Puerto Rico forecasts effects of high Medicare Advantage enrollment

“The law requires that MA benchmarks be based on a county’s average Medicare FFS per capita costs, and there is no evidence that FFS costs in Puerto Rico are higher than the costs observed in the FFS claims data and thus no basis for overhauling Puerto Rico’s MA benchmarks,” CMS wrote in the rate announcement in April.

CMS does not have a specific threshold for a county’s Medicare Advantage penetration when it comes to calculating rates, a CMS spokesperson said. The agency does use a “credibility adjustment” for counties with fewer than 1,000 beneficiaries in the traditional program to make the estimate more accurate, she said.

Some in the industry are hoping Congress can step in and change the law for Puerto Rico outright.

A bipartisan group of lawmakers in the House of Representatives, including Puerto Rico’s Resident Commissioner Jenniffer González-Colón (R), introduced a bill in June that would create a system in which Puerto Rico’s benchmarks could never fall below a certain level, which is higher than what results from the current system. The legislation would also allow the territory to implement the Medicare Savings Program for 2024.

Under the bill, insurers would have to spend at least half of any additional funds on increased provider payment.

“We’re not asking for parity. We’re not asking you to take us up to the national average. Just give us a minimum—what our neighboring island, also a territory of the United States, receives,” García Rodríguez said, referring to the Virgin Islands.

Edwin Park, a research professor at the Georgetown University McCourt School of Public Policy, is skeptical of the argument that Puerto Rico insurers need large increases in Medicare Advantage payments. He believes Medicaid reform, for which the Medicaid and Medicare Advantage Products Association of Puerto Rico also advocates, could have more of an impact on the island’s healthcare system.

“It’s not the most efficient use of a limited amount of federal dollars,” he said. “If you want to help Puerto Rico’s healthcare system and in turn have all these ripple effects in terms of the safety net, attracting providers, Medicaid is really the ballgame.”