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Medicaid, Medicare Advantage providers challenge Law 90 in federal court

The Medicaid and Medicare Advantage Products Association of Puerto Rico (MMAPA) has turned to the federal court to challenge Law 90, which establishes fees for the payment of services under Medicare Advantage plans, claiming the bill jeopardizes benefits for thousands of insureds, and encroaches on federal law by trying to regulate MA funds or their administration. 

“As custodians of federal funds that create Medicare Advantage products in Puerto Rico, all MA coordinated care organizations have an obligation to have the program comply with federal law,” said Ignacio Fernández de Lahongrais, the attorney representing MMAPA in this case.

“MMAPA expressed this position to the Puerto Rico Legislature in a letter dated Nov. 6, 2018. The federal law clearly prevails over state law in this regard,” he said. “This organization cannot jeopardize a program that serves more than 75% of our population over the age of 65.” 

Under federal law, “the standards established for Medicare for the administration of Medicare Advantage programs supersedes any state law [with the exception of state licensing laws relating to plan solvency] with respect to MA plans offered by MA organizations.” (42 U.S.C. Section 1395w-26(b)(3), the group claims.

Law 90 of Aug. 1, 2019, signed by then-Gov. Ricardo Rosselló during the final days of his tenure, amended the Puerto Rico Insurance Code to prohibit an organization that offers Medicare Advantage services from reaching an agreement with a service provider at a lower rate than that set by the Centers for Medicare and Medicaid Services (CMS) in the rate guide for the corresponding year.

However, the CMS guide does not require that rates be set at those levels in compensation agreements that exist between coordinated care organizations and providers participating in the MA program, the MMAPA said.

The MA and Medicaid programs are of vital importance to Puerto Rico’s healthcare system and are based on coordinated care principles aimed at providing quality services to beneficiaries. Both programs require participating organizations to allocate the vast majority of the premiums to providing healthcare services to the beneficiaries.

Specifically, the CMS states that a minimum of 85 cents of every premium dollar — and ASES requires at least 92 cents of this — go to direct health care through payments to doctors, hospitals, laboratories and other service providers, the Association said.

The primary purpose of the MMAPA is to achieve parity for Puerto Rico in the allocation of federal funds for Medicare Advantage and Medicaid, raising awareness in relevant forums regarding this historical gap – accentuated by the Affordable Care Act – between the per capital federal funds the island receives and the national average.

‘Since 2012, the federal government has reduced MA funding for the island by more than 20%, despite the significant growth in the elderly population.

Currently, the rate set by the CMS as a benchmark for MA for Puerto Rico is 43% below the national average, with Puerto Rico receiving 60% less in Medicaid funds for its medically indigent population than received by the states, the organization said.

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This story was written by our staff based on a press release.

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