Addressing Puerto Rico’s Medicaid Cliff

Addressing Puerto Rico’s Medicaid Cliff

Published on July 16, 2019

Rosanna close-up
Director, Washington D.C. Office

The House Energy and Commerce Committee is expected to markup 26 bills tomorrow at 9:30AM, including H.R. 2328, the “Reauthorizing and Extending America’s Community Health Act”.  An Amendment in the Nature of a Substitute (ANS) – essentially a full replacement of bill text – will be offered to incorporate language of H.R. 3631, the “Territories Health Care Improvement Act” which includes a temporary fix to Puerto Rico’s Medicaid cliff.

In light of the recent FBI arrests and the messaging scandals, some representatives and senators have called for additional controls on federal funding for Puerto Rico.  An initial read of the ANS text suggests that staff has already worked this out internally and agreed to certain program integrity requirements, including the implementation of an asset verification program, a payment error rate measurement program, and the collection and reporting of data to the Transformed Medicaid Statistical Information System (T–MSIS), formerly known as the Medicaid Management Information System (MMIS).   This system is designed to improve internal controls over Puerto Rico’s Medicaid program, minimizing the possibility of waste, fraud and abuse.  As incorporated in the original bill text, Puerto Rico will also be required to produce an annual report to the House Energy and Commerce Committee and Senate Finance Committee that describes how it has used such the additional funding to improve program access and benefits.

If the bill gets approved, Puerto Rico is one step closer to addressing the looming Medicaid cliff.  There are two key aspects to any proposed solution: the Federal Medicaid Assistance Percentage (FMAP) that is set by statute at 55% (with the exception of the last BBA package that increased the amount to full federal funding) and the annual federal funding cap, arbitrarily set by statute and which grows incrementally along with the consumer price index.  In this package, Puerto Rico would receive two years at an 83% FMAP – the amount Puerto Rico would get if it were computed using the same formula for states – followed by two years at a 76% FMAP – the percentage provided to the poorest state, Mississippi.  The funding cap would be lifted to $2.8B for FY2020, $2.9B for FY2021, $3.0B for FY2022 and $3.1B for FY2023. The date for floor consideration is still uncertain, but it is expected to be considered in the fall. No news yet on how the upper chamber views the package.  

Revised FMAP and Section 1108 funding cap for Puerto Rico 

Fiscal Year


 Funding Cap



$ 2,823,188,000



$ 2,919,072,000



$ 3,012,610,000



$ 3,114,331,000



Other recent congressional activity related to Puerto Rico

House Oversight and Reform Committee
Date: July 16, 2019, 10:00am (postponed for a later date)
Hearing: Lessons Lost After Katrina? The Trump Administration’s Response to the Hurricanes in Puerto Rico and the U.S. Virgin Islands

House Homeland Security Subcommittee on Emergency Preparedness, Response, and Recovery
Date: July 11, 2019, 10:00am
Hearing: Road to Recovery: Puerto Rico and the U.S. Virgin Islands after Hurricanes Irma and Maria

Subcommittee on Environment of the House Oversight and Reform Committee
Date: June 25, 2019, 2:00pm
Hearing: Recovery, Resiliency and Readiness—Contending with Natural Disasters in the Wake of Climate Change (Climate Change, Part III)

Ways and Means Committee
Date: June 20, 2019, 9:30am
Markup and passage of H.R. 3300, The Economic Mobility Act of 2019, which provides Puerto Rico about $600 million a year to leverage and expand the local EITC.

Subcommittee on Health of the House Energy and Commerce Committee
Date: June 20, 2019, 10:30am
Hearing: Strengthening Health Care in the U.S. Territories for Today and Into the Future