Puerto Rico

The Puerto Rico Medicare Coalition for Fairness is composed of key leaders from the healthcare segment in the Commonwealth of Puerto Rico who have committed to make a call for action regarding Medicare equality on behalf of the beneficiaries. The Coalition’s mission is to seek more financial support for the beneficiaries of Puerto Rico by calling upon the U.S. Congress and the Obama Administration to protect the rights of U.S. Citizens residing in the island. Please see our website for more information: http://www.prmedicarecoalitionforfairness.org

As you may know, the Medicare Advantage (MA) program in Puerto Rico is going through severe funding cuts related to the Affordable Care Act (ACA). It is estimated that Puerto Rico has lost over $1 billion in funding between 2011 and 2014. In addition, Puerto Rico is expected to lose over $5 billion from 2014 to 2019, which totals a shocking grand loss of over $6 billion dollars in Federal funding for the island’s Medicare program from 2012 to 2019. The Centers for Medicare and Medicaid Services (CMS) recently published its “Advance Notice of Methodological Changes for Calendar Year (CY) 2015 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2015 Call Letter” (the Advance Notice) which discusses proposed rate and other changes for Medicare Advantage in 2015. The Advance Notice is issued in draft form but will be issued in final form by CMS on April 7, 2014.

Based on the Advance Notice, the dramatic decrease for Puerto Rico’s Medicare Advantage funds will worsen in 2015. While the MA cuts nationally are a concern to many, the Advance Notice announcement means MA rate cuts for Puerto Rico’s beneficiaries will approximate 7%-10% in 2015, compared to 2014 rates, with more cuts mandated by the ACA through 2017.

If nothing is done to change both the 2015 Advance Notice and the already mandated ACA cuts, the unintended consequences of the implementation of the ACA for Puerto Rico will continue producing the greatest capitation cut of any jurisdiction in the United States on a population whose Median Household Income is 62% less than the United States National Average.

In response to this situation, healthcare leaders from the Coalition recently sent a letter with proposals to president Obama and will be traveling in the forthcoming days to Washington DC to further advocacy efforts on behalf of Puerto Rico’s beneficiaries.

Submitted Electronically to AdvanceNotice2015@cms.hhs.gov

The Honorable Kathleen Sebelius
U.S. Department of Health and Human Services
200 Independence Avenue, SW
Washington, DC 20201

Marilyn B. Tavenner
Center for Medicare and Medicaid Services
U.S. Department of Health and Human Services
200 Independence Avenue, SW
Washington, DC 20201

Jonathan Blum
Principal Deputy Administrator
Centers for Medicare & Medicaid Services
Department of Health and Human Services
7500 Security Boulevard
Baltimore, MD 21244-1850

Richard F. Coyle, Jr., A.S.A., M.A.A.A.
Acting Director, Part C & D Actuarial Group
Office of the Actuary
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244-1850

RE: While the 2% Medicare Advantage (MA) cuts nationally are concerning to many, the announcement means MA rates cuts to Puerto Rico (PR) may reach over 15% in 2015 compared to 2011 rates, the highest amount for any constituent group during that time period, with more cuts mandated by the Affordable Care Act (ACA) through 2017. An urgent revision of PR calculations is needed to avoid serious consequences to approximately 540,000 Medicare beneficiaries, thousands of providers and the healthcare system in PR as a whole.

Dear Secretary Sebelius, Administrators Tavenner & Blum, and Director Coyle:

As supporters of the Puerto Rico Medicare Coalition for Fairness, we are all advocates and community stakeholders of the healthcare segment in the Commonwealth of Puerto Rico.

We are providing formal comments on the “Advance Notice of Methodological Changes for Calendar Year (CY) 2015 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2015 Call Letter,” (the Advance Notice) released by the Centers for Medicare & Medicaid Services (CMS) on February 21, 2014.

As key healthcare stakeholders, patients, beneficiaries and community leaders from Puerto Rico, we believe that it is critical to raise the level of urgency related to specific concerns that impact benefits and access to care for Medicare beneficiaries in Puerto Rico. Through the course of the six-year ACA cuts that apply to the island, should the estimated additional cuts in MA Rates set forth in the Advance Notice be adopted, MA rates will go down over 30% in total, having already started in 2012 and continuing through 2017. It is estimated that the fully implemented ACA reductions would mean that each of the approximately 540,000 United States Citizens/MA beneficiaries residing in Puerto Rico could lose almost $2,000 or over 10% of the Median Household Income a year in benefits. The additional proposed cuts in the Advance Notice, coupled with the demographics surrounding the island of Puerto Rico, as well as, previously enacted ACA cuts, could prove fatal to all beneficiaries in the health care system of Puerto Rico.......


After doing an assessment of the proposals under consideration in the Advanced Notice and Draft Call Letter for 2015, estimates conclude that Puerto Rico will have lost over $1 billion in funding for its Medicare program by 2015, compared to 2011 funding levels before the Affordable Care Act (ACA) revised funding for Medicare Advantage. Puerto Rico’s net funding loss extends dangerously beyond the Affordable Care Act’s goal of a reduction relative to projected trends, and represents an unintentional, yet crippling blow for the healthcare system supporting Puerto Rico’s needy beneficiaries.

