Legislation introduced to expand Medicare Part D low-income subsidies to U.S. territories

The U.S. Capitol in Washington, D.C. (File)

Bipartisan bill would allow residents of Puerto Rico, other U.S. territories to become eligible for the subsidy program beginning in plan year 2021

SAN JUAN — Reps. Donna Shalala (FL-27), Darren Soto (FL-9), Jenniffer González-Colon (PR), and Stephanie Murphy (FL-7) introduced Wednesday the Medicare Low-Income Subsidy Expansion for Territories Act of 2019, bipartisan legislation that would allow residents of U.S. territories to become eligible for the Medicare Part D low-income subsidy (LIS) program beginning in plan year 2021.

The LIS program (also called Extra Help) assists low-income individuals by providing subsidies to fully or partially cover their out-of-pocket costs under the Medicare Part D prescription drug program. Program subsidies help reduce or completely cover the out-of-pocket cost of Medicare Part D premiums, deductibles and coinsurance, while also eliminating the prescription drug coverage gap and waiving the penalty for late enrollment into Medicare Part D.

Residents of U.S territories are currently barred from receiving LIS under Part D. In place of the low-income subsidy, territorial residents receive a fixed amount of funding to provide Medicaid-covered prescription drugs for all low-income beneficiaries. This funding can be substantially lower than the amount of federal financial support that low-income beneficiaries would receive if territorial residents were eligible for the LIS program.

“For generations, the residents of Puerto Rico and other U.S. territories have been treated like second-class citizens,” Shalala said in a joint release. “Though these territories face many inequities, poverty–particularly among seniors–may be their most daunting challenge to overcome. This bill is an important step towards alleviating poverty among seniors in Puerto Rico and other territories with aging populations, and it is also a meaningful stride towards better and more equitable treatment for American citizens who have for too long been ignored.”

“This is a step forward for Puerto Rico and the rest of the U.S. territories that have suffered from unequal treatment in several Medicare programs,” said González-Colón. “In the specific case of Puerto Rico, the current situation is critical for the elderly because of limited access to prescription drug assistance compared to the citizens of the rest of the states. H.R. 4666 would grant our duals the same right to access to Medicare Part D subsidies that other Americans enjoy. It is a step in correcting the discrimination in federal programs that our most vulnerable citizens suffer, for the only reason of wishing to remain in Puerto Rico.  I want to thank my colleagues in Congress for supporting such an important piece of legislation that will improve the quality of life of the 3.2 million American citizens that live in Puerto Rico.”

No senior should ever have to forego vital, life-saving healthcare just because of where they live,” said Soto. “At a time when Puerto Rico and the U.S. territories are still suffering from the long-standing injustice of poverty, it’s more imperative than ever that we ensure our communities get the care they deserve. I’m proud to introduce H.R. 4666 with my colleagues and I’m grateful for the bipartisan support.”

“Puerto Rico and the other U.S. territories deserve to be treated fairly. I’m proud to support this bipartisan bill that ensures low-income seniors in Puerto Rico receive the same assistance as their fellow Americans in Florida and other states to help them better afford their prescription drugs,” said Murphy, a member of the House Ways and Means Committee.

González Colón and Soto had also previously introduced HR 4195, Territories Medicare Prescription Drug Assistance Equality Act of 2019, a bipartisan measure that would make the Part D LIS Program applicable in the territories in the same way as is applicable stateside, to continue driving that this assistance be granted to U.S citizens residing in Puerto Rico.




Puerto Rico gov discusses recovery aid with federal officials in Washington

(Courtesy)

Week-long agenda also focuses on improving credibility in Congress

SAN JUAN — Puerto Rico Gov. Wanda Vázquez continued her meeting agenda in Washington, D.C., Tuesday in an effort to regain the federal government’s trust in the island’s government administration and achieve the disbursement of funds for Medicaid, economic development, housing and reconstruction after Hurricane Maria, among other pressing needs of the island.

In a statement issued by her office, La Fortaleza, the governor noted that she would be meeting with White House Office of Intergovernmental Affairs officials to discuss Puerto Rico’s recovery efforts and the allocation of federal funds.

