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The Health 202

A newsletter briefing on the health-care policy debate in Washington.

There's fresh drama around funding Puerto Rico's Medicaid program

The Health 202

A newsletter briefing on the health-care policy debate in Washington.

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Hellooo, good morning. It seems like CBO likes a good, down-to-the-wire deadline just as much as us. (Read on to learn more.) 

Below, Biden still hasn't named three health officials to oversee social services programs, and several former Trump officials are launching a health care think tank. But first:

Watchdog says nope to the administration's cash infusion for Puerto Rico Medicaid

In late September, the Biden administration quietly made a decision with huge implications for Puerto Rico’s Medicaid program. 

Health officials interpreted language from recent laws to mean the federal government must give at least $2.9 billion per year to the island’s fragile safety net program. But the government’s watchdog says the administration is wrong. 

In a legal opinion yesterday, the Government Accountability Office wrote those payments shouldn’t have been allowed. But the determination is nonbinding, leaving federal health officials to decide whether to reverse course or ignore the agency's conclusion. 

  • It’s not yet clear which route the Centers for Medicare and Medicaid Services will take. The agency is reviewing the GAO opinion, a spokesperson said yesterday.
  • Puerto Rico officials contend the funding should stay. “The Governor believes that HHS will stand firm on its interpretation,” according to Carmen M. Feliciano, executive director of the Puerto Rico Federal Affairs Administration.
  • Meanwhile, Republicans quickly pounced. “The Biden administration does not have the legal authority to make this funding permanent,” Rep. Cathy McMorris Rodgers (R-Wash.), the top GOP lawmaker on the House panel overseeing Medicaid, said in a statement.

But either way, the Biden administration’s move will be moot if Democrats pass their sweeping social spending bill. It includes a larger — and permanent — boost to the island’s Medicaid funding, so that the territory won’t have to fret funding cliffs again. 

How we got here

Puerto Rico’s Medicaid program has long been underfunded. That's in part because of how the federal government pays for the safety net program in the territories.

  • In the states, there’s no cap on the amount of dollars the federal government can put toward their programs.
  • In the territories, federal funding is limited to a certain amount per year.
  • On Capitol Hill, lawmakers typically increase the relatively low funding limits — at least for a few years. They also boost the rate at which the federal government matches the territories’ Medicaid dollars.

If Congress didn’t act by Sept. 30, funding levels for Puerto Rico would have dropped from about $3 billion to roughly $400 million. That could force the territory to rollback boosts in provider payments and expansions in Medicaid eligibility, according to the Kaiser Family Foundation. 

Here’s where it gets tricky. CMS officials analyzed recent laws related to the territories’ Medicaid payments, like the agency does every year, and believed the fineprint directed the agency to keep Puerto Rico’s roughly $3 billion going in perpetuity.

  • “It’s funny how a very technical set of things has very large implications,” a CMS official told The Health 202 back in September.
  • But GAO disagreed: “We are not expressing an opinion on the policy question of federal funding for Puerto Rico’s or the other territories’ Medicaid programs,” the agency wrote in its opinion. “That is clearly a matter for Congress. Our conclusion is one of statutory interpretation, and the plain meaning of the language of the statute is clear.”
What's next

To Jorge Galva, the GAO conclusion wasn’t all that shocking. But still, the head of the island’s health insurance administration said he spent the bulk of yesterday afternoon ensuring Puerto Rico’s government was aware of the legal opinion, which officials plan to discuss in depth at a Thursday meeting. 

  • “We still believe it is a valid interpretation,” he said of the Biden's administration's decision.

Multiple Puerto Rico officials said they’ve turned their sights to urging Democrats to pass the party's $1.75 trillion economic bill. That legislation would increase the island’s Medicaid funding to at least $3.6 billion per year, as well as permanently boost the rate the federal government matches the territories’ Medicaid spending.

That would resolve this year’s Puerto Rico Medicaid dispute once and for all. 

  • “Right now everybody is hanging their hat on Build Back Better because it provides a greater degree of funding,” said Veronica Ferraiuoli, the legal counsel for Jenniffer González-Colón, Puerto Rico’s representative in Congress.

White House prescriptions

Biden has yet to name three health officials overseeing social services programs

President Biden faces a deadline today to name three Senate-confirmed positions at the sprawling Administration for Children and Families — a division within the federal health department with a $62 billion budget. 

  • It’s responsible for a slew of social-service policies, including managing the nation’s Head Start program for low-income children, welfare and foster care programs and the embattled refugee program that oversees the care of migrant children, our colleague Dan Diamond reports.

