Puerto Rico Recovery Act of 2016

Puerto Rico Recovery Act of 2016

This bill amends the Internal Revenue Code to make citizens of Puerto Rico eligible for the federal earned income tax credit and allow them to claim the refundable portion of the child tax credit on the same basis as U.S. taxpayