The Financial Oversight and Management Board for Puerto Rico notified Gov. Ricardo Rosselló and the Legislature that the compliance certification issued by government Aug. 1 regarding the recently passed Act 47, failed to provide the required formal estimate of the law’s fiscal impact.
Moreover, in the letter sent Wednesday, the Oversight Board noted that its preliminary analysis leads it to conclude that Act 47 Healthcare Act is “significantly inconsistent with the Fiscal Plan for the Commonwealth of Puerto Rico,” adding that “based on the information currently available, it appears unrealistic to expect that Act 47 will not increase medical costs.”
Act 47 empowers the Patient Advocate to intervene in disputes between patient and medical plans. It had the backing of the College of Physicians and Surgeons.
The Board noted that Puerto Rico Oversight, Management and Economic Stability Act (“PROMESA”) Section 204(a)(2)(A) provides that a compliance certification shall include a “formal estimate…of the impact, if any, that the law will have on expenditures and revenues.”
Accordingly, the Board asked the government to provide a formal estimate of public healthcare expenditure impacts from implementing the law.
“The island’s loss of significant federal health care funding adds to the pressures to reform the system for delivering much-needed care for the people of Puerto Rico,” said Natalie Jaresko, executive director of the Board.
“However, the Board believes that Act 47 will likely increase healthcare costs and impede the Commonwealth’s ability to develop effective managed care models that meet the healthcare savings goals required by the certified Fiscal Plan for getting Puerto Rico back on its feet,” she said.
“With health care costs rising three times faster than the rate of inflation, a complete overhaul of the public healthcare system is a social and economic necessity,” she added.
“The government of Puerto Rico is working diligently on a new model to bend the cost curve and meet the nearly 30 percent reduction in public health care expenditure required by the Fiscal Plan,” Jaresko said.
Implementing value-based reforms that change the way both insurers and providers operate on the island is essential for achieving structural balance and a return to growth,” she concluded.