FCC Proposes $18.7M Fine for Universal Service Fund Rural Healthcare Program Violations

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The Federal Communications Commission (FCC or Commission) has proposed an $18,715,405 fine against DataConnex for apparent violations involving the Universal Service Fund Rural Health Care Program. The Florida- and Mississippi-based telecommunications services provider is charged with violating the Communications Act and the program’s competitive bidding rules, and using forged, false, misleading, and unsubstantiated documents to improperly seek funding from the Universal Service Fund (USF).

In its investigation, the FCC’s Enforcement Bureau found that DataConnex’s relationship with a consultant called Healthcare Connect United enabled DataConnex to influence both sides of the bidding process for providing telecommunications services to rural health care providers. From 2014 through 2016, according to the FCC, DataConnex paid more than $220,000 to Harrison & Howard Advisors, a company under common ownership with Healthcare Connect United.  Further, DataConnex held itself out to rural health care providers as just another service provider while Healthcare Connect United professed to be an independent representative whose loyalty was to the rural health care providers.

The FCC states that DataConnex and Healthcare Connect United apparently developed coordinated plans and strategies targeting rural health care providers, and undermined the basic fairness required of competitive bidding. DataConnex apparently encouraged rural health care providers to retain Healthcare Connect United as their consultant prior to the initiation of the competitive bidding process. In many instances, after Healthcare Connect United was retained to help manage the bid process, DataConnex was awarded program contracts by these rural health care providers. The Enforcement Bureau determined that the rural health care providers were not aware of the financial relationship between DataConnex and Harrison & Howard Advisors/Healthcare Connect United.

The FCC also found that DataConnex apparently created urban rate letters that were based on forged, false, misleading, and unsubstantiated documents to increase its support from the USF.

 

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