medicaid in puerto rico: financing and spending data ... · 50 states and the district of columbia...
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www.macpac.gov @macpacgov
Medicaid and CHIP Payment and Access Commission
March 7, 2019
Medicaid in Puerto Rico: Financing and Spending Data Analysis and Projections
Kacey Buderi and Chris Park
Overview
• Congressional request • Background • Medicaid spending in Puerto Rico and
comparison to states • Challenges beginning in FY 2020 • Spending projections by source of funds under
different scenarios • Choices regarding benefits and eligibility under
different scenarios March 7, 2019 2
Congressional Request
• House Committee on Appropriations requested that MACPAC “evaluate and assess viable options for ensuring long-term sustainable access to care for Medicaid beneficiaries in the territory”
• Request has no due date; does not require recommendations
March 7, 2019 3
Background
March 7, 2019 4
Program Overview • Covered over 1.5 million people in 2017 (47 percent
of the population) – 1.3 million covered by Medicaid
• Includes 250,000 individuals dually eligible for Medicare – 90,000 children covered by Medicaid-expansion CHIP – 150,000 enrollees covered through Puerto Rico-only funds
• Puerto Rico is considered a state unless otherwise indicated (§1101(a)(1) of the Social Security Act)
• Some differences in benefits offered, eligibility • Capped allotment financing structure
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Financing • Statutorily defined federal medical assistance
percentage (FMAP) of 55 percent – would receive maximum allowable FMAP of 83 percent if
set using state formula – receives expansion state FMAP for adults without
dependent children (93 percent) • Can access federal dollars only up to an annual cap
(1108 cap) – set in 1968; grows with medical component of CPI-U
• Capped amount has historically been insufficient to cover federal share – federal contribution at times below 20 percent
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Additional Time-Limited Funds • Patient Protection and Affordable Care Act (ACA,
P.L. 111-142, as amended) – Section 2005: $5.4 billion available July 2011-September
2019 – Section 1323: $925 million available through December
2019 • Consolidated Appropriations Act of 2017 (P.L. 115-
31): $295.9 million added to Section 2005 funds • Bipartisan Budget Act of 2018 (BBA): $4.8 billion
available January 2018 – September 2019
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Spending
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Spending – FYs 2011-2019 (millions)
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$290.6 $298.7 $309.2 $321.3 $329.0 $335.3 $347.4 359.5 366.7
$224.1 $588.9
$781.8 $879.7 $1,192.5 $1,304.1
$1,453.9 $1,801.3
$2,290.0
$476.3
$726.2
$853.0 $728.0
$840.5 $832.0
$805.0 $463.3
$102.2
$991.0
$1,613.8
$1,944.0 $1,929.0
$2,362.0 $2,471.5
$2,606.3 $2,624.1 $2,758.9
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
2011 2012 2013 2014 2015 2016 2017 2018 20191108 cap Federal spending in excess of cap Puerto Rico spending
Notes: FY is fiscal year. 1108 cap refers to the annual cap on federal funds that territories receive under Section 1108(g) of the Social Security Act, while additional federal spending reflects utilization of the allotments provided by the ACA, as well as spending not subject to the cap (including enhanced allotment plan spending, which cannot be backed out for these years using available data). Spending data for FYs 2011-2017 is actual spending; spending data for FYs 2018-2019 is projected. Source: MACPAC 2018 analysis of CMS-64 financial management report net expenditure data and CMS-37 budget projections; CMS 2016, 2017, 2018.
actual projected
Comparison to State Spending • Calculated Puerto Rico Medicaid benefit spending
per full-year equivalent (FYE) in FY 2020 using data provided by the Puerto Rico Health Insurance Administration (ASES) and Milliman
• Calculated FY 2020 benefit spending per FYE in the 50 states and the District of Columbia using Medicaid Statistical Information System (MSIS), CMS-64 data, and CMS Office of the Actuary trends – excluded spending on long-term services and supports
(LTSS) – reweighted each state’s enrollment across eligibility
groups to match the enrollment mix in Puerto Rico
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Comparison of Medicaid Benefit Spending per FYE, FY 2020
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Notes: FYE is full-year equivalent. Total spending includes federal and state funds. Excludes Medicaid-expansion CHIP enrollees. Excludes spending for administration and long-term services and supports (LTSS). To adjust for differences in enrollment mix across states and Puerto Rico, the enrollment mix across eligibility groups in each state was reweighted to match the distribution of enrollees across eligibility groups in Puerto Rico. 1 Excludes Rhode Island due to data reliability concerns regarding completeness of monthly claims and enrollment data. Sources: ASES and Milliman 2019a, b. OACT 2018. MACPAC 2019 analysis of MSIS data as of December 2016 and CMS-64 Financial Management Report (FMR) net expenditure data from CMS as of June 2016; CMS-64 FMR net expenditure data as of July 20, 2018 and CMS-64 enrollment reports as of September 19, 2018.
