Congressional Committee Takes Action on Medicaid for Territories

Today the House Committee on Energy and Commerce passed the “Territories Health Care Improvement Act” (H.R. 3631).

Timing for full consideration by the House of Representatives has not yet been confirmed.

In anticipation of the Committee’s consideration of the bill today, Chairman Frank Pallone (D-NJ) provided the following description of H.R. 3631:

H.R. 3631, introduced by Reps. Soto and Bilirakis (R-FL), would increase Puerto Rico’s Medicaid funding to approximately $3 billion annually for four years, increase the federal medical assistance percentage (FMAP) for four years, and make important program integrity improvements to Puerto Rico’s Medicaid program.

It would require Puerto Rico to have an asset verification program in place by the end of the third year, and a payment error rate measurement program in place by the end of the fourth year. It would also provide six years of increased federal funding and increased FMAP for the U.S. Virgin Islands, American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. By the end of year four, the legislation would require all of the territories to have established a Transformed Medicaid Statistical Information System (T-MSIS) and a Medicaid Fraud Control Unit (MFCU).

On July 11, 2019, the Subcommittee on Health met in open markup session and favorably forwarded H.R. 3631 to the full Committee by a voice vote. An amendment is expected to be offered to the AINS that will require additional oversight of the Puerto Rico Medicaid program.

The bill includes $12 billion for Medicaid in Puerto Rico over four years. It also includes additional oversight of the territory’s Medicaid program.  Provisions to oversee Puerto Rico’s Medicaid program were added to the legislation after the Health Subcommittee passed the bill last week and before the full Energy and Commerce Committee considered the bill today.

The legislative proposal also included a Sense of Congress regarding the need to develop a permanent legislative solution to provide the territories with a reliable and consistent source of federal funding under the Medicaid program.

The Sense of Congress explains that the territories have spending caps, which means that there is a limit on the amount of money provided for Medicaid, regardless of need. Puerto Rico and the other territories are required to provide Medicaid services, and when the cost goes beyond the cap on federal funds, the territories’ governments have to foot the bill. This leads to financial hardship, an inability to provide needed services, or — more often — both.

“As a result of these Federal funding caps, which have not been adjusted over time,” the Sense of Congress continues, “the territories continue to struggle in managing their Medicaid programs, including planning for their respective financial obligations and managing health care services for low-income adults, children, pregnant women, elderly adults, and persons with disabilities.”

The legislative language notes that Congress has had to come up with new bills six times since 2004, which has included temporary additions of funds and supplemental block grants, and this approach to the problem is inefficient.

The committee therefore concluded that “a more permanent legislative solution must be developed in order to provide the territories with a reliable and consistent source of Federal funding under their Medicaid programs so that the territories can continue to meet the health care needs of vulnerable populations.”