next funding year on July 1, 2011.
In response to your request that we examine the operation of the Rural
Health Care Program, this report addresses three main questions:
* How has FCC managed the primary Rural Health Care Program to meet
the needs of rural health care providers, and how well has the program
addressed those needs?
* How have FCC's design and implementation of the pilot program
affected participants?
* What are FCC's performance goals and measures for the Rural Health
Care Program, and how do these goals compare with the key
characteristics of successful performance goals and measures?
For each of these questions, we reviewed FCC documents, including FCC
orders and requests for comment on the Rural Health Care Program, as
well as written comments submitted in response to these requests. We
also interviewed FCC staff and staff of the Universal Service
Administrative Company (USAC)--the not-for-profit corporation that
administers the Rural Health Care Program under a memorandum of
understanding (MOU) with FCC.[Footnote 8] To provide information on
the design, operation, and trends of the primary Rural Health Care
Program, we analyzed data from USAC on applications, funding
commitments, and disbursements for the first 12 years of the primary
Rural Health Care Program (1998 to 2009). On the basis of interviews
with USAC officials to understand how these data were handled, stored,
and protected, we determined that the data were sufficiently reliable
for the purposes specified. To provide information on the pilot
program, we conducted a Web-based survey of representatives from all
61 pilot projects that had recent contact information on file with
USAC at the time of our survey to obtain their views on program
requirements and on how to improve the program, among other things.
Our survey response rate was 100 percent. This report does not contain
all of the results from the survey; our questionnaire and a more
complete tabulation of the results can be viewed in an e-supplement to
this report.[Footnote 9] To provide information about performance
goals and measures, we reviewed FCC documentation on the agency's
performance goals and measures for the Rural Health Care Program and
compared this information with literature on results-oriented
management and effective practices for setting performance goals and
measures. Additionally, we interviewed officials from other federal
agencies, including the Department of Health and Human Services (HHS),
the U.S. Department of Agriculture (USDA), and the Department of
Commerce, to collect information on FCC's collaboration efforts on the
Rural Health Care Program. We also interviewed representatives from
telecommunications and rural health care stakeholder organizations to
learn about the impact of the program on their members. See appendix I
for additional information on our scope and methodology.
We conducted this performance audit from August 2009 to November 2010,
in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
A key goal of universal service is to ensure affordable
telecommunications services to consumers living in high-cost areas,
low-income consumers, eligible schools and libraries, and rural health
care providers.[Footnote 10] Universal service programs are funded by
statutorily mandated payments into the Universal Service Fund by
companies that provide interstate and international telecommunications
services.[Footnote 11] These payments are deposited into the federal
Universal Service Fund, from which disbursements are made for the
various federal universal service programs, including the Rural Health
Care Program. Companies generally pass their universal service costs
along to consumers through a universal service fee on customers'
telephone bills.
FCC's current Rural Health Care Program is made up of three components
that fund different benefits. As figure 1 illustrates, the first two
components--the Telecommunications Fund and the Internet Access Fund--
are commonly discussed together as the "primary Rural Health Care
Program." Both components in the primary Rural Health Care Program
offer discounts on services provided to a single site. In contrast,
the third component--the pilot program--encourages health care
providers to form comprehensive, multisite, state and regional
dedicated health care networks.
Figure 1: Components of the Current Rural Health Care Program:
[Refer to PDF for image: illustration]
Current Rural Health Care Program:
Program component: Telecommunications Fund;
What is funded:
* Telecommunications services;
* Rural only;
Funding mechanism:
* Funds urban/rural price differential;
Funding started: 1998.
Program component: Internet Access Fund;
What is funded:
* Internet access;
* Rural only;
Funding mechanism:
* Funds 25% of invoice;
* Funds 50% of invoice for states that are entirely rural;
Funding started: 2004.
[Telecommunications Fund and Internet Access Fund form the Primary Rural
Health Care Program]
Program component: Pilot Program;
What is funded:
* One-time capital costs for network deployment;
* Recurring costs for up to 5 years;
* Urban and rural
Funding mechanism:
* Funds 85% of eligible costs;
Funding started: 2007.
Source: GAO analysis of FCC and USAC information.
[A] USAC has identified only American Samoa, the U.S. Virgin Islands,
the Commonwealth of the Northern Mariana Islands, and Guam as entirely
rural under the program's definition of the term.
[End of figure]
Figure 2 shows how the components in the current Rural Health Care
Program may change if FCC adopts the proposed reforms described in its
July 2010 NPRM.[Footnote 12] As the figure illustrates, the Health
Broadband Services Program would replace the Internet Access Fund (and
raise the discount percentage). A new Health Infrastructure Program
would make available up to $100 million per year to support up to 85
percent of the construction costs of new regional or statewide
networks for health care providers in areas of the country where
broadband is unavailable or insufficient. This $100 million would be
part of the overall $400 million annual spending cap that covers the
Rural Health Care Program as a whole and that FCC established in 1997.
[Footnote 13]
Figure 2: Current Rural Health Care Program and Proposed Rural Health
Care Program, as of November 2010:
[Refer to PDF for image: illustration]
Current Rural Health Care Program:
Program component: Telecommunications Fund;
What is funded:
* Telecommunications services;
* Rural only;
Funding mechanism:
* Funds urban/rural price differential;
Funding started: 1998.
Program component: Internet Access Fund;
What is funded:
* Internet access;
* Rural only;
Funding mechanism:
* Funds 25% of invoice;
* Funds 50% of invoice for states that are entirely rural;
Funding started: 2004.
[Telecommunications Fund and Internet Access Fund form the Primary Rural
Health Care Program]
Program component: Pilot Program;
What is funded:
* One-time capital costs for network deployment;
* Recurring costs for up to 5 years;
* Urban and rural
Funding mechanism:
* Funds 85% of eligible costs;
Funding started: 2007.
Proposed Future Rural Health Care Program:
Program component: Telecommunications Fund;
What is funded:
* Telecommunications services;
* Rural only;
Funding mechanism:
* Funds urban/rural price differential.
Program component: Health Broadband Services Program;
What is funded:
* Broadband access, including dedicated Internet access; [bolded text]
* Rural only;
Funding mechanism:
* Funds 50% of invoice. [bolded text]
Program component: Health Infrastructure Program;
What is funded:
* One-time capital costs for network development;
* Limited maintenance and administrative costs; [bolded text]
* Urban and rural.
Funding mechanism:
* Funds 85% of eligible costs;
* Total infrastructure program funding limited to $100
million per year. [bolded text]
Source: GAO analysis of FCC and USAC information.
Note: The bolded text in the Health Broadband Services Program and
Health Infrastructure Program components of the proposed Rural Health
Care Program indicates differences from the current Rural Health Care
Program.
[End of figure]
In managing the program, FCC oversees USAC[Footnote 14]--the not-for-
profit corporation that administers the program. USAC uses its
subcontractor, Solix, Inc.,[Footnote 15] to carry out certain key
aspects of the program, such as reviewing and processing funding
applications. An MOU between FCC and USAC as well as FCC orders and
rules set forth the roles and responsibilities of FCC and USAC in the
management, oversight, and administration of the Rural Health Care
Program.[Footnote 16] (See the sidebar on this page for examples of
benefits provided by the Rural Health Care Program.)
[Sidebar:
Benefits of the Primary Rural Health Care Program:
USAC has reported that health care providers are using the funds from
the primary Rural Health Care Program to deliver health care to
America’s rural communities more quickly and proficiently—-and with
real cost savings. According to USAC, by helping health care providers
pay for telecommunications and Internet services, the primary Rural
Health Care Program may reduce expenses and travel time for consumers,
decrease medical errors, enable health care providers to quickly share
critical patient-care information in electronic format, and allow
rural health care providers to connect to specialists in urban areas.
Impact of the Primary Rural Health Care Program: Kodiak, Alaska:
USAC has highlighted the impact of the Rural Health Care Program on
the Kodiak Area Native Association (KANA). KANA is a nonprofit
corporation that provides health and social services for the Alaska
Natives of the Koniag region. According to the Information Systems
Manager of KANA, the support received from the primary Rural Health Care
Program has “revolutionized telehealth services” at KANA. KANA
patients once had to wait between 6 and 9 months to see an ear
specialist, but telemedicine has reduced patient wait times 2 weeks
and has reduced travel costs, since many patient visits can be
conducted remotely by other health care providers. For example, a
physician in Anchorage was able to assist a health aide in Kotzebue
perform a surgery when severe weather made air travel impossible. The
Information Systems Manager reported that without support from the
primary Rural Health Care Program, KANA would be forced to go back to
using dial-up services. Without this support, “it would be difficult
to afford even the smallest connection between the villages and KANA.”
Source: USAC's 2007 annual report. End of sidebar]
To be eligible to participate in the primary Rural Health Care
Program, applicants must be located in a rural area and be a public or
not-for-profit health care provider as defined by statute and FCC
rules.[Footnote 17] As shown in figure 1, the primary Rural Health
Care Program provides two types of subsidies to eligible rural health
care providers. First, the Telecommunications Fund subsidizes the
rates paid by rural health care providers for telecommunications
services, such as basic telephone or satellite service charges, so
that rural and urban prices are comparable within each state.[Footnote
18] Second, to support advanced telecommunications and information
services, the Internet Access Fund offers most rural health care
providers a 25 percent flat discount on monthly Internet access
charges.[Footnote 19] Eligible rural health care providers can apply
for support from both the Telecommunications Fund and the Internet
Access Fund. However, FCC has stated that rural health care providers
have not participated at the rate it had expected.
The steps that applicants must carry out to obtain support from one or
both components of the primary Rural Health Care Program are
illustrated in figure 3.
Figure 3: The Primary Rural Health Care Program Processes:
[Refer to PDF for image: illustration]
1) Health care provider: Files Form 465 describing products and
services sought.
2) USAC: Confirms eligibility, approves Form 465, and posts form on
Web site to begin the 28-day competitive bidding process.
3) Service provider: Bids on contract to provide desired services.
4) Health care provider: Contracts with the most cost-effective
service provider and files form requesting funds (Form 466 for
benefits from the Telecommunications Fund and/or Form 466-A for benefits
from the Internet Access Fund).
5) USAC: Confirms eligibility of selected service provider, approves
Form 466 and/or Form 466-A, and mails funding commitment letter to
health care provider and provides a copy to the service provider[A].
6) Service provider: Receives funding commitment letter and begins
receiving services from service provider.
7) Health care provider: Receives copy of funding commitment letter
and begins discounted services to health care provider.
8) Health care provider: Files Form 467 confirming that discounted
services have begun.
9) USAC: Approves Form 467 and issues a Support Schedule (a detailed
report of the approved services and support information) to health care
provider and service provider.
10A) Health care provider: Receives Support Schedule.
10B) Service provider: Receives Support Schedule, credits the health
care provider, and invoices USAC.
11) USAC: Approves invoice and reimburses service provider.
Source: GAO analysis of FCC and USAC information.
[A] A funding commitment letter explains that the application has been
approved and lists the amount of support the applicant may expect.
[End of figure]
FCC created the third component of the current Rural Health Care
Program, the pilot program, in September 2006 after acknowledging that
the primary Rural Health Care Program was "greatly underutilized."
[Footnote 20] FCC explained that "although there are a number of
factors that may explain the underutilization" of the program, it was
"apparent that health care providers continue to lack access to the
broadband facilities needed to support…advanced telehealth
applications."[Footnote 21] The pilot program funds 85 percent of the
costs of deploying dedicated broadband networks connecting rural and
urban health care providers, including the cost of designing and
installing broadband networks that connect health care providers in a
state or region, as well as the costs of advanced telecommunications
and information services that ride over that network. This is in
contrast to the primary Rural Health Care Program, which provides
discounts only on monthly recurring costs for telecommunications
services or Internet access to rural health care providers. The pilot
program also provides funding for the cost of connecting state or
regional networks to Internet2 or National LambdaRail[Footnote 22]--
two national networks that connect government research institutions as
well as academic, public, and private health care institutions--and
the costs of connecting to the public Internet. Any eligible public
and nonprofit health care provider--whether located in an urban or a
rural area--was eligible to apply for funding when the pilot program
was announced. However, the program rules required that applicants'
proposed networks include at least a de minimis number of public and
nonprofit health care providers that serve rural areas.
FCC received 81 applications from projects seeking to participate in
the pilot program. In November 2007, FCC announced that it had
accepted 69 of the 81 projects into the program and capped total
funding for all of the pilot projects at roughly $418 million over 3
years.[Footnote 23] Since then, a few projects have merged and 1
project has withdrawn from the program. The size and scope of the
remaining projects vary widely.[Footnote 24] For example, the Illinois
Rural HealthNet project is using pilot program funds to pay for the
installation of approximately 1,250 miles of buried fiber. The purpose
of this fiber is to create the backbone of a network that will connect
rural critical access hospitals, health clinics, and community mental
health centers to specialists throughout the state and nation. In
contrast, a project in Wisconsin is planning to use the pilot program
funds to link two existing fiber systems to establish connections
between four hospitals that allow health care specialists to transmit
images between facilities. (See the sidebar on this page for other
examples of pilot projects.)
[Sidebar:
Examples of Pilot Projects:
Pilot projects vary in their scope, planned activities, and award
amount. Listed below are two examples of projects participating in
the pilot program and their status as of July 2010.
Palmetto State Providers Network (South Carolina):
This project creates a private, statewide broadband network that links
rural caregivers in all 46 counties to the state’s academic and large
medical centers. Approximately 84 entities are connected to the network,
although more may be added. Ineligible health care entities are
permitted to join the network, assuming they pay a fee and the cost of
connecting to the network. In addition, the network provides a link to
Internet2. The project has indicated it will use the bandwidth
provided by the network to support telemedicine, telepsychiatry, high-
definition videoconferencing, and participation in a stroke
consultation program. Total award amount: $7,944,950.
Indiana Telehealth Network:
This project seeks to give hospitals access to dedicated Ethernet
transport from the individual hospitals to a common point in downtown
Indianapolis, where there will be a gateway to the public Internet.
The project will build fiber-optic cable directly into the hospitals
and will “light” the hospitals with gigabit Ethernet switches.
Connection speeds will range from 10 to 100 megabits per second.
Approximately 56 eligible health care providers in 41 counties will
benefit from the high-speed broadband connections. Total award amount:
$16,138,270.
End of sidebar]
USAC administers the pilot program pursuant to FCC's rules. Each pilot
project must designate a project coordinator and associate project
coordinator, who manage the administrative aspects of the program for
the project and submit the required forms. USAC provides each project
with a "coach"--that is, a designated Solix staff person who works
closely with a pilot project to assist the project through the
program's administrative requirements and processes.[Footnote 25] With
some exceptions, the pilot program forms and administrative processes
are the same as those previously described in the primary Rural Health
Care Program. However, pilot participants pay 15 percent of eligible
costs (and all ineligible costs), and the pilot program funds up to 85
percent of eligible costs. In addition, pilot participants must meet
additional requirements before they can receive funding:
* The lead entity in charge of the pilot project must obtain a letter
of agency from every entity participating in its project. This letter
authorizes the lead entity to act on the other entity's behalf in all
matters related to the pilot program.
* Pilot participants must develop a sustainability plan describing how
the project will be self-sustaining in the future, to include network
ownership and membership arrangements, and describing sources of
future support.
* Pilot participants are required to submit quarterly progress reports
describing the status of their project.
In February 2010, FCC's Wireline Competition Bureau extended by 1
year, to June 30, 2011, the deadline for participants in the pilot
program to submit to USAC requests for funding commitments.[Footnote
26]
FCC Has Not Performed the Analysis Necessary to Ensure That the
Primary Rural Health Care Program Meets the Needs of Rural Health Care
Providers:
Participation in the Program, Although Increasing, Has Not Met FCC
Projections and over Half of All Program Funds Are Used in Alaska:
Annual disbursements from the primary Rural Health Care Program have
increased from 1998 through 2009, yet they have never approached FCC's
original projections for participation. Figure 4 shows the total
amount of funds that have been disbursed for the primary Rural Health
Care Program from 1998 to 2009.
Figure 4: Cumulative Primary Rural Health Care Program Disbursements
(1998-2009):
[Refer to PDF for image: stacked vertical bar graph]
$400 million annual funding cap.
Year: 1998;
Cumulative disbursements: $3.4 million;
Year funding: $3.4 million;
Previous year's funding: 0.
Year: 1999;
Cumulative disbursements: $7.7 million;
Year funding: $4.3 million;
Previous year's funding: $3.4 million.
Year: 2000;
Cumulative disbursements: $18.0 million;
Year funding: $10.3 million;
Previous year's funding: $7.7 million.
Year: 2001;
Cumulative disbursements: $36.6 million;
Year funding: $18.6 million;
Previous year's funding: $8.0 million.
Year: 2002;
Cumulative disbursements: $40.2 million;
Year funding: $21.6 million;
Previous year's funding: $18.6 million.
Year: 2003;
Cumulative disbursements: $66.1 million;
Year funding: $25.9 million;
Previous year's funding: $40.2 million.
Year: 2004;
Cumulative disbursements: $97.1 million;
Year funding: $31.0 million;
Previous year's funding: $66.1 million.
Year: 2005;
Cumulative disbursements: $137.2 million;
Year funding: $40.1 million;
Previous year's funding: $97.1 million.
Year: 2006;
Cumulative disbursements: $182.3 million;
Year funding: $45.1 million;
Previous year's funding: $137.2 million.
Year: 2007;
Cumulative disbursements: $235.8 million;
Year funding: $53.5 million;
Previous year's funding: $182.3 million.
Year: 2008;
Cumulative disbursements: $285.4 million;
Year funding: $49.6 million;
Previous year's funding: $235.8 million.
Year: 2009;
Cumulative disbursements: $309.6 million;
Year funding: $24.2 million;
Previous year's funding: $285.4 million.
Source: GAO analysis of USAC data.
Note: This figure represents the amount of disbursements through July
31, 2010. Because of the application process, funding commitments and
disbursements may be made after a program year ends. Funding for 2008
and 2009 appear smaller than the previous years because a number of
commitments have not yet been invoiced and disbursed as of this date.
[End of figure]
USAC disbursed just over $327 million for the primary program from
1998 through 2009. Thus, as figure 4 illustrates, total program
expenditures in 12 years of disbursements have not yet reached the
single year funding cap of $400 million. Also, as of September 2010,
USAC has disbursed just over $26 million for the pilot program.
[Footnote 27] Therefore, USAC has disbursed less than $400 million for
all three components of the Rural Health Care Program since the
program began in 1998. (FCC does not collect $400 million each year
from telecommunications carriers for this program, but rather bases
collections only on projected expenditures. FCC uses a quarterly
evaluation of health care provider demand to assess how much
telecommunications companies must contribute to the Universal Service
Fund each quarter. This means that if FCC's proposed reforms create
more participation in the program, telecommunications companies would
need to pay more in Universal Service Fund contributions.