The still-vacant positions:

  • An assistant secretary to oversee ACF
  • A commissioner to lead its Administration for Native Americans
  • A commissioner to run its children, youth and families bureau

These roles are currently being filled by acting officials. Under the Federal Vacancies Reform Act, those officials can serve in those spots until today, after which point their responsibilities will technically fall to Health and Human Services Secretary Xavier Becerra, unless Biden names permanent replacements.

  • HHS spokesperson Sarah Lovenheim said the agency has a plan in case Biden does not nominate officials ahead of the deadline. “The process has been set up so that by midnight tonight, everyone in an acting appointee role at ACF today would continue assuming the full range of responsibilities associated with their respective role,” Lovenheim said yesterday.

Biden has lagged behind other presidents in filling positions (Check out Wednesday’s The Health 202 for more info.) While his pace of confirmations is similar to that of former President Donald Trump, it is slower than both Barack Obama and George W. Bush.

Industry Rx

First in the 202s: Several former Trump administration officials are launching a new think tank, Paragon Health Institute, focused on studying “market-oriented” health-care policies, Theodoric Meyer and your host report.

Brian Blase, who served on the National Economic Council in Trump's White House and later started a consulting firm, will be the think tank’s president. He helped craft an executive order on promoting alternatives to Obamacare coverage — policies panned by Democrats — as well as efforts to crack down on consolidation in the health industry and bolster competition.

Demetrios Kouzoukas, a top official at the Centers for Medicare and Medicaid Services in the Trump administration, and Joel Zinberg, who served on Trump’s Council of Economic Advisers, are also on board, along with Caroline DeBerry and Gary Alexander.

The think tank also includes a roster of outside advisers consisting of a mix of Trump administration veterans (Joe Grogan, Eric Ueland, Paul Mango), former officials in George W. Bush’s administration (Allan Hubbard, Tevi Troy), and conservative think tank types. Stand Together, the group behind Charles Koch’s network of nonprofits, is among the groups providing financial support, according to a spokesman. 

In other news: Al Sandrock, Biogen’s lead scientist and the face of the pharmaceutical company’s campaign to promote the Alzheimer’s treatment Biogen, is leaving the company, Stat’s Damian Garde, Adam Feuerstein and Matthew Herper report. Sandrock’s surprise departure after more than two decades comes as Biogen faces a worsening business outlook, and a federal investigation is probing the FDA’s approval of its controversial Alzheimer’s drug.


  • Pfizer has agreed to a license-sharing deal for its experimental covid-19 pill, which the company says could give more than half the world's population access to the treatment, The Post's Adam Taylor and Claire Parker report.
  • Vaccine maker Moderna is finalizing a pledge to sell millions of doses of its coronavirus vaccine to low- and middle- income countries through a deal with the vaccine equity initiative Covax, Politico’s Adam Cancryn, Erin Banco and Sarah Owermohle report. The company has faced intense pressure to share more of its vaccines with the developing world.
  • Biden’s approval rating on his handling of the coronavirus pandemic has continued on a downward trend, a Washington Post-ABC News poll found.
  • Some European countries and cities are reinstating restrictions amid a surge in coronavirus cases, The Post’s Miriam Berger reports. In Berlin, only the vaccinated or those who have recovered from covid-19, can eat out in restaurants or visit bars. Meanwhile, a three-week partial lockdown is underway in the Netherlands, with restaurants and shops ordered to close early.
  • Houston Methodist Hospital suspended a doctor for “spreading dangerous misinformationand sharing “harmful” personal and political opinions about the coronavirus, The Post’s Andrea Salcedo reports

Reproductive wars

Americans broadly support Roe v. Wade

Americans say by a roughy 2-to-1 margin that the Supreme Court should uphold its landmark abortion decision in Roe v. Wade. A similar margin opposes a Texas law banning most abortions after six weeks of pregnancy, according to a Washington Post-ABC News poll.

  • “While Americans have long supported limiting access to abortion after the first trimester of pregnancy, the poll suggests Americans widely oppose recent efforts in conservative-leaning states to enforce more severe restrictions,” The Post’s Scott Clement, William Bishop and Robert Barnes report.

On the Hill

Down to the wire: The Congressional Budget Office plans to release projections for the cost of Democrats’ sweeping economic package by the end of Friday. 

Moderates have said they'd vote on the bill no later than this week, provided it doesn't added to the deficit. But they want more information about the $1.75 trillion bill’s impact beforehand— setting the stage for a possibly late Friday or weekend work.

Sugar rush

Thanks for reading! See y'all tomorrow.