Administration seeks to better align Puerto Rico’s health care with the mainland

While HHS has invested over $9.5 billion in Puerto Rico from 2009 to 2014 to improve health care systems and health outcomes of the 3.5 million Americans living in Puerto Rico, the Obama Administration seeks to do more through additional funding for Medicare and Medicaid programs and supplemental funding to reduce transmission of the Zika virus. Secretary Burwell and HHS announced that they are working closely with other members of the Administration and key stakeholders to not only address the current fiscal crisis in Puerto Rico, but to help ensure that residents of Puerto Rico get access to quality and affordable health care.


HHS has used available resources to help the more than 1.6 million Medicaid enrollees in Puerto Rico’s health care system, of whom 600,000 could lose their coverage when its one-time Medicaid funding run out in 2019. For example, through the fiscal year (FY) 2016 budget, HHS provided Puerto Rico and the territories access to the Medicaid Drug Rebate Program to lower prescription drug cost in Medicaid.

The Administration believes that more meaningful measures are needed that will require legislation. As such, the Administration’s FY 2017 Budget proposed three principle reforms to the Medicaid program to raise the standard of care in Puerto Rico to a level that better aligns with the mainland: (1) lift the federal cap on Medicaid funding to Puerto Rico and the other U.S. Territories; (2) immediately increase the federal Medicaid share from 55 percent to 60 percent and raise it to 83 percent over time as Puerto Rico and the other territories successfully strengthen and modernize their Medicaid programs; and (3) expand eligibility to 100 percent of the federal poverty level over time.


The Administration’s FY 2017 Budget proposes giving the HHS Secretary the 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 such, HHS plans to further address the distribution of uncompensated care payments to Puerto Rico in its 2017 Inpatient Prospective Payment System (IPPS) Final rule, especially if CMS continues to determine uncompensated care payments using SSI days. HHS also plans to accelerate the alignment of the formula to pay hospitals in Puerto Rico with the formula used in the 50 states, which would increase hospital payment rates in Puerto Rico by approximately 5 percent.

Supplemental Zika virus funding

Because Puerto Rico is experiencing ongoing active transmission of Zika, on February 8, 2016, the Administration made a request to Congress for a temporary one-year increase in Puerto Rico’s Medicaid Federal Medical Assistance Percentage (FMAP). This would 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 microcephaly, and other health care costs. The request would not make any changes to Puerto Rico’s underlying Medicaid program, and the additional funding will not count towards Puerto Rico’s current Medicaid allotment. Unlike the states, Puerto Rico’s Medicaid funding is capped, which gives it limited capacity to respond to emergent and growing health needs.

Other Administration efforts

Since 2009, the Administration has made the following efforts in Puerto Rico: (1) invested in expanding early childhood education and child care programs; (2) provided access to health insurance and health care services through the Children’s Health Insurance Program (CHIP) and Medicaid; (3) supported food safety and security monitoring projects; (4) helped people with disabilities and older adults to live with dignity and independence; (5) funded 20 health centers treating over 330,000 people in 2014; and (6) established eight new service delivery sites with the help of $5 million in funding in 2015.