Telecommunications companies would likely pass these costs on to
consumers through higher universal service fees in consumers'
telephone bills.)
According to USAC data, primary Rural Health Care Program funding was
disbursed to all of the types of rural health care providers
designated by statute as eligible to participate in the program. As
figure 5 illustrates, over 68 percent of total applicants in 2008 were
either rural health clinics or not-for-profit hospitals.
Figure 5: Applicants, by Type of Eligible Primary Rural Health Care
Program Provider (2008):
[Refer to PDF for image: pie-chart]
Rural health clinic: 37.5%;
Not-for-profit hospital: 30.7%;
Community health center or health center providing health care to
migrants: 11.0%;
Local health department or agency: 10.7%;
Community mental health center: 8.8%;
Other[A]: 1.3%.
Source: GAO analysis of USAC data.
[A] The "other" category indicates postsecondary educational
institutions offering health care instruction, teaching hospitals or
medical schools, dedicated emergency departments of rural for-profit
hospitals that participate in Medicare, part-time eligible entities,
and consortia of health care providers consisting of one or more
eligible entities.
[End of figure]
As with disbursements, the number of applicants to the primary Rural
Health Care Program has generally increased since the program began.
Figure 6 shows the number of rural health care providers that have
applied to the primary Rural Health Care Program have increased from a
low of 1,283 applicants in 1999 to 4,014 in 2009.
Figure 6: Number of Primary Rural Health Care Program Applicants (1998-
2009):
[Refer to PDF for image: line graph]
Year: 1998;
Applicants: 2,693.
Year: 1999;
Applicants: 1,111.
Year: 2000;
Applicants: 1,375.
Year: 2001;
Applicants: 2,050.
Year: 2002;
Applicants: 2,282.
Year: 2003;
Applicants: 2,647.
Year: 2004;
Applicants: 3,016.
Year: 2005;
Applicants: 3,526.
Year: 2006;
Applicants: 3,411.
Year: 2007;
Applicants: 3,623.
Year: 2008;
Applicants: 3,663.
Year: 2009;
Applicants: 4,014.
Source: GAO analysis of USAC data.
Note: The number of applicants to the program dropped significantly
after the first year of the program. USAC officials said that, in
1998, many applicants started the application process when the program
was first launched, but after learning more program details, did not
complete the application process. After the first year, fewer
applicants started the process without completing it. In addition,
USAC officials said that the slight increase in 2005 can be attributed
to a temporary FCC provision that provided additional discounts for
advanced telecommunications and information services to health care
providers in the affected areas of Hurricane Katrina and in areas
where evacuees relocated.
[End of figure]
Similarly, the number of funding commitments issued to participants in
the primary Rural Health Care Program has exhibited a slow, steady
increase over time from 799 funding commitments in 1998 to 6,790 in
2008. Figure 7 shows the number of funding commitments by the type of
service requested (e.g., telecommunications services or Internet
access services[Footnote 28]).
Figure 7: Number of Funding Commitments, by Type of Service Requested
(1998-2008):
[Refer to PDF for image: stacked vertical bar graph]
Year: 1998;
Telecom: 799;
Internet: 0.
Year: 1999;
Telecom: 931;
Internet: 0.
Year: 2000;
Telecom: 1,299;
Internet: 0.
Year: 2001;
Telecom: 2,039;
Internet: 0.
Year: 2002;
Telecom: 2,640;
Internet: 0.
Year: 2003;
Telecom: 2,935;
Internet: 0.
Year: 2004;
Telecom: 3,547;
Internet: 670.
Year: 2005;
Telecom: 4,091;
Internet: 710.
Year: 2006;
Telecom: 4,289;
Internet: 938.
Year: 2007;
Telecom: 4,933;
Internet: 1,103.
Year: 2008;
Telecom: 5,429;
1,361.
Source: GAO analysis of USAC data.
Note: This figure represents the number of commitments through July
31, 2010. Because of the application process, funding commitments and
disbursements may be made after a program year ends. Funding for 2009
was not included in the figure because many commitments still needed
processing as of this date. Discounts for Internet access services
began in 2004.
[End of figure]
Funding commitments have varied considerably among applicants within
the states and territories, with almost 55 percent of the funding
going to applicants in Alaska. Disbursements range from over $178
million for Alaska to none for three states (Connecticut, New Jersey,
and Rhode Island). Health care providers in Wisconsin received the
second-largest disbursement, approximately $18.5 million (almost 5.7
percent) of all primary Rural Health Care Program funding. For a
snapshot of funding to applicants by state and territory, see appendix
II, which contains the numbers of applicants and amounts committed by
state for 2008. Table 1 shows the total amount of money that has been
committed and disbursed to applicants, by state, over the program's
history.
Table 1: Funds Committed and Disbursed to Applicants, by State and
Territory (1998-2009):
State: Alabama;
Committed amount: $1,244,270;
Disbursed amount: $1,046,086.
State: Alaska;
Committed amount: $210,847,884;
Disbursed amount: $178,341,754.
State: American Samoa;
Committed amount: $477,999;
Disbursed amount: $249,591.
State: Arizona;
Committed amount: $11,710,540;
Disbursed amount: $10,584,443.
State: Arkansas;
Committed amount: $2,317,205;
Disbursed amount: $1,943,684.
State: California;
Committed amount: $5,426,514;
Disbursed amount: $4,599,692.
State: Colorado;
Committed amount: $1,607,445;
Disbursed amount: $1,352,770.
State: Connecticut;
Committed amount: $0;
Disbursed amount: $0.
State: Delaware;
Committed amount: $825;
Disbursed amount: $475.
State: District of Columbia;
Committed amount: $0;
Disbursed amount: $0.
State: Florida;
Committed amount: $2,558,103;
Disbursed amount: $2,200,481.
State: Georgia;
Committed amount: $6,499,162;
Disbursed amount: $5,661,055.
State: Guam;
Committed amount: $245,612;
Disbursed amount: $172,841.
State: Hawaii;
Committed amount: $2,250,886;
Disbursed amount: $2,197,702.
State: Idaho;
Committed amount: $1,639,419;
Disbursed amount: $1,222,038.
State: Illinois;
Committed amount: $5,267,479;
Disbursed amount: $4,611,892.
State: Indiana;
Committed amount: $2,848,147;
Disbursed amount: $2,167,047.
State: Iowa;
Committed amount: $2,998,147;
Disbursed amount: $2,719,887.
State: Kansas;
Committed amount: $3,541,080;
Disbursed amount: $3,371,444.
State: Kentucky;
Committed amount: $4,178,284;
Disbursed amount: $3,868,426.
State: Louisiana;
Committed amount: $1,056,242;
Disbursed amount: $964,264.
State: Maine;
Committed amount: $325,451;
Disbursed amount: $283,445.
State: Maryland;
Committed amount: $418;
Disbursed amount: $418.
State: Massachusetts;
Committed amount: $504,947;
Disbursed amount: $485,983.
State: Michigan;
Committed amount: $8,395,508;
Disbursed amount: $7,240,863.
State: Minnesota;
Committed amount: $15,000,280;
Disbursed amount: $13,471,056.
State: Mississippi;
Committed amount: $1,281,168;
Disbursed amount: $1,203,554.
State: Missouri;
Committed amount: $2,075,678;
Disbursed amount: $1,594,763.
State: Montana;
Committed amount: $6,143,725;
Disbursed amount: $5,743,548.
State: Nebraska;
Committed amount: $10,692,417;
Disbursed amount: $10,137,736.
State: Nevada;
Committed amount: $631,106;
Disbursed amount: $508,815.
State: New Hampshire;
Committed amount: $94,413;
Disbursed amount: $85,158.
State: New Jersey;
Committed amount: $0;
Disbursed amount: $0.
State: New Mexico;
Committed amount: $3,824,239;
Disbursed amount: $2,917,260.
State: New York;
Committed amount: $487,496;
Disbursed amount: $414,847.
State: North Carolina;
Committed amount: $2,120,879;
Disbursed amount: $1,851,398.
State: North Dakota;
Committed amount: $6,805,852;
Disbursed amount: $5,921,101.
State: Ohio;
Committed amount: $1,887,774;
Disbursed amount: $1,636,512.
State: Oklahoma;
Committed amount: $2,714,135;
Disbursed amount: $1,783,742.
State: Oregon;
Committed amount: $1,103,373;
Disbursed amount: $978,239.
State: Pennsylvania;
Committed amount: $625,395;
Disbursed amount: $509,191.
State: Rhode Island;
Committed amount: $0;
Disbursed amount: $0.
State: South Carolina;
Committed amount: $301,719;
Disbursed amount: $265,577.
State: South Dakota;
Committed amount: $7,281,519;
Disbursed amount: $6,632,480.
State: Tennessee;
Committed amount: $1,547,336;
Disbursed amount: $1,213,735.
State: Texas;
Committed amount: $4,692,568;
Disbursed amount: $4,139,973.
State: U.S. Virgin Islands;
Committed amount: $718,615;
Disbursed amount: $700,027.
State: Utah;
Committed amount: $4,901,956;
Disbursed amount: $4,417,855.
State: Vermont;
Committed amount: $546,798;
Disbursed amount: $498,419.
State: Virginia;
Committed amount: $4,390,239;
Disbursed amount: $3,846,751.
State: Washington;
Committed amount: $801,684;
Disbursed amount: $683,945.
State: West Virginia;
Committed amount: $1,213,317;
Disbursed amount: $1,097,853.
State: Wisconsin;
Committed amount: $21,304,567;
Disbursed amount: $18,520,375.
State: Wyoming;
Committed amount: $1,283,544;
Disbursed amount: $1,206,401.
State: Total;
Committed amount: $380,413,359;
Disbursed amount: $327,266,593.
Source: GAO analysis of USAC data.
Note: This table represents the amount of commitments and
disbursements through July 31, 2010, for funding years 1998 through
2009. U.S. territories that have never received commitments or
disbursements are not included in the table. Funds are distributed to
service providers, not directly to states.
[End of table]
Figure 8 shows the total dollar amount disbursed across the United
States for funding year 2008, by ZIP code, illustrating the wide
variation in geographic use and the heavy concentration of funding in
Alaska.
Figure 8: Total Dollar Amount Committed for Funding Year 2008, by ZIP
Code:
[Refer to PDF for image: illustrated U.S. map]
The following are indicated on the map:
Dollars, by ZIP code:
Less than $10,000;
$10,000 to less than $50,000;
$50,000 to less than $100,000;
$100,000 or more.
Source: GAO analysis of USAC data.
[End of figure]
According to FCC and USAC staff, health care providers in Alaska
dominate use of the primary Rural Health Care Program because Alaska's
rural areas often require expensive satellite telecommunications
services. Alaska's vast size, harsh winter weather, and sparse
population make fiber networks and other technologies either too
expensive or too infeasible. Some wireless technologies also can be
challenging, since Alaskan terrain often includes mountains or forests
that can obstruct line-of-sight transmission. As a result, satellite
is often the most feasible option for many rural communities in
Alaska. Although the cost of telecommunications service in rural areas
can vary considerably, satellite service can cost up to $13,000 per
month,[Footnote 29] creating a significant difference in urban and
rural rates in parts of Alaska, and making FCC's Rural Health Care
Program particularly attractive under such circumstances.
We also found that, according to USAC data, FCC and USAC have been
successful in disbursing committed funds in the primary Rural Health
Care Program. Table 1 shows that USAC generally disburses most of the
funds that are committed to rural health care providers. Of the more
than $380 million committed for the program, over $327 million (over
86 percent) has been disbursed, leaving just over $53 million that has
been committed but not disbursed since the program began. Some of this
$53 million in remaining money will eventually be disbursed as USAC
closes more recent funding years.[Footnote 30]
FCC Has Not Assessed the Telecommunications Needs of Rural Health Care
Providers to Guide the Evolution of the Rural Health Care Program:
A needs assessment is crucial to both the effective design of new
programs and the assessment of existing programs.[Footnote 31] The
primary purpose of a needs assessment is to identify needed services
that are lacking (in this case, telecommunications services for rural
health care providers) relative to some generally accepted standard.
By establishing measures of comparison, program managers can more
accurately determine how well their programs are doing in meeting the
needs of the targeted population of the program. We have previously
recommended that needs assessments include the following
characteristics:
* benchmarks to define when needs have increased or decreased,
* a plan to determine how needs assessment results will be prioritized
in supporting resource allocation decisions, and:
* integration of information on other resources available to help
address the need.[Footnote 32]
However, throughout its 12 years of managing the program, FCC has not
conducted a comprehensive needs assessment to learn how the program
can best target the telecommunications needs of rural health care
providers within the broad latitude provided by Congress in the 1996
Act.
When designing the $400 million annual spending cap for the Rural
Health Care Program, FCC officials noted the scarcity of information
available about the universe of eligible providers, and what it might
cost to meet the providers' telecommunications needs.[Footnote 33] As
our analysis showed, the current $400 million spending cap is not
based on meaningful estimates of program participation. FCC stated in
its 1997 report and order that the Rural Health Care Program spending
cap is "based on the maximum amount of service that we have found
necessary and on generous estimates of the number of potentially
eligible rural health care providers."[Footnote 34] FCC acknowledged
at the time that it expected actual program disbursements to be less
than the cap for a number of reasons.[Footnote 35] Although FCC
expected program disbursement to be under $400 million annually, on
multiple occasions, FCC has released documents stating that the
primary Rural Health Care Program is underutilized.[Footnote 36] For
example, in its 2006 pilot program order, FCC states that the primary
Rural Health Care Program "continues to be greatly underutilized and
is not fully realizing the benefits intended by the statute and our
rules. In 1997, we authorized $400 million per year for funding of
this program. Yet, in each of the last 10 years, the program generally
has disbursed less than 10 percent of the authorized funds."[Footnote
37]
When we asked FCC officials what acceptable utilization of the program
would mean, they said that they did not know, but that program
utilization would include disbursing funds somewhere between 10
percent and 100 percent of the allowable cap. FCC's repeated claim
that the program is underutilized, without a more specific vision of
what utilization would mean, is troublesome. No needs assessment has
been conducted to show that the program is, in fact, underutilized. A
comprehensive needs assessment could provide useful information to FCC
to help officials envision acceptable program utilization--that is,
how many providers actually need services, rather than just how many
providers are eligible to participate under program rules.
As part of our review, we interviewed knowledgeable stakeholders to
identify potential reasons for FCC's reported underutilization. These
reasons include the following:
* Some health care providers lack the infrastructure (e.g., the
broadband facilities needed to support telemedicine) to use advanced
telecommunications services.
* The application process is too complex and cumbersome to justify
participation.
* The 25 percent Internet subsidy is not large enough to encourage
participation.
* The difference between urban and rural telecommunications rates is
negligible or not significant enough to justify resources toward
program participation.[Footnote 38]
* Rural health care providers do not have enough administrative
support to apply to the program annually.
* Some eligible health care providers may not know about the program.
* Statutory restrictions prevent support to certain providers who
might benefit from the program (e.g., emergency medical technicians).
[Footnote 39]
* Some health care providers cannot afford expensive telemedicine
equipment;[Footnote 40] therefore, they are not concerned with gaining
access to the telecommunications services needed to use that equipment.
* Some Medicare and Medicaid rules, including reimbursement
limitations, may inhibit the use of telemedicine technologies;
therefore, health care providers may not be concerned with gaining
access to the telecommunications services needed to support those
technologies.[Footnote 41]
Despite these and other issues, we were also told that many of the
current program participants are dependent on the benefits they
receive from the primary Rural Health Care Program.
Although it lacks a needs assessment, FCC has made multiple changes to
the primary Rural Health Care Program over time in an attempt to
address underutilization and better meet providers' needs. For example:
* In a 2003 report and order, FCC provided support for rural health
care providers to obtain a 25 percent discount off the cost of monthly
Internet access services. The 2003 report and order states: "Because
participation in the rural health care support mechanism has not met
the Commission's initial projections, we amend our rules to improve
the program, increase participation by rural health care providers,
and ensure that the benefits of the program continue to be distributed
in a fair and equitable manner."[Footnote 42]
* In a 2004 report and order, FCC changed the definition of "rural,"
revised its rules to expand funding for mobile rural health care
services, and allowed a 50 percent subsidy (rather than 25 percent)
for Internet access services for health care providers in entirely
rural states.[Footnote 43] According to USAC, this report and order
increased the number of health care providers eligible to participate
in the primary Rural Health Care Program by adding new rural areas
while grandfathering health care providers in areas no longer defined
as rural.[Footnote 44]
* In a 2006 order, FCC announced the pilot program, which will be
discussed in greater detail in the next section of this report. FCC
created the pilot program to address two potential reasons for the
primary Rural Health Care Program's possible underutilization: lack of
infrastructure and access to dedicated broadband networks.
Without a needs assessment, however, FCC does not have key information
regarding the extent to which any of these reasons actually impacted
the primary Rural Health Care Program's participation rate.[Footnote
45] FCC officials told us that the changes FCC has made to the program
were based primarily on information gathered through the agency's
notice and comment procedures and internal deliberations. FCC
officials told us that this is how FCC--as a federal regulatory
agency--conducts its business pursuant to the Administrative Procedure
Act (APA).[Footnote 46] However, there is nothing in the APA process
that would have precluded FCC from conducting a formal needs
assessment. Using data-based assessments to supplement the information
gained through FCC's regulatory procedures would enhance FCC's ability
to fulfill its role as the manager of the Rural Health Care Program.
Specifically, if FCC had obtained data through a formal needs
assessment, it may have been able to more accurately ascertain why
some rural health care providers are not participating, and have
better ensured that programmatic changes achieved the intended results.
To FCC's credit, one of the proposed changes in the 2010 NPRM--that
FCC replace the current Internet Access Fund with a new Health
Broadband Services Program (as previously shown in figure 2)--appears
to have been based, in part, on a data-based assessment. FCC
recommends that the new program subsidize 50 percent of an eligible
rural health care provider's recurring monthly costs for any advanced
telecommunications and information services that provide point-to-
point connectivity, including dedicated broadband access, instead of
the current program's 25 percent discount on monthly Internet service.
[Footnote 47] FCC provided us with results from some modeling that the
agency conducted using various scenarios to try to ascertain the
possible effects of moving to a 50 percent discount level.[Footnote
48] While the data generated from the modeling will be helpful to FCC
in its decision-making process, the information generated was mostly
to understand the possible effects on the funding from new
participants entering the program or from current participants moving
from one funding mechanism to the new program. FCC staff said that
they expect the proposed change will increase the use of the program,
and that FCC recently sought public comment on the proposed 50 percent
discount. A more formal needs assessment, however, would supplement
this information and help FCC determine whether the change will
address the most critical needs of rural health care providers and
whether 50 percent is the most appropriate subsidy.
To develop the National Broadband Plan, an FCC task force recently
undertook an initial analysis to quantify some of the broadband needs
of rural health care providers. The task force examined the locations
of institutions within FCC's geographic definition of rural and
concluded that less than 25 percent of the approximately 11,000
eligible institutions are currently participating in the Rural Health
Care Program.[Footnote 49] However, without fully understanding the
telecommunications and broadband needs of rural health care providers,
FCC may have difficulty in determining why the other 75 percent of
eligible institutions are not participating. Moreover, if FCC does not
conduct an effective needs assessment, it will not have the
information necessary to determine whether the design of the proposed
new Health Broadband Services Program will effectively meet providers'
needs and will target available funds to the areas of greatest need.
FCC's Poor Planning and Communication during the Design and
Implementation of the Pilot Program Caused Delays and Difficulties:
FCC's Limited Collaboration with USAC, Federal Agencies, and Other
Knowledgeable Stakeholders Affected Pilot Program Design:
FCC missed multiple opportunities to collaborate with USAC, federal
agencies, and other knowledgeable stakeholders when designing the
pilot program. These stakeholders all could have provided useful
insights into FCC's design of the pilot program. Such consultations
could have helped FCC better identify potential pitfalls in its pilot
program design as well as meaningful opportunities to leverage federal
resources and ensure that the pilot program targeted rural health care
providers' needs in the most efficient way.
Although USAC officials had 9 years' experience working with the rural
health care community and administering the primary Rural Health Care
Program, FCC did not consult with USAC officials prior to issuing the
2006 order calling for applications to the pilot program. Our prior
work has noted the importance of involving stakeholders (including
third-party administrators like USAC) when designing, implementing,
and evaluating programs.[Footnote 50] FCC officials stated that they
did not consult with USAC because USAC does not formulate policy.
However, USAC's experience with the primary Rural Health Care Program
may have provided FCC with valuable insights into how to design a
pilot program, particularly regarding the administrative processes and
forms. For example, FCC's decision to use the primary program's forms
and processes for the pilot program led to a complicated
administrative process, particularly since some aspects of the primary
Rural Health Care Program's forms and administrative processes were
ill-suited to the pilot program. Because FCC used primary program
forms rather than creating new and more tailored ones for the pilot
program, the forms required complicated attachments.[Footnote 51]
According to our survey of pilot project representatives, of the 57
respondents[Footnote 52] that expressed an opinion, 38 respondents
rated assembling their request for proposals (RFP)[Footnote 53]
package (Form 465 package) as "very difficult" or "somewhat
difficult." In addition, 27 of the 42 respondents that provided an
opinion rated assembling their requests for funding (Form 466-A
packages) as "very difficult" or "somewhat difficult." Solix officials
agreed that pilot participants seemed to have difficulty in completing
these forms and attachments.
FCC also missed opportunities to coordinate with other federal
agencies when designing the pilot program. We have noted that a lack
of collaboration among federal agencies can lead to a patchwork of
programs that can waste scarce funds, confuse and frustrate program
customers, and limit the overall effectiveness of the federal effort.
[Footnote 54] A number of federal agencies are involved in
telemedicine efforts, and some provide funds to health care providers
that could complement FCC's pilot program. For example, the Health
Resources and Services Administration (HRSA), the primary federal
agency for improving access to health care services for people who are
uninsured, isolated, or medically vulnerable, administers a Telehealth
Network Grant Program that provides funds to projects to demonstrate
how telehealth programs and networks can improve access to quality
health care services in underserved rural and urban communities.
However, with USDA being the one exception, FCC did not contact other
federal agencies prior to announcing the pilot program in 2006. FCC
officials told us that after announcing the creation of the pilot
program in 2006,[Footnote 55] they met with representatives from
various agencies within HHS[Footnote 56] in 2007, to discuss
coordination. Representatives from some of these agencies reported
that these meetings were primarily informational, with FCC explaining
its pilot program to them, and that no strategies for collaboration or
follow-up were developed. USDA officials stated that FCC officials met
with them prior to announcing the pilot program to discuss USDA's
Distance Learning and Telemedicine Program, including how USDA scored
applications and evaluated the program.[Footnote 57] However, it is
unclear how FCC used the information that USDA provided, since similar
information was not provided in FCC's call for applications or order
selecting pilot projects. According to federal and other stakeholders,
officials at other agencies also could have:
* provided FCC with an understanding of rural health care providers'
needs, potential information technology (IT) issues, and how to design
a more user-friendly program and:
* helped FCC identify additional appropriate service providers, one of
which had to petition to be included.[Footnote 58]
FCC also did not request public comment on its proposed design for the
pilot program. Although FCC did request comments in 2004 on providing
some infrastructure support by funding upgrades to the public switched
or backbone networks, FCC did not imply that it was considering a
pilot program to fund the creation of private networks, or provide
specific details on how such a program would operate.[Footnote 59] We
have previously reported that FCC's use of NPRMs to pose broad
questions without providing actual rule text can limit stakeholders'
ability to determine either what action FCC is considering or what
information would be most helpful to FCC when developing a final
rule.[Footnote 60] FCC officials said that they did not issue a Notice
of Inquiry (NOI) regarding the pilot program because the process would
have delayed the pilot program. However, providing the public with
advance notice of proposed changes and an opportunity to comment on
them is desirable in that it allows agencies, according to a 2006
resource guide, to "find out earlier rather than later about views and
information adverse to the agency's proposal or bearing on its
practicality."[Footnote 61] Similarly, in comments submitted to FCC,
the National Telecommunications Cooperative Association,[Footnote 62]
observed that "interested or affected parties had no opportunity to
explore with the Commission various aspects of the Pilot Program."
[Footnote 63] In addition, industry concerns regarding the funding of
redundant networks arose after the implementation of the pilot
program.[Footnote 64] If FCC had provided a more detailed explanation
of the proposed pilot program and requested comment prior to
establishing the program, it may have been better prepared to address
these concerns.[Footnote 65]
Pilot Participants Have Experienced Delays and Difficulties, in Part,
Because FCC Did Not Fully Establish Requirements Prior to Calling for
Applications and Did Not Provide Effective Program Guidance:
Pilot Participants Have Experienced Delays and Difficulties for Many
Reasons:
FCC called for applications to participate in the pilot program before
it fully established pilot program requirements. This, along with the
addition of requirements as the pilot program has progressed, has led
to delays and difficulties for pilot participants. Most importantly,
the entire pilot program itself has been delayed. Participants may
issue multiple RFPs as they progress through various stages of
designing and constructing their networks, but the deadline for pilot
participants to submit all of their requests for funding (projects
submit at least one Form 466-A for each RFP they issue) to USAC was
June 30, 2010. On February 18, 2010, FCC extended this deadline by 1
year, to June 30, 2011.[Footnote 66] According to USAC data, at the
time of the extension, projects had requested 11 percent of the
roughly $418 million in total program funding. As of July 31, 2010,
projects had requested 17 percent of the total program funding. As
shown in figure 9, as of July 31, 2010, 28 projects (45 percent) have
received at least one funding commitment letter, but 18 projects (29
percent) had not yet posted an RFP.
Figure 9: Status of Pilot Projects as of July 31, 2010:
[Refer to PDF for image: pie-chart]
Project has received at least one funding commitment letter from USAC
(28): 45%;
Project is close to requesting funding from USAC (11): 18%;
Project is active, but not close to posting an RFP (10): 16%;
Project is in the competitive bidding process (includes bid evaluation
and contract negotiation) (5): 8%;
Project is inactive (4): 6%;
Project is about to post an RFP for competitive bidding (4): 6%.
Source: GAO analysis of USAC data.
Note: Percentages do not add to 100 percent due to rounding.
[End of figure]
According to our survey, delayed and inconsistent guidance led to
delays for many pilot projects. In addition, it appears pilot
participants have struggled with requirements that were added at the
same time that FCC announced the pilot participant selections, such as
the need to obtain letters of agency. Figure 10 indicates the number
of survey respondents reporting whether they experienced certain
issues during the course of their project, and the number of
respondents that reported they were delayed by that issue.
Figure 10: Issues That Delayed Pilot Projects:
[Refer to PDF for image: vertical bar graph]
Issue: Delays in guidance;
Experienced: 44;
Delayed: 36.
Issue: Difficulty in submitting entity eligibility documentation;
Experienced: 39;
Delayed: 36.
Issue: Difficulty in developing a sustainability plan;
Experienced: 39;
Delayed: 33.
Issue: Difficulty with internal project resources;
Experienced: 39;
Delayed: 32.
Issue: Change in project's scope;
Experienced: 37;
Delayed: 32.
Issue: Inconsistent guidance;
Experienced: 37;
Delayed: 31.
Issue: Difficulty in obtaining letters of agency;
Experienced: 34;
Delayed: 27.
Issue: Pursued or considered pursuing Recovery Act[A];
Experienced: 33;
Delayed: 17.
Issue: Delays in USAC's processing of your forms;
Experienced: 30;
Delayed: 27.
Issue: Difficulty in securing project's 15% match;
Experienced: 27;
Delayed: 17.
Issue: Difficulty in submitting expense eligibility documentation;
Experienced: 20;
Delayed: 18.
Source: GAO analysis of Pilot Participant Survey data.
[A] American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5,
123 Stat. 115 (Feb. 17, 2009).
[End of figure]
Table 2 reports the results from our survey question that asked pilot
participants to rate the ease or difficulty of performing various
program tasks. Four of the tasks rated as "very difficult" or
"somewhat difficult" by more than half of the respondents that
provided an opinion fall into one of two categories: the task is
associated with program processes and forms that were carried over
from the primary Rural Health Care Program (Form 465 and Form 466-A),
or the task is a requirement FCC added, but that was not mentioned in
the initial call for applications (developing a sustainability plan
and obtaining letters of agency). In addition, when asked to list the
top three things that program officials should change if FCC
established a new, permanent program with goals similar to those of
the pilot program, simplifying or improving the administrative process
was the most frequently mentioned issue.[Footnote 67]
Table 2: Requirements Rated "Very Difficult" or "Somewhat Difficult"
by More Than Half of Survey Respondents That Provided an Opinion
(Listed in Order of Overall Difficulty Rating):
Ease or difficulty of performing various program tasks: Funding
ineligible expenses (e.g., administrative costs);
Number of respondents rating this task as "very difficult" or
"somewhat difficult:" 36;
Total number of respondents: 51.
Ease or difficulty of performing various program tasks: Assembling the
Form 465 package;
Number of respondents rating this task as "very difficult" or
"somewhat difficult:" 38;
Total number of respondents: 57.
Ease or difficulty of performing various program tasks: Developing a
sustainability plan thus far;
Number of respondents rating this task as "very difficult" or
"somewhat difficult:" 37;
Total number of respondents: 58.
Ease or difficulty of performing various program tasks: Completing the
Form 466-A package;
Number of respondents rating this task as "very difficult" or
"somewhat difficult:" 27;
Total number of respondents: 42.
Ease or difficulty of performing various program tasks: Completing
invoices;
Number of respondents rating this task as "very difficult" or
"somewhat difficult:" 13;
Total number of respondents: 23.
Ease or difficulty of performing various program tasks: Obtaining
letters of agency;
Number of respondents rating this task as "very difficult" or
"somewhat difficult:" 30;
Total number of respondents: 58.
Source: GAO analysis of Pilot Participant Survey data.
[End of table]
FCC's Call for Applications Did Not Include Needed Information about
the Eligibility of Entities, Expenses, and How to Meet the Match
Requirement:
The Grant Accountability Project, a 2005 Domestic Working Group
chaired by the former United States Comptroller General, notes that an
agency's ability to ensure that funds are used as intended is impacted
when the terms, conditions, and provisions in award agreements are not
well-written.[Footnote 68] The group also notes that a thorough
assessment of proposed projects can reduce the risk that money may be
wasted or projects may not achieve intended results. However, FCC did
not fully establish the requirements of the pilot program before it
requested applications, and it required projects to provide additional
information after they were accepted into the program. This led to
delays because (1) participants needed additional guidance on how to
meet the requirements and (2) Solix staff (under USAC direction) had
to retroactively review projects to determine the eligibility of the
participating entities and activities. In addition, some participants
faced difficulties in funding ineligible expenses. In contrast, other
federal agencies generally provide extensive detail on program rules
when calling for applications for competitive funding programs,
including the criteria by which applications will be judged and how
the criteria will be weighted. For example, USDA's 2010 Distance
Learning and Telemedicine Program Grant Application Guide provides
potential applicants with specific information on eligible uses for
the funds, eligible match funding, copies of the forms to be used, and
information on the application scoring process.[Footnote 69]
FCC's 2006 order establishing the pilot program and calling for
applications[Footnote 70] did not provide detailed information on many
essential aspects of the program, including:
* which entities would be eligible to participate in the program (FCC
provided a legal citation, but no actual text);
* which expenses could be paid for with program funds; and:
* how projects could fund their 15 percent match.
After issuing its call for applications, FCC did provide some of this
information on its Frequently Asked Questions Web page[Footnote 71] on
the pilot program. However, this information may not have reached all
interested parties, and it would have been more efficient to determine
these issues in advance of requesting applications. FCC also provided
some of this information in its 2007 order; however, by this time, FCC
was also announcing which projects were selected.[Footnote 72] FCC did
not fully screen applications to determine the extent to which their
proposed activities and entities would be eligible for funding. Thus,
several of the accepted projects had ineligible components.
Specifically, based on survey respondents that provided a substantive
answer:[Footnote 73]
* 25 of 59 respondents included an entity that was determined to be
ineligible,
* 25 of 57 respondents included an expense that was determined to be
ineligible, and:
* 10 of 59 respondents relied on ineligible sources to fund their
match.
The lack of established criteria and an in-depth screening prior to
announcing pilot project awards led to a lengthy process by which
Solix staff (under USAC direction) determine the eligibility of
entities postaward. Pilot participants must submit documentation for
every entity in their project, which Solix staff then review to
determine eligibility. According to our survey, 36 of 60 respondents
were delayed by difficulties in compiling and submitting the
documentation needed to establish entity eligibility. In addition,
although 39 survey respondents rated the current program guidance
regarding entity eligibility as "very clear" or "somewhat clear"; some
confusion remains, as 20 pilot participants rated the current guidance
as "slightly clear" or "not at all clear."[Footnote 74] FCC's 2007
order also notes that program administration costs, such as personnel,
travel, legal, marketing, and training costs, are ineligible for
program funding. Pilot participants have indicated in written comments
to FCC that they did not anticipate that administrative costs would
not be eligible for funding, and some have faced challenges in funding
these costs themselves. In our survey, 36 of 51 respondents indicated
that funding ineligible costs, including administrative costs, has
been "very difficult" or "somewhat difficult." In addition, when asked
to list the top three things that program officials should change if
FCC established a new, permanent program with goals similar to those
of the pilot program, providing funding for administrative costs was
the second-most frequently mentioned issue.[Footnote 75]
FCC Introduced New Requirements after Its Call for Applications and
Selection of Pilot Participants:
FCC's 2007 order also introduced new requirements that were not
mentioned in the 2006 order. For example, while the 2006 order states
that the pilot program would use the same forms and administrative
processes used in the primary Rural Health Care Program,[Footnote 76]
the 2007 order also requires projects to secure a letter of agency
from every entity participating in a project.[Footnote 77] This letter
authorizes the lead project coordinator to act on the signing agency's
behalf. Since a number of the selected pilot program participants
included providers that were also participating in another
participant's proposed network, FCC noted that the letter of agency
would demonstrate that the entity has agreed to participate in the
network and prevent improper duplicate support for providers
participating in multiple networks.[Footnote 78] Considering that FCC
encouraged applicants to create statewide networks, some projects have
hundreds of participating entities, creating the need for such
projects to secure hundreds of letters of agency. The letter of agency
requirement has proven extremely time-consuming and resource-intensive
for some projects. According to our survey, 34 of 60 respondents faced
difficulties in securing letters of agency, and 27 of these
respondents were delayed because of these difficulties. (See figure
10.)
Similarly, according to our survey results, FCC has not provided
sufficient guidance to pilot projects on how to meet FCC's requirement
that projects comply with HHS health IT initiatives. In response to a
letter from HHS, FCC outlined a number of requirements in its 2007
selection order that pilot program participants should meet to ensure
that their pilot projects were consistent with HHS health IT
initiatives.[Footnote 79] FCC officials stated that the explanation of
the requirements in its 2007 selection order, in addition to a
guidance document created in 2008, provided guidance for the pilot
projects in how to meet these requirements. However, one HHS official
described the language in the 2007 selection order as vague and in
need of an update. In addition, the 2008 guidance document has not
been revised to reflect new developments in interoperability
specifications and certification programs. Currently, pilot
participants are required to explain in each quarterly report how they
are complying with the HHS health IT requirement. However, 34 of 47
survey respondents who provided an opinion stated the guidance
provided on how to meet these requirements was "slightly sufficient"
or "not at all sufficient."[Footnote 80]
Following the release of the 2007 order, FCC created additional
requirements as the program progressed and did not provide program
guidance in a timely manner on how to meet these requirements. For
example, FCC stated in its 2007 award order that selected pilot
participants generally "provided sufficient evidence that their
proposed networks will be self-sustaining by the completion of the
pilot program."[Footnote 81] However, program officials began
requiring more detailed sustainability plans in the fall of 2008,
after some projects had gone through the competitive bidding process
and had requested funding commitment letters from USAC. Outside of an
October 24, 2008, letter to USAC in which FCC noted that participants
should "disclose all sources or potential sources of revenue that
relate to the network" and intentions to sell or lease excess capacity
[Footnote 82] in the project's sustainability plan,[Footnote 83] FCC
did not provide any other written guidance on what specific
information should be included in participant's sustainability plans
until April 2009. At that time, FCC posted an item to its Frequently
Asked Questions Web page that suggested more information to be
included in a participant's sustainability plan, including status of
obtaining the match, projected sustainability period, network
membership agreements, ownership structure, sources of future support,
and management structure. USAC and Solix officials noted that some
pilot participants believed that because their application was
accepted by FCC, they met all of the program requirements for
sustainability. In some cases, this misunderstanding led to confusion
and disagreements between the pilot participants and program officials
regarding the need for additional information and the amount of time
that a sustainability plan should cover. Moreover, it appears some
confusion remains. When asked to rate their satisfaction with any
guidance they received thus far on how to develop a sustainability
plan, 21 of the 60 survey respondents that provided an opinion were
"very dissatisfied" or "somewhat dissatisfied."[Footnote 84] In
addition, 39 of 59 survey respondents faced difficulties in developing
a sustainability plan; 33 of these respondents stated that
difficulties in developing a sustainability plan have delayed their
projects. (See figure 10.)
