by Robert King, POLITICO
February 9, 2024
‘This is it’: Puerto Rico hopes time is now for Medicare Advantage pay fix
BY ROBERT KING | 02/09/2024 08:00 AM EST
Puerto Ricans are optimistic that President Joe Biden will finally fulfill a campaign promise this year to address low Medicare Advantage payment rates. | AFP via Getty Images
Puerto Rico’s allies on Capitol Hill hope this is the year President Joe Biden fulfills a campaign promise to fix the island’s low Medicare Advantage rates, which they say contribute to its health care system’s deterioration.
Advocates and members of Congress want CMS to raise government-funded, privately run Medicare Advantage plan payments for the territory to match what the U.S. Virgin Islands receives.
“Putting it in parity with other Caribbean islands is fair and definitely helps people in Puerto Rico,” said Rep. Raul Ruiz (D-Calif.), one of a dozen Democratic members to propose that change in a letter to the administration last month.
The average base payment to a Medicare Advantage plan in Puerto Rico in 2023 was $644, compared with $837 for the Virgin Islands and $1,099 for the United States, according to data from the Medicare and Medicaid Advantage Products Association of Puerto Rico, a nonprofit trade group of insurers.
The 2025 rates, due to be finalized in the spring, could be the Biden administration’s last chance to ratchet up reimbursements for the island’s doctors and address a widening gap in pay between the mainland and the territory.
“This is the time to do it,” Rep. Nydia Velázquez (D-N.Y.) said. “The administration needs to look at any tool to address this issue because it is a matter of life and death.”
Medicare Advantage plans in Puerto Rico in 2024 are paid 39 percent below the national average. That lower pay contributes to a health care system rapidly collapsing on an island where 8,000 doctors — nearly half of all physicians — have left over the past 13 years, partly because of the low pay.
CMS did not include any increase for Puerto Rico when it proposed 2025 rates last week, but it did call for recommendations on adjusting payments.
That has some lawmakers and advocates optimistic this could be the year CMS acts.
“The current administration has recognized these challenges,” Rep. Jenniffer González-Colón, the current at-large representative for Puerto Rico, said in a statement.
The island's Department of Health did not return a request for comment, but Puerto Rico’s health secretary Dr. Carlos Mellado Lopez recently told the newspaper El Nuevo Día that the adjustment could cost between $1 billion and $1.2 billion a year.
Others, however, are more critical of the administration. Biden promised to address historically low Medicare Advantage rates in a campaign release in Sept. 2020. However, the same pledge was missing from a recovery plan released by the White House in 2022.
The White House referred questions on the issue to CMS and HHS.
The lack of attention has critics wondering if the Biden administration’s focus on health equity gaps extends to Puerto Rico, where 41 percent of the people live in poverty and have chronic conditions such as diabetes at higher rates than people in the United States.
“The administration for four years says we want equity to be a priority and not have these proportional changes, and you look at Puerto Rico and you see the inequities,” Javier LLano, a partner with the consulting firm Capitol Hill Advisors and a Puerto Rican native said.
Crumbling system
Medicare in Puerto Rico is vastly different from in the states. Medicare Advantage rates are based on traditional Medicare spending in the area.
However, in Puerto Rico, Medicare Advantage has been more popular than in the U.S. thanks to offering lower costs compared with traditional Medicare. More than 80 percent of the elderly population (more than 653,000 people) is on Medicare Advantage compared with roughly half of the U.S. population.
Since traditional Medicare spending is so low on the island, that translates into lower Medicare Advantage rates. Obamacare also changed how Medicare Advantage benchmarks, which represent the traditional Medicare spending in an area, are calculated to lower payments to all plans.
The lower rates then lead to more doctors leaving for higher paying jobs on the mainland, creating more access problems — a vicious cycle.
“Most of my residents … choose to leave after they finish their residency either for further training or just because their job offers are beyond what we can extend,” Dr. Yussef Galib, president of the Puerto Rico Medical Association and an attending physician, said during a Capitol Hill briefing on Monday.
A study published last year in the journal Social Science & Medicine showed that in 2009, the island had 14,500 doctors, but by 2020, that number shrank to 9,000 — in a U.S. territory of more than 3 million people.
“We don’t have the core social and health infrastructure that the system needs,” Roberto Pando, a board member for the Medicare and Medicaid Advantage Products Association of Puerto Rico, said.
CMS told POLITICO it received the Democrats’ letter but didn’t say whether it will accept the Virgin Islands recommendation.
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