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U.S. Senate Does Not Need to Heed GAO Opinion

By on December 2, 2021

GAO: if Unaddressed, Medicaid Cliff Could Be Repeated

Editor’s note: This report was first published in the Dec. 2, 2021, issue of Caribbean Business. Subscribe here to read about the most important developments of the week.

An opinion issued by the U.S. Government Accountability Office (GAO) warns that the Department of Health and Human Services’ (HHS) 2022 allotment of some $2.9 billion is not authorized, an issue that if left unaddressed could lead to another Medicaid fiscal cliff in Puerto Rico. 

The Nov. 15 missive, signed by the GAO’s general counsel, Edda Emmanuelli, was sent to the Senate Finance Committee Chairman Ron Wyden and House Energy and Commerce Chairman Frank Pallone.  

“It is well established that where the language of a statute is plain and unambiguous, the plain terms of the statute must prevail,” the GAO letter reads. “Section 1108(g) of the Act directs HHS to disregard identified statutory language in determining the allotments for Puerto Rico and the other four territories for years after FY [fiscal year] 2021. As written, the statute requires HHS to base Puerto Rico’s FY 2022 allotment on its allotment for FY 2019 and the allotments for the other four territories, which are not at issue here, on their allotments for FY 2021. HHS, however, did not apply the plain language of the statute, asserting that it would produce an ‘absurd result’—a ‘drastic reduction’ in funding for Puerto Rico and a ‘modest increase’ in funding for the other territories. Instead, HHS adopted an interpretation of section 1108(g) that resulted in modest adjustments in funding for all five territories.” 

A Caribbean Business source in Washington, D.C., with direct knowledge of the situation said that although the GAO missive is “persuasive, it is an opinion,” and Congress does not have to act on it. 

“The issue with the GAO opinion is that, first of all, it is just that, an opinion,” the source stressed. “The other issue is the direction in which the opinion went, which is a very technical direction. They are looking at the … Supreme Court cases relative to ‘absurd results’ and how far an agency can go in terms of reversing an ‘absurd result’ given the facts and the applicable regulations.” 

Furthermore, the missive states that it is well established that statutory analysis “begins with the plain language of the statute.” 

If the statutory language is clear and “unambiguous on its face,” then the plain meaning of that language prevails, the missive says, further noting that the language governing Puerto Rico’s allotment for fiscal year 2022 is clear. 

“HHS acknowledges that this approach would lead to the use of FY 2019 as the base year for Puerto Rico’s FY 2022 allotment, which HHS calculated would produce an amount of $406,400,000. HHS contends that such a ‘drastic reduction’ in federal funding for Puerto Rico in comparison to the ‘modest increases’ in funding for the other four territories is ‘an absurd result’ that necessitates an alternate approach.” 

A ‘Vital’ Bill

Meanwhile, Resident Commissioner Jenniffer González said that essentially the GAO opinion notes that the amendment made in 2018 needs to be reauthorized. 

“We asked the federal Health Department under the Biden administration for a 36 percent increase and a basic assignment of $2.9 billion,” González said. “We asked for that amendment to raise the base number. We achieved that the base number was no less than $2.9 billion.”  

The congresswoman said the opinion does not affect Senate votes because “what they are saying is let’s raise the base number.” 

She added that it was “vital” that the measure be passed because, otherwise, the cap on local Medicaid funding for medically indigent patients will remain at $390 million. The increase, included in the Build Back Better Act, would raise such funding to $3.6 billion. The legislation, which would fund programs for the next 10 years, would also increase the Federal Medical Assistance Percentage (FMAP) used to set the Medicaid matching fund rate from 55 percent to 76 percent and then to 83 percent the following fiscal year, González said. The measure also includes an extension of the Supplemental Security Income (SSI) program to island residents.

González acknowledged that the bill, which is being considered by the Senate, still lacks the enough votes to be passed. Although the Democratic leadership has vowed to pass it before year’s end, Republicans are pushing for the reconciliation bill to stay in place until February. 

In September, Congress extended through December the current Medicaid allotment for the island, which is of some $2.8 billion. 

“We are not expressing an opinion on the policy question of federal funding for Puerto Rico’s or the other territories’ Medicaid programs. That is clearly a matter for Congress. Our conclusion is one of statutory interpretation, and the plain meaning of the language of the statute is clear,” the missive concludes. 

—Senior reporter José Alvarado contributed to this report.  

It is astonishing to hear an announcement by the OBoard that it would further tweak the POA to include several bennies such as Act 80 for incentivized public employee retirement; Act 81 for a dignified retirement and Act 82 for the liquidation of accrued leave days. And the cherry on top is the prohibiting of the 10-year restitution of the defined benefit pension system. Even Marty Bienenstock, he of the Ley de Quiebra Criolla, admitted that implementing acts 80 and 82 is not a risk worth taking because it affects the POA’s feasibility. Perhaps Bienenstock spoke the truth when he said that local laws are incompatible with Promesa. There is pain coming; that market access will not keep at bay.      

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