Health Insurance Administration single payee plan before House committee
By John McPhaul
Health Insurance Administration single payee plan before House committee
The Health Insurance Administration (ASES by its Spanish initials) expressed to the House Health Committee its opposition to a measure that seeks to make the agency the single direct payer of medical services provided by public hospital entities and facilities to beneficiaries of the Vital Plan.
Among them, Senate Bill 2 (P.S. 2) includes the Cardiovascular Center of Puerto Rico and the Caribbean, Dr. Antonio Ortiz University Pediatric Hospital, Adult University Hospital, Dr. Ramón Ruiz Arnau University Hospital of Bayamón, and the Medical Emergency Corps.
According to the explanatory statement of the legislative piece, the Medical Services Administration (ASEM by its Spanish initials), the entity in charge of the administration of the Medical Center of Puerto Rico, is in a difficult economic situation along with the rest of the entities that provide medical-hospital services.
For this reason, the measure identifies as the main problem the payment system adopted to pay these institutions and proposes to remove part of the role of insurers through an internal mechanism in which the ASES becomes the direct payer of the entities for the services they provide to the beneficiaries of the Vital Plan.
However, the ASES rejected that the model proposed in the project is the best way to address the fiscal problem faced by these entities and hospital facilities. For the agency, the legislative measure deviates from what was approved by the Centers for Medicare and Medicaid Services (CMS by Spanish initials), so it will require submitting a “number of” amendments to the current State Plan.”
“It should be noted that these amendments involve demonstrating to the federal government that the state can meet fiscal responsibility ... These changes could have serious repercussions,” said the executive director of ASES, Edna Marín Ramos, while declaring that, on the one hand, the liquidity of insurers would be disrupted, to the extent that the payment of premiums would be reduced.
On the other hand, he explained that the funds of the government’s health plan come from a gap between state and federal funds. However, federal funds are received through a reimbursement mechanism and, if ASES becomes the direct payer, state funds corresponding to the federal item would have to be allocated to it, which could subsequently be reimbursed.
Marín Ramos explained that converting the ASES into a single-payer will require the modification of the administrative framework; the recruitment of a considerable number of employees who must have the knowledge and experience necessary to carry out the tasks of insurers; an additional budget allocation; the transfer of all data under the custody of insurers and the incorporation of technological infrastructure for the management of these.
“If efforts are made with the federal government and the authorization of the single-payer concept is achieved under the exception established by federal law ... would the ASES be in a position to seek that change?” questioned the president of the Health Committee Sol Higgins Cuadrado.
“The ASES can seek change. If the public policy we want to address is that, obviously, we have to move in that direction. What happens is that they are extremely complex scaffolding,” Marín Ramos replied.
“It’s going to take us several years to come up with a model like that. However, taking into account part of what the measure is proposing, and that I know that the sector as a whole we want to attend, we have to look for the mechanism of requiring insurers during these next years and/or establish how that process of negotiating the rates will be,” said the executive director.
For their part, the Medical Services Administration and the Cardiovascular Center of Puerto Rico and the Caribbean said as part of a shared position that assigning fair rates to be paid for medical plans according to the actual expenses of government health facilities is a “pressing, urgent and necessary.” but that it should not be limited only to patients assigned to the Vital Plan as presupposed by P.S. 2.
ASEM’s Director of Fiscal Resources, Paul Barreras, told the House committee that in order to ensure that the Puerto Rico Medical Center, the Trauma Hospital, the Cardiovascular Center and the government hospitals remain open, an additional economic injection of approximately $70 million annually is necessary.
“The fact that we all know that at the Medical Center every patient is going to be cared for and treated is an advantage for the people and a benefit for the most destitute. But, in economic terms, the only one that benefits from the service we offer are the medical plans that do not pay fair rates for the services we offer in our public hospitals,” Barreras said.
Both entities maintained that they see it beneficial that the rates paid by medical plans to the facilities of the State are reviewed with actuarial studies every two years, as provided in the senatorial measure.
However, they said that it should not be limited to what the plans pay in the government’s health plan, but should be extended to any medical plan that does business in Puerto Rico regardless of the segment, whether it is Medicaid (Vital), commercial-private, Medicare and Medicare Advantage, as well as the Automobile Accident Compensation Administration (ACAA).
On the other hand, P.S. 2 would require establishing a mechanism for ASES to handle claims, reconciliations and the operational processing of the same, which in the past operated under a system subcontracted by a tertiary administration model.
Under this model, both the ASEM and the Cardiovascular Center recommend that the ASES, and not the TPA, be the entity that establishes the rates to be paid to government institutions for the beneficiaries of the Vital Plan, reviewable every two years.
“Our humble call is to the union of purposes and wills in order to identify additional sources of income. We are working tirelessly to present additional proposals that do not represent tax increases for Puerto Ricans,” Barreras said.
The Comprehensive Cancer Center of the University of Puerto Rico (UPR), meanwhile, denounced that the biggest challenge they face in terms of the services they provide to the patients of the Vital Plan is that the existing rates do not adequately cover the real cost of the services provided.
Likewise, the lack of uniform processes between the different insurers of the Vital Plan is also the cause of substantial delays in the billing and collection process, which in turn results in lower income for the institution, said Dr. José Quijada González, deputy executive director of the Comprehensive Center.
Among the situations he listed are vendor credentialing; contracting of services; different billing rules; proprietary medical policies; lack of uniformity in contracted rates; outdated beneficiary information; and complicated claims processes.
“The Comprehensive Cancer Center coincides with the legislative intention of P.S. 2 and the position expressed by other entities concerned in this legislative process, in order that actions must be taken to increase the rates of the Vital Plan to cover the real cost of the services provided and to expedite the contracting processes, billing and collection of services,” said the doctor.