Historical data anomalies regarding the Fee-For-Service (Traditional Medicare) cost in the island, negatively impact Medicare payment formulas for Puerto Rico, even before the 2011 implementation of funding cuts started by the ACA. Puerto Rico was already an outlier at the very lowest funding level in the United States with an average MA benchmark of $595 per month, or $198 (25%) lower than the average jurisdiction in America. Since the implementation of the ACA cuts, this disparity has gotten even worse. Puerto Rico’s average MA benchmark in 2014 is: (1) $548 per month, the absolute lowest in the United States, or $281 (34%) lower than the average jurisdiction in America; (2) at an alarming $223 (or 29%) lower than the next lowest US jurisdiction (HI) in 2014; and (3) getting worse every year under the ACA. Since the ACA was implemented in 2011, Puerto Rico’s MA benchmarks have decreased more than any other United States jurisdiction from both a dollar (-$47 per month) and percentage (-8%) basis.

The Puerto Rico healthcare community is very concerned about the 2015 CMS Advance Notice. Considering the increase in Medicare population in the next 5-6 years, the rate cut could produce reductions in benefits and resources that could amount to over $5 billion in the 2012-2019 period.

In addition to the core problem of the Traditional Medicare cost calculations and its impact in the MA benchmarks, the exclusion from the Part D Low Income Subsidy that has been noted by the President’s Task Force for Puerto Rico, is also a clear disparity in benefits, producing additional limitations to quality, access to care and STAR rating performance. The Coalition has been having meetings in Washington, DC about this, but unfortunately there has been no concrete request from the Administration to Congressional leaders, or a material attempt of Committee leaders, to amend the law and end this benefit disparity for Medicare beneficiaries residing in the Territories.

In the interest of over 540,000 Medicare Advantage and Part D beneficiaries in Puerto Rico, and approximately 250,000 Dual Eligible beneficiaries, we urge you to address the unsustainable disparity that for decades has existed in Traditional Medicare for beneficiaries in Puerto Rico. The ultimate permanent solution to the island’s Medicare inequities would be to establish an alternative method to appropriately determine reasonable payment rates for the Medicare and Medicare Advantage programs.

From a practical stance point, we request the leadership of CMS to evaluate and act upon the following specific proposals, which move us ahead towards more equitable payment rates. These proposals can be executed administratively and change the lives of our beneficiaries in 2015:

1. Proposed STAR Weighting
Apply the proposed STAR weighting changes starting with the 2015 payment year, in consideration of the exclusion of the Part D Low Income Subsidy (LIS) benefits in the Territories, and the recognized correlation between medication adherence and out of pocket costs.

2. STARs Demonstration for Territories
Establish a “STARs Demonstration Project for Territories with NO-LIS benefits” as a progressive incentive for quality improvement, and to avoid undue beneficiary impact related to the loss of rebate funding for additional necessary benefits.

3. Complete DSH / Uncompensated Care Adjustment
Include the uncompensated care payment impact beginning fourth quarter 2013 and full year 2014, to appropriately account for the uncompensated care payment change as per the final IPPS Rule for fiscal year 2014.

4. Physician In-Home Visits are crucial for beneficiaries in PR
Maintain the validity of diagnosis documentation at home for physician visits to beneficiaries in Puerto Rico, to avoid creating a burden for home bound patients, while also taking into consideration the importance of home care given the exclusion of long term care in the island’s Medicaid program. In lieu of these transitory changes, a permanent solution is still needed for this situation to fix the underlying error in the Traditional Medicare baseline rates; therefore, we also request the following:

5. Rollback the MA benchmarks for floor counties/US Territories to 2011 pre-ACA rates while an alternative methodology is defined to avoid permanent damage to the poorest and lowest costs areas.

In the alternative, it is imperative that CMS exercise its statutory authority and stay any disproportionate and unintended impact to Puerto Rico by maintaining the current payment levels, pending an alternative calculation methodology that will appropriately determine payment rates for the Medicare Advantage program.

CMS also has the authority to support our low income population by maximizing the applicability of the integrated dual eligible program called Medicare Platino. CMS can make the pertinent adjustments in the Medicaid State Plan to (a) enroll Medicare beneficiaries already with Medicare Parts A and B, and still in Puerto Rico’s Mi Salud (Medicaid) Program, and (b) to increase the eligibility threshold for elderly blind and disabled to 138% FPL.

Puerto Rico is already the most cost-effective Medicare program in the nation, generating access and quality at the lowest cost. However, the new MA formula is widening disparity in a scenario that is already significantly uneven for the US citizens residing in Puerto Rico. You have in your hands potential Executive actions that can stop the perpetuation of inequality for Medicare beneficiaries residing in the island, and the accelerated dismantling of an improving Medicare program in Puerto Rico as promoted by Federal policy in the late 1990s.

The Medicare Advantage program in Puerto Rico has direct impact on the lives of over 540,000 beneficiaries and the access to care of the entire population by supporting the healthcare system in general. The solutions proposed are practical proposals that make the Medicare program fairer for the eligible citizens that reside in Puerto Rico. As members of the Puerto Rico Medicare Coalition for Fairness we respectfully request action at the Executive level from CMS leaders, to avoid more harm to the Medicare program in Puerto Rico and to all Medicare beneficiaries residing in the island.


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