1. RURAL HEALTH CARE DIVISION Michigan Telemedicine Policy Group January 8, 2003 Universal Service Support for Rural Health Care Telecommunications William England Universal Service Administrative Company Rural Health Division www.rhc.universalservice.org, ph 800-229-5476

2. RURAL HEALTH CARE DIVISION USAC Organization

3. RURAL HEALTH CARE DIVISION Eligibility Rural public and non-profit health care providers post-secondary health care educational institution or medical school community health center community mental health center local health department or agency not-for-profit hospital rural health clinic

4. RURAL HEALTH CARE DIVISION Telecommunication Services Eligible services (used to provide health care): T3 & fractional T3 T1 & fractional T1 ISDN Frame relay Link extension Other telecom svcs Equipment not eligible. Service must be from telecom carrier and must post Form 465 28 days before choosing carrier.

5. RURAL HEALTH CARE DIVISION Avg Monthly Support & HCP Cost USAC* HCP Service $600 $310 T-1 1.544 Mbps $384 $189 Frame Relay 1.544 Mbps $575 $470 Frame Relay 256 Kbps $180 $248 Frame Relay 56 Kbps $124 $86 ISDN 128 Kbps $428 $251 Average (USAC share 63%) * Year 2001 averages (excludes Alaska.) Actual support depends on distance or urban/rural difference.

6. RURAL HEALTH CARE DIVISION Year HCPs Funding Average 1998 450 $2,768,636 $6,153 1999 510 $2,435,809 $4,776 2000 615 $4,377,360 $7,118 2001# 1,009 $6,330,103 $6,274 2002* 151 $1,112,112 $7,365 2002+ 1,120 $7,400,000 $6,600 2003+ 1,200 $7,900,000 $6,600 # 95% Completed * 15% Completed + Forecast RHCD Non-AK Commitments

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12. RURAL HEALTH CARE DIVISION Supported Applicants by Type HCP Type Year 98 Year 99 Year 00 Yr 01* Yr 02* Hospital 199 275 302 349 45 Rural Health Clinic 187 221 308 456 62 Comm Health Center 34 75 78 87 14 Comm Mental Hlth Ctr 50 43 30 77 7 Local Health Dept. 3 10 21 184 42 Educational Institution 10 9 4 0 0 Total 483 633 743 1153 170 * Yr 2001 about 95% complete, Yr 2002 about 15% complete.

13. RURAL HEALTH CARE DIVISION

14. RURAL HEALTH CARE DIVISION On 5/15/02, FCC Published NPRM for Rural Health Care Support Mechanism Sought comments (due 7/1/02, reply 7/29/02) on: Improving and simplifying program operation. Increasing # of eligible entities (within $400M cap). Eligibility of rural HCPs that have other functions beyond those directly listed in statute. Whether/how to provide Internet access discounts. Whether/how to change support calculations including:  What is comparable service for urban/rural difference?  Should rate be that of nearest large city?  What should be Maximum Allowable Distance?

15. RURAL HEALTH CARE DIVISION Comments Filed on NPRM for Rural Health Care Support Mechanism 75 comments and 15 reply comments were filed. Most HCPs supported modification of program in directions mentioned in NPRM. Some carriers and others cautioned that program not be expanded beyond original intent. Many comments urged revising of how support is calculated for Pacific territories. Final rule likely late spring. Effective date?

16. RURAL HEALTH CARE DIVISION Administrative Changes Being Considered for Rural Health Care Support Mechanism Eliminate Form 468, merge into Form 466. Post Urban Rates for use if rate not submitted by HCP. Implement electronic submission of Form 466. Implement electronic submission of telco invoices.

17. RURAL HEALTH CARE DIVISION WWW.RHC.UNIVERSALSERVICE.ORG 800-229-5476 M-F 8AM-8PM Call Us