Bureau Clarifies “Evergreen” Healthcare Contract Status

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The Federal Communications Commission’s (FCC or Commission) Wireline Competition Bureau (Bureau) has released a Public Notice clarifying the scope of the “evergreen” contract exemption in the Commission’s universal service Rural Health Care program.  Under the Telecommunications and Healthcare Connect Fund Programs of the Rural Healthcare Support Mechanism, multi-year contracts may be designated as “evergreen” by the Universal Service Administrative Company (USAC), meaning that for the life of the contract, the health care provider (HCP) need not annually re-bid the service by posting an FCC Form 465 or FCC Form 461. In the December 2012 Healthcare Connect Fund Order, the Commission concluded that if a HCP had a contract designated as “evergreen” under the Telecommunications Program or Internet Access Program before January 1, 2014, it may choose to seek support for the services provided under the evergreen contract from the Healthcare Connect Fund without undergoing additional competitive bidding, so long as the services are eligible for support under the Healthcare Connect Fund and the HCP complies with all other Healthcare Connect Fund rules and procedures.  Some parties have expressed concern as to whether Telecommunications Program evergreen contracts designated after January 1, 2014 may be used to seek Healthcare Connect Fund support without undergoing additional competitive bidding. The Bureau has clarified that the January 1, 2014 date is not a bright-line cut-off for the evergreen exemption. If USAC designates a contract as “evergreen” under the Telecommunications Program, that designation will also apply under the Healthcare Connect Fund Program, and vice versa. In both instances, the HCP will not be required to undergo additional competitive bidding for the life of the evergreen contract.

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