Rosselló Administration All In On P.R. Integrity in Medicare Advantage Act
At 5 a.m. Sept. 20, 2017, Hurricane Maria churned off the southeast coast of Puerto Rico; her eye packing 145-mile-per-hour winds took aim on the island, and then unleashed 12 hours of fury, decimating homes, its power grid and economy. That epic disaster drew the world’s attention and brought to the forefront an unfolding humanitarian crisis that exposed, among other things, funding disparities in Medicare—healthcare for elderly people—for 3.3 million U.S. citizens who pay full Social Security taxes that should cover full rates for the island. Still, Puerto Rico receives only 43 percent of the national average. The question today begs: why?
The devastation wrought by Hurricane Maria lay raw the vulnerability of the island’s hospital network and set in motion net outmigration estimated at more than 47,000 people. If that trend continues at the current rate, Puerto Rico could see population declining below the 3 million mark in 2025. The mass exodus, which also includes one physician per day leaving the island, and an economy in a double-digit slide more than a decade in the making, presents a harrowing scenario that set in motion initiatives on the Congressional front intended to rebuild an island left in tatters. Equilibrium in funding for Medicare Advantage (the program to fund Medicare gaps, chosen by 72 percent of the island’s Medicare beneficiaries) is among the initiatives that would go a long way to mending this broken economy.
Foremost among the measures on the Congressional front is House Resolution 6809, also known as the Puerto Rico Integrity in Medicare Advantage Act (Prima), which would “amend Title XVIII of the Social Security Act to provide for temporary stabilization of Medicare Advantage payments following Hurricane Maria.”
The bill filed on Sept. 13, 2018, by Puerto Rico’s Resident Commissioner in Washington Jenniffer González, would among other things, stabilize Medicare Advantage (MA) rates paid to Puerto Rico in 2019, 2020 and 2021. If the bill were to be approved in the U.S. House Ways & Means Committee or the [House] Energy & Commerce Committee and pass in the Senate, Puerto Rico stands to receive a windfall of some $3 billion in additional funds over the next three years and, more importantly, provisions included in the measure stipulate that no less than 50 percent of those funds will go to healthcare providers.
“Last year, we managed to obtain more funds for Medicare Advantage on the island, but we perceived that it wasn’t reaching the providers—doctors, pharmacies and hospitals,” González said in an exclusive interview with Caribbean Business that took place one hour after she announced the status of HR 6809 during a healthcare conclave titled “From Obamacare to Trumpcare,” which was hosted by the Puerto Rico Chamber of Commerce at the end of September. “Before, you had an increase in premiums, but the money wasn’t going to the healthcare practitioners. If the bill is approved, you would have a law that stipulates that at least 50 percent of those funds will be passed on to healthcare providers [for a period of three years]. Now, for the first time, you have the whole industry behind this.”
Importantly, the insurance companies are included among those advocating for the measure. “As pertains to [HR] 6089, we as MMAPA [Medicaid & Medicare Advantage Products Association of Puerto Rico] had some dissenters as to whether we should advocate for that wording,” explains Medical Card System Inc. (MCS) CEO Jim P. O’Drobinak, who is the former president of the Medicare Coalition for Fairness and MMAPA. “Yet the notion stands that when you get to the front of the line, you have to give your best story. So, we pushed to make certain we got that wording in there—for the 50 percent for physician fees—and we are glad it got in there. I feel she [González] has outperformed what a lot of people have given her credit for. She got that wording in there.”
The hope of Puerto Rico’s non-voting member of Congress is that the bill will help to stem the tide of doctors leaving Puerto Rico at an alarming rate. “Take into account that two years ago, we had one doctor per day leaving the island to the point where some subspecialties do not have professionals left on the island. You have a healthcare network that is much more compromised. Thus, you have a system that commences to collapse. So, it is important to obtain that money.”
Whether HR 6809 rallies enough support to pass is contingent on many factors. Although the measure has a roster of co-sponsors—José Serrano (D-N.Y.); Don Bacon (R-Neb.); Peter King (R-N.Y.); Darren Soto (D-Fla.); Stephanie Murphy (D-Fla.) and Amata Coleman Radewagen (R-Am. Samoa)—on both sides of the aisle, midterm elections held on Nov. 4 could put the brakes on the momentum behind Prima if allies lose their Congressional seats.
In Congress We Trust?
One conservative adviser on the Hill with knowledge of the bill put it into federal context with this: “This bill is a perfect example of insularism that politicians in Puerto Rico have about how to best interface with the rest of the United States and, in this case, with the rest of the members of Congress. I think it shows a great deficiency in the sophistication of this particular nonvoting resident commissioner.
