An upcoming decision by Health and Human Services Secretary Alex Azar could prove crucial for Puerto Rico’s economic recovery.
Azar is due in April to announce Medicare Advantage (MA) rates for the states and territories, an administrative decision with enormous stakes for the island.
“There is nothing more important to Puerto Rico than a strong health-care system,” said Jim O’Drobniak, CEO of Medical Card System, a health-care service provider in Puerto Rico.
“If this doesn’t work out, I don’t know where you start,” he added.
Puerto Rico Gov. Ricardo Rosselló (D) wrote Azar Monday asking him to instruct the Centers for Medicare and Medicaid Services (CMS) to adjust the way it calculates the territory’s slice of the pie of federal MA funds.
In his letter, Rosselló said Puerto Rico’s benchmark rate for MA for 2018 is 43 percent lower than the national average. In 2011, the island’s benchmark was 24 percent lower, showing a steep downward trend.
That means MA, a program that allows private service providers to deliver Medicare services with a combination of federal Medicare funds and user fees, spends $483 dollars a month per Puerto Rican user on average, compared to a national average of $853.
Rosselló’s administration is asking Azar to help cut that gap, warning that a failure to do so could derail the island’s already teetering economy.
The program is the financial backbone of the island’s health-care industry.
Luis Rivera Marín, Puerto Rico’s secretary of state, told attendants at the Puerto Rico Health and Insurance Conference that a failure to prop up the health-care industry could have dire consequences.
“Without a proper recovery from the private sector, especially the health sector, there’s no way we can recover,” Rivera Marín said.
Yet Roberto Ramírez García, a public health policy professor at the University of Puerto Rico, said it’s “not true” that a failure to increase Puerto Rico’s MA participation will derail the economy.
Ramírez said that argument comes from service providers who have a financial stake in increasing federal MA funds for the island.
“What would follow,” said Ramírez, “would be, ‘prove to me that if that raise doesn’t come, you can justify [that] you can’t maintain the level of care that [MA] requires.'”
But experts warned that, adding to the potential economic consequences of a continued MA decline, the pay scale difference is causing medical practitioners to migrate stateside.
O’Drobniak made the case that, even as federal Medicaid contributions have grown, the exodus of doctors over the past seven years is correlated to the reduction in MA benchmarks.
Eduardo Zetina, an actuarial consultant whose company also designs medical service apps, said bilingual doctors in Puerto Rico could move to New York and immediately triple their earnings.
Zetina said the Affordable Care Act is partly to blame for the decline in medical payments, a point Rosselló also made in his letter to Azar.
When MA was first instituted in Puerto Rico, it increased benchmarks and allowed investment in medical infrastructure. But ObamaCare equated MA payments with traditional Medicare, causing a $100 billion yearly decrease in federal Medicare funds for the island from 2011 to 2016.
That left the island’s medical system at a “breaking point,” Zetina said.
Along with the loss of MA funds, the island went into a bankruptcy-like state over its inability to pay more than $70 billion in debt before being struck by two massive hurricanes.
In January, Congress provided some relief for the cash-strapped island by fully funding its Medicaid system for two years.
Rosselló called that relief “breathing room” Thursday, acknowledging what many in the island know — that the health-care system has to find a way to reinvest in itself before those funds run out.
While O’Drobniak said that increasing MA funding is the “only” option to keep the health-care system — and the island’s economy — on a path to recovery, Zetina said MA is only one of several options.
But Zetina added that MA is the island’s best shot, because the pre-ObamaCare medical infrastructure already exists and it can quickly channel any cash influx into the starved economy.
“It’s not the only [solution], but it’s definitely the most sensible one,” he said.
“It’s water coming into the same causeways.”