Health Centers owed for Medicaid services sue to stop debt discharge
SAN JUAN – Several federally funded healthcare centers that had sued Puerto Rico 20 years ago, seeking some $100 million in unpaid Medicaid services since 1997, asked the U.S. District Court not to discharge the debt as part of Promesa’s Title III bankruptcy process.
The centers said in a suit filed earlier this week that Promesa’s own terms state that nothing in the law can impair or in any manner relieve the commonwealth from complying with federal laws or implementing a federal program protecting people’s health.
The plaintiffs, Atlantic Medical Center Inc., Camuy Health Services Inc., Centro de Salud Familiar Dr. Julio Palmieri Ferri Inc., Ciales Primary Health Care Services Inc., Corp. de Serv. Médicos Primarios y Prevención de Hatillo Inc., Costa Salud Inc., Centro de Salud de Lares Inc., Centro de Servicios Primarios de Salud de Patillas Inc., Hospital General Castañer Inc. and Río Grande Community Health Center Inc. participate in two federal healthcare grant programs for medical assistance cases and under section 330 of the Public Health Service Act.
In the past, Puerto Rico was divided into 10 regions. For each region, a single managed-care operator (MCO) was responsible for Medicaid services. All providers of Medicaid services, including section 330 grantees, were forced to contract with the MCO that had exclusive responsibility for the region in which the providers were located.
From 1989 to 2010, the commonwealth failed to pay the healthcare centers for Medicaid services Among other things, they said the commonwealth allegedly neglected to calculate federally required rates for any health center; failed to implement any process for centers to claim supplemental payments from its Medicaid program when MCOs paid the centers less than the Medicaid Act’s required amounts; and refused to make supplemental payments to centers to make up the difference between the centers’ required rates and the amounts paid by the MCOs.
The MCOs participating in the island’s Medicaid program paid the centers significantly less than their costs for providing Medicaid services.
“Because of the chronic underpayment, Section 330 grantees were forced to use their Section 330 grant funds to pay for Medicaid services provided to residents of the Commonwealth,” they noted.
To collect the payment for Medicaid services, various centers sued the Commonwealth in both state and federal courts. The litigation in Puerto Rico is still ongoing after nearly two decades.
In 2002, the health centers sued the commonwealth in the Puerto Rico Court of First Instance, which entered four partial final judgments awarding some of the health centers $11.5 million plus post-judgment interest for Medicaid services owed from Jan. 1, 2001, onward.
“There is nothing left to do regarding the Final and Firm Judgments, but to enforce and collect the same,” the document states.
Another case is still pending in appeal after a ruling that awards $28 million to the plaintiffs.
In 2003, three Puerto Rican health centers–one in Río Grande and two that are not party to the complaint filed this week–sued the local Health Department in federal court, which ordered the government to comply with the law. Five more suits followed in 2006, and in 2010 the court ordered the commonwealth to make certain payments.
In August 2017, the plaintiffs removed the claims in state court to federal court and seek a ruling that the debt cannot be discharged or impaired in any way as part of the bankruptcy process.