“The broader issue is that Puerto Rico as a jurisdiction has a very high participation in the Medicare Advantage program, which from a conservative point of view, provides the Medicare recipients the ability to choose in ways the regular Medicare does not necessarily do. And the opportunity that the Puerto Rico folks miss is to be a part of the whole—everything that is going on around the country; why is this good across the country? They miss the forest for the trees.
“Nobody seems to have mounted a concerted effort to make sure CMS [Centers for Medicare & Medicaid Services] treats all federal taxpayers equally—and that is the issue; if you are a federal taxpayer who paid into the system, whether you live in the Virgin Islands or Guam, California, Oregon or Florida—you should not have to worry about what the tax dollars you paid are going to do for you.”
Actually, the MMAPA’s O’Drobinak together with MMAPA leaders belonging to MA providers Triple-S Management, Humana and MMM, spent the better part of the past six years explaining the disparities in treatment of Puerto Rico in the reimbursement rates to anyone who would listen on the Hill and at CMS. Despite the political shifts in ideology, O’Drobinak believes the message has not been lost.
“The problem becomes, when you see it on the micro basis, down here, when the political parties change, there is a shift in ideology. The difference between here and there is that the tenured staffers are deeper there,” O’Drobinak explained with the experience of hundreds of visits with policy wonks underpinning his perspective. “So, there are people [who are replaced]—if you change from what was a Democrat-based environment before Trump to one that has the leaders at the Health & Human Services [HHS] agency and CMS becoming Republicans. But the people who are doing the math are the ‘lifers.’ So, despite the party shift, they have those lifers who have their numbers that they believe in.”
The ACA assault on MA fairness
The numbers are not pretty. Back in 2013, Caribbean Business reported Medicare Advantage was targeted for cuts by the administration of President Barack Obama in the run-up to pass the Affordable Care Act (ACA) in U.S. Congress. The federal government commenced paring down the MA program nationally by freezing payments at 2010 levels—making cuts totaling $136 billion paid through insurers nationwide. Those cuts were particularly onerous for Puerto Rico because the island had funding levels at the time of only $548 per beneficiary, which was 30 percent less than the lowest state of the Union, Hawaii, which had $771 per beneficiary at the time.
Those Obamacare cuts and the glaring disparities in funding today, where Puerto Rico receives only 43 percent of the national average, are particularly devastating because 72 percent of eligible Medicare beneficiaries have chosen the MA program to fund the gaps in their healthcare coverage. Add fiscal insult to bankruptcy, Puerto Rico had already been losing more than $300 million annually prior to the ACA cuts.
In a special Caribbean Business report in 2013, O’Drobinak explained: “The ACA cuts are a problem for everyone in Puerto Rico. They aren’t just about senior citizens, healthcare providers or plans. They critically affect care for anyone who receives healthcare on the island, and are a big problem for all senior residents in Puerto Rico. These cuts impact the entire Puerto Rico economy and will change how people live their lives,” he said.
The apocalypse to which he referred is a meltdown leading to fewer beneficiaries paying greater costs yet receiving decreased benefits and services from fewer hospitals and physicians. With the elderly citizens accounting for as much as 43 percent of the healthcare spending in Puerto Rico, it is likely that many MA beneficiaries will be left without subsidies to cover their Medicare Part B (physician services) and will be forced to join the rolls of Mi Salud, the local government health plan for the medically indigent. This beneficiary exodus to the government health plan would exert further pressure on Puerto Rico’s already strained healthcare reform funding and the distressed commonwealth fiscal situation. In that scenario, MA’s intended virtue to provide “affordable care” and reasonable access for beneficiaries will be lost, albeit unintentionally, for more than 500,000 U.S. citizens of Puerto Rico.
Nationwide, the MA program is an alternative to the Traditional Fee-For-Service (FFS) Medicare program under which beneficiaries voluntarily make an annual choice to join. MA allows beneficiaries to choose from a selection of plans for their healthcare needs and provides additional benefits such as prescription drug, dental coverage and eyeglasses, not allowed under Traditional Medicare. Puerto Rican beneficiaries elected MA at a rate almost 300 percent higher than their U.S. mainland counterparts in 2013.
The federal austerity plan is particularly harsh on the island’s seniors because of an existing, historical Medicaid and Medicare funding imbalance as it pertains to Puerto Rico. “Unlike in the States, Puerto Rico isn’t eligible to receive federal Medicaid funds to provide premium [payment] assistance to low-income seniors enrolled in FFS Medicare,” Pedro Pierluisi told Caribbean Business during an exclusive interview with the then-resident commissioner in 2010, soon after he had sent a letter to Health & Human Services Secretary Kathleen Sebelius requesting fair treatment in funding. “To fill this gap—and attract enrollees—MA plans in Puerto Rico will often pay some or all of the Part B premium for these individuals. This accounts for MA’s popularity on the island,” Pierluisi said at the time.
