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Governor presents strategy to stop doctors from fleeing Puerto Rico

By on December 21, 2017

Gov. Ricardo Rosselló Nevares announced today the granting of the first 132 tax credit decrees to doctors as a measure to stop the mass exodus of doctors from the island, which benefits medical specialists, subspecialists, podiatrists and dentists, as well as those who wish to relocate within Puerto Rico.

Flanked by a contingent of his cabinet members, the chief executive said the delivery of the decrees is the culmination of a process that began with approval of incentives in Act 14-2017, the Retention & Return of Medical Professionals, which culminates with the official granting of these decrees.

Governor Ricardo Rossello during one of his daily press briefings. (Juan J. Rodríguez/CB)

“Puerto Rico has already been losing its doctors in recent decades, creating a huge gap in the health area. One of the main measures was Act 14, a law that provides very aggressive tax incentives. The effort began in October, and today we announce that 404 requests have been received for this decree and 132 have already been granted,” the governor said.

“What it offers is a 4% tax preference rate on income derived from providing medical services, up to 25% contribution for individual retirement plans, an added value for our society, including more than 180 hours of community service through the Government Health Plan to offer services to the most vulnerable sectors,” Rosselló Nevares added, while explaining that the term to manage the decrees extends for two years, and are valid for 15 years.

The 132 decrees were delivered by the secretary of the Economic Development & Commerce Department (DDEC by its Spanish acronym), Manuel Laboy Rivera, and correspond to the 2017 tax year.

The head of DDEC said that in the next few days another round of decrees will be issued, which are being processed by the Industrial Tax Exemption Office (OECI by its Spanish acronym), which is attached to DDEC, and the Treasury and the Health departments.

“This is an important professional sector for Puerto Rico, not only because it contributes to the health and quality of life for Puerto Ricans, but also because it contributes significantly to economic development, both regionally and throughout the island,” Laboy Rivera expressed.

The president of the P.R. Doctors & Surgeons Association, Víctor Ramos, urged the medical class to evaluate whether it is convenient for him to obtain a decree and apply.

“I think my call is now to the doctors, to those who skeptically thought this was not going to happen, that the government was not going to comply; we are already here. Go to your accountant, who can do the numbers and establish if you agree or not with the decree,” Ramos said.

Bittersweet outcome for doctors
Yesterday, the Medical & Surgeons Association president warned that insurers operating in Puerto Rico have a plan that will bring in about $600 million to respond to the increase in service cost itineraries, which was reviewed by the Centers for Medicare & Medicaid Services (CMS), and which they claim will be directed to their beneficiaries.

“CMS establishes what the rate should be for each visit, for each procedure, for each thing that is done. For this reason, if that is already pre-established, who is to say that the intention of the insurers is to not keep that money, and enrichen themselves more and more,” Ramos explained.

The doctor also indicated that CMS increased the Geographic Practice Cost Indexes (GPCI), which establish the rates by which the federal entity would be paying its beneficiaries for the medical services they require.

However, the medical association anticipated insurers will continue to be governed by the GPCI that was approved in 2016, which establishes lower payments to the beneficiaries of their plans. According to Ramos, GPCIs are established through actuarial studies and vary from region to region.

“We have the lowest GPCI in the entire United States. A spectacular and intense effort was made to show CMS that they were wrong. The correct statistics were collected, the study was done, the study was paid. And CMS said ‘they are right; for many years we have been paying less than what we have to pay, because now we are going to correct that,’” said the president of the Medical & Surgeons Association.

Ramos said that as a measure to counteract the imposition of this increase to the GPCI, the presiding organization is evaluating legal alternatives to guarantee insurers that provide Medicare Advantage and Medicaid services can take advantage of the newly established rates.

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