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Puerto Rico Releases Government Health Plan RFP

This week’s In Focus section, written by HMA Principal Juan Montanez, reviews the request for proposals (RFP) issued by Puerto Rico earlier this month to deliver managed care services to the territory’s Government Health Plan (GHP) members. The government of Puerto Rico is seeking to contract with between three and six MCOs to provide services to the approximately 1.3 million members of the GHP, the territory’s medical assistance and insurance affordability program. Proposals in response to the recently issued RFP are due in early April.

Services and Populations Covered

The GHP provides preventive, primary, acute care, behavioral health, and pharmacy services to pregnant women, newborns, children, parents and childless adults who meet income requirements. The GHP encompasses federal Medicaid and CHIP funds along with territory general funds. The GHP also has a “buy-in” option, and certain government employees – such as the territory’s police – receive health care through the GHP at no cost.

Significant Contract Changes

The most significant changes in this contract from the previous contract (RFP released in 2014) are as follows:

  • In keeping with initiatives proposed in the recently released Fiscal Plan, the GHP will transition from a model where a single MCO operates in one of eight geographic regions to an island-wide model where MCOs will, in effect, compete for business across the territory. New enrollees will be auto-assigned to an MCO and, in alignment with federal laws and regulations, have 90 days to change MCOs. Details on the auto-assignment algorithm are not yet available.
  • Because of the change in model, MCOs will need the capacity and ability to provide an adequate network and manage services for members who live anywhere in the territory. In a press conference held in early February, the territory’s health secretary noted that this change in model is driven in part by concerns regarding the availability of specialists. MCOs are encouraged to propose approaches to meeting this requirement that incorporate “partnerships” with other MCOs and provider-based organizations (health systems, IPAs, etc.). These partnerships could incorporate alternative payment models and various modalities of “value-based care.”
  • In its RFP announcement, in related public communications and in the aforementioned Fiscal Plan, the government has placed significant emphasis on MCOs addressing the needs of high-cost GHP members – individuals with chronic or high- cost diseases who are also the highest utilizers of GHP-covered services. In response to this, MCOs will be expected to propose innovative approaches to managing and delivering care to these members.
  • While historically the government has contracted directly with a PBM, in public communications it has suggested that it may consider allowing or requiring the MCOs to fulfill PBM functions.
  • In its Fiscal Plan the government is targeting a five-year reduction of almost 18 percent (in current dollars) in the average per-member cost of the program, from approximately $175 to $144. While this goal is not entirely dependent on MCO requirements – for instance, there are assumptions in the Fiscal Plan regarding standardization of provider fees, MFCU-driven fraud recoveries and PDL controls – it is safe to assume that the government will expect MCOs to manage their provider networks, service utilization and reimbursement such that the government’s goal becomes achievable.

Current Medicaid Managed Care Market

At present the 1.3 million GHP members are divided amongst four carriers, each of which operates as the single MCO in two of eight geographic regions:

  • Triple-S, the owner of the Blue Cross and Blue Shield licenses in Puerto Rico, and the largest insurance company on the island.
  • MMM, the largest issuer of Medicare Advantage products on the island.
  • First Medical, a provider-based plan that also has significant government employee and retiree business.
  • Molina Healthcare’s Puerto Rico subsidiary.

RFP Timeline

Proposals in response to the recently issued RFP are due in early April.  The government expects to announce the winning proposals in June, with resulting contracts planned to go into effect in October.

Link to RFP/Bidders’ Library

The public notice for the RFP can be accessed by clicking here.