Vázquez will meet with Treasury Secretary Steven Mnuchin and Housing Secretary Ben Carson. In addition, she will meet with Energy Department officials.

Resident Commissioner Jenniffer González and Puerto Rico Federal Affairs Administration (PRFAA) Executive Director Jennifer Storipan will accompany the governor for some of the meetings.

Vázquez arrived in Washington on Sunday and started to hold meetings Monday, when she discussed the island’s funding and health-related program needs with officials from the U.S. Department of Health and Human Services’ (HHS) Centers for Medicare and Medicaid Service. She also met with Education Assistant Secretary Frank Brogan, with whom she discussed priority issues “for the proper functioning of Puerto Rico’s school system.”

The governor will meet with members of the Federal Emergency Management Agency (FEMA) on Thursday regarding the island’s recovery efforts after hurricanes Irma and Maria. 

“The main purpose of this visit to the federal capital is to restore relations with federal entities that are key in the disbursement of funds for the recovery of Puerto Rico and the projects that allow the social and economic development of the island,” Vázquez said in a statement. “We are focused on improving the credibility of Puerto Rico at federal Congress, as well as creating alliances to develop projects that improve the quality of life of Puerto Ricans.”

On Wednesday and Thursday, Vázquez and Puerto Rico officials will meet with various members of Congress to continue discussing hurricane recovery efforts, Puerto Rico’s admission as a state, the Puerto Rico Oversight, Management & Economic Stability Act (Promesa), the energy system and Medicaid. 

The meetings slated for Wednesday and Thursday include separate conversations with Reps. José Serrano (D-N.Y.), Darren Soto (D-Fla.), Nydia Velázquez (D-N.Y.),  Rob Bishop (R-Utah), Stephanie Murphy (D-Fla.), Greg Walden (R-Ore.), Rick Scott (R-Fla.) and Lisa Murkowski (R-Ark.), according to an agenda sent to Caribbean Business. 




V2A report: Difficult times for Puerto Rico hospital sector

‘Consolidation, both across the hospital sector but also vertically along the health system may help turn these trends around.’

Editor’s note: The following was published in the most recent newsletter issued by Vision to Action (V2A), a strategic consultancy firm that also analyzes industries and has been publishing its reports since 2009.

Hospitals play a key role in the provision of health services to Puerto Rico citizens. In recent years they have been operating in a complicated environment where several industry trends have been hurting their profitability. That situation has only been aggravated by Hurricane María. Consolidation, both across the hospital sector but also vertically along the health system may help turn these trends around.

This article is the first of a series of Insights where we evaluate the hospital sector of Puerto Rico, looking at its recent trends and providing our perspective looking forward. Let’s start with the size of the hospital sector. There are 61 community hospitals1 in Puerto Rico with a total of approximately 9,350 inpatient beds with presence in 24 of the 78 Municipalities (see Figure 1, double click to zoom in and browse the map to see hospital names and number of beds by hospital)2. The MetroPavía system is the largest hospital group with 11 hospitals across Puerto Rico and 15% of all inpatient beds in the Island, followed by HIMA with 5 hospitals and 13% of inpatient beds (mainly in the Metro and East regions) and the Doctors group with 4 hospitals and 7% of inpatient beds.

The hospital sector in Puerto Rico has experienced a deterioration in terms of profitability driven, in part, by the impact of Hurricane María but, also, by industry dynamics that are putting pressure on their margins. As can be observed in Figure 2, the number of hospitals with a negative income margin increased from 15 to 25 in the past five years, representing almost 44% of all the community hospitals in 2017-18. This compares unfavorably against the hospital sector in the US where the proportion of negative income hospitals averaged 23.5% during the 2010-16 period (22.6% in 2015 and 26.4% in 2016).