Program Guidance Is Not Provided in an Effective Manner:
In addition, because FCC is responsible for all policy decisions
regarding the pilot program, unique or difficult situations are
typically referred from USAC to FCC for its decision. The need for
such consultations is compounded by an absence of formal written
guidance for USAC and pilot participants. We have reported that
information should be recorded and communicated to management and
others who need it in a form and within a time frame that enables them
to carry out their responsibilities.[Footnote 85] FCC staff stated
that, in some cases, they have not provided written guidance because
they want the pilot program to remain flexible. However, in some
cases, it has taken several months for FCC to make a decision or
provide guidance on issues.[Footnote 86] However, it appears that
pilot participants are dissatisfied with certain elements of program
guidance. As noted in figure 11, of the 59 respondents that provided
an opinion, 32 respondents were "very dissatisfied" or "somewhat
dissatisfied" with the clarity of program guidance, and 28 respondents
were "very dissatisfied" or "somewhat dissatisfied" with the amount of
formal written guidance. In addition, as we note in figure 10, 37 of
60 respondents stated that they had received inconsistent guidance.
Similarly, when asked to list the top three things that program
officials should change if FCC established a new, permanent program
with goals similar to those of the pilot program, providing more
guidance and templates was the third-most frequently mentioned issue.
[Footnote 87]
Figure 11: Survey Respondents' Satisfaction with Program
Communications:
[Refer to PDF for image: vertical bar graph]
Response: The amount of formal written guidance;
Somewhat or very satisfied: 22;
Neither satisfied nor dissatisfied: 9;
Somewhat or very dissatisfied: 28.
Response: The overall clarity of any program guidance;
Somewhat or very satisfied: 21;
Neither satisfied nor dissatisfied: 6;
Somewhat or very dissatisfied: 32.
Response: The timeliness of program officials' responses to your
questions;
Somewhat or very satisfied: 30;
Neither satisfied nor dissatisfied: 6;
Somewhat or very dissatisfied: 23.
Response: The timeliness of program officials' review of your forms;
Somewhat or very satisfied: 32;
Neither satisfied nor dissatisfied: 5;
Somewhat or very dissatisfied: 22.
Source: GAO analysis of Pilot Participant Survey data.
[End of figure]
In addition, although FCC recognized in its 2006 order calling for
applications that ineligible entities may be participating in the
networks and would need to pay their fair share of costs, FCC chose
not to establish detailed guidance on how to address such issues prior
to establishing the program. Instead, FCC provided guidance as
questions arose from USAC (USAC's first request about how to determine
fair share was in June 2007 when it was noted that a substantial
number of ineligible entities were included in applications submitted
to FCC) and from pilot program participants.[Footnote 88] According to
USAC officials, questions concerning payment of fair share or
incremental costs for excess capacity shared with ineligible entities
occurred at the pilot program training in February 2008 and continued
from participants to USAC and from USAC to FCC throughout 2008. The
most recent FCC guidance was a March 2009 matrix outlining nine
scenarios in which excess capacity could be used. However, issues
regarding excess capacity remain. FCC's July 2010 NPRM notes that
"rules governing the sharing of this subsidized infrastructure are
necessary to prevent waste, fraud and abuse," and requested comment on
a number of detailed questions regarding the sharing of excess
capacity with ineligible entities, different methods for allocating
costs among entities, providing excess capacity for community use, and
what types of guidance are needed.[Footnote 89] According to our
survey, 21 of 60 respondents indicated that their project "definitely"
or "probably" will include excess capacity.
Participants Reported That the Benefits Afforded by the Pilot Program
Are Worth the Costs of Participating, and They Were Generally Positive
about Program Officials:
Although there have been some challenges, many pilot participants
emphasized the importance of the pilot program in their responses to
our survey as well as in comments submitted to FCC. According to our
survey, if pilot participants are able to accomplish their pilot
project goals:
* 55 of 57 respondents indicated their project "definitely" or
"probably" will have entities that obtain telecommunications or
Internet services that would otherwise be unaffordable;
* 48 of 55 respondents indicated their project "definitely" or
"probably" will have entities obtain telecommunications or Internet
services that would otherwise be unobtainable due to lack of
infrastructure; and:
* 58 of 59 respondents indicated that their project "definitely" or
"probably" will have entities upgrade an existing telecommunications
or Internet service.
In addition, when asked to consider their current understanding of the
costs and administrative requirements of participating in the pilot
program, 52 of 57 respondents reported that the pilot program's
benefits will outweigh the costs of participating in the program.
Pilot participants were also generally positive about the usefulness
of program officials, in particular their coach. When asked to list
the top three things that program officials did well in their
administration of the program, respondents provided positive opinions
about their communications with program officials, the effort put
forth by program officials, and the coaches or the coaching concept.
[Footnote 90] These responses are consistent with those provided to
another question that rated program officials--be they FCC, USAC, or a
project coach--as the most useful resource for pilot participants.
(See figure 12.)
Figure 12: Respondents' Ratings of Pilot Program Resources:
[Refer to PDF for image: stacked horizontal bar graph]
Percentage of respondents that provided an opinion: USAC coach;
Extremely or very useful: 62%;
Moderately useful: 13%;
Slightly or not at all useful: 25%.
Percentage of respondents that provided an opinion: FCC officials and
staff;
Extremely or very useful: 60%;
Moderately useful: 23%;
Slightly or not at all useful: 17%.
Percentage of respondents that provided an opinion: USAC staff other
than your coach;
Extremely or very useful: 59%;
Moderately useful: 21%;
Slightly or not at all useful: 20%.
Percentage of respondents that provided an opinion: USAC's SharePoint
Web site;
Extremely or very useful: 45%;
Moderately useful: 38%;
Slightly or not at all useful: 17%.
Percentage of respondents that provided an opinion: USAC training
events:
Extremely or very useful: 36%;
Moderately useful: 30%;
Slightly or not at all useful: 34%.
Percentage of respondents that provided an opinion: Formal guidance
from FCC;
Extremely or very useful: 34%;
Moderately useful: 34%;
Slightly or not at all useful: 32%.
Percentage of respondents that provided an opinion: Monthly USAC
conference calls;
Extremely or very useful: 30%;
Moderately useful: 22%;
Slightly or not at all useful: 48%.
Percentage of respondents that provided an opinion: USAC's Web page
for the program;
Extremely or very useful: 29%;
Moderately useful: 34%;
Slightly or not at all useful: 37%.
Source: GAO analysis of Pilot Participant Survey data.
[A] SharePoint is an online portal that project coordinators can use
to electronically submit information, use form templates and help
guides, and monitor their status in the administrative process.
[End of figure]
Pilot participants were also satisfied with their coaches as a source
of information. USAC appointed coaches to serve as a project's direct
point of contact with program officials. Of the 61 respondents who
provided an opinion, some specifically noted their satisfaction with
the ease with which they could contact their coach (53 respondents
were "very satisfied" or "somewhat satisfied") and the level of
interaction with their coach (49 respondents were "very satisfied" or
"somewhat satisfied"). Coaches were rated somewhat lower on their
knowledge of the program (40 respondents were "very satisfied" or
"somewhat satisfied"), although this lower rating may be related to
the lack of established guidance at the beginning of the program and
the need to refer difficult issues to Solix management, USAC, and FCC,
depending on the complexity of the issue.
FCC Is Seeking More Input and Providing More Detail on Its Proposed
New Program, but It Is Not Clear Whether Planning and Communication
Have Been Fully Addressed:
In its July 2010 NPRM, FCC proposed a new Health Infrastructure
Program that would make available up to $100 million per year to
support up to 85 percent of the construction costs of new regional or
statewide networks for health care providers in areas of the country
where broadband is unavailable or insufficient.[Footnote 91] In this
NPRM, FCC made improvements over previous NPRMs by outlining potential
program requirements and requesting comment on the proposed new
program. FCC provided much more information than it did when
announcing the pilot program and is allowing for stakeholder input
into the program's design. In addition, FCC recognized some of the
challenges mentioned in this report and requested comment on potential
improvements. In particular, FCC proposed and requested comment on:
* requiring that applicants prove or otherwise certify that broadband
at minimum connectivity speeds is unavailable or insufficient to meet
their health care needs when applying to the program;
* requiring applicants to submit letters of agency as part of their
application, rather than after they are accepted into the program;
* having USAC review entity eligibility;
* providing limited funding for administrative costs;
* expanding entity eligibility to include off-site administrative
offices, off-site data centers, nonprofit skilled nursing facilities,
and nonprofit renal dialysis facilities; and:
* providing additional guidance regarding the funding and permitted
uses of excess capacity and the allocation of related costs.
However, it remains unclear the extent to which FCC is coordinating
with USAC in preparing for this program. The NPRM indicates that USAC
will develop a user-friendly Web-based application for participants to
use. However, during our conversations with USAC, officials noted that
it would take a considerable amount of time and effort to properly
develop such systems. FCC indicates in its NPRM that the new programs
could be implemented by funding year 2011. If FCC does not better plan
the details of the new program before it calls for applications,
participants in the Health Infrastructure Program may experience the
same delay and difficulties as participants have experienced in the
pilot program.
FCC Has Not Followed Key Performance Management Practices, Thus It
Lacks the Performance Data to Make Effective Policy Decisions and
Implement Program Reforms:
FCC Has Attempted to Develop Performance Goals and Measures for the
Rural Health Care Program, but They Are Ineffective for Managing
Program Performance:
We have previously reported that results-oriented organizations
commonly perform a number of key practices to effectively manage
program performance.[Footnote 92] In particular, results-oriented
organizations implement two key practices, among others, to lay a
strong foundation for successful program management. First, these
organizations set performance goals to clearly define desired
outcomes. Second, these organizations develop performance measures
that are clearly linked to the program goals. However, FCC has
reversed these two key practices. In 2006, 8 years after FCC first
implemented the primary Rural Health Care Program, the Office of
Management and Budget (OMB) assessed FCC's Rural Health Care Program
and concluded that the program had no performance goals and measures.
[Footnote 93] In 2007, FCC issued a report and order adopting
performance measures for the Rural Health Care Program related to
USAC's processing of applications, paying invoices, and determining
appeals.[Footnote 94] However, FCC stated that it did not have
sufficient data to establish performance goals for the Rural Health
Care Program in the report and order.[Footnote 95] Instead of specific
performance-related goals, the Rural Health Care Program has operated
for 12 years under broad overarching goals, including the statutory
goal established by Congress in the 1996 Act, which is to ensure that
rural health care providers receive telecommunications services at
rates comparable for the same services in urban areas.[Footnote 96]
Furthermore, the performance measures that FCC adopted for the primary
Rural Health Care Program and the pilot program in 2007 fall short
when compared with the key characteristics of successful performance
measures that we have identified in our past work.[Footnote 97]
Following is a discussion of these characteristics and the extent to
which FCC has fulfilled them in developing performance measures:
* Measures should be tied to goals and demonstrate the degree to which
the desired results are achieved. These program goals should, in turn,
be linked to overall agency goals. However, as we have previously
discussed, the measures that FCC has adopted are not based on such
linkage because no specific performance goals have been established.
By establishing performance measures before establishing the specific
performance goals that it seeks to achieve through the Rural Health
Care Program, FCC may waste valuable time and resources collecting the
wrong data. FCC receives the data for these performance measures on a
quarterly basis from USAC, but without effective performance goals to
guide its data collection, it cannot ensure that the data gained from
these performance measures are an effective use of resources.
* Measures should address important aspects of program performance.
For each program goal, a few performance measures should be selected
that cover key performance dimensions and take different priorities
into account. For example, measures should be limited to core program
activities because an excess of data could obscure rather than clarify
performance issues. Performance measures should also cover key
governmentwide priorities, such as timeliness and customer
satisfaction. FCC's performance measures appear to address certain key
performance dimensions. By selecting just three types of measures--
related to USAC's (1) processing of applications, (2) paying invoices,
and (3) determining appeals--there are fewer chances of obscuring the
most important performance issues. The measures also appear to take
into account such priorities as timeliness and customer satisfaction.
For example, the 2007 performance measures include requirements to
measure the number of current and pending appeals, and the time that
it takes to resolve those appeals. However, again, without first
setting specific performance goals defining what the programs are
specifically intended to accomplish, FCC cannot be sure that it has
adopted the most appropriate performance measures.
* Measures should provide useful information for decision making.
Performance measures should provide managers with timely, action-
oriented information in a format that helps them to make decisions
that improve program performance. However, the data collected by these
performance measures--such as the number of applications submitted,
rejected, and granted--are output, not outcome, oriented.[Footnote 98]
The FCC task force that developed the National Broadband Plan also
reported that the performance measures developed for the Rural Health
Care Program need to be improved to assess desired program outcomes,
such as the impact of the program on patient care.[Footnote 99] The
limited nature of the data obtained by current performance measures,
combined with the absence of specific performance goals, raises
concerns about the effectiveness of these performance measures for
programmatic decision making.
FCC is attempting to improve its performance management by seeking
public comment on performance goals and measures for the Rural Health
Care Program in its July 2010 NPRM.[Footnote 100] For example, FCC
proposed a specific measure of how program support is being used: that
is, requiring beneficiaries to annually identify the speed of the
connections supported by the program and the type and frequency of the
use of telemedicine applications as a result of broadband access.
Although this is a positive step, the NPRM does not specify whether
this data collection would be linked to specific connection speed
goals that participants should obtain with program funds, and it does
not propose what the goal should be for type and frequency of the use
of telemedicine applications. While this NPRM could lead to better
goals and measures for the Rural Health Care Program, FCC has
exhibited a pattern of repeatedly seeking comment on goals and
measures for the Rural Health Care Program, which indicates that it
does not have a clear vision for what it intends the program to
accomplish within the broad statutory framework provided by Congress.
FCC has sought public comment on performance goals and measures for
the program on two previous occasions that did not result in effective
performance goals and measures for the program:
* In June 2005, FCC issued a NPRM seeking comment on whether specific
performance goals were needed and on ways to establish useful outcome,
output, and efficiency measures for each of the universal service
programs, including the Rural Health Care Program. FCC officials
stated that this NPRM led to the 2007 performance measures that we
have previously described.[Footnote 101]
* In September 2008, FCC issued a NOI seeking comment on how to more
clearly define the goals of the Universal Service Fund programs,
including the Rural Health Care Program, and to identify any
additional quantifiable performance measures that may be necessary or
desirable. FCC officials stated that this NOI led to the July 2010
NPRM, which, again, requests comment on performance goals and
measures.[Footnote 102]
Performance goals and measures are particularly important for the
Rural Health Care Program, because they could help FCC to make well-
informed decisions about how to address the trends that we have
previously described. If FCC does use information from the latest NPRM
to develop specific performance goals and measures, it should focus on
the results that it expects its programs to achieve. We have
identified the following practices for developing successful
performance goals and measures:
* create a set of performance goals and measures that addresses
important dimensions of a program's performance and balance competing
priorities,
* use intermediate goals and measures to show progress or contribution
to intended results,
* include explanatory information on the goals and measures,
* develop performance goals to address mission-critical management
problems,
* show baseline and trend data for past performance,
* identify projected target levels of performance for multiyear goals,
and:
* link the goals of component organizations to departmental strategic
goals.[Footnote 103]
Clearly articulated, outcome-based performance goals and measures are
important to help ensure that the Rural Health Care Program meets the
guiding principles that Congress has set forth.
Without Effective Performance Goals and Measures, FCC Cannot Reliably
Evaluate Program Performance, Which Could Lead to a Repeat of Its Past
Management Weaknesses:
After implementing the key performance management practices that we
have previously discussed--establishing effective performance goals
and measures--results-oriented organizations implement a third, key
practice: that is, evaluating the performance of their
programs.[Footnote 104] Measuring performance allows these
organizations to track progress toward goals and provides managers
with the crucial performance data needed to make management decisions.
We have previously reported that performance data can have real value
only when used to identify the gap between a program's actual
performance level and the performance level identified as its goal.
[Footnote 105] Again, without specific performance goals and effective
performance measures, FCC cannot identify program performance gaps and
is unlikely to conduct evaluations that are useful for formulating
policy decisions.
FCC has not formally evaluated the performance of the primary Rural
Health Care Program to determine whether it is meeting the needs of
rural health care providers, and it may lack the tools to evaluate the
pilot program--such as an effective progress reporting mechanism and
an evaluation plan. To its credit, FCC has stated that it intends to
evaluate the pilot program after its completion. However, it is
unclear whether FCC has effective evaluation tools for conducting a
pilot program evaluation that will be useful for making policy
decisions about the future of the Rural Health Care Program. To track
the progress of pilot projects, FCC requires pilot program
participants to complete quarterly reports that are filed with FCC and
USAC, but it is unclear whether these reports are effective tools for
evaluating pilot program performance for the following reasons:
* Quarterly report data are not quantitative. Quarterly reports
collect data that are mostly qualitative (e.g., a narrative
description of a project's network and how the network will be
sustained) instead of quantitative. While qualitative data can help
officials understand project progress on an individual basis, the
information is not objective or easily measured.
* FCC has not involved key stakeholders. We have previously reported
that stakeholder and customer involvement helps agencies to ensure
that efforts and resources are targeted at the highest priorities.
[Footnote 106] However, key stakeholders and pilot participants are
not involved in ensuring that quarterly reports are providing the most
useful information possible. Pilot program coaches, who guide pilot
participants through the program's administrative processes, and USAC
officials said that FCC has not told them how the reports will be used
to evaluate pilot program progress. USAC and the pilot program coaches
work directly with participants and without understanding how these
reports will be used, they are unable to effectively guide
participants into providing the most useful evaluation information
possible. Additionally, of the 45 pilot program survey respondents
that provided an opinion, 26 said that they receive too little
feedback on their quarterly reports.
* Quarterly reports may require too much information. Of the 58 pilot
program survey respondents that provided an opinion, 28 said that too
much information is required in quarterly reports. As we have
previously discussed, an excess of data can obscure rather than
clarify performance.
