AAFP Calls for Lasting Fix to Territorial Medicaid Funding
Chronic Uncertainty Leading to Primary Shortage, Health Inequity
April 1, 2021, 3:37 p.m. News Staff — The Academy is calling on Congress to enact a long-term solution for Medicaid funding in the U.S. territories, ahead of a looming fiscal cliff.
The territorial Medicaid funding system — which is capped and subject to a federal medical assistance percentage of 55%, significantly less than that of the states despite higher average Medicaid enrollment — “is unfair to the territories and leads to more stringent Medicaid eligibility limits, less comprehensive Medicaid benefits to participants and inadequate payments to clinicians and hospitals,” said the AAFP’s March 17 letter.
To permanently address these issues, the Academy said, “Congress should pass H.R. 265, the Insular Area Medicaid Parity Act, which would lift the Medicaid funding cap in the U.S. territories.”
The letter was sent to Reps. Anna Eshoo, D-Calif., and Brett Guthrie, R-Ky., the chair and ranking member, respectively, of the House Committee on Energy and Commerce’s Health Subcommittee in advance of a hearing that day titled “Averting a Crisis: Protecting Access to Health Care in the U.S. Territories.” It was signed by AAFP Board Chair Gary LeRoy, M.D., of Dayton, Ohio.
“The most immediate concern is the impact of the impending Medicaid fiscal cliff (Sept. 30) in the U.S. territories,” the AAFP wrote. “If Congress fails to act before the end of the current fiscal year, all providers, including family physicians, and their patients in American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico and the U.S. Virgin Islands will face significant reduction in resources and access to necessary care.”
It’s a perennial threat that leaves territorial Medicaid “chronically underfunded,” the letter added, noting that previous funding fixes had offered only short-term answers. (The AAFP made a similar plea in 2019, with Congress’ most recent temporary patch contained in the Families First Coronavirus Response Act.)
Story Highlights
“Our constituent chapters in the territories represent hundreds of family physicians who have long been proponents of changes to the current funding mechanisms to ensure that the territories are treated more equitably to the states for the purposes of Medicaid financing,” the Academy said in its March 17 letter.
“Without additional support, the territories will revert to a 55% FMAP on Oct. 1, when many physician practices and patients will still be coping with the effects of COVID-19 on their health and financial well-being.
“Additionally, these territories are facing an ongoing exodus of physicians from the islands as reimbursement for services remains significantly lower than the same services performed in the U.S. mainland.”
As of 2016, the Academy told lawmakers, physicians and surgeons in Puerto Rico earned “a median hourly salary that was less than half of their mainland counterparts,” and that territory’s primary care physicians numbered so few that they could address just 1.9% of the population’s need.
Participants in the hearing echoed these concerns.
“Tens of thousands of residents of my district will lose access to health care unless Congress takes action to eliminate the federal Medicaid fiscal cliff in the territories once and for all,” said Rep. Stacey Plaskett, D-Virgin Islands, said. “Listen, to have us continually come and beg you for money to be treated equitably is absolutely unfair, and all of us as members of Congress — all of you on this committee — should be embarrassed that you have members of Congress asking you to be treated fairly.”
An Inside Health Policy story on the hearing noted a possible roadblock for the legislation.
“House Energy & Commerce Republicans were particularly focused on Puerto Rico’s management of federal Medicaid dollars and CMS oversight of the territory’s procurement process,” the story said. “In 2019, the former executive director of Puerto Rico’s Health Insurance Administration was indicted for allegedly stealing federal Medicaid money through a corrupt bidding process with private contractors.
CMS does not oversee any state or territory’s Medicaid procurement process, the Government Accountability Office says, but Puerto Rico is trying to reform its program and plans to open competitive procurement information to the public by the end of 2021.”
Throughout the territories, however, chronic Medicaid underfunding and continuous re-evaluation of funding levels are “crippling an already at-risk population,” the Academy warned.
Ensuring adequate Medicaid funding for U.S. territories, where Medicaid participation is high and includes a significant percentage of minority groups, “is an important step toward achieving health equity,” the letter said. “Passing the Insular Area Medicaid Parity Act will allow the U.S. territories to better serve their communities, grow their physician workforces, plan for long-term health care spending, and better respond to future natural disasters.”
The Academy also was a co-signer of a March 17 Partnership for Medicaid letter to Eshoo and Guthrie calling for passage of H.R. 265.
Joining the AAFP on that letter were 15 other organizations, representing a majority of that coalition and including the American College of Obstetricians and Gynecologists, the National Association of Community Health Centers and the National Rural Health Association.