One of the forces driving the lower profitability is the effort made by Medicare, Medicaid and the health insurers to reduce hospitals costs. In part, this is done by working with doctors and hospitals to reduce the number of patients that are hospitalized and the average length of stay in hospital inpatient beds, obviously ensuring that patients can be safely treated outside hospitals. This has long been the trend in the United States where the percentage of inpatient vs outpatient revenue decreased from 70% in 1995 to 63% in 2005 and 52% in 2016 (see Figure 3). As can be observed in Figure 4, the Puerto Rico hospital sector has also experienced this trend in recent years (from 68% in 2014 to 64% in 2018) but the proportion of inpatient revenue is still significantly above US levels. The higher inpatient revenue levels in Puerto Rico compared to the United States indicates that there is room for further reduction in terms of patient hospitalization and average length of stay in hospitals. We should expect further margin pressure for hospitals from the inpatient revenue side.

There seems to be an excess of hospital beds in Puerto Rico which is also impacting hospital financials. Puerto Rico ranks number 18 in terms of number of beds per 1,000 persons when we compare against States in the US (see Figure 5). The 2.89 number of beds per 1,000 persons is high, particularly when we consider that the Island is quite dense in terms of population compared to most States. In other words, there is not a need to subsidize hospitals in remote areas with low population density as in States like, for example, Nebraska or Montana. In fact, highly dense States like New Jersey, Rhode Island or Massachusetts show significantly lower ratios than Puerto Rico (2.33, 2.12 and 2.30, respectively).

If we draw a straight line from the center of each of the 901 Puerto Rico sub-counties (“barrios”) to the nearest community hospital, we will only find 19 sub-counties with a straight-line distance larger than 20km. One of these sub-counties is Isla de Mona and another 7 sub-counties are located in Vieques where the only community hospital closed after María and has not reopened since. For the other 11 sub-counties, the straight-line distance to the nearest hospital ranges between 20 and 22.5 kms and they are located in Santa Isabel (Jauca 1), Orocovis (Damián Abajo, Cacaos, Collores, Damián Arriba and Pellejas), Quebradillas (Guajataca, Terranova, San Antonio and Quebradillas Pueblo) and San Sebastián (Guajataca).

The large number of hospital beds is also confirmed by the fact that bed utilization is, in general, low in Puerto Rico. A total of 25 community hospitals in Puerto Rico have a utilization rate below 60%. As can be observed in Figure 6, most of the hospitals with low utilization rate also charge less per inpatient discharge. There seems to be a large variability in terms of the amount charged by hospitals across Puerto Rico. This variability is not only driven by the mix of service types provided by hospitals (e.g. cardiovascular surgeries are more expensive than orthopedic surgeries) but also by a large variability in operating costs across hospitals.

But what are the implications of the deterioration of hospitals profitability and the drivers behind it? First of all, there seems to be room for consolidation to leverage hospital synergies, particularly for hospitals located in the same region or adjacent regions. For example, instead of competing against each other for the same patients, hospitals in the same region under a common administration could become complementary through focusing in differing specializations. Additionally, patients could be “directed” to the hospitals with lower utilization and/or more affordable prices (not necessarily with lower margins). Consolidation, particularly within regions, also allows for the integration of information systems (including patients records), better communication between doctors and the standardization of processes, translating into a better and more efficient service to the patient.

Another trend that we should expect to continue is vertical consolidation, where insurance companies enter the business of providing health care services, in this case through the acquisition of hospitals. That move allows insurance companies to align their incentives (reduce unnecessary healthcare costs) to those of the hospitals. Additionally, they increase the number of touchpoints with their affiliates to convey healthy practices and focus on prevention.

There are plenty of hospitals that could be targeted by existing groups or health insurance companies. A total of 20 non-government hospitals in Puerto Rico (33% of total) with 28% of total inpatient beds do not belong to any hospital group. There are 13 more that belong to hospital groups of less than 4 hospitals and they accumulate 23% of total inpatient beds. In other words, there is space in the hospital sector for more concentration.

Finally, there is another trend in the United States and Puerto Rico hospital sectors that may put more pressure on revenue margins. That is the increased focus on quality by CMS and other Federal regulators. Based on the available data provided by CMS for Medicare patients, Puerto Rico does not fare well in terms of the quality of services provided by hospitals vis-à-vis hospitals in the United States. In the next insight of this series dedicated to the hospital sector in Puerto Rico we will take a close look at the quality metrics available for hospitals in the Island.

