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MA Rate Announcement Still Imposes Disproportionate Risk Model Reductions to Puerto Rico, But Change

“MMAPA and the healthcare community in Puerto Rico will continue to work with the Biden Administration on a path forward that advances full health equality for the American citizens of Puerto Rico, especially our most vulnerable populations.”


Following the release by CMS of the 2024 Medicare Advantage (MA) Final Announcement, Roberto Pando Cintrón, President of the Medicaid and Medicare Advantage Products Association of Puerto Rico (MMAPA), released the following statement:


“The decision in the 2024 MA Final Announcement averts a major and historic $800 million reduction in 2024 of Medicare funds for Puerto Rico, but its impact will still be phased in over the next three years. The resolve and unified voice of organizations and communities throughout Puerto Rico and the entire United States has been crucial and successfully raised the awareness about the disastrous, negative outcomes these changes would have for hundreds of thousands of our most vulnerable people on the island,” said Roberto Pando Cintrón, President of MMAPA.


“Now it is more important than ever for us to continue our work with the Biden Administration and Congress to reconsider these risk model changes and act on other key policy fixes for Puerto Rico. We are encouraged by the fact that Administration officials at HHS and CMS are listening, and we are hopeful that concrete steps to implement new policies that advance health equity for Medicare beneficiaries can be executed.”


“MMAPA and the healthcare community in Puerto Rico will continue to work with key government stakeholders on a path forward that advances health equity for hundreds of thousands of seniors in Puerto Rico, particularly our most vulnerable populations. The Governor, Resident Commissioner, Speaker of the House, President of the Senate, and numerous community organizations in Puerto Rico united in one voice to address the potential reductions for 2024.”


Background

Apart from the impact of the risk score model change, the new 2024 MA base rates reflect an overall increase of approximately 3.7% for Puerto Rico, compared to a 2.28% increase in the national average. However, the combined impact for Puerto Rico when including the risk score model change for 2024, IRA impacts, STARs and others, is now estimated as a reduction of -1% to -3%, completely offsetting the increase in the base rate. This is the first year of potential reductions in Medicare Advantage for Puerto Rico from one year to the next since 2017.


Although less than anticipated, this reduction of MA funds will still be a challenge for the MA program benefits and providers in Puerto Rico considering inflation and cost trends. In the Advance Notice for 2024 released in February, CMS explained that annual price increase in the Consumer Price Index (CPI) for 2024 is projected to be 7.83% and the National Health Expenditures for prescription drugs are projected to increase 8.01%, including prior period adjustments. In addition, Social Security payments were adjusted by 8.7% across the Nation starting in January 2023 to reflect a cost-of-living adjustment.


Apart from the threat of disproportionate reductions from the risk score model change, the long-standing disparity in MA base rates for Puerto Rico continues to be the main inequity for MA beneficiaries that reside on the island. The final MA base rates for 2024, while having a higher increase than average for most of the island, continues to leave Puerto Rico as an outlier at the bottom regarding MA funding when compared to the States and even other U.S. territories. For 2024, MA base rates will still be 39% below the national average and 21% below the neighboring Virgin Islands. The analysis of the anomalous and disproportionate impact of the proposed risk score model change inevitably highlighted the core issue of the long-standing disparity in MA base rates.


“As CMS plans to implement years two (2025) and three (2026) of the risk score model changes, implementing a floor in the MA base rate would provide a minimum level of resources for beneficiaries in Puerto Rico. At the USVI MA benchmark level, MA in Puerto Rico can take an important step, and still be significantly lower than any state. Puerto Rico can do more with less, but the current gap in funding is just too much to bear,” added Pando.


MMAPA recently provided additional analysis and data to CMS in a study performed by The Moran Company, which concluded that only 6% of Medicare beneficiaries on the island with parts A&B remain in the traditional Medicare Program, a fee-for-service (FFS) model. The low membership and history of statutory differences invalidate the use of the FFS program in Puerto Rico to set MA base rates

Furthermore, according to a recent report by Milliman, at full implementation the proposed changes to the current MA risk score model could lead to a 9.1% reduction in MA payments in Puerto Rico, marking a disproportionate decrease in funding compared to the national average reduction of 3.4%. This reduction will hurt the most vulnerable and marginalized population on the island.


Puerto Rico’s exclusion from equitable funding and distinct statutory treatment has been a perennial issue, and the island continues to be omitted from important policy action despite promises from multiple successful presidential campaigns to make the issue a priority. This includes the exclusion from the Part D Low Income Subsidy Program (LIS) and the Medicare Savings Program (MSP) that pays the part B member premium for the dual eligible as part of the Medicaid coverage.


Today, 640,000 citizens in Puerto Rico are MA beneficiaries, making the island home to the largest share of MA beneficiaries across the States. These Americans often face social determinants of health that negatively impact their wellbeing, such as food insecurity, lack of transportation, and poor housing. MA has proven to be their primary choice to advance individual whole-person care in a coordinated effort centered on the patient, and at the lowest MA rates in the entire Nation.

About MMAPA


The Medicaid and Medicare Advantage Products Association of Puerto Rico (MMAPA) is a non-profit organization of the leading Medicaid and Medicare Advantage organizations in Puerto Rico. Founded in 2009, MMAPA is dedicated to promoting policy solutions to solve Puerto Rico’s healthcare challenges.


Follow MMAPA on Twitter at @mmapapr or visit our website, mmapapr.org.


Media Contact:


Brendan Conley

Brendan.Conley@pentagroup.com






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