Senate Leadership still has doubts about the Medicaid funding in Puerto Rico

Washington - The chairman of the U.S. Senate Finance Committee, Republican Charles Grassley (Iowa), warned yesterday that he will need more information about  the Medicaid funding Puerto Rico receives before committing to supporting additional funds.

"Congress must have a thorough and serious discussion before enacting such policies" in the federal contribution to Puerto Rico's health system, Grassley said in a statement yesterday, announcing the response by the Center for Medicare and Medicaid Services (CMS) to a request for information made last July 17 to U.S. Health Secretary Alex Azar.

When he wrote to Azar this summer, Grassley referred to corruption charges involving former Health Insurance Administration (PRHIA) Director Ángela Ávila and said that "the recent and unfortunate allegations concerning misuse of public funds in Puerto Rico’s health system, along with an ongoing lack of transparency in the government of Puerto Rico, raises important questions."

At the time, Grassley said he had "difficulties" in assessing what "equitable" Medicaid funding for Puerto Rico should be, since the program depends on income from the U.S. general fund and "individuals in Puerto Rico do not participate in the federal personal income tax system."

The response to Grassley was sent by CMS Administrator Seema Verma in a letter dated September 17 that the Republican senator's office released yesterday. Verma provided a list of the total Medicaid funds received by the government of Puerto Rico beginning in 2014, as requested, and the percentage federal contribution for Medicaid services on the island - which are granted through the Vital health plan - they represent.

Grassley said he intends to follow up on the effective federal matching rate for Medicaid services since CMS data indicate that although the cap for the island is 55 percent, it has exceeded funding of 62 percent as of 2014.

In 2018, the federal contribution rose to 91.8 percent, after authorizing $4.8 billion in emergency funds in February of that year and increasing the federal contribution to 100 percent, due to the devastation left by Hurricane María.

Javier Llano, a Capitol Hill Advisors lobbyist and health expert, said Senator Grassley ignores that these are temporary increases authorized by Congress, but that the island faces a fiscal cliff that could cause the health system to collapse in the spring of 2020 if it returns to the 55 percent cap and about $380 million annually. Verma said Medicaid currently excludes Puerto Rico from certain requirements, such as implementing an accounting system to verify how the programs are managed, and another administrative structure that allows identifying errors in the payment systems.

However, the CMS director warned that since 2002, the Puerto Rico Health Department has operated an anti-fraud unit to detect abuse and fraud that has received praise from the federal Health Department.

The House bipartisan bill pending that would allocate $12 billion to the island over the next four federal fiscal years includes language requiring audits to Puerto Rico's health plan, the implementation of an accounting system to verify how programs are managed, and an administrative structure to track errors in payment systems. 

That legislation did not advance after recent corruption cases, although it was unanimously approved by the Energy and Commerce Committee.

According to Senate Minority Leader Charles Schumer (New York), Democrats will promote new Medicaid funds in an omnibus spending bill that can be approved in November.

Several sources indicated that Grassley rejects increasing federal  funding to 83 percent, as allowed by the House bill during fiscal years 2020 and 2021. That percentage would drop to 76 percent in 2022 and 2023, according to the House measure.

Grassley also wants more controls.  "There are inconsistencies that need more explanations. It’s my goal to provide Medicaid beneficiaries the help they need while holding the government accountable," Grassley said.

This week, the Senate must pass a continuing resolution that would allow Puerto Rico's Medicaid funding to remain at 100 percent and the rest of the $4.8 billion in emergency funds -about $400 million- to be used until November 21, which will be around $400 million as of September 30.

 "We find Senator Grassley's reaction ridiculous and unintelligent ... he must be more prudent and recognize that Puerto Rico, as well as the District of Columbia and poor states need allocations equitable to poverty levels," Llano said.