Notes:

1Based on the American Hospital Association (AHA), community hospitals are defined as all nonfederal, short-term general, and other special hospitals. Other special hospitals include obstetrics and gynecology; eye, ear, nose, and throat; long term acute-care; rehabilitation; orthopedic; and other individually described specialty services. Community hospitals include academic medical centers or other teaching hospitals if they are nonfederal short-term hospitals. Excluded are hospitals not accessible by the general public, such as prison hospitals or college infirmaries.

2Data for hospital in Culebra not available

Sources:

American Hospital Directory (https://www.ahd.com/); American Hospital Association “Trendwatch Chartbook 2018”

Disclaimer

Accuracy and Currency of Information: Information throughout this “Insight” is obtained from sources which we believe are reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. While the information is considered to be true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information. The information may change without notice and V2A is not in any way liable for the accuracy of any information printed and stored, or in any way interpreted and used by a user.

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MCS develops app to optimize healthcare operations

(Courtesy)

Rx Pharmacy helps improve service to Medicare members

SAN JUAN — Puerto Rico managed healthcare plan provider MCS has launched Rx Pharmacy, an application to allow the more than 1,000 pharmacies in its network to process prescription drug pre-authorizations through an online system.

The objective of adopting the new technology is to replace the manual process, “thus facilitating members’ access to the prescription drugs they need,” MCS said in a release, adding that as an added-value, the tool fosters “teamwork with the pharmacies to optimize business operations and streamline the services provided” by MCS Advantage to MCS Classicare members.

Pharmacies belonging to the MCS network first register at a central portal—provinet.mcs.com.pr—to be able to begin offering the streamlined service.

“At MCS, we are pioneers in implementing this virtual system, which will improve communications between the pharmacies and the medical plan, while reducing medication pre-authorization wait times. For example, for expedited medications, we expect to reduce the pre-authorization time from 24 hours to an average of just 12 hours. And for standard 72-hour medications, an average of 36 hours. That way, we can ensure our members keep their health conditions under control,” Dr. Carolyn Rodríguez, executive vice president of Pharmacy at MCS, said in the published announcement.

Rodríguez explained that the industry conducts the pre-authorization process by fax, an antiquated and cumbersome process.

“However, with Rx Pharmacy, we will be able to streamline the prescription drug pre-authorization process, which will help prevent duplicate faxes, reduce hardcopy expenses, and provide the real-time status of each case. It will also result in a virtual database, allowing the pharmacy and the member to be quickly informed of the pre-authorization status of a much-needed medication,” she said.

MCS’s CEO, Jim O’Drobinak, added that the move is a reflection of the company’s commitment to ensure that its provider network offers the best services possible.

“In order to provide quality health care, it must be based on automated processes that speed up the operation of the business. Only then can better service be provided to our members. That’s why it’s essential that providers incorporate the necessary technological solutions into their operations. And because we are aware of this, we used our in-house talent to develop and implement the Rx Pharmacy application, which will allow us to work as a team with our pharmacies to further improve the health care we currently offer to our members,” O’Drobinak said.

At the Puerto Rico Pharmacists Convention, which will be held Aug. 15-16, MCS will deliver an educational talk on pre-authorizations and Rx Pharmacy’s features, including its ability to generate reports for business operations. The talk will be worth three continuing education credits.




Puerto Rico governor to attend State of the Union

SAN JUAN – Puerto Rico Gov. Ricardo Rosselló was invited by Senate Democratic leader Charles Schumer of New York to attend President Trump’s State of the Union address.

Rosselló left Monday evening for Washington for the event Tuesday at the House of Representatives. His office, La Fortaleza, said he also intends to meet with members of Congress and the Trump administration to “discuss pressing matters pertaining the approval of emergency aid to meet the funding of several assistance programs of the Island.”

The referred to federal aid includes that for the island’s Nutritional Assistance Program and Medicare and Medicaid funding, “as well as other issues related to the recovery and reconstruction of Puerto Rico following the passage of Hurricane Maria in 2017.”