FCC officials told us that they have learned lessons from using these
quarterly reports, and that, as part of the 2010 NPRM, FCC requested
public comment on a similar reporting requirement for the proposed
Health Infrastructure Program.[Footnote 107]
Furthermore, despite FCC's intentions to evaluate the pilot program,
officials have not yet developed an evaluation plan for the pilot
program. FCC officials told us that this is because the pilot program
is still under way, and that FCC will plan the evaluation when the
pilot program is closer to completion (as we previously stated, the
deadline for participants in the pilot program to select a vendor and
request a funding commitment from USAC is June 30, 2011). However, we
have previously reported that when conducting pilot programs, agencies
should develop sound evaluation plans before program implementation--
as part of the design of the pilot program itself--to increase
confidence in results and facilitate decision making about broader
application of the pilot program. We have previously identified the
following key features of sound evaluation plans:
* well-defined, clear, and measurable objectives;
* measures that are directly linked to specific program objectives;
* criteria or standards for determining program performance;
* clearly articulated methodology and a strategy for comparing results
with other efforts;
* a clear plan that details the type and source of data necessary to
evaluate the program, methods for data collection, and the timing and
frequency of data collection;
* a detailed data-analysis plan to track the program's performance and
evaluate its final results; and:
* a detailed plan to ensure that data collection, entry, and storage
are reliable and error-free.[Footnote 108]
The lack of a documented evaluation plan for the pilot program
increases the likelihood that FCC will not collect appropriate or
sufficient data, which limits understanding of pilot program results.
Without this understanding, FCC will be limited in its decision making
about the pilot program's potential broader application to FCC's
proposed future programs.
The National Broadband Plan states that for all four universal service
fund programs, including the Rural Health Care Program, "there is a
lack of adequate data to make critical policy decisions regarding how
to better utilize funding to promote universal service objectives."
[Footnote 109] FCC has not effectively followed the three key
performance management practices discussed in this report and has not
obtained the data that it needs to make critical policy decisions and
successfully manage the program. Furthermore, FCC has proposed two new
programs under the Rural Health Care Program in its 2010 NPRM (the
Health Broadband Services Program and the Health Infrastructure
Program), even though the National Broadband Plan states that FCC does
not have the data to make critical policy decisions on how to better
use its funds.[Footnote 110] In our previous work, we have reported
that results-oriented organizations recognize that improvement goals
should flow from a fact-based performance analysis.[Footnote 111]
However, the proposed improvements to the Rural Health Care Program
are not based on a fact-based performance analysis because the
performances of the primary Rural Health Care Program and the pilot
program have not been evaluated. FCC officials told us that they
believe the proposals set forth in the July 2010 NPRM are "positive
first steps" toward creating improvements to performance analysis.
Because FCC has not determined what the primary Rural Health Care
Program and the pilot program are specifically intended to accomplish
and how well the programs are performing, it remains unclear how FCC
will make informed decisions about the new programs described in the
July 2010 NPRM. Moreover, as new technologies are developed, measuring
the performance and effectiveness of existing programs is important so
that decision makers can design future programs to effectively
incorporate new technologies, if appropriate. If FCC does not
institute better performance management tools--by establishing
effective performance goals and measures, and planning and conducting
effective program evaluations--FCC's management weaknesses will likely
continue to affect the current Rural Health Care Program, and will
likely carry forward into the design and operation of proposed Rural
Health Care programs.
Conclusions:
Over the first 12 years of its Rural Health Care Program, FCC has
distributed more than $327 million to rural health care providers to
assist them in purchasing telecommunications and information services.
FCC and USAC have been particularly successful in disbursing committed
funds in the primary Rural Health Care Program, and FCC has generally
seen slow but steady growth in both the amounts of annual
disbursements and the number of annual applicants to the primary
program.
However, since the Rural Health Care Program's inception, FCC has not
provided the program with a solid performance management foundation.
FCC could better inform its decision making and improve its
stewardship of the Rural Health Care Program by incorporating
effective performance management practices into its regulatory
processes. FCC has not conducted a comprehensive needs assessment to
determine the needs of rural health care providers, has no specific
goals and measures for the program to guide its management decisions,
and has not evaluated how well the program is performing. FCC's
attempts to improve the program over time, including the 2006 pilot
program, have not been informed by a documented, fact-based needs
assessment; consultations with knowledgeable stakeholders, including
other government agencies; and performance evaluations. Despite FCC's
efforts to improve the program, a significant number of eligible rural
health care providers currently do not use the primary Rural Health
Care Program, and FCC's management of the pilot program has often led
to the delays and difficulties reported by pilot participants.
We found that a number of rural health care providers depend on the
support they receive from the primary Rural Health Care Program, and
that most pilot program participants are seeking services that they
believe would have been otherwise unaffordable. It is possible that
FCC's proposed changes to the Rural Health Care Program will increase
participation by rural health care providers, thus increasing the
amount of funding committed by the Rural Health Care Program and,
ultimately, increasing the universal service fees paid by consumers on
their telephone bills. Changes in FCC's approach to performance
management could help ensure that higher telephone bills are
justified; that program resources are targeting the needs of rural
health care providers; and that the program, in fact, is helping our
nation to realize more widespread use of telemedicine technologies.
Recommendations for Executive Action:
To improve its performance management of the Rural Health Care
Program, we recommend that the Chairman of the Federal Communications
Commission take the following five actions. If FCC does develop any
new rural health care programs under the Universal Service Fund--such
as the proposed Health Care Broadband Access Fund and the Health Care
Broadband Infrastructure Fund--these steps should be taken before
implementing any new programs or starting any new data collection
efforts:
* Conduct an assessment of the current telecommunications needs of
rural health care providers.
* Consult with USAC, other federal agencies that serve rural health
care providers (or with expertise related to telemedicine), and
associations:
representing rural health care providers to incorporate their
knowledge and experience into improving current and future programs.
* Develop effective goals, and performance measures linked to those
goals, for all current and future programs.
* Develop and execute a sound performance evaluation plan for the
current programs, and develop sound evaluation plans as part of the
design of any new programs before implementation begins.
* For any new program, ensure that FCC's request for applications to
the program clearly (1) articulates all criteria for participating in
the program and any weighting of that criteria, (2) details the
program's rules and procedures, (3) outlines the program's performance
goals and measures, and (4) explains how participants' progress will
be evaluated.
Agency Comments and Our Evaluation:
We provided a draft of this report to the Federal Communications
Commission and the Universal Service Administrative Company for their
review and comment.
In its written comments, FCC did not specifically agree or disagree
with our recommendations but discussed planned and ongoing actions to
address them. FCC agreed that it should continue to examine and work
to improve the Rural Health Care Program to ensure that the program is
effectively and efficiently achieving its statutory goals. In response
to our first recommendation that FCC conduct an assessment of the
current needs of rural health care providers, FCC stated that it is
gathering information about health care needs, including needs
assessments performed by other governmental agencies. FCC also stated
that going forward, it is committed to developing benchmarks to define
when needs have increased or decreased, applying needs assessment
results to resource allocation decisions, and integrating information
from other resources available to help address the need. FCC's efforts
to obtain information and assessments from other agencies and
stakeholders are encouraging. We continue to believe, however, that
FCC would benefit from conducting its own assessment of the
telecommunications needs of the rural health care providers eligible
under its Rural Health Care Program.
In response to our second recommendation that FCC consult with
stakeholders and incorporate their knowledge into improving current
and future programs, FCC stated that it is committed to maximizing
collaboration efforts with federal and other knowledgeable
stakeholders and that it will work closely with USAC to prepare for
the new program. FCC included in its comments an October 2010
statement from the Office of the National Coordinator for Health IT,
Department of Health and Human Services, about collaborative efforts
with FCC and other federal agencies. In response to our third
recommendation that FCC develop effective performance goals and
measures, FCC concurred with the need to develop quantifiable
performance measures. However, FCC did not specifically state whether
it concurred with our recommendation to develop effective goals and to
link performance measures to those goals. We continue to believe that
FCC should develop program performance goals first, and then develop
performance measures and link them to those goals. In response to our
fourth recommendation that FCC develop and execute effective
performance evaluation plans for the current and future programs, FCC
stated that it intends to conduct an evaluation of the pilot program
after it is concluded. While FCC did not address evaluation of the
current primary program, it stated that for any future enhancements to
the program, it is committed to developing and executing sound
performance evaluation plans, including key features that we
identified in our report. In response to our fifth recommendation that
FCC identify critical program information, such as criteria for
funding, and prioritization rules in its call for applications for any
new programs, FCC stated that the July 2010 NPRM[Footnote 112]
discusses these elements in detail. While we appreciate FCC's efforts
to better detail proposed programs in its NPRM, we continue to believe
that FCC should detail the requirements for participation in the call
for applications to any future programs. FCC's full comments are
reprinted in appendix III.
In its written comments, USAC stated that it will work with FCC to
implement any orders or directives that FCC issues in response to our
recommendations. USAC's full comments are reprinted in appendix IV.
USAC also provided technical comments that we incorporated as
appropriate.
As agreed with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution until 30 days
from the report date. At that time, we will send copies to the
appropriate congressional committees, the Chairman of the Federal
Communications Commission, the Acting Chief Executive Officer of the
Universal Service Administrative Company, and other interested
parties. In addition, the report will be available at no charge on
GAO's Web site at [hyperlink, http://www.gao.gov].
If you have any questions about this report, please contact me at
(202) 512-2834 or goldsteinm@gao.gov. Contact points for our Offices
of Congressional Relations and Public Affairs may be found on the last
page of this report. Major contributors to this report are listed in
appendix V.
Signed by:
Mark L. Goldstein:
Director, Physical Infrastructure Issues:
List of Requesters:
The Honorable Henry A. Waxman:
Chairman:
The Honorable John D. Dingell:
Chairman Emeritus:
The Honorable Joe Barton:
Ranking Member:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Bart Stupak:
Chairman:
The Honorable Michael Burgess:
Ranking Member:
Subcommittee on Oversight and Investigations:
Committee on Energy and Commerce:
House of Representatives:
The Honorable John D. Rockefeller, IV:
Chairman:
Committee on Commerce, Science, and Transportation:
United States Senate:
The Honorable Greg Walden:
House of Representatives:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
Our objectives were to address the following questions: (1) How has
the Federal Communications Commission (FCC) managed the primary Rural
Health Care Program to meet the needs of rural health care providers,
and how well has the program addressed those needs? (2) How have FCC's
design and implementation of the pilot program affected participants?
and (3) What are FCC's performance goals and measures for the Rural
Health Care Program, and how do these goals compare with the key
characteristics of successful performance goals and measures?
Background Research:
We conducted the following background research that helped inform all
of our reporting objectives. Specifically, we reviewed:
* prior GAO reports on other Universal Service Fund programs;
* FCC's Universal Service Monitoring Reports on the Rural Health Care
Program;
* documentation from FCC and the Universal Service Administrative
Company (USAC) on the structure and operation of the Rural Health Care
Program and pilot program; and:
* FCC documents, including FCC orders and requests for comment on the
Universal Service Fund programs, as well as written comments submitted
in response to these requests.
In addition, we interviewed:
* officials from FCC's Office of Managing Director and Wireline
Competition Bureau to identify actions undertaken to address
previously identified problems and plans to address issues of concern
in the programs and:
* officials from USAC's Rural Health Care Division and Solix, Inc., to
collect information on program operations and USAC's actions to
implement prior FCC orders on the primary Rural Health Care Program
and pilot program.
Analysis of Primary Rural Health Care Program Data:
To evaluate how the primary Rural Health Care Program was managed to
meet the needs of rural health care providers, we examined trends in
the demand for and use of primary Rural Health Care Program funding
from data we obtained from USAC's Packet Tracking System (PATS), which
is used to keep track of primary Rural Health Care Program
applications, and the Simplified Invoice Database System (SIDS), which
is used to keep track of program disbursements. When analyzing and
reporting on the data, we considered the limitations on how data can
be manipulated and retrieved from both the PATS and SIDS databases
since these systems were designed to keep track of applications and
finances and not to be data retrieval systems. We assessed the
reliability of the data by questioning officials about controls on
access to the system and data back-up procedures. Additionally, we
reviewed the data sets provided to us for obvious errors and
inconsistencies. On the basis of this assessment, we determined that
the data were sufficiently reliable to describe broad trends in the
demand for and use of Rural Health Care Program funding.
We obtained the following data--including annual and cumulative
figures--for funding years 1998 through 2009:
* the number and characteristics of applicants, including their entity
type, the type of service requested, and location;
* the dollar amount of funding commitments and disbursements by entity
type, type of service requested, and state;
* the number of commitments and disbursements by state; and:
* the amount of money committed but not disbursed by entity type and
type of service requested.
To provide these data, USAC performed queries on the PATS and SIDS
systems and provided the resulting reports to us in July 2010. Data
from both systems can change on a daily basis as USAC processes
applications for funding and reimbursement, applicants request
adjustments to requested or committed amounts, and other actions are
taken. As a result, the data we obtained and reported on reflect the
program status at the time that USAC produced the data, and thus may
be somewhat different if we were to perform the same analyses with
data produced at a later date.
Interviews to Assess How Well the Primary Rural Health Care Program
Addressed Health Care Provider Needs:
To assess how well the primary Rural Health Care Program addressed the
needs of rural health care providers, we interviewed FCC and USAC
officials to determine how the program was designed to address rural
health care provider needs. We reviewed relevant documentation,
including FCC orders, notices of proposed rulemaking, and FCC's
National Broadband Plan.[Footnote 113] We also reviewed comments and
reply comments to the record to gain insight into the public
perception of how the program was addressing needs. Furthermore, we
interviewed representatives from stakeholder groups, including the
American Telemedicine Association, the National Organization of State
Offices of Rural Health, the National Rural Health Association, the
Center for Telehealth and E-Health Law, and the National
Telecommunications Cooperative Association, to gain their perspective
on the primary Rural Health Care Program.
Survey of Pilot Program Participants:
To obtain information on how FCC's design and implementation of the
pilot program affected participants, we conducted a Web-based survey
of pilot projects. For a more complete tabulation of the survey
results, see the e-supplement to this report.[Footnote 114] To develop
the survey questionnaire, we reviewed comments submitted to FCC by
representatives from the pilot projects and other stakeholders in
response to FCC requests for feedback on the pilot program. We also
interviewed pilot project representatives who were in various stages
of the pilot program processes as well as FCC, USAC, Solix, and
stakeholder groups knowledgeable about the program and issues of
concern to participants. We designed draft questionnaires in close
collaboration with GAO survey specialists. We conducted pretests with
four pilot projects that were in various stages of the pilot program
processes to help further refine our questions, develop new questions,
and clarify any ambiguous portions of the survey. We conducted these
pretests in person and by telephone. In addition, we had FCC and USAC
review the survey prior to it being sent to the pilot participants.
We sent our survey to all 61 of the pilot projects that had recent
contact information on file with USAC, as of June 2, 2010. We excluded
the Puerto Rico project because at the time of our survey, it was the
only project that had been withdrawn from the program for an extended
period of time; thus, although we tried, locating a contact with
knowledge of the program was not possible.
Our goal was to obtain responses from individuals with knowledge of
and experience with the tasks related to the pilot program--such as
preparing forms and responding to information requests--for each
sampled entity. Our data set included the name and contact information
for each project's project coordinator and associate project
coordinator. We asked USAC coaches to identify who they interacted
with the most on each project (project coordinator, associate project
coordinator, or someone else), and we sent the survey to that
individual. If that individual was unable to complete the survey, we
asked the other contact (project coordinator, associate project
coordinator, or someone else) to complete the survey. One respondent
was the primary point of contact for two projects, but a separate
survey was completed for each project.
We notified the 61 preidentified contacts on June 2, 2010, by e-mail
that the survey was about to begin and updated contact information as
needed. We launched our Web-based survey on June 8, 2010, and asked
for responses to be submitted by June 18. Log-in information was e-
mailed to all participants. We contacted by telephone and e-mailed
those who had not completed the questionnaire at multiple points
during the data collection period, and we closed the survey on July 2,
2010. All 61 projects submitted a completed questionnaire with usable
responses for an overall response rate of 100 percent.
We also followed up with certain projects on the basis of survey
responses to gain additional information about plans for using excess
capacity, as well as the extent to which the project was impacted by
federal coordination with the pilot program.
While all pilot projects were selected for our survey, and, therefore,
our data are not subject to sampling errors, the practical
difficulties of conducting any survey may introduce nonsampling
errors. For example, differences in how a particular question is
interpreted, the sources of information available to respondents, or
the types of people who do not respond to a question can introduce
errors into the survey results. We included steps in both the data
collection and data analysis stages to minimize such nonsampling
errors. As we previously indicated, we collaborated with GAO survey
specialists to design draft questionnaires, and versions of the
questionnaire were pretested with four members of the surveyed
population. In addition, we provided a draft of the questionnaire to
FCC and USAC for their review and comment. From these pretests and
reviews, we made revisions as necessary to reduce the likelihood of
nonresponse and reporting errors on our questions. We examined the
survey results and performed computer analyses to identify
inconsistencies and other indications of error and addressed such
issues, where possible. A second, independent analyst checked the
accuracy of all computer analyses to minimize the likelihood of errors
in data processing. In addition, GAO analysts answered respondent
questions and resolved difficulties that respondents had in answering
our questions. For certain questions that asked respondents to provide
a narrative answer, we created content categories that covered more
than 90 percent of the narrative responses provided, and asked two
analysts to independently code each response into one of the
categories. Any discrepancies in the coding of the two analysts were
discussed and addressed by the analysts.
Interviews to Assess Federal Coordination:
To determine the extent to which FCC coordinated with other federal
agencies when designing and implementing the pilot program, we
interviewed FCC officials regarding the nature of their coordination
with other agencies, and followed up with representatives from other
federal agencies, including the Department of Health and Human
Services (Agency for Healthcare Research and Quality, Centers for
Disease Control and Prevention, Centers for Medicare and Medicaid
Services, Health Resources and Services Administration, Indian Health
Service, National Library of Medicine, Office of the Assistant
Secretary for Preparedness and Response, and Office of the National
Coordinator for Health Information Technology); the U.S. Department of
Agriculture's Rural Utilities Service; and the Department of
Commerce's National Telecommunications and Information Administration.
We reviewed relevant documentation and assessed the extent to which
FCC coordinated with other agencies against criteria for coordination
established in prior GAO reports.
Document Review and Interviews with FCC and USAC on Performance Goals
and Measures:
To determine the performance goals and measures of the Rural Health
Care Program and how these measures compare with the key
characteristics of successful performance measures, we reviewed the
Telecommunications Act of 1996. We then reviewed our past products and
science and evaluation literature to identify effective practices for
setting performance goals and measures. We compared this information
with the program goals and measures that FCC set forth in agency
documentation--including FCC orders, notices of proposed rulemaking,
strategic plans, and performance and accountability reports. We also
reviewed the Office of Management and Budget's Program Assessment
Rating Tool 2006 report on the Rural Health Care Program's
effectiveness. In addition, we interviewed officials from FCC's
Wireline Competition Bureau and Office of Managing Director, and
officials from USAC's Rural Health Care Division to obtain their views
on plans to implement Rural Health Care Program performance goals and
measures.
[End of section]
Appendix II: 2008 Commitments to Applicants, by State and Territory:
State or territory: Alabama;
Total applicants: 139;
Total number of commitments: 120;
Total funds committed: $291,321.
State or territory: Alaska;
Total applicants: 244;
Total number of commitments: 521;
Total funds committed: 35,093,001.
State or territory: American Samoa;
Total applicants: 1;
Total number of commitments: 1;
Total funds committed: $141,191.
State or territory: Arizona;
Total applicants: 97;
Total number of commitments: 148;
Total funds committed: $1,251,742.
State or territory: Arkansas;
Total applicants: 92;
Total number of commitments: 155;
Total funds committed: $616,492.
State or territory: California;
Total applicants: 130;
Total number of commitments: 185;
Total funds committed: $1,026,093.
State or territory: Colorado;
Total applicants: 35;
Total number of commitments: 52;
Total funds committed: $251,697.
State or territory: Connecticut;
Total applicants: 0;
Total number of commitments: 0;
Total funds committed: 0.
State or territory: Delaware;
Total applicants: 2;
Total number of commitments: 2;
Total funds committed: $350.
State or territory: District of Columbia;
Total applicants: 0;
Total number of commitments: 0;
Total funds committed: 0.
State or territory: Florida;
Total applicants: 22;
Total number of commitments: 49;
Total funds committed: $477,243.
State or territory: Georgia;
Total applicants: 147;
Total number of commitments: 431;
Total funds committed: $1,565,191.
State or territory: Guam;
Total applicants: 2;
Total number of commitments: 20;
Total funds committed: $87,800.
State or territory: Hawaii;
Total applicants: 25;
Total number of commitments: 88;
Total funds committed: $148,487.
State or territory: Idaho;
Total applicants: 59;
Total number of commitments: 57;
Total funds committed: $291,740.
State or territory: Illinois;
Total applicants: 90;
Total number of commitments: 190;
Total funds committed: $1,156,549.
State or territory: Indiana;
Total applicants: 72;
Total number of commitments: 158;
Total funds committed: $849,867.
State or territory: Iowa;
Total applicants: 92;
Total number of commitments: 128;
Total funds committed: $557,951.
State or territory: Kansas;
Total applicants: 82;
Total number of commitments: 78;
Total funds committed: $287,033.
State or territory: Kentucky;
Total applicants: 124;
Total number of commitments: 178;
Total funds committed: $499,668.
State or territory: Louisiana;
Total applicants: 31;
Total number of commitments: 36;
Total funds committed: $70,374.
State or territory: Maine;
Total applicants: 11;
Total number of commitments: 12;
Total funds committed: $21,865.
State or territory: Maryland;
Total applicants: 0;
Total number of commitments: 0;
Total funds committed: 0.
State or territory: Massachusetts;
Total applicants: 3;
Total number of commitments: 7;
Total funds committed: $151,250.
State or territory: Michigan;
Total applicants: 156;
Total number of commitments: 242;
Total funds committed: $1,537,172.
State or territory: Minnesota;
Total applicants: 226;
Total number of commitments: 498;
Total funds committed: $2,594,358.
State or territory: Mississippi;
Total applicants: 35;
Total number of commitments: 60;
Total funds committed: $178,487.
State or territory: Missouri;
Total applicants: 81;
Total number of commitments: 109;
Total funds committed: $543,686.
State or territory: Montana;
Total applicants: 83;
Total number of commitments: 149;
Total funds committed: $842,040.
State or territory: Nebraska;
Total applicants: 123;
Total number of commitments: 230;
Total funds committed: $1,521,306.
State or territory: Nevada;
Total applicants: 15;
Total number of commitments: 16;
Total funds committed: $91,924.
State or territory: New Hampshire;
Total applicants: 14;
Total number of commitments: 3;
Total funds committed: $14,658.
State or territory: New Jersey;
Total applicants: 1;
Total number of commitments: 0;
Total funds committed: 0.
State or territory: New Mexico;
Total applicants: 69;
Total number of commitments: 98;
Total funds committed: $725,920.
State or territory: New York;
Total applicants: 31;
Total number of commitments: 41;
Total funds committed: $70,059.
State or territory: North Carolina;
Total applicants: 63;
Total number of commitments: 87;
Total funds committed: $315,660.
State or territory: North Dakota;
Total applicants: 109;
Total number of commitments: 146;
Total funds committed: $1,125,118.
State or territory: Ohio;
Total applicants: 51;
Total number of commitments: 57;
Total funds committed: $334,145.
State or territory: Oklahoma;
Total applicants: 88;
Total number of commitments: 63;
Total funds committed: $627,662.
State or territory: Oregon;
Total applicants: 23;
Total number of commitments: 29;
Total funds committed: $300,256.
State or territory: Pennsylvania;
Total applicants: 18;
Total number of commitments: 25;
Total funds committed: $103,740.
State or territory: Rhode Island;
Total applicants: 0;
Total number of commitments: 0;
Total funds committed: 0.
State or territory: South Carolina;
Total applicants: 12;
Total number of commitments: 7;
Total funds committed: $11,453.
State or territory: South Dakota;
Total applicants: 100;
Total number of commitments: 132;
Total funds committed: $1,401,460.
State or territory: Tennessee;
Total applicants: 53;
Total number of commitments: 26;
Total funds committed: $205,404.
State or territory: Texas;
Total applicants: 78;
Total number of commitments: 157;
Total funds committed: $1,038,392.
State or territory: U.S. Virgin Islands;
Total applicants: 11;
Total number of commitments: 11;
Total funds committed: $46,404.
State or territory: Utah;
Total applicants: 56;
Total number of commitments: 109;
Total funds committed: $755,520.
State or territory: Vermont;
Total applicants: 27;
Total number of commitments: 30;
Total funds committed: $108,350.
State or territory: Virginia;
Total applicants: 152;
Total number of commitments: 201;
Total funds committed: $770,336.
State or territory: Washington;
Total applicants: 47;
Total number of commitments: 45;
Total funds committed: $68,045.
State or territory: West Virginia;
Total applicants: 32;
Total number of commitments: 60;
Total funds committed: $213,666.
State or territory: Wisconsin;
Total applicants: 337;
Total number of commitments: 1299;
Total funds committed: $4,940,178.
State or territory: Wyoming;
Total applicants: 17;
Total number of commitments: 30;
Total funds committed: $108,057.
State or territory: Total;
Total applicants: 3,608;
Total number of commitments: 6,576;
Total funds committed: $65,430,363.
Source: GAO analysis of USAC data.
Note: U.S. territories that have never received a commitment or
disbursement are not included in this appendix. Funds are committed to
service providers, not directly to states. We chose 2008 data instead
of 2009 data because many commitments still need to be processed for
2009.
[End of table]
[End of section]
Appendix III: Comments from the Federal Communications Commission:
Federal Communications Commission:
Washington, D.C. 20554:
November 3, 2010:
Mark Goldstein:
Director, Physical Infrastructure Issues:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
Dear Mr. Goldstein:
Thank you for the opportunity to review the draft Government
Accountability Office (GAO) Report regarding assessment of the
management of the Universal Service Fund Rural Health Care program. In
section 254 of the Communications Act of 1934, as amended by the
Telecommunications Act of 1996 (the Act), Congress charged the
Commission with implementing a rural health care program based on the
principle that "health care providers...should have access to advanced
telecommunications services...."[Footnote 1] Currently, the program
supports the telecommunications needs of rural health care providers
through three different components. The "telecommunications program"
subsidizes the rates paid by rural health care providers for
telecommunications services to eliminate the rural/urban price
difference within each state.[Footnote 2] The "internet access
program" provides a 25% flat discount on monthly Internet access for
rural health care providers and a 50% discount for health care
providers in states that are entirely rural.[Footnote 3] The Pilot
Program, established in 2007, provides support for up to 85% of the
onetime capital costs associated with deploying broadband health care
networks in a state or region, as well as recurring capital and
operational costs over five years.[Footnote 4]
In 2009, Congress directed the Commission to develop a National
Broadband Plan to ensure every American has "access to broadband
capability,"[Footnote 5] and required that this plan include a
detailed strategy for achieving affordability and maximizing use of
broadband to advance, among other things, "health care delivery."
[Footnote 6] The National Broadband Plan, released in March 2010,
recommends that the Commission make changes to the Rural Health Care
program to address the broadband connectivity gap for health care
providers, including replacing the existing internet access program
with a broadband access fund and establishing a health care
infrastructure fund to subsidize network deployment to health care
delivery locations where existing networks are insufficient.[Footnote
7] In July 2010, the Commission issued a Notice of Proposed Rulemaking
(NPRM) to reform the Rural Health Care program based on lessons
learned from the Pilot Program and recommendations made in the
National Broadband Plan.[Footnote 8]
The Rural Health Care program has experienced steady growth over the
past ten years, as GAO recognized, from approximately 800 funding
commitments in 1998 to nearly 7,000 commitments for the
telecommunications and internet access programs in 2008,[Footnote 9]
with a corresponding increase in disbursement of committed funds (over
S327 million, or over 86 percent of committed funds) as of the report
date.[Footnote 10] Important first steps have been taken towards the
goals of ensuring that rural health care providers pay no more than
their urban counterparts for their telecommunications needs in the
provision of health care services, and of stimulating the deployment
of the broadband infrastructure necessary to support e-care in those
areas of the country where the need for such services is most acute.
We are pleased that the vast majority of participants in the Pilot
Program reported to GAO that (1) their project will allow health care
providers to obtain telecommunications or Internet services that would
otherwise be unaffordable and/or unobtainable due to a lack of
infrastructure; (2) the Pilot Program's benefits outweighed the costs
of participation; and (3) they were pleased with their communications
with, and the effort put forth by, FCC and Universal Service
Administrative Company (USAC) program officials.[Footnote 11]
The Commission is dedicated to achieving the universal service goals
of section 254 of the Act and welcomes suggestions on making
additional improvements to the Rural Health Care program. In its draft
report, the GAO offers five recommendations for the Commission to
follow before implementing new rural health care programs or
initiating new data collection efforts. We address each recommendation
below.
First, the GAO recommends that the Commission conduct an assessment of
the current telecommunications needs of rural health care providers.
[Footnote 12] We appreciate GAO's recognition of the Commission's
efforts to date to assess those needs.[Footnote 13] In order to
develop the National Broadband Plan, an FCC task force undertook an
initial analysis to quantify some of the broadband needs of rural
health care providers.[Footnote 14] but as the Plan recognized,
research historically has been scarce in this area. Recently, the
Commission released a staff working paper that expanded upon the
National Broadband Plan analysis of health care providers'
connectivity requirements and the ability of the country's
infrastructure to meet those needs.[Footnote 15] In addition, the NPRM
seeks information on the needs of rural health care providers, such as
the minimum bandwidth and level of financial support needed for the
underlying connectivity to access critical health IT applications.
[Footnote 16] Going forward, the Commission is committed to developing
benchmarks to define when needs have increased or decreased, applying
needs assessment results to resource allocation decisions, and
integrating information from other resources available to help address
the need}.[Footnote 17]
In addition, Commission staff continue to gather information on health
care needs from other parties, including needs assessments performed
by other governmental agencies, and on resources other than the Rural
Health Care program that can help address the connectivity needs of
health care providers. For example, in August, 2010, the Health and
Human Services (HHS) Secretary met with the FCC Chairman, the
Secretaries of Agriculture and Commerce, as well as a Veterans Affairs
representative, to discuss inter-agency collaborations to ensure
widespread adoption of health IT. Noting that rural communities face
specific challenges (e.g., lack of access to affordable broadband
connectivity) staff from HHS, the Department of Agriculture, and FCC
are collaborating to align their programs to focus on rural health
care providers—a common beneficiary of their programs. HHS, FCC, the
National Telecommunications and Information Administration, and their
partners (e.g., the National Rural Health Association (NRHA), the
American Hospital Association, and the Healthcare Information and
Management Systems Society) are collecting and analyzing data from
various sources to identify disparities in the rates of adoption
across the nation. For example, preliminary results of an NRHA study
in 2010 show that approximately 60 percent of rural health care
providers in the review were at or below stage 2 and 30 percent at
stage 0 of achieving "meaningful use" of electronic health records
(with stage 4 being the threshold for meaningful use).[Footnote 18]
The data gathered by NRHA and others shows that rural health care
providers face significant challenges in qualifying for meaningful use
because they lack the connectivity and resources available in urban
and suburban areas. The Commission recognizes the importance of
obtaining similar assessments as it considers reforms to the Rural
Health Care program, in order to properly prioritize the allocation of
resources to the program.Footnote 19]
Second, the GAO recommends that the Commission consult with USAC,
other federal agencies that serve rural health care providers (or that
have expertise related to e-care), and associations representing rural
health care providers to incorporate their knowledge and experience
into improving current and future programs.[Footnote 20] We agree that
such input is valuable and we are committed to maximizing
opportunities to collaborate with USAC, other federal agencies and
knowledgeable stakeholders to advance the goals of the Rural Health
Care program. We are pleased that GAO noted recent improvements the
FCC has made, for example, by outlining potential program requirements
and requesting comments on the proposed new Rural Health Care program
in our NPRM, thereby allowing for stakeholder input into the program's
design and potential improvements. The Commission has received over a
hundred comments and reply continents in the pending rulemaking,
including detailed comments regarding the NPRM from HHS; numerous
state offices of rural health; and various other stakeholders,
including health care providers, statewide networks, vendors, and
trade associations such as the American Telemedicine Association, the
American Hospital Association, and the National Rural Health
Association. We have engaged HHS (and its component agencies, such as
the Office of the National Coordinator for Health Information
Technology, the Health Resources and Services Administration, the
Indian Health Service, and the Office of Rural Health Policy) to
provide further context and feedback through inter-agency meetings and
have also established an ongoing dialogue with other independent
federal agencies such as the Substance Abuse and Mental Health
Services Administration. Prior to issuing the NPRM, Commission staff
also consulted with the Department of Agriculture's Rural Utilities
Service to discuss lessons learned from that agency's experience in
administering the Broadband Initiatives Program. In addition,
Commission staff regularly conduct outreach at relevant conferences
and policy working groups, such as those of the American Telemedicine
Association, Internet2, Healthcare Information and Management Systems
Society (HIMSS), eHealth Initiative, Continua Health Alliance, and
Health IT Now Coalition and will continue to solicit input as we
consider reforms to the Rural Health Care program. Finally, Commission
staff meet regularly with USAC to discuss issues arising from the
administration of the Rural Health Care program. We will work closely
with USAC to prepare for the new program and to avoid repetition of
some of the delays and difficulties participants in the Pilot Program
may have experienced.
Third, the GAO recommends that the Commission develop effective goals,
and performance measures linked to those goals, for all current and
future programs.[Footnote 21] We appreciate GAO's recognition of the
Commission's efforts to date in developing performance measures for
the Rural Health Care program. We concur with the need to develop
quantifiable performance measures that can be used in determining the
program's success. In the NPRM, the Commission acknowledges the
necessity of ensuring that support is properly targeted to achieve
defined goals, and seeks comment on performance measures that would
offer objective tests of how support is used, what data should be
collected to track progress in making broadband available to eligible
health care providers, and how the Commission can monitor and evaluate
the success of the rural health care program.[Footnote 22] The
Commission has also begun working with other agencies with extensive
program evaluation experience in the health care arena to help design
and implement performance measures for the Rural Health Care program.
Fourth, the GAO recommends that the Commission develop and execute a
sound performance evaluation plan for the current program, and develop
sound evaluation plans as part of the design of any new programs
before implementation begins.[Footnote 23] As acknowledged in the GAO
Report, the Commission has committed to conducting an evaluation at
the conclusion of the Pilot Program.[Footnote 24] The Commission also
is committed to developing and executing sound performance evaluation
plans for any future enhancements to the program that are adopted,
including key features such as well-defined, clear and measurable
objectives; a clearly articulated methodology; and a strategy for
comparing results with other efforts.
Finally, GAO recommends that for any new program, the FCC's request
for applications to the program should clearly articulate all criteria
for participating in the program and any weighting of that criteria,
detail the program's rules and procedures, outline the program's
performance goals and measures, and explain how participants' progress
will be evaluated. The NPRM discusses these elements in detail,
including criteria for funding and prioritization rules;[Footnote 25]
initial application, selection, funding commitment, and build-out
requirements;[Footnote 26] and proposed performance measures.[Footnote
27] The NPRM also proposes specific regulations that could be used to
implement the proposals.
Once again, we appreciate GAO's recommendations. We agree that the
Commission should continue to examine and work to improve the Rural
Health Care Program to ensure that it is effectively and efficiently
achieving the important statutory goal of enhancing access to advanced
telecommunications and information services for public and non-profit
health care providers, thereby improving America's health and health
care delivery systems. We look forward to working with you on this in
the future.
Sincerely,
Signed by:
Sharon E. Gillett:
Chief, Wireline Competition Bureau:
Attachment:
October 29, 2010 Statement from the Office of the National Coordinator
for Health IT, Department of Health and Human Services to FCC:
The American Recovery and Reinvestment Act of 2009 (ARRA) was enacted
to foster national and regional economic growth. ARRA's Health
Information Technology for Economic and Clinical Health (HITECH) Act
provisions authorized an unprecedented investment in health
information technology (IT). Specifically, the HITECH Act authorized
the Department of Health and Human Services (HHS) to establish
programs to improve health care quality, safety, and efficiency
through the promotion of health IT, including electronic health
records (EHRs) and private and secure electronic health information
exchange. For example, under HITECH, eligible health care providers
can qualify for incentive payments when they adopt certified EHR
technology and use it to achieve specified objectives. Through ARRA,
Congress charged HHS (i.e., HHS's Office of the National Coordinator
for Health IT) with coordinating the Federal Government's efforts to
realize the implementation of nationwide health IT infrastructure
within a narrow legislatively mandated timeline.
The Administration's goal is for all Americans to benefit from access
to EHRs. In February 2010, the White House convened an interagency
task force to coordinate efforts and investments to meet the
President's health IT agenda. Access to a sufficient level of
broadband services is a key element of the Administration's larger
efforts to ensure that all health care providers become meaningful
users of EHRs. Accordingly, HHS is working with its Federal partners,
including the Federal Communication Commission (FCC), to ensure that
health care providers have access to broadband services.
In August, 2010, the HHS Secretary met with the FCC Chairman, the
Secretaries of Agriculture and Commerce, as well as a Veterans Affairs
representative to discuss intra-agency collaborations to ensure
widespread adoption of health IT. Noting that rural communities face
specific challenges (e.g., lack of access to affordable broadband
connectivity) staff from HHS, the Department of Agriculture, and FCC
are collaborating to align their programs to focus on rural health
care providers—a common beneficiary of their programs. In addition,
HHS provided comments on FCC's Notice of Proposed Rule Making on the
Rural Health Care Support Mechanism, which would implement key
provisions from the National Broadband Plan released by FCC in April
of 2010. HHS's objective in commenting was to support FCC's efforts to
address serious broadband capacity and connection issues facing rural
health care providers.
