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FOR IMMEDIATE RELEASE
February 18, 2016
Contact: HHS Press Office
202-690-6343
media@hhs.gov

HHS Fact Sheet: Working to Solve the Health Care Challenges in Puerto Rico

“We are committed to continuing our work to strengthen Puerto Rico’s health care system and improve health outcomes on the island using available administrative authorities,” said HHS Secretary Sylvia M. Burwell. “However, a true solution for the 3.5 million Americans living in Puerto Rico, including reforms to strengthen Puerto Rico’s Medicaid program, such as raising the federal share of Medicaid funding, requires Congress to act.”

Secretary Burwell and the U.S. Department of Health and Human Services (HHS) are a core part of the Administration’s team working closely with Puerto Rico and other key stakeholders to address the fiscal crisis in the Commonwealth. HHS has taken a number of steps to help ensure that residents of Puerto Rico continue to have access to quality and affordable health care and a more sustainable future.

Last week, as part of the President’s FY17 Budget, the Administration detailed its proposal to improve health care outcomes in Puerto Rico and prevent more than 600,000 Americans from losing access to health care by reforming Medicaid in Puerto Rico and the other territories.

The Administration continues to call on Congress to act on a legislative package that provides Puerto Rico with the tools it needs to address its worsening crisis and create a path to recovery. A comprehensive restructuring authority that can allow Puerto Rico to solve its fiscal crisis in a fair and orderly way is urgently needed. But make no mistake; while a restructuring authority is needed immediately, there is no long-term solution for Puerto Rico without legislative action to address the inadequate treatment under federal statute of Puerto Rico’s Medicaid program.

Medicaid

Under federal law, Puerto Rico’s 3.5 million American citizens are left without access to routine   treatments considered standard in the rest of the nation. There are more than 1.6 million Medicaid enrollees in Puerto Rico’s health care system, of which 600,000 people living in Puerto Rico could lose their health care coverage when one-time Medicaid funds run out.

HHS is committed to using its available authorities to help address these challenges by taking Administration action to –

  • Lowering Prescription Drug Costs – In 2016, HHS provided Puerto Rico and the territories access to the Medicaid Drug Rebate program. Through this action, Puerto Rico will have access to drug rebates that will help lower prescription drug costs in Medicaid.

However, the most meaningful measures for Puerto Rico will require legislation. Here, HHS and the Administration have proposed to:

  • Reform and Strengthen Puerto Rico’s Medicaid program - The President’s FY17 Budget proposal would transform the Medicaid program in Puerto Rico and the other territories, and is integral to the Administration’s broader roadmap to financial stability for Puerto Rico. The proposal puts forward three core reforms to raise the standard of care in Puerto Rico to a level that better aligns  with what is available on the mainland, including:
     
  • Lift the federal cap on Medicaid funding to Puerto Rico and the other U.S. Territories. Currently, federal Medicaid spending in the territories is subject to an annual limit, which prevents the program from flexibly responding to health care emergencies or growing needs.
     
  • Raise the federal Medicaid share from 55 percent to 83 percent over time. Currently, the federal Medicaid matching rate for territories is statutorily set at 55 percent. The proposal would immediately increase the federal share to 60 percent and raise it to 83 percent as Puerto Rico and the other territories successfully strengthen and modernize their Medicaid programs.
     
  • Expand eligibility to 100 percent of the federal poverty level. Eligibility in Puerto Rico and some other territories is lower than what it is in states. The proposal would expand eligibility to 100 percent of the federal poverty level over time.

Helping Puerto Rico and the Other Territories Respond to Zika Virus

Locally transmitted Zika virus has been reported in the Commonwealth of Puerto Rico, the U.S. Virgin Islands, and American Samoa.

The Administration’s Zika supplemental request to Congress would expand vector control programs to reduce transmission of the Zika virus by Aedes Aegypti mosquitos and enhance lab capacity for Zika and other infectious disease testing in Puerto Rico and the U.S. Territories. 

As noted above, unlike states, Puerto Rico and the territories’ Medicaid funding is capped, which has limited their capacity to respond to emergent and growing health needs. HHS has requested that Congress enact a temporary one-year increase in territories’ federal Medicaid share to provide an estimated $250 million in additional federal assistance to support health services for pregnant women at risk of infection or diagnosed with Zika virus and for children with micocephaly, and other health care costs. This request does not make any changes to Puerto Rico’s underlying Medicaid program, and the additional funding will not be counted towards Puerto Rico’s current Medicaid allotment.

Medicare

While reforming Puerto Rico’s Medicaid program to provide a higher standard of care is the single most impactful measure, HHS has also explored several changes to the Medicare program to expand resources for health care providers and ensure beneficiary access to care on the island. 

  • Provide a More Robust Accounting for Low Income Patients and Uncompensated Care –The FY17 Budget proposes to give the Secretary authority to adjust Medicare’s disproportionate share (DSH) payments to better account for the higher costs of low income patients in Puerto Rico.  Both DSH and uncompensated care payments depend, in part, on patients being eligible for Supplemental Security Income (SSI) which Puerto Ricans do not receive. As indicated in the FY 2016 Inpatient Prospective Payment System (IPPS) final rule, HHS will further address the distribution of uncompensated care payments to Puerto Rico in the 2017 rulemaking process, if CMS proposes to continue to determine uncompensated care payments using SSI days.  
  • Increase Payment Rates for Hospitals in Puerto Rico – HHS is moving forward with accelerated implementation of new legislation passed by Congress at the end of last year that aligns the formula to pay hospitals in Puerto Rico with the formula used in the 50 states, increasing hospital payment rates in the Commonwealth by approximately 5 percent.    

More detail on additional administrative actions will be made available as part of ongoing rulemaking activity. 

Strengthening the Health Care System in Puerto Rico

HHS has already made ongoing investments to improve the quality and accessibility of the health care system in Puerto Rico as part of a systemic effort, led by the Secretary’s Puerto Rico working group, to look across the Department’s programs and identify opportunities to support Puerto Rico.

From 2009-2014, HHS has invested over $9.5 billion in Puerto Rico to improve the health and well-being of the 3.5 million Americans living in Puerto Rico. Among other programs, the administration has invested in expanding early childhood education and child care programs; provided access to health insurance and health care services through the Children’s Health Insurance Program (CHIP) and Medicaid;  supported food safety and security monitoring projects, and helped people with disabilities and older adults to live with dignity and independence.

In addition, 20 HHS-funded health centers in Puerto Rico treated over 330,000 people (99% racial or ethnic minorities; over 97% below the federal poverty level; 12% uninsured) in 2014 and established eight new service delivery sites with the help of $5 million in funding in 2015.

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Note: All HHS press releases, fact sheets and other news materials are available at http://www.hhs.gov/news.
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Last revised: February 18, 2016

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