Securing Double Bonus for Star Ratings for Health Plan in Puerto Rico


December 31, 2019

Epstein Becker Green (EBG) achieved a victory for a long-time health plan client, Medical Card Systems (MCS) of Puerto Rico, in the Announcement of 2018 Medicare Advantage Rates and Final Call Letter. Under the Affordable Care Act, Centers for Medicare & Medicaid Services (CMS) payments to Medicare Advantage (MA) plans would be adjusted based on the MA plan contract’s quality score under the Star Rating System. Bonuses were to be awarded for contracts receiving four or more stars, increasing the plan reimbursement benchmark payment by 5 percent. Congress additionally added a provision to grant a double bonus to plans achieving four stars or more in counties with high population, high MA penetration, and low Medicare fee-for-service costs.  For several years, CMS took the position that otherwise eligible counties in Puerto Rico were ineligible for the double bonus provision. In 2016, a separate Puerto Rico health plan offered comments to the annual MA Rate Advanced Notice and Draft Call Letter, suggesting to CMS that MA plans serving otherwise eligible counties in Puerto Rico should receive the double bonus. CMS declined to act upon these comments, stating that it lacked the statutory authority to make the requested change.

In 2017, EBG assisted MCS in making its own arguments to CMS on this issue. Working closely with the client’s executives, EBG conducted the programmatic research and statutory and regulatory analysis to clearly demonstrate to CMS that (i) MA plans serving Puerto Rico counties were eligible under the statute for the double bonus provision and (ii) a significant number of Puerto Rico counties satisfied the specific criteria. EBG’s analysis was submitted by the client to CMS in response to the annual MA Rate Advanced Notice and Draft Call Letter. The client shared EBG’s analysis with another Puerto Rico health plan to be submitted to CMS as well.

In the April 3, 2017, Announcement of 2018 Medicare Advantage Rates and Final Call Letter, CMS announced that it was changing its interpretation of the double bonus provision to include all Puerto Rico counties if they satisfy the enumerated criteria. CMS stated that it “appreciated” the “detailed analysis” drafted by EBG and used by CMS in reaching its decision. This CMS policy change, directly attributable to EBG performance, increased MA reimbursements to the client by 4%-5%, representing tens of millions of dollars in revenue impact in 2018. Total reimbursement to all MA plans in Puerto Rico was estimated to increase by nearly 3 percent, in 2018. The EBG team on this issue included Philo D. Hall, Thomas E. Hutchinson, and Kevin J. Malone.

This victory demonstrates the value of EBG’s distinctive multi-perspective approach combining (i) historical knowledge of the MA program from both the CMS and plan perspective and (ii) familiarity with the Puerto Rico heath care system and its distinctive demographic factors, with a thorough regulatory and statutory analysis.