HHS, FCC, the National Telecommunications and Information
Administration, and their partners (e.g., the National Rural Health
Association (NRHA), the American Hospital Association, the Healthcare
Information and Management systems Society) are collecting and
analyzing data from various sources to identify disparities in the
rates of adoption across the nation. For example, a survey conducted
by the American Hospital Association in 2008 found that urban
hospitals were twice as likely to have in place EHRs that meet a basic
level of functionality as their rural counterparts.[Footnote 28]
Further, the results of these inquiries demonstrate that there are
gaps in implementation of health IT between urban and rural areas and
that these gaps are widening.[Footnote 29] Preliminary results of an
NRHA study in 2010 show that approximately 60 percent of rural health
care providers in NRHA's review were at or below stage 2 and 30
percent at stage 0 of achieving meaningful use, with stage 4 being the
threshold for meaningful use. Of all hospitals, including rural,
approximately 35 percent were at or below stage 2 and 11 percent at
stage 0 of achieving meaningful use. The Federal Government and its
partners are also gathering and analyzing data to identify potential
barriers to the adoption and meaningful use of health IT in
communities across the country, chief among them being rural
providers' lack of access to affordable broadband connectivity
sufficient to transmit relevant patient data in a reliable way.
HHS and its partners in the Executive Branch, including FCC, are
especially concerned with ensuring implementation of the health IT
infrastructure among rural healthcare providers within the
legislatively mandated timeframes required by ARRA. Lacking the
connectivity and resources available in urban and suburban areas,
rural communities and their health care providers face significant
challenges to qualifying for the meaningful use incentive payments.
That is, after fiscal year 2014, providers will be penalized for not
achieving the requirements set forth in HITECH (i.e., adopting and
achieving meaningful use of health IT). It would be unfortunate for
rural communities to be penalized when the infrastructure to support
them did not exist. The Executive Branch is collaborating now to align
the wealth of resources currently available to achieve common
objectives.
Footnotes for Appendix III:
[1] 47 U.S.C. § 254061(6), § 254(h).
[2] 47 C.F.R. § 54.609.
[3] 47 C.F.R. § 54.627. Together, the telecommunications program and
the internet access program are known as the "primary" program.
[4] Rural Health Care Support Mechanism, WC Docket No. 02-60, Order,
22 FCC Rcd 20360 (2007).
[5] See Connecting America: The National Broadband Plan, at xi (rel.
Mar. 16, 2010) (National Broadband Plan), available at [hyperlink,
http://www.broadband.govidownload-plan/].
[6] See id.
[7] Id. at 215-217.
[8] Rural Health Care Support Mechanism, WC Docket No. 02-60, Notice
of Proposed Rulemaking, FCC 10-125 (rel. July 15, 2010) (NPRM).
[9] GAO Draft Report at 15.
[10] Id. at 20.
[11] Id. at 42-43.
[12] Id. at 55.
[13] Id. at 25-26. 20-21.
[14] Id. at 26.
[15] FCC Omnibus Broadband Initiative, Health Care Broadband in
America: Early Analysis and a Path Forward (OBI Working Paper Series
No. 5, Aug. 2010), mailable at [hyperlink,
http://download.broadband.00viplan/fcc-omnibus-broadbandinitiative-
(obi)-working-reports-series-technical-paper-health-care-broadband-in-
america.pdf]
[16] NPRM at 9-20, 104-106.
[17] GAO Report at 20-21.
[18] See Attachment at 1.
[19] GAO Report at 20-21.
[20] Id. at 55.
[21] Id.
[22] NPRM at 141.
[23] GAO Report at 56.
[24] Id.
[25] See. e.g. NPRM at IN 19-25. 55-59, 93-103, 128-134.
[26] Id. at 15-18.
[27] Id. at 142-147.
[28] Jha, A, DesRoches, C., Campbell, E., Donelan, K., Rao, S.,
Ferris, T., Shields, A., Rosenbaum., Blumenthal, D. (2009). Use of
Electronic Health Records in U.S. Hospitals. New England Journal of
Medicine, 360 (16).
[29] Jha, A, DesRoches, C., Kralovec, P., and Joshi, C. (2010). A
Progress Report on Electronic Health Records in U.S. Hospitals. Health
Affairs, 29(10).
[End of section]
Appendix IV: Comments from the Universal Service Administrative
Company:
USAC:
Universal Service Administrative Company:
William England:
Vice President:
Rural Health Care Division:
Via Electronic Mail:
November 3, 2010:
Mark L. Goldstein:
Director, Physical Infrastructure Issues:
U.S. Government Accountability Office:
441 G Street, NW Room 2T23:
Washington, DC 20548:
Re: Response to Draft Report to Congressional Requestors on Management
of the Universal Service Fund Rural Health Care Program:
Dear Mr. Goldstein:
This letter responds to the draft Government Accountability Office's
(GAO's) Report, dated November 2010. to Congressional Requestors,
titled: "FCC's Performance Management Weaknesses Could Jeopardize
Proposed Reforms of the Rural Health Care Program." The Universal
Service Administrative Company (USAC) would like to recognize the
professional work of the GAO staff on this project. USAC submits this
response to the GAO draft report.
The federal Universal Service Rural Health Care Program is
administered by USAC. The Federal Communications Commission ("FCC" or
the "Commission") is responsible for the overall management, oversight
and administration of the Rural Health Care Program and the Universal
Service Fund (USE), including all policy decisions.[Footnote 1] The
GAO's draft report focuses on the following issues: (1) how the FCC
has managed the primary Rural Health Care ("RHC") program ("Primary
Program") to meet the needs of rural health care providers, and how
well the program has addressed those needs; (2) how the FCC's design
and implementation of the RISC pilot program ("Pilot Program")
affected participants; and (3) the FCC's performance goals and
measures for both the Primary and Pilot programs, and how these goals
compare to key characteristics of successful performance goals and
measures.
Assess Rural Health Care Providers' Telecommunications Needs
GAO's first recommendation is that the Commission should conduct an
assessment of current telecommunications needs of rural health care
providers. The GAO also recommends the FCC develop benchmarks to
define when needs have increased or decreased and a plan to determine
how needs assessment results will he prioritized in supporting
resource allocation decisions, and integration of information about
other resources available to health care providers to help address
needs. USAC, as the administrator of the Rural Health Care Program,
will work with the FCC to implement any orders or directives it may
issue concerning needs assessments.
Incorporate Knowledge from USAC and Other Federal Agencies to Improve
the Rural Health Care Program:
GAO's second recommendation is that the FCC consult with USAC, other
federal agencies that serve rural health care providers (or with
expertise related to telemedicine), and associations representing
rural health care providers to incorporate their knowledge and
experience in improving current and future programs. USAC will provide
to the FCC any requested information about its experience in
administering the Rural Health Care Program and will work with the FCC
to implement any orders or directives it may issue.
Rural Health Care Program Performance Goals and Measures:
GAO's third recommendation is that the Commission should develop
effective goals, and performance measures linked to those goals for
the current and future Rural Health Care Program. USAC will work with
the FCC to implement any orders or directives it may issue concerning
performance goals and measures for the Rural Health Care Program.
Rural Health Care Performance Evaluation Plans:
GAO's fourth recommendation is that the Commission develop and
implement performance evaluation plans for the current Primary Program
and develop evaluation plans as part of the design of any new programs
before implementation begins. USAC will work with the FCC to implement
any orders or directives it may issue concerning evaluation plans for
the Rural Health Care Program.
Clearly Define Criteria, Rules, Goals and Measures of Any New Rural
Health Care Program:
GAO's final recommendation is that the FCC in designing and
implementing any new Rural Health Care Program should: (I) articulate
criteria for participants in the program and any weighting of that
criteria; (2) detail the programs rules and procedures; (3) outline
the program's performance goals and measures; and (4) explain how-
participants' progress will be evaluated. USAC will work with the FCC
to implement any orders or directives it may issue concerning any
criteria, rules, goals and measures of any new Rural Health Care
Program.
USAC appreciates the opportunity to submit its response to GAO's draft
report on the Rural Health Care Program.
Sincerely,
Signed by:
William England:
Vice President, Rural Health Care Division:
Appendix IV Footnote:
[1] See 47 C.F.R. ii 54.702.
[End of section]
Appendix V: GAO Contact and Staff Acknowledgments:
GAO Contact:
Mark L. Goldstein, (202) 512-2834 or goldsteinm@gao.gov.
Staff Acknowledgments:
In addition to the contact named above, Faye Morrison (Assistant
Director), Elizabeth Curda, Lorraine Ettaro, Cheron Green, Amy
Higgins, Crystal Huggins, Catherine Hurley, Linda Kohn, Armetha Liles,
Elizabeth Marchak, Valerie Melvin, John Mingus Jr., Sara Ann
Moessbauer, Charlotte Moore, Joshua Ormond, Madhav Panwar, Carl
Ramirez, Amy Rosewarne, Cynthia Saunders, Michael Silver, Teresa
Tucker, and Mindi Weisenbloom made key contributions to this report.
[End of section]
Footnotes:
[1] The term "broadband" commonly refers to high-speed Internet
access. Broadband enables consumers to receive information much faster
than a dial-up connection and provides an "always on" connection to
the Internet. Consumers can receive a broadband connection through a
variety of technologies, such as cable modem, digital subscriber line
service, fiber, and satellite.
[2] An electronic health record is an electronic version of a
patient's medical history that may include all of the key
administrative clinical data relevant to that person's care, including
demographics, progress notes, problems, medications, vital signs, past
medical history, immunizations, laboratory data, and radiology
reports. Under the Health Information Technology for Economic and
Clinical Health Act of 2009, beginning in 2011, eligible health care
professionals and hospitals can qualify for Medicare and Medicaid
incentive payments when they adopt certified electronic health record
technology and use it to achieve specified objectives. Conversely,
beginning in 2015, the Department of Health and Human Services will
reduce payments to eligible health care providers that are not
meaningfully using electronic health record technology. Pub. L. No.
111-5, div. A, title XIII, div. B, title IV, 123 Stats. 115, 226, 467
(Feb. 17, 2009).
[3] Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56
(1996).
[4] Telecommunications services can include local and long-distance
telephone services as well as high-speed data links (such as T1 or T3
lines or frame relay service).
[5] For the purposes of this report, when referencing all programs
under the Rural Health Care Universal Service Fund--including both of
the discount rate programs and the pilot program--we use the term
"Rural Health Care Program." When referencing the components of the
Rural Health Care Program that are not part of the pilot program, we
use the term "primary Rural Health Care Program."
[6] Federal Communications Commission, Connecting America: The
National Broadband Plan (Mar. 16, 2010).
[7] Rural Health Care Support Mechanism, Notice of Proposed
Rulemaking, 25 FCC Rcd 9371 (2010).
[8] See the MOU between FCC and USAC (Sept. 9, 2008), [hyperlink,
http://www.fcc.gov/omd/usac-mou.pdf] (last accessed on Oct. 25, 2010).
[9] GAO, Telecommunications: Information on Participation in the Rural
Health Care Pilot Program, [hyperlink,
http://www.gao.gov/products/GAO-11-25SP] (Washington, D.C.: Nov. 17,
2010).
[10] In addition to the Rural Health Care Program, the Universal
Service Fund supports the High-Cost program, the Schools and Libraries
program (commonly known as the E-rate program), and the Low-Income
program. Combined, the four programs provided more than $7 billion in
support payments in 2009. For more information on other universal
service programs, see GAO, Telecommunications: Improved Management Can
Enhance FCC Decision Making for the Universal Service Fund Low-Income
Program, [hyperlink, http://www.gao.gov/products/GAO-11-11]
(Washington, D.C.: Oct. 28, 2010); Telecommunications: FCC Should
Assess the Design of the E-rate Program's Internal Control Structure,
[hyperlink, http://www.gao.gov/products/GAO-10-908] (Washington, D.C.:
Sept. 29, 2010); Telecommunications: Long-Term Strategic Vision Would
Help Ensure Targeting of E-rate Funds to Highest-Priority Uses,
[hyperlink, http://www.gao.gov/products/GAO-09-253] (Washington, D.C.:
Mar. 27, 2009); and Telecommunications: FCC Needs to Improve
Performance Management and Strengthen Oversight of the High-Cost
Program, [hyperlink, http://www.gao.gov/products/GAO-08-633]
(Washington, D.C.: June 13, 2008).
[11] 47 U.S.C. § 254(d) and 47 C.F.R. § 54.706.
[12] 25 FCC Rcd 9371 (2010).
[13] Federal-State Joint Board on Universal Service, Report and Order,
12 FCC Rcd 8776, 9093-9161, paras. 608-749 (1997).
[14] FCC oversees the Rural Health Care Program through rule-making
proceedings, enforcement actions, audits of participants, and reviews
of funding decision appeals from participants.
[15] Solix, Inc., a for-profit company,was established in 2005 as an
independent administrative process outsourcing firm--a spin-off of the
National Exchange Carrier Association (NECA). USAC is a wholly owned,
independent subsidiary of the association. NECA's Board of Directors,
by FCC regulation, is prohibited from participating in the functions
of USAC. See 47 C.F.R. § 54.703. Under a contract with USAC, Solix
reviews and processes applications for funding for the Rural Health
Care Program as well as requests for reimbursements from service
providers. As a contractor, Solix performs these reviews on the basis
of USAC-approved procedures and with USAC oversight.
[16] In September 2008, FCC and USAC signed an updated MOU, which will
remain in effect for 4 years.
[17] The Rural Health Care Program uses the statutory definition of
"health care provider" established in section 254(h)(7)(B) of the 1996
Act. Specifically, this section defines "health care provider" as "(i)
post-secondary educational institutions offering health care
instruction, teaching hospitals, and medical schools; (ii) community
health centers or health centers providing health care to migrants;
(iii) local health departments or agencies; (iv) community mental
health centers; (v) not-for-profit hospitals; (vi) rural health
clinics; and (vii) consortia of health care providers consisting of
one or more entities described in clauses (i) through (vi)." FCC has
clarified that dedicated emergency departments of rural for-profit
hospitals that participate in Medicare are "public" health care
providers and are eligible to receive prorated rural health care
support and also clarified that nonprofit entities that function as
rural health care providers on a part-time basis are eligible for
prorated rural health care support. See Rural Health Care Support
Mechanism, Report and Order, Order on Reconsideration, and Further
Notice of Proposed Rulemaking, 18 FCC Rcd 24546, 24553-55, paras. 13-
16 (2003).
[18] Section 254(h)(1)(A) directs that telecommunications carriers
provide telecommunications services that are necessary for the
provision of health care services in rural areas at rates that are
reasonably comparable to rates in urban areas. See 47 U.S.C. §
234(h)(1)(A).
[19] Section 254(h)(2)(A) directs FCC to establish competitively
neutral rules to enhance, to the extent technically feasible and
economically reasonable, access to advanced telecommunications and
information services for public and nonprofit health care providers.
See 47 U.S.C. § 254(h)(2)(A). In 2003, FCC established the rural
health care Internet Access Fund to provide a flat percentage discount
on monthly charges for access to the public Internet for rural health
care providers. See 18 FCC Rcd 24546, 24557-62, paras. 22-29 (2003).
[20] Rural Health Care Support Mechanism, Order, 21 FCC Rcd 11111,
11113, para. 8 (2006).
[21] Rural Health Care Support Mechanism, Order, 21 FCC Rcd 11111,
11113, para. 8 (2006).
[22] National LambdaRail was added as an eligible network following a
petition from National LambdaRail to FCC. See Rural Health Care
Support Mechanism, Order on Reconsideration, 22 FCC Rcd 2555 (2007).
[23] See Rural Health Care Support Mechanism, Order, 22 FCC Rcd 20360
(2007). FCC allocated approximately $139 million annually for 3
funding years, for a total of roughly $418 million for the pilot
program. The $139 million per funding year allocation also falls under
the $400 million per funding year cap for the entire Rural Health Care
Program. Because the primary Rural Health Care Program was using less
than 10 percent of this cap, FCC concluded that the $139 million per
year estimate for the pilot program would fall easily under the
overall Rural Health Care Program cap. Unused pilot program support
can be carried over to the next pilot program funding year. A project
can request funding for up to 5 years for its recurring costs. A
project has 5 years from the date of its first funding commitment
letter to request reimbursement.
[24] At the time of our survey, 61 projects had recent contact
information on file with USAC.
[25] Program participants perceive all of their contacts and form
submissions to be with USAC. Solix staff refer to themselves as USAC
staff when interacting with program participants.
[26] Rural Health Care Support Mechanism, Order, 25 FCC Rcd 1423
(Wireline Competition Bureau: 2010).
[27] As of September 2010, USAC has issued funding commitment letters
that total over $83 million for the pilot program.
[28] According to FCC, some services, such as Ethernet, may be
categorized as a telecommunications service (eligible for the urban/
rural differential support) or an Internet service (eligible for the
25 percent Internet access discount).
[29] In its 2003 report and order, FCC states that commenters have
reported that the monthly cost of Internet access in rural areas
ranges from $21.95 to $800 for a digital subscriber line, $45 to $400
for a cable modem, $40 to $300 for wireless service, and $30 to
$13,000 for satellite service. See 18 FCC Rcd 24546, ftn 83 (2003).
[30] The most recent year that USAC has completely closed is 2004.
USAC officials told us that there are many reasons that it can take
several years to completely close a funding year. For example,
typically, health care providers pay their telecommunications service
bills in full, so vendors have no financial incentive to invoice USAC,
simply to pass through a credit to the health care provider. In
addition, there is a problem with staff turnover and lack of
recordkeeping in the offices of small rural health care providers.
Therefore, it is possible that an employee who originally filled out
the program application may have left the organization, and the new
employee may not know that a credit is due to the health care provider.
[31] Peter H. Rossi, Mark W. Lipsey, and Howard E. Freeman,
Evaluation: A Systematic Approach (Thousand Oaks, Calif.: 2004).
[32] GAO, Military Personnel: Actions Needed to Achieve Greater
Results from Air Force Family Needs Assessments, [hyperlink,
http://www.gao.gov/products/GAO-01-80] (Washington, D.C.: Mar. 8,
2001).
[33] Because there was no historical record of what it would cost to
provide support to rural health care providers and no list of public
and nonprofit health care providers that fit the definition of "health
care providers that are located in rural areas," FCC based the funding
cap on an estimate of 12,000 eligible rural health care providers on
the basis of figures supplied by various federal agencies and national
associations. FCC acknowledged that these calculations were subject to
error. See 12 FCC Rcd 8776, 9141, para. 706, ftn 1845 (1997).