A spokesman for Rosselló said the governor plans to “warn Trump against ‘draining’ cash earmarked for post-hurricane recovery efforts on the island and use it to fund the construction of a border wall with Mexico,” according to the New York Daily News.

Rosselló will be joined by the executive director of the Puerto Rico Federal Affairs Administration, Carlos Mercader, for the meetings.

Puerto Rico Secretary of State Luis Rivera will serve as acting governor until Rosselló returns to the island Thursday.

Puerto Rico gov says he asked Trump if he would use recovery funds for border wall




Prima Bill Gains Important Support

Grover G. Norquist, president of Americans for Tax Reform, joined the request by the Government of Puerto Rico and Financial Oversight & Management Board (FOMB) requesting Congress to approve H.R. 6809, the P.R. Integrity in Medicare Advantage Act (Prima), which was presented by the island’s Resident Commissioner Jenniffer González Colón.

Americans for Tax Reform is a nationally known anti-tax advocate organization that Norquist founded. His support is important because this group is a strong ally of several Republican members of Congress and President Donald Trump.

In the letter to members of Congress, Norquist said the legislation “has bipartisan support in the House of Representatives,” and legislators “should ensure the Prima Act is passed into law before the end of the year, either as a standalone bill or in a broader vehicle.”

Grover G. Norquist, president of Americans for Tax Reform. (Gage Skidmore)

Prima was introduced by Resident Commissioner González Colón and seeks to establish a 0.70 average geographic adjustment (AGA) baseline for each county in the United States. The AGA changes reimbursement based on estimated operating expenses in different regions across the country.
“The Prima Act provides a temporary, modest, deficit-neutral correction to Puerto Rico’s Medicare Advantage [MA] base payments level that will help the island recover from the catastrophic negative impacts of the hurricanes,” Norquist said in his letter.

“Compared to traditional Medicare coverage, [MA] plans leverage competition to promote consumer choice, increase options and put downward pressure on costs. The Trump administration is rightly expanding on this model to promote further private-sector negotiation and efficiency,” Norquist added. “Utilization of [MA] plans in Puerto Rico are high compared to many U.S. states. Today, there are roughly 580,000 seniors in Puerto Rico covered through [MA] plans, or nearly 90 percent of those eligible for Medicare,” Norquist pointed out.

In Puerto Rico, Medicare Advantage payment rates were 24 percent lower than the U.S. average in 2011 and have fallen for the past seven years. In 2019, the average base payment will be 43 percent lower than the U.S. average.

The intention of the legislation is to address this discrepancy “by increasing Puerto Rico’s average geographic adjustment, which is set by the Centers for Medicare & Medicaid Services to 0.70 for 2019, 2020 and 2021.”

“Over 97 percent of the counties currently have AGA factors of between 0.70 and 1.3, so this is a modest change that will bring Puerto Rico more in line with the mainland United States,” the activist said.
On similar terms, Natalie Jaresko, executive director of the FOMB, last week wrote to the U.S. congressional leadership requesting they address the disparity between the island and other stateside jurisdictions regarding healthcare funding.

Her letter stressed that the situation “affects the viability of doctors and service providers for Medicare beneficiaries to continue working in Puerto Rico, further exacerbating the exodus of physicians.”

“This increase would have a significant impact on Puerto Rico’s private health sector. The bill establishes a three-year sunset [automatic termination unless it is reauthorized] on this increase, sufficient to counterbalance the long-term effects of the devastation caused by the [2017] hurricanes,” Jaresko, wrote.

The letter was addressed to Senate Majority Leader Mitchell McConnell Jr., House Speaker Paul Ryan Jr., Senate Minority Leader Charles Schumer and House Minority Leader Nancy Pelosi.




MCS renews multimillion-dollar contract with PharmPix 

SAN JUAN – Puerto Rico health insurance provider Medical Card System Inc. (MCS) announced Wednesday that it has entered a contract renewal agreement with Puerto Rican-owned PharmPix Corp. for the latter to manage the pharmacy benefits of MCS’s more than 180,000 commercial customers, “covering over $150 million in annual drug spending.”