Now, nearly eight years later, the MMAPA and healthcare sector are hanging their hopes on a bill that faces a significant stretch in a Congressional gauntlet chock-full of special interests specific to national districts in midterm elections.
“The issue about Medicare in Puerto Rico is about the basics. It is one of the few issues where the individuals who have paid into the Medicare program and into the social security program have a direct relationship to the federal government and can actually demand that CMS updates their reimbursement schedule for Puerto Rico and doesn’t leave Puerto Rico behind. But I don’t think this bill gets there,” the capitol source told Caribbean Business. “I think it attempts to do that but in a way that continues to be Puerto Rico-specific versus dealing with the formula for Medicare reimbursement tied to salient points and not this allowing CMS to treat Puerto Rico differently without any good reason.”
The 6809 gorilla
O’Drobinak has seen those special interests many times. “So, 6809 is the 10,000-pound gorilla—it is what the resident commissioner is talking about and what we are focusing on. It is precisely why we try not to make it Puerto Rico-specific, but it identifies outliers bringing a blended rate, so it brings their [MA] number for us [Puerto Rico] closer to the national average. It represents about $1 billion annually, but by virtue of where the macro MA rates are, it has been scored at zero. We are extremely optimistic.”
At this writing, Puerto Rico’s healthcare sector continues to hope against hope as it averts one fiscal cliff after another. The most recent reprieve came in the form of $3.6 billion additional funding earmarked for Medicaid through Sept. 30, 2019. Puerto Rico is eligible for another $1.2 billion in Medicaid funds, but it must adopt best practices in data reporting through the Medicaid Management Information System (MMIS) and the establishment of a fraud-detection unit by year’s end.
Those reprieves in the federal realm often serve to bolster the myth of abundance when rationing of services is central to effective managed care. A May report by the U.S. Government Accountability Office lists expenditure for the Puerto Rico Health Insurance Administration at $2.5 billion. This funding mirage in the commonwealth fiscal plan that states: “In [fiscal year (FY)] 2018, however, the available share of funds is much higher due to several federal funding sources. Additional federal funding is provided in FY 2018 through remaining Affordable Care Act block grants (about $598 million) and supplemental FY 2017 Omnibus Federal funding of $296 million. The Bipartisan Budget Act of 2018 [BBA] allocated a supplemental $4.8 billion in federal funding for Puerto Rico Medicaid for use through September 2019.”
O’Drobinak and the Medicare Advantage brigades would like to see the same happen for Medicare funds. Medicare Advantage wants the same thing. “We as an industry bought ourselves some time on Medicaid; now, let’s get some more funding on Medicare Advantage,” says MMAPA’s O’Drobinak. “Medicare Advantage pays four times more per member…. But do not kid yourself; Medicare Advantage subsidizes Medicaid. Yes, Medicaid is a necessity in society, you have to help people—you must have quality healthcare.”
Delivering that quality healthcare becomes more difficult because the exodus of doctors is real. The resident commissioner is pushing legislation on several fronts that would help to improve Medicare Advantage funding. “So, you have the whole health industry on the island impacted directly—it is creating a loss of physicians, a loss of healthcare providers. That creates a sad situation; you don’t have an appointment because there are not enough doctors to attend to you,” González told Caribbean Business. She has been trying to educate representatives on the Hill that Puerto Rico is paying into Medicare and yet doesn’t receive the same amount of benefits or equal treatment.”
“A perfect example is Medicare Part B; we filed legislation, HR 797—with bipartisan support because Puerto Rico is the only territory that is not included automatically in the enrollment to receive that,” González added. “Once you reach the age for Medicare, you have something like 30 days to enroll; if you don’t do that in Puerto Rico, you have to pay penalties for life—unlike the rest of the nation where you have to opt out. In Puerto Rico, you have to opt in. So, our people are paying [a total of ] $3.5 million in annual penalties for life. That is money that people can use for medicines, and on other health-related costs.”
O’Drobinak put it into perspective with this: “When you look at the population dip from 2010, down from the 3.6 million down to the 3.3 million that has not been adjusted for in the economy. And then if we go from 3.3 [million] to, take your pick, 2.9 [million]? we are going to have some tough days ahead for providers, for physicians. But it all gets better with some more money—from the humanitarian perspective, from the criticality in the budget perspective, from the ‘how are we going to get the Bell-shaped curve back?’ perspective.”