San Juan, PR (July 23, 2024) The Medicaid and Medicare Advantage Products Association of Puerto Rico (MMAPA) and the Puerto Rico Hospital Association (PRHA) are continuing their efforts to achieve pay equity in Medicare formulas. They recently submitted letters with recommendations to the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) at the end of June to advocate for fair payment rates to hospitals. The letters included comments and recommendations on the proposed rule regarding Medicare Part A payment methodology for 2025.
Jaime Plá, Executive President of the PRHA, stated, "Historically, CMS has provided compensation far below the actual cost of services offered in Puerto Rico's hospitals, placing us in the bottom 25 percentile when compared to payments issued to hospitals in the nation and its territories. This situation leaves local hospitals unable to absorb the economic impact of providing services to the uninsured and indigent population, which exceeds 40%, the highest poverty rate in the United States and its territories."
MMAPA’s Medicare Committee Chair, Roberto Pando Cintrón, explained that “the imbalance and payment deficiencies impacting all Medicare programs in Puerto Rico stem from the lack of comprehensive data and the discounted payment formulas applied in traditional Medicare programs. Crucial steps have been taken to address these issues for Puerto Rico’s hospitals, but improvements should be made annually. In recent years, Part A payment rules have been adjusted through supplementary payments from the Uncompensated Care for the Uninsured fund. Furthermore, in 2020, CMS established a minimum adjustment cap in the Geographic Adjustment Factor applicable to hospitals, also known as the “wage index.”. This adjustment represents over $100 million annually for Puerto Rico's hospitals through Medicare Part A.”
MMAPA and PRHA endorse CMS proposal to continue the low wage index hospital policy at least until FY 2027, in order to collect sufficient data, unaffected by the COVID-19 PHE, to better evaluate the importance and necessity of this policy. But they also encourage CMS to analyze this policy through the lens of the health equity principles. There is only one US labor market and mobility of health care workers across jurisdictions is increasingly a factor. Allowing payment formulas to create or exacerbate the distance of payment rates between higher cost (richer) and lower cost (poorer) areas is an unintended effect that may perpetuate structural imbalances within the same Medicare program across the Nation. A policy establishing a minimum distance from the mean wage index score or adjusting wage index values based on documented cost of living indexes, may be alternatives to protect low-cost areas from a perpetual spiral to the bottom.
Both the Puerto Rico Hospital Association (PRHA) and the Medicaid and Medicare Advantage Products Association have submitted technical proposals for Part A, aimed at maintaining and expanding policies related to uncompensated care and the wage index for Puerto Rican hospitals. “Continuously addressing Medicare Part A payments is crucial to ensuring fair and more equitable resources to provide better care for Medicare beneficiaries residing in Puerto Rico. “It is important to reiterate that U.S. citizens residing in Puerto Rico pay the same Medicare payroll tax and the same Part A and Part B premiums as individuals in the states. Thus, there should be no reason for such significant differences in funding, which leave Puerto Rico’s beneficiaries at a disadvantage and cause economic strain on the healthcare system. This occurs despite Puerto Rico offering the same services required by Medicare programs and paying the same costs for prescriptions as people in the rest of the United States”, stated PRHA’s Executive President.
It is anticipated that the current policies benefiting Puerto Rico will continue to be extended. The final rule for 2025 is expected to be published at the end of August this year and will take effect on October 1, 2024.
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About PRHA
The Puerto Rico Hospital Association is a private, non-profit organization that brings together public and private hospitals in Puerto Rico, as well as other institutions and individuals interested in the health industry. It also provides education to healthcare leaders and serves as a source of information on healthcare topics and trends. Our advocacy efforts include engagement with the legislative, executive, and regulatory spheres.
About MMAPA
The Puerto Rico Medicaid and Medicare Advantage Products Association (MMAPA) is a non-profit organization that brings together the major Medicaid and Medicare Advantage entities in Puerto Rico. Founded in 2009, MMAPA is dedicated to advancing public policy solutions to address Puerto Rico's healthcare challenges.
MEDIA CONTACT:
Melisa Diaz • 202-285-0785 melisa@melisadiaz.com
Ana María Santiago • 787-319-1415 anamaria@amscomunicaciones.com
AHPR / Wilson Nazario
787-409-8376 / wilson.nazario@gmail.com
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