Among the initiatives MCS and Guaynabo-based PharmPix have developed since partnering in 2016, are the MCS Life’s Prescribed Drugs by Mail program, which allows members to receive their medications at home; the Concurrent Drug Utilization Review (DUR) program, which verifies a patient’s drug history to identify potentially harmful or unsafe combinations of prescription medications; and Quality Clinical Projects aimed at educating members with diabetes and therapy adherence problems.

MCS CEO Jim O’Drobinak said that in addition to its commitment to Puerto Rico residents’ healthcare, the insurer’s relationship with PharmPix reflects its dedication to support the island’s economic well-being.

“In these historic times that Puerto Rico is experiencing, we at MCS are committed to promote talented Puerto Rican-owned companies that can ensure the continued improvement of both Puerto Rico’s financial health and the healthcare experience of our members,” O’Drobinak said. “Given that healthcare is one of our Vívela MCS corporate culture pillars, which embrace our MCS Conexión de Salud program, we have decided to extend our relationship with PharmPix since they have proven to be an outstanding business partner ensuring the proper delivery of pharmacy benefits. PharmPix has exceeded its pharmacy benefit manager role by assisting us in the development of innovative programs intended to help improve our members’ health in many creative ways.”

MCS also provides various Medicare Advantage plans under a contract with the Ccenters for Medicare and Medicaid services. MCS Life Insurance Co., meanwhile, offers commercial health plans for groups and individuals, as well as group life insurance. MCS General Insurance Agency offers life and disability products.

“At PharmPix, we are focused on providing effective support to our clients’ clinical operations in favor of the patients who benefit from our services. We maintain the transparency that allows trust and security in our work, and this puts us in the position of having again the support of companies such as MCS,” said Dr. Martty Martinez Fraticelli, PharmPix’s president and chief pharmacy officer, who oversees more than 100 employees.




Humana launches community outreach, senior programs campaign

SAN JUAN – With a multimillion-dollar investment, Humana has launched a publicity campaign and community outreach programs aimed seniors. Under the “Vamos hay mucho por vivir!” or “Come on, There’s a lot to Experience!” slogan, the health insurer hopes to promote the achievement of new goals and projects while staying healthy.

The campaign includes events such as “Humana en tu Pueblo,” or “Humana in Your Town,” to be held across the island’s municipalities with renowned entertainers Luisito Vigoreaux and Noelia Crespo and their comedy show. In addition, as part of the effort, a “Humana University” course program will be offered at educational institutions to help the population adapt to technological advances.

“We want to encourage optimism while helping them with the variety of product options we have from Medicare Advantage plans to maintain optimal health. We see a large number of seniors who are alone or who have made the decision to stay in Puerto Rico while their family members emigrated to the United States.

“Many of them are looking for ways to have fun while making new friends. Given the [island’s] economic situation, we designed an offer that provides financial aid through our products,” said Luis A. Torres, president of Humana in Puerto Rico.

The production, made with local talent, put together everyday scenes of elderly people spending time with friends, going on a trip or having fun with grandchildren and relatives.

The company’s director of marketing and public relations, Sandra Estada, said the creative concept and its foundation were inspired from observing how seniors look for ways to achieve goals while valuing family relationships and friendships.

Humana has Medicare Advantage plans for coordinated care for people with dual Platinum and non-Platinum eligibility, Medication Plans and Supplemental Medicare coverage. Some of these, without referrals and Platinum products with reduced Medicare Part B premiums that start at $35 monthly, up to $85, among other benefits.




Rosselló Administration All In On P.R. Integrity in Medicare Advantage Act

Editor’s note: The following originally appeared in the Oct. 25-31, 2018, issue of Caribbean Business.

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.

Prima brigades

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.”

All aboard

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.”




[Editorial] Heroes for More Than One Day

Editor’s note: The following originally appeared in the Oct. 25-31, 2018, issue of Caribbean Business.

