• The San Juan Daily Star

Oversight board to update the commonwealth fiscal plan

Medicaid and Medicare Advantage Products Association President Roberto García Rodríguez

By The Star Staff

The Financial Oversight and Management Board for Puerto Rico informed the island government Monday that it will again update the commonwealth fiscal plan, the blueprint describing strategic steps for putting the bankrupt commonwealth on a solid fiscal path.

The update is expected to be completed in January. It will be the first update since a plan of adjustment (POA) was submitted to the federal Title III bankruptcy court for its approval.

In a letter Monday, the oversight board revised a schedule for the process of developing, submitting, approving and certifying an updated Fiscal Plan, which was updated earlier this year.

The revisions of the Fiscal Plan seek to incorporate new information available regarding Puerto Rico’s macroeconomic environment, government expenditures, additional updates regarding federal funding, and POA expenses. The POA has yet to be approved by the court.

Gov. Pedro Pierluisi Urrutia already submitted a proposed updated Fiscal Plan to the oversight board last Wednesday.

On Dec. 17, the oversight board will send the governor a notice of violations, as needed.

On Jan. 3, the governor must submit a revised proposed updated Fiscal Plan to the oversight board. On Jan. 21, 2022, the board expects to certify an updated Fiscal Plan.

Meanwhile, the Medicaid and Medicare Advantage Products Association asked the oversight board recently to postpone the Diagnosis Related Group (DRG) implementation to October 2022.

A diagnosis-related group (DRG) is a patient classification system that standardizes prospective payment to hospitals and encourages cost containment initiatives. In general, a DRG payment covers all charges associated with an inpatient stay from the time of admission to discharge.

The oversight board said in a letter to Association President Roberto García Rodríguez on Monday that it “understands the impact the change to the new payment model represents to the island’s healthcare system.”

“As stated in the April 2021 Fiscal Plan, pursuing value-based improvement initiatives are required to help the Commonwealth ‘bend the curve’ on healthcare inflation without jeopardizing outcomes,” the board said.

Implementing a DRG-based payment model where providers are reimbursed a fixed amount to fully treat a patient with a given medical condition helps control medical costs by incentivizing providers to deliver cost-effective care without sacrificing quality. In addition, it improves the effectiveness of Medicaid service delivery by standardizing the measurement of patient acuity across providers, the oversight board said.

The Health Insurance Administration originally planned to launch the DRG-based payment model in July of this year. However, due to the delicate position hospitals have been in during the coronavirus pandemic, that go-live date was postponed to October.

The oversight board approved the Medicaid and Medicare Advantage Products Association’s request but asked for an update by Dec. 15.

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