Federal Official Agrees to Examine Puerto Rico’s Health Care Funding

Secretary of Health and Human Services Sylvia Burwell Matthews has agreed to convene a joint Federal-territorial working group examine Puerto Rico’s treatment in Federal health programs.

Burwell agreed to the working group in a meeting with Governor Alejandro Garcia Padilla and former Services Employees International Union Vice President Dennis Rivera, who is originally from Puerto Rico and has been leading a campaign to press for improved treatment for Puerto Rico in Federal health care programs.

Rivera has been quoted as saying that he had received a call from the White House urging him to mobilize residents of Florida of Puerto Rican origin to increase political pressure for increased Federal healthcare funding for Puerto Rico. One million residents of Florida are now of Puerto Rican origin, and the Puerto Rican population in Florida has been increasing as the territory’s economic problems worsen.  Florida’s Puerto Ricans supported President Obama but also voted heavily for Jeb Bush as governor.  They are also settling heaving in Central Florida, which political pundits refer to as the ‘Swing Vote of the Swing State.’

The Rivera campaign was initiated because of a planned 11% reduction for Medicare Advantage (MA) program payment rates in Puerto Rico in 2016. Medicare Advantage programs operated by private insurance companies pay for services covered by Medicare and additional health care services, and they are paid to do so by Medicare. ‘Obamacare’ tightened the rules for payment because of what were felt to be excessive profits. The Department of Health and Human Services’ Centers for Medicare and Medicaid Services (CMS) issued MA rates for 2016 in April. Rates are based on local healthcare costs. Rates for the States, where less than a third of Medicare beneficiaries participate in MA plans, will increase an average of three percent.  CMS recently confirmed its determination to cut Medicare Advantage (MA) premiums for Puerto Rico beneficiaries by 11%. More than three-quarters of Puerto Rico Medicare enrollees have MA plans.

At the request of Puerto Rico’s Resident Commissioner in the U.S. House of Representatives, Pedro Pierluisi, and other members of the Congress, CMS reviewed additional data submitted by Puerto Rico MA interests but concluded last week that the 11% reduction was correct.  A response from the Department of Health and Human Services explained that research is being conducted and that improvements may be made in 2017, but that the cuts would go forward.

“We at the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS) take access to health care services for Medicare and Medicaid beneficiaries in Puerto Rico very seriously,” wrote Acting Administrator Andrew Slavitt. He went on to say that “Puerto Rico has a unique health care market, with many low-income individuals in both Medicare and Medicaid, and a complex legal history that affects the health care system in many ways.”

The decision will reduce payments to MA insurance companies in Puerto Rico approximately $300 million in 2016, the companies claim. They also assert that reduced services will lead to additional costs for the Government of Puerto Rico’s healthcare system.

Gubernatorial Chief of Staff Victor Suarez has indicated that the working group should have a recommendation on 2016 MA rates by the end of this month.

The territory is funded less than equally with the States in Medicaid, Medicare, and the 2010 Federal healthcare reform’s health insurance subsidy program. U.S. Government Accountability Office researchers two years ago estimated that the less than equal treatment denies the insular government and residents $4.5 billion-$6 billion a year that would be provided in a State. The unequal treatment is a major cause of the territory’s financial problems.

Another major Federal funding issue for Puerto Rico’s healthcare system is that the insular government is spending the additional funds that it was granted for Medicaid by Obamacare at a rate that would exhaust the funds intended in one case to last until September 30th, 2019 and in another until December 31st, 2019 by March 2018. The spending was accelerated by the insular government’s decision to provide 2010 healthcare reform benefits even though the territorial government sought and received a controversial waiver of a Federal requirement for the benefits. The Garcia Padilla Administration last week reversed course and proposed legislation to roll-back some of the benefits.

Some leaders from Puerto Rico’s government took the annual Puerto Rican Day Parade in New York as an opportunity to increase awareness of the issue.