[34] 12 FCC Rcd 8776, 9141, para. 705 (1997).
[35] FCC expected actual disbursements to be less than the $400
million cap because (1) the maximum bandwidth eligible for funding
would not be available in all areas; (2) many rural health care
providers would not choose to use the full amount of support; and (3)
the practice of rate averaging would result in lower support amounts.
See 12 FCC Rcd 8776, 9140-44, paras. 704-708 (1997).
[36] See 21 FCC Rcd 11111, para. 8 (2006); Rural Health Care Support
Mechanism, Second Report and Order, Order on Reconsideration, and
Further Notice of Proposed Rulemaking, 19 FCC Rcd 24613, para. 41
(2004); 18 FCC Rcd 24546, para. 8 (2003); and Rural Health Care
Support Mechanism, Notice of Proposed Rulemaking, 17 FCC Rcd 7806,
7810-11, para. 10 (2002).
[37] 21 FCC Rcd 11111, para. 8 (2006).
[38] The requirement to ensure that urban and rural telecommunications
rates are comparable comes from the 1996 Act. However, if, through a
sound needs assessment, FCC determines that there are statutory
restrictions that prohibit it from making the Rural Health Care
Program more effective, FCC could inform Congress and seek the needed
legislative changes.
[39] The 1996 Act limits the type of health care provider eligible for
the program. Again, if FCC discovers that statutory restrictions limit
its ability to meet the needs of rural health care providers, FCC
could notify Congress and seek legislative changes. For example, in
the National Broadband Plan, an FCC task force recommended that
"Congress should consider providing support for for-profit
institutions that serve particularly vulnerable populations." See the
National Broadband Plan, p. 200, ch. 10.
[40] Examples of telemedicine equipment include "capture" devices,
such as digital and video cameras, radiographs (e.g., X-ray images),
and physiologic monitors (e.g., oxygen saturation monitors).
[41] Medicare covers aspects of telemedicine services under certain
circumstances, and states are permitted to cover telemedicine to some
degree in their Medicaid programs, although decisions to cover these
services may vary from state to state. Some stakeholders told us that
current restrictions should be relaxed. The National Broadband Plan
makes recommendations for reducing regulatory barriers to
telemedicine, such as resolving security issues related to
prescriptions for certain medications.
[42] 18 FCC Rcd 24546, para. 1 (2003).
[43] FCC stated that it adopted this change because the definition of
rural being used by FCC at that time was no longer being updated by
Census Bureau data.
[44] See 19 FCC Rcd 24613 (2004). To ease the transition to the new
definition, FCC permitted all health care providers that had
previously received a funding commitment from USAC to continue to
qualify for support under the rural health care support mechanism for
the next 3 years under the old definition. In 2008, FCC released an
Order on Reconsideration extending the grandfathered period for an
additional 3 years. Rural Health Care Support Mechanism, Order on
Reconsideration, 23 FCC Rcd 2539, 2541, para. 4. (2008). The Wireline
Competition Bureau has recently sought comment on the petition filed
by the Nebraska Public Service Commission to permanently grandfather
rural health care providers that would not be eligible for universal
service support after June 30, 2011, absent FCC action. See Comment
Sought on Request to Permanently Grandfather Rural Health Care
Providers that Require Funding Commitments Prior to July 1, 2005 So
That They Will Remain Eligible for Universal Service, Public Notice,
25 FCC Rcd 10872 (2010).
[45] 21 FCC Rcd 11111 (2006).
[46] Administrative Procedure Act, 5 U.S.C. §§ 551 et seq.
[47] 25 FCC Rcd 9371 (2010).
[48] The model, which is not publicly available, also simulated the
effects of a 60 percent discount and a simplified application process.
[49] National Broadband Plan, p. 214, ch. 10.
[50] GAO, Equal Employment Opportunity: Pilot Projects Could Help Test
Solutions to Long-standing Concerns with the EEO Complaint Process,
[hyperlink, http://www.gao.gov/products/GAO-09-712] (Washington, D.C.:
Aug. 12, 2009); and Executive Guide: Effectively Implementing the
Government Performance and Results Act, [hyperlink,
http://www.gao.gov/products/GAO/GGD-96-118] (Washington, D.C.: June 1,
1996).
[51] For example, the primary Rural Health Care Program Forms 465 and
466-A are designed for support of eligible costs at one site. However,
the pilot program funds eligible costs for pilot projects that can
have hundreds of sites, and both eligible and ineligible costs must be
allocated among all of the sites in a project. To address this issue,
program officials created a Form 465 attachment that requires projects
to fill in 48 columns of information for each site in their project.
In some cases, this requirement has led to eligibility spreadsheets
that are over 100 pages long. Similarly, projects submitting a Form
466-A must also complete an attachment that requires 45 columns of
information for each site in a project as well as a 20-column Network
Cost Worksheet to allocate costs among each site in a project.
[52] Each respondent represents 1 pilot project. Although we received
usable questionnaires from each of the 61 projects, in some cases, not
all 61 answered a question, or in some cases, selected options such as
"no opinion" or "don't know." Thus, the total number of respondents
that provided a substantive answer is noted each time we report a
survey result, and may change with each question.
[53] The RFP is the first step toward establishing a contract for
services and creating the networks envisioned in the applications
submitted to FCC more than 3 years ago.
[54] GAO, Results-Oriented Government: Practices That Can Help Enhance
and Sustain Collaboration among Federal Agencies, [hyperlink,
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21,
2005).
[55] 21 FCC Rcd 11111 (2006).
[56] According to FCC, the agencies and offices represented included
the Agency for Healthcare Research and Quality, the Centers for
Disease Control and Prevention, the Centers for Medicare and Medicaid
Services, HRSA, the National Library of Medicine, the Office of the
Assistant Secretary for Preparedness and Response, and the Office of
the National Coordinator for Health Information Technology.
[57] USDA's Distance Learning and Telemedicine Program provides loans
and grants to rural community facilities (including hospitals) for
advanced telecommunications systems that can provide health care and
educational benefits to rural areas.
[58] FCC's initial order only funded connections with Internet2, even
though a similar nonprofit entity, National LambdaRail, could provide
similar services to pilot participants. Following a petition filed by
National LambdaRail, FCC addressed this matter by issuing another
order allowing connections with either entity. See 22 FCC Rcd 2555
(2007).
[59] 19 FCC Rcd 24613 (2004).
[60] GAO, FCC Management: Improvements Needed in Communication,
Decision-Making Processes, and Workforce Planning, [hyperlink,
http://www.gao.gov/products/GAO-10-79] (Washington, D.C.: Dec. 17,
2009).
[61] Jeffrey Lubbers, A Guide to Federal Agency Rulemaking, 4TH ed.
(Chicago: 2006). This is a resource guide created by the
Administrative Law and Regulatory Practice and Government and Public
Sector Lawyers Division of the American Bar Association.
[62] The National Telecommunications Cooperative Association is an
industry association representing rural telecommunications providers.
[63] Comments of the National Telecommunications Cooperative
Association in WC Docket No. 02-60 (Public Notice seeking comment on
the National LambdaRail, Inc.'s Petition for Reconsideration or, in
the alternative, Clarification of FCC's Sept. 29, 2006, Order
establishing the Rural Health Care Pilot Program), p. 2 (Nov. 21,
2006).
[64] See, for example, Reply Comments of the Montana
Telecommunications Association in WC Docket No. 02-60 (Rural Health
Care NPRM, 25 FCC Rcd 9371 (2010) (Sept. 23, 2010); but see Reply
Comments of the Health Information Exchange of Montana, Inc., in WC
Docket No. 02-60 (Rural Health Care NPRM, 25 FCC Rcd 9371 (2010)), pp.
6-9 (Sept. 23, 2010).
[65] Commissioner Jonathan Adelstein, in his statement to the 2006
order, noted concern with the lack of comments. Specifically, he said
the following: "Had we sought comment on whether to create a pilot
program and how to tailor it, we likely would have greater clarity and
transparency here but, unfortunately, that is not the case." See 21
FCC Rcd 11111, 11121 (2006).
[66] 25 FCC Rcd 1423 (Wireline Competition Bureau: 2010).
[67] This statement is based on our analysis of survey respondents'
verbatim responses.
[68] Domestic Working Group, Grant Accountability Project: Guide to
Opportunities for Improving Grant Accountability (Washington, D.C.:
October 2005).
[69] U.S. Department of Agriculture, Rural Utilities Service, Distance
Learning and Telemedicine Program: Grant Application Guide
(Washington, D.C.: 2010).
[70] 21 FCC Rcd 11111 (2006).
[71] See the following Web address: [hyperlink,
http://www.fcc.gov/cgb/rural/rhcp.html#faqs] (last accessed on Nov. 9,
2010).
[72] 22 FCC Rcd 20360 (2007).
[73] Excluding respondents that answered "don't know" or did not
respond to the question.
[74] Two respondents selected "no opinion."
[75] This statement is based on our analysis of survey respondents'
verbatim responses.
[76] 21 FCC Rcd 11111 (2006).
[77] 22 FCC Rcd 20360 (2007).
[78] 22 FCC Rcd 20360, 20406, para. 87 (2007).
[79] "In particular, where feasible, selected participants shall: (1)
use health IT systems and products that meet interoperability
standards recognized by the HHS Secretary; (2) use health IT products
certified by the Certification Commission for Healthcare Information
Technology; (3) support the [Nationwide Health Information Network]
NHIN architecture by coordinating activities with the organizations
performing NHIN trial implementations; (4) use resources available at
HHS's [Agency for Healthcare Research and Quality] AHRQ National
Resource Center for Health Information Technology; (5) educate
themselves concerning the Pandemic and All Hazards Preparedness Act
and coordinate with the HHS Assistant Secretary for Public Response
[sic] as a resource for telehealth inventory and for the
implementation of other preparedness and response initiatives; and (6)
use resources available through HHS's [Centers for Disease Control and
Prevention] CDC [Public Health Information Network] PHIN to facilitate
interoperability with public health and emergency organizations.
Finally, selected participants shall coordinate in the use of their
health care networks with HHS and, in particular, with CDC in
instances of national, regional, or local public health emergencies
(e.g., pandemics, bioterrorism). In such instances, where feasible,
selected participants shall provide access to their supported networks
to HHS, including CDC, and other public health officials." See 22 FCC
Rcd 20360, 20402-03, para. 82 (2007).
[80] Two respondents rated the guidance "completely sufficient"; 11
respondents rated the guidance "somewhat sufficient"; and 13
respondents stated they did not know. One respondent did not answer
the question.
[81] 22 FCC Rcd 20360, 20388-89, para. 54 (2007).
[82] Generally defined by FCC as installing or having more fiber or
similar facilities than is needed by a project's current members.
[83] Federal Communications Commission, letter from Dana Shaffer to
Scott Barash, WC 02-60 (Oct. 24, 2008). See the following Web address:
[hyperlink, http://www.fcc.gov/cgb/rural/wcbletter.pdf] (last accessed
on Oct. 26, 2010).
[84] Twenty-seven survey respondents were "somewhat satisfied" or
"very satisfied" with the guidance; 12 respondents stated they were
"neither satisfied nor dissatisfied"; and 1 respondent stated they had
not received any guidance.
[85] GAO, Standards for Internal Control in the Federal Government,
[hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (November
1999).
[86] For example, in September 2009, the Southwest Alabama project
appealed USAC's decision that its off-site administrative office was
ineligible, arguing that it provided functions that were necessary for
the provision of health care services, and citing pilot program order
language that recognized a component of an eligible health care
provider is eligible when the facility is part of the eligible health
care provider, even when the function that the facility performs on
its own would not be eligible (emergency medical service facilities).
According to USAC, the appeal raised concerns because while the denial
was consistent with FCC guidance for the pilot program, it was
inconsistent with USAC policy for participants in the primary program.
USAC formally requested guidance from FCC in January 2010. According
to USAC officials, FCC indicated USAC should deny the appeal and have
the project appeal to FCC. FCC officials noted that FCC did not
provide written guidance on USAC's letter, since it understood that an
appeal would be forthcoming, and the issue would be addressed at that
time. USAC denied the appeal in March 2010, and the project appealed
to FCC on May 10, 2010. One month later, FCC issued a request for
comments on the appeal, with all comments due by July 26, 2010. No
comments were filed, and no decision was made as of August 4, 2010.
See Comment Sought on Southwest Alabama Community Mental Health
Request for Review of Decision by the Universal Service Administrative
Company, Public Notice, 25 FCC Rcd 7419 (2010). The National Broadband
Plan recommended that FCC expand its interpretation of eligible health
care providers to allow participation by off-site administrative
offices. See the National Broadband Plan, p. 216 (Rec. 10.8). In
addition, as we note later in this report, in its July NPRM, FCC has
proposed and sought comment on amending its rules to permit certain
off-site administrative offices to have the opportunity to receive
rural health care support. See 25 FCC Rcd 9371, 9416-18, pp. 116-119
(2010).
[87] This statement is based on our analysis of survey respondents'
verbatim responses.
[88] Due to statutory restrictions, pilot participants cannot sell
fiber or facilities paid for with pilot program funds. However, some
pilot participants indicated interest in sharing, leasing, and selling
excess capacity to other entities, and a number of complicated
questions arose. Specifically, section 254(h)(3) provides that
"telecommunications services and network capacity provided to a public
institutional telecommunications user under this section may not be
sold, resold, or otherwise transferred by such user in consideration
for money or any other thing of value." See 47 U.S.C. § 254(h)(3). FCC
interpreted this section to restrict the resale of any services
purchased pursuant to the section 254(h) discount for services under
the RHC support mechanism. See 47 C.F.R. § 54.617; see also 12 FCC Rcd
8776, 8795, para. 33 (1997).
[89] 25 FCC Rcd 9371, 9400-9404, paras. 67-82 (2010).
[90] This statement is based on our analysis of survey respondents'
verbatim responses.
[91] 25 FCC Rcd 9371 (2010).
[92] [hyperlink, http://www.gao.gov/products/GAO/GGD-96-118].
[93] See the following Web address: [hyperlink,
http://www.whitehouse.gov/omb/expectmore/summary/10003110.2006.html]
(last accessed on Oct. 27, 2010). OMB's Rural Health Care Program
assessment was last updated in January 2009.
[94] See Comprehensive Review of the Universal Service Fund
Management, Administration, and Oversight, Report and Order, 22 FCC
Rcd 16372 (2007). In the 2007 report and order, FCC stated that the
measures would apply only to the primary Rural Health Care Program.
However, in the 2008 MOU with USAC, FCC clarified that these measures
also apply to the pilot program.
[95] 22 FCC Rcd 16372, 16396, para. 54 (2007).
[96] Section 254(h)(1)(A) provides, "A telecommunications carrier
shall, upon receiving a bona fide request, provide telecommunications
services which are necessary for the provision of health care services
in a State, including instruction relating to such services, to any
public or nonprofit health care provider that serves persons who
reside in rural areas in that State at rates that are reasonably
comparable to rates charged for similar services in urban areas in
that State. A telecommunications carrier providing service under this
paragraph shall be entitled to have an amount equal to the difference,
if any, between the rates for services provided to health care
providers for rural areas in a State and the rates for similar
services provided to other customers in comparable rural areas in that
State treated as a service obligation as a part of its obligation to
participate in the mechanisms to preserve and advance universal
service." See 47 U.S.C. § 254(h)(1)(A).
[97] See, for example, GAO, Pipeline Safety: Management of the Office
of Pipeline Safety's Enforcement Program Needs Further Strengthening,
[hyperlink, http://www.gao.gov/products/GAO-04-801] (Washington, D.C.:
July 23, 2004); Agency Performance Plans: Examples of Practices That
Can Improve Usefulness to Decisionmakers, [hyperlink,
http://www.gao.gov/products/GAO/GGD/AIMD-99-69] (Washington, D.C.:
Feb. 26, 1999); and [hyperlink,
http://www.gao.gov/products/GAO/GGD-96-118]. We have also identified
specific attributes of successful performance measures linked to these
characteristics. See GAO, Tax Administration: IRS Needs to Further
Refine Its Tax Filing Season Performance Measures, [hyperlink,
http://www.gao.gov/products/GAO-03-143] (Washington, D.C.: Nov. 22,
2002).
[98] OMB has noted that performance measures should reflect desired
outcomes, which describe the intended results of the program, not
simply outputs, which describe the level of activity.
[99] National Broadband Plan, p. 200, ch. 10.
[100] 25 FCC Rcd 9371 (2010).
[101] Comprehensive Review of the Universal Service Fund Management,
Administration, and Oversight, Notice of Proposed Rulemaking and
Further Notice of Proposed Rulemaking, 20 FCC Rcd. 11308 (2005).
[102] Comprehensive Review of the Universal Service Fund Management,
Administration, and Oversight, Notice of Inquiry, 23 FCC Rcd 13583
(2008).
[103] See, for example, [hyperlink,
http://www.gao.gov/products/GAO-08-633] and [hyperlink,
http://www.gao.gov/products/GAO/GGD/AIMD-99-69].
[104] [hyperlink, http://www.gao.gov/products/GAO/GGD-96-118].
[105] [hyperlink, http://www.gao.gov/products/GAO/GGD-96-118].
[106] [hyperlink, http://www.gao.gov/products/GAO/GGD-96-118].
[107] 25 FCC Rcd 9371, 9404-05, para. 84 (2010).
[108] GAO, Tax Administration: IRS Needs to Strengthen Its Approach
for Evaluating SRFMI Data-Sharing Pilot Program, [hyperlink,
http://www.gao.gov/products/GAO-09-45] (Washington, D.C.: Nov. 7,
2008); Limitations in DOD's Evaluation Plan for EEO Complaint Pilot
Program Hinder Determination of Pilot Results, GAO 08-387R
(Washington, D.C.: Feb. 22, 2008); and Equal Employment Opportunity:
DOD's EEO Pilot Program Under Way, but Improvements Needed to DOD's
Evaluation Plan, [hyperlink, http://www.gao.gov/products/GAO-06-538]
(Washington, D.C.: May 5, 2006).
[109] National Broadband Plan, p. 144, ch. 8.
[110] 25 FCC Rcd 9371 (2010).
[111] [hyperlink, http://www.gao.gov/products/GAO/GGD-96-118].
[112] 25 FCC Rcd 9371 (2010).
[113] Federal Communications Commission, Connecting America: The
National Broadband Plan (Mar. 16, 2010).
[114] GAO, Telecommunications: Information on Participation in the
Rural Health Care Pilot Program, [hyperlink,
http://www.gao.gov/products/GAO-11-25SP] (Washington, D.C.: Nov. 17,
2010).
[End of section]
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