April 5, 2020

Seema Verma
Administrator
Centers for Medicare and Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244

Dear Administrator Verma:

I applaud the aggressive efforts by the Centers for Medicare and Medicaid Services through the
unprecedented exercise of its regulatory flexibilities to help healthcare providers contain the spread
of COVID-19. In this vein, I write to request your assistance in avoiding the imminent collapse of
the health care system that my 3.2 million constituents in Puerto Rico depend on.

Unlike in the mainland, the vast majority (90%) of Medicare beneficiaries with Medicare Part A
and Part B in Puerto Rico and almost all dual (97%) eligible beneficiaries receive their care through
local Medicare Advantage (MA) organizations. Health care provided through MA organizations
account for nearly half of all health care expenses in Puerto Rico.

Payments to providers under MA organizations in Puerto Rico pay as low as 70% and as high as
30% the Medicare rate schedule for the relevant year. Moreover, history has shown that
MA organizations in Puerto Rico to do pass on increases in their premiums to providers, who will
also have to disproportionally bear the additional costs of complying with the new mandatory
coverage for COVID-19.

The most recent census of hospital utilization shows that original Medicare accounted for only
10% of utilization. Because many of the mechanisms included in the CARES Act (P.L. 116-136)
seek to provide immediate cashflow to hospitals are based on original Medicare (e.g., Medicare
sequester relief, IPPS payment add-ons, advances on original Medicare reimbursements, extending
GPCI 1.00 floor), they will hardly put a dent in the Puerto Rico ho pi al ca h flo problem .

Other mechanism, such as the postponement of the reduction of payments through the
Disproportionate Share Hospital program, are also inapplicable in Puerto Rico.
 Rep. Jenniffer Gonzalez-Colon
Letter to Administrator Verma on CARES Act
Page 2

With a median income of less than $20,000 and approximately 43% of the population living under
he po er le el, almo 40% of P er o Rico pop la ion depend on Medicaid for heir
heal hcare need . Moreo er, abo 6% of P er o Rico pop la ion i nin red. Thi mean ha
hospitals in Puerto Rico treat a disproportionate number of low-income patients and, conversely,
incur in a disproportionate amount of expenses with a low rate of reimbursement. However, despite
my efforts to remedy this situation, Congress has not extended the Supplemental Security Income
(SSI) program to Puerto Rico and, while hospitals in Puerto Rico may provide care to certain
individuals living on the mainland who are eligible for SSI, most Americans living in Puerto Rico
are ineligible for SSI. Therefore, using the SSI in the formula to determine DSH payments means
that hospitals in Puerto Rico are, for all intents and purposes, excluded from these payments.

The precario a e of he I land ho pi al prior to Hurricane Maria and prior to this public
health emergency is well known to CMS. With an ocean between Puerto Rico and the mainland,
the Americans living in Puerto Rico need their hospitals to be financially strong in order to provide
the services that are needed, not just in Puerto Rico, but in the U.S. Virgin Islands and throughout
the Caribbean.

Wi h all elec i e rgerie cancelled, hi eek ili a ion cen of Puerto Rico hospitals shows,
at most, 30% overall occupancy. On Tuesday, the San Jorge Children and Women Ho pi al
laid off half its staff (their Medicare patients are practically zero), two additional hospitals have
informed me that they will not have sufficient funds to make payroll on April 15th, and other
hospitals have announced that they will be forced to start laying off employees very soon in order
to stay open as long as possible.

Hospitals have been, and will continue to be, on the front lines of the coronavirus response efforts,
driving a need for supplies and incurring in extraordinary expenses. With the COVID-19 curve in
Puerto Rico just beginning to rise, there is a valid concern that when we reach the COVID-19 peak,
our hospitals will not be in a position to handle it. The situation is dire, and it needs to be addressed
urgently.

I would like to discuss the ways in which CMS can exercise its regulatory discretion to help avoid
us the imminent closing of the hospitals in Puerto Rico. Please contact my scheduler Natasha
Marquez, at Natasha.Marquez@mail.house.gov, to schedule a conference call at your earliest
availability.

Sincerely,

Jenniffer González-Colón
Member of Congress