Puerto Rico $2,144 Puerto Rico $1,495
$0$1,000$2,000$3,000$4,000$5,000$6,000$7,000$8,000$9,000
$10,000$11,000$12,000$13,000$14,000$15,000
Total Spending per FYE Federal Spending per FYE
Distribution of benefit spending per FYE in 50 states plus DC1
$13,429
$10,243
$6,763
$3,342
$4,550
$2,402
Challenges Beginning FY 2020
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Puerto Rico Financial Oversight and Management Board (FOMB) Spending Reduction Targets
• Mandatory Medicaid spending reductions amounting to $826 million annually by FY 2023
• Hope to accomplish through reforms to managed care system – changes to contracts: $478 million in savings off FY 2020 baseline – additional savings from improving program integrity capabilities,
prescription drug cost controls, standardizing fee schedules • Concern that planned reforms will not yield required savings; that
benefit or eligibility reductions will be necessary • Not clear how reductions will be enforced • Not clear how requirements would be affected if additional federal
Medicaid funds are provided
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Expiration and Exhaustion of Federal Medicaid Funds • Puerto Rico reports that it will continue to have sufficient
federal funding through FY 2019 • Will exhaust all FY 2020 federal Medicaid funds during March
2020 – shortfall of $1.01 billion for the fiscal year – will exhaust FY 2021 federal funds during December 2020
• Unlikely to fully exhaust all federal funds prior to expiration; up to $874.4 million may go unspent – $81.2 million in ACA Section 2005 funds expiring September 30, 2019; – $289.8 million in BBA funds expiring September 30, 2019; – $366.7 million available under the FY 2019 Section 1108 cap, expiring
September 30, 2019; and – $136.7 million in ACA Section 1323 funds expiring December 30, 2019
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FY 2020 Financing Scenarios
• Without additional federal funds, Puerto Rico must increase its own Medicaid spending or reduce total spending – unlikely that Puerto Rico could increase territorial
share; may need to decrease territorial spending • Congress would face choices for how to structure
additional federal Medicaid funds, including the amount, matching rate, and time period available
March 7, 2019 15
Projected Medicaid Spending in Puerto Rico under Different Funding Scenarios by Source of Funds, FY 2020 (millions)
Notes: FY is fiscal year. ACA is the Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended). 1108 cap are the federal funds available under the annual ceiling on federal financial participation specified in §1108(g) of the Social Security Act (the Act). EAP is the Enhanced Allotment Plan, which can only be used to help pay for prescription drugs for low-income dually eligible beneficiaries (§1935(e) of the Act). ACA §1323 funds are additional federal funds provided under §1323 of the ACA, available through December 2019. “Spending assuming sufficient federal funds” are scenarios in which Congress has appropriated enough federals funds to fully match all projected spending. “Spending assuming no new federal funds available” are scenarios that reflect the amount of federal funds currently available to Puerto Rico for FY 2020. The “maintain projected territory spending” scenario assumes that Puerto Rico would spend up to the projected $892.9 million in territory spending even though not all of those funds would be matched with federal dollars. The “no territory spending beyond matched funds” scenario assumes that Puerto Rico would stop spending territory funds once all the available federal funds were exhausted. Sources: ASES and Milliman 2019
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$374.0 $374.0 $374.0 $374.0 $59.0 $59.0 $59.0 $59.0
$449.7 $449.7 $449.7 $449.7
$1,013.6
$1,478.2
$892.9
$428.3
$892.9
$415.6
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Spending assuming sufficientfederal funds at current FMAP
of 55%
Spending assuming sufficientfederal funds at maximum
allowable FMAP of 83%
Spending assuming no newfederal funds available
(maintain projected territoryspending)
Spending assuming no newfederal funds available (noterritory spending beyond
matched funds)
Med
icai
d Sp
endi
ng ($
Mill
ions
)
Federal (1108 cap) Federal (EAP) Federal (ACA §1323) Additional federal funds Puerto Rico
FY 2020 projected spending $2,789.1 $2,789.1
$1,775.5
$1,298.2
Effects of Spending Reductions under Different Scenarios
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Projected Medicaid Spending in Puerto Rico under Different Funding Scenarios by Category of Service, FY 2020 (millions)
Notes: FY is fiscal year. “Sufficient federal funds” are scenarios in which Congress has appropriated enough federals funds to fully match all projected spending. “No new federal funds available” are scenarios that reflect the amount of federal funds currently available to Puerto Rico for FY 2020. The “maintain projected territory spending” scenario assumes that Puerto Rico would spend up to the projected $892.9 million in territory spending even though not all of those funds would be matched with federal dollars. The “no territory spending beyond matched funds” scenario assumes that Puerto Rico would stop spending territory funds once all the available federal funds were exhausted. Sources: ASES and Milliman 2019.
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$513.8
$385.8
$679.1
$808.6
$65.4 $234.2 $102.2
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Sufficient federal funds at currentFMAP of 55 percent
No new federal funds available(maintain projected territory
spending)
No new federal funds available (noterritory spending beyond matched
funds)
Inpatient Hospital Outpatient Hospital Physician Drugs Dental Other Administration
Mandatory Services
Optional Services
$1,298.2
$2,789.1
$1,775.5
Projected Medicaid Full Year Equivalent (FYE) Enrollees in Puerto Rico under Different Funding Scenarios, FY 2020
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1,253,289
797,814
583,346
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
Sufficient federal funds at currentFMAP of 55 percent
No new federal funds available(maintain projected territory
spending)
No new federal funds available(no territory spending beyond
matched funds)
Full
Year
Equ
ival
ent E
nrol
lees
Notes: FY is fiscal year. “Sufficient federal funds” are scenarios in which Congress has appropriated enough federals funds to fully match all projected spending. “No new federal funds available” are scenarios that reflect the amount of federal funds currently available to Puerto Rico for FY 2020. The “maintain projected territory spending” scenario assumes that Puerto Rico would spend up to the projected $892.9 million in territory spending even though not all of those funds would be matched with federal dollars. The “no territory spending beyond matched funds” scenario assumes that Puerto Rico would stop spending territory funds once all the available federal funds were exhausted. Sources: ASES and Milliman 2019.
Next Steps
• MACPAC will include this information and information presented in prior meetings in a chapter in June 2019 report to Congress
• Commissioner feedback on chapter’s key messages would be helpful
March 7, 2019 20
www.macpac.gov @macpacgov
Medicaid and CHIP Payment and Access Commission
March 7, 2019
Medicaid in Puerto Rico: Financing and Spending Data Analysis and Projections
Kacey Buderi and Chris Park