FCC channels up to $400 million to build out telehealth networks

Up to $400 million annual funding will be made available to healthcare providers as part of the Federal Communication Commission( FCC)'s new Healthcare Connect Fund. The financing will help expand and make permanent a pilot program that has supported 50 provider healthcare networks in 38 states.

The telehealth networks will link urban medical centers to rural clinics or offer instant access to electronic health records (EHRs). The agency will begin accepting applications for the grants in late summer, according to an announcement made Jan. 7 by FCC Chairman Julius Genachowski.

The fund will enable thousands of new providers across the country to benefit from connectivity to improve the delivery of care and dramatically cut costs for both hospitals and the FCC's Universal Service Fund, which underwrites advanced telecommunications services. Many other providers will have the means to upgrade their connections, the agency said.

The Healthcare Connect Fund program builds on the agency’s Rural Healthcare pilot program. For years, the FCC's primary healthcare program has made it difficult for hospitals serving rural patients to get high bandwidth connections needed for modern telemedicine by limiting the services eligible for funding and by making it hard for groups to effectively bargain for the lowest cost service, the FCC said.

The fund will enable patients at hospitals and clinics around the country to access specialists at major health centers through telemedicine and support the exchange of EHRs, which could lead to better coordination of care and lower costs. The program will also encourage formation of state and regional healthcare consortia to save costs and expand access to healthcare.

The FCC fund will offer a 65-percent discount on broadband services, equipment, connections to research and education networks, and provider-constructed and owned facilities if cost-effective. Healthcare providers will contribute 35 percent of the costs.

Healthcare organizations that will be eligible are public or not-for-profit hospitals, rural health clinics, community health centers, health centers serving migrants, community mental health centers, local health departments or agencies, post-secondary educational institutions/teaching hospitals/medical schools, or a consortia of the above. Non-rural providers may participate in the Healthcare Connect Fund as part of a consortium, but the group must remain majority rural.

Telemedicine has at track record that shows it can drive down costs, FCC officials said. For example, in South Dakota, e-ICU services have saved eight hospitals over $1.2 million in patient transfer costs over just 30 months. In upstate New York, a network of about 50 providers expect $9 million in cost savings from providing cardiology, trauma, mental health, neurology and respiratory services over their broadband connections.

The FCC will also launch in 2014 a new program to test how to support broadband connections for skilled nursing facilities. Funding will be up to $50 million total over a three-year period.