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Thursday, February 16, 2012

Pierluisi Introduces Legislation to Obtain Medicare Funding Equity for Puerto Rico Hospitals

WASHINGTON, DC- Resident Commissioner Pedro Pierluisi spoke today on the floor of the U.S. House of Representatives in support of legislation he has introduced to correct an inequality in current law that results in the federal government reimbursing Puerto Rico hospitals that treat Medicare patients a substantially lower amount than hospitals in the 50 states.
“As a territory, Puerto Rico has always been treated unequally under federal health programs. While the Affordable Care Act dramatically improved the Island’s treatment under Medicaid, a number of key inequalities remain under both Medicaid and Medicare,” said the Resident Commissioner in his floor speech.

Under the current system, Medicare pays every hospital in the states the same base amount per patient to cover the hospital’s operating and capital costs. The base amount is then adjusted based on a variety of factors, like the severity of the patient’s illness and market conditions in the area where the hospital is located.

In Puerto Rico, however, hospitals are not paid the same base rate as hospitals in the states. Instead of receiving a base rate based on 100% of the national operating and capital costs associated with running a hospital, Island hospitals receive a base rate based on 75% of the federal base payment amount and 25% of a Puerto Rico-specific rate. Thus, while the base rate for all hospitals in the states is $5,630, the base rate for Puerto Rico hospitals is $4,899.

“Puerto Rico hospitals are paid a base rate that is about 13% lower than the base rate for stateside hospitals. Thus, an Island hospital will receive substantially less than any urban, suburban, or rural hospital in the states for providing the exact same inpatient services, making it harder for Island hospitals to deliver high-quality care and to remain financially sound,” said Pierluisi.

The Resident Commissioner’s legislation, called the Puerto Rico Hospital Medicare Reimbursement Equity Act of 2012, is cosponsored by Reps. José Serrano (D-NY), Nydia Velázquez (D-NY), Madeleine Bordallo (D-Guam), Eni Faleomavaega (D-American Samoa), Donna Christensen (D-USVI), and Gregorio Kilili Camacho Sablan (D-CNMI).

Explaining his support for Pierluisi’s legislation, Congressman Serrano said: “We must make every effort to ensure that Puerto Rico gets fair and equal treatment from the federal government. There is no good reason that a hospital in Puerto Rico should receive less than a hospital in any of the 50 states. This bill will eliminate that unfair disparity. Our nation’s laws should not discriminate against Puerto Rico, and I applaud Mr. Pierluisi for tackling one of the most glaring problems of legal inequality.”
The Resident Commissioner has been working to fix this disparity since 2009 with the collaboration and support of the Puerto Rico Hospital Association.
According to one estimate, paying Puerto Rico hospitals the same base rate as stateside hospitals will result in additional reimbursements of about $24 million a year, which could be used by hospitals to improve patient care and remain financially stable.