Recent amendments to Chapter 19 of the Puerto Rico Insurance Code prohibit payment of a lower fee than those established by the U.S. Centers for Medicare and Medicaid Services ("CMS") and the termination or cancellation of a health provider contract without just cause

By: Myrna I. Lozada Guzmán, Esq.

August 30, 2019

Earlier this month, the Governor of Puerto Rico signed into law Act No. 90 of August 1, 2019 to amend Section 7 and add a new Section 8 to Article 19.150 of the Puerto Rico Insurance Code as they relate to service provider agreements between health care service providers and health service organizations that provide Medicare Advantage plans in Puerto Rico.

As amended, Section 7 now prohibits any contract, agreement or addendum between a Medicare Advantage health service organization and a Medicare Advantage service provider that contains a clause establishing a lower or a less favorable fee schedule with the service provider than the fee schedule established by CMS for Puerto Rico for the specific service or procedure performed by the service provider. In addition, any condition, stipulation or agreement that is contrary to the minimum fee shall be null and void.

The CMS reimbursement fee schedule applicable to medical practitioners for their services and procedures takes into consideration the Geographic Pricing Cost Index ("GPCI"), which, in the case of Puerto Rico, is the lowest among all jurisdictions within the United States. However, several Medicare Advantage insurers have continued reimbursing fees to medical practitioners that are lower than those established by CMS. The amendment has been adopted to force all Medicare Advantage health service insurers to include the minimum fee reimbursement determined by CMS.

Act No. 90 also added a Section 8 to Article 19.150 that prohibits the cancellation or termination of any contract entered between a Medicare Advantage health service organization and a health provider or professional, without just cause. Any condition, stipulation or agreement contrary to this new restriction will be deemed null and void. For purposes of Section 8, the term "just cause" must be interpreted in accordance with the applicable provisions of the Puerto Rico Civil Code. In sum, the most important provisions of these amendments are: (i) the new compulsory minimum fee reimbursement as established by CMS; and (ii) the prohibition to terminate any existing Medicare Advantage contract, agreement or stipulation, except for just cause.

Goldman Antonetti & Córdova, LLC stands ready to assist health insurance organizations and medical practitioners on the recent amendments to Article 19.150 of the Puerto Rico Insurance Code.

If you have any questions related to this area, please contact the following members of our Firm:

Myrna Lozada, Esq.
787.759.4149
[email protected]

Francisco Dox, Esq.
787.759-4220
[email protected]

Alicia Lamboy, Esq.
787.759.4144
[email protected]

Gretchen Méndez, Esq.
787.759.4207
[email protected]

William Morales, Esq.
787.759.4103
[email protected]

Thelma Rivera, Esq.
787.759.4104
[email protected]

Arnaldo Villamil, Esq.
787.759.4148
[email protected]

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