The newspaper that you are holding in your hands is a Special Edition of Caribbean Business dedicating more than the usual amount of space to the embattled healthcare sector because it faces pressing concerns—particularly in the aftermath of a natural disaster and the many punishing lessons endured.

It will be a very long time before we forget the violence wrought by Hurricane Maria and the consequences suffered when some hospitals lost electricity—most people were largely left to their own devices without critical access to quality healthcare.

Thankfully, more than a year later, the stalwarts of the healthcare industry—physicians, nurses and hospitals—have proven their resilience. I know firsthand of medicine students from some of our finest universities—the University of Puerto Rico and Ponce Health Sciences University among them—who went out into the field to help mend the broken, either in shelters or Mash units.

Today, many of Puerto Rico’s hospitals have become storm-hardened; physicians and med students have proven their mettle in the face of adversity. The healthcare sector rallied under very adverse conditions.

Truth be told, Puerto Rico’s healthcare sector has a long trajectory of rallying for the disadvantaged—in the 1990s, the island’s doctors came to grips with the strict tenets of universal healthcare for Puerto Rico’s medically indigent population. In those salad days of healthcare reform, Puerto Rico suffered the same growing pains that have traditionally been tied to managed care as Puerto Rico’s Reforma de Salud under then-Gov. Pedro Rosselló received a paltry 15 percent in Medicaid funding—the remaining 85 percent of costs were covered by the state.

In managed care, rationing of services is inevitable; doctors who are forced to behave as accountants have a tough time dealing with sometimes onerous capitation levels—Puerto Rico has not been the exception.

When the Affordable Care Act (ACA) was passed in March 2010, under the administration of then-President Barack Obama, Puerto Rico’s healthcare sector had opted to receive a $5.4 billion block grant at a clip of $700 million annually—seven years later, the Puerto Rico’s government had blown through the lot, leaving the Puerto Rico Health Insurance Administration at the border of a fiscal cliff.

Had it not been for lobbying by Puerto Rico’s entire healthcare industry—the Hospital Association, Medicaid & Medicare Advantage Products Association, Manufacturers Association and Chamber of Commerce, together with Gov. Ricardo Rosselló and the island’s Resident Commissioner in Washington Jenniffer González—the local government health system would have run out of money. To her credit, González conveyed the extreme disparities Puerto Rico faces in Medicaid and Medicare funding (the island receives 43 percent of the national average).

Puerto Rico secured $4.8 billion earmarked for Medicaid—$1.2 billion of which is contingent upon the adopting of best practices in data reporting through a Medicaid Management Information System (MMIS) and the establishment of a fraud-detection unit by year’s end. There is work to be done.

The big prize, however, is the Puerto Rico Integrity in Medicare Advantage Act (Prima), also now as House Resolution 6809. That measure would grant Puerto Rico close to $3 billion in Medicare Advantage funds over three years commencing in 2019.

Importantly, the measure includes a provision that would guarantee 50 percent of those Medicare Advantage funds would go to healthcare providers—physicians, hospitals and pharmacies. If that helps stem the tide of doctors leaving Puerto Rico at a rate of one physician per day, it will be huge help. Time will tell. At this writing H.R. 6809 has six co-sponsors, but its future will not be decided until after the Nov. 4 midterm elections.

Two observers with vast experience dealing with Puerto Rico healthcare issues on Capitol Hill believe the bipartisan support for the bill could give the measure a fighting chance to be included in a larger economic package beyond the midterm elections.

That is important because so many of the island’s seniors—as much as 72 percent—who are eligible for Medicare, have chosen Medicare Advantage to cover cost gaps in Puerto Rico’s insufficiently funded Medicare.

One of this newspaper’s sources on Capitol Hill insists Puerto Rico should be pounding down the door at the Centers for Medicare & Medicaid Services (CMS) to help obtain the parity in funding for a program that every single U.S. citizen on the island has fully paid into through Social Security taxes.

Perhaps Prima is a right for so many wrongs past—but the time has come to stop asking for handouts for something that is rightfully ours.

Rosselló Administration All In On P.R. Integrity in Medicare Advantage Act