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  • Writer's pictureThe San Juan Daily Star

Fiscal board: Gov’t must claw back $200 million from ASES

Office of Management and Budget Director Juan Carlos Blanco

By The Star Staff

The Financial Oversight and Management Board has told the government it must claw back some $200 million from the Health Insurance Administration (ASES by its Spanish acronym), cutting its budget to $565.5 million.

The information is in a letter to Treasury Secretary Francisco Parés Alicea, ASES head Edna Marín Ramos and Office of Management and Budget Director Juan Carlos Blanco Urrutia.

On Dec. 29, 2022, President Biden signed into law House Resolution (HR) 2617, also known as the “Consolidated Appropriations Act of 2023.” HR 2617 assigns $3.2 billion to Puerto Rico for federal fiscal year (FFY) 2023 and extends the increased Federal Medical Assistance Percentage of 76% for Puerto Rico’s Medicaid program through Sept. 30, 2027.

Additionally, HR 2617 grants a $300 million appropriation during FFY 2023 if the secretary of Health and Human Services (HHS) certifies that Puerto Rico’s Medicaid program establishes a reimbursement floor, implemented through a directed payment arrangement plan, for physician services covered under the Medicare Part B fee schedule, in Puerto Rico, established under the Social Security Act.

The reimbursement floor must be not less than 75% of the payment that would apply to such services if they were furnished under Part B of Title XVIII of the Social Security Act during FFY2023, the letter dated Feb. 28 notes.

In addition, a further increase of $75 million may be granted if the HHS secretary determines Puerto Rico fully satisfies the requirements set forth in the Social Security Act.

“Given that the Fiscal Year 2023 General Fund Budget for the Puerto Rico Health Insurance Administration was certified prior to the enactment of HR 2617, the FY2023 GF Budget did not account for the additional federal appropriations or increased FMAP funding,” the oversight board said.

Nevertheless, the possibility of such increased funding was contemplated by the Certified 2022 Commonwealth Fiscal Plan.

The oversight board reserves the right to revise the projected General Fund appropriation for ASES.

”Accordingly, based on the enactment of HR 2617, the Oversight Board has revised the projected general budget appropriation for ASES to reflect the additional funding provided by the Act,” the board said. “Please be advised that ASES’ total General Fund Budget appropriation for FY2023, after considering all other cost concepts (including PayGo), should be amended from $814.6 million to $565.5 million.”

To the extent that the full appropriation has already been transferred to ASES, the oversight board also asked that the island Treasury Department withhold any future disbursements to ASES and coordinate with ASES the return of the surplus funds already appropriated less the withheld funds.

“Any such surplus funds must be transferred back to the Government to its ‘Unallocated Capital Expenditures – Clawback Medicaid’ account under the Custody of the Office of Management and Budget,” the board said in the letter.

Consistent with past practice, the $249.1 million in funds impacted by the oversight board’s decision must be used by the government to continue strengthening the island’s healthcare infrastructure and to address other priorities identified at the health agencies, including improvements to public hospital information technology; settlement of past due debts or lawsuits (i.e., utilities, 330 Centers); health facility infrastructure improvements, including design, construction costs, and strategic/technical advisory services; and state fund matching for capital projects funded by federal funds, among others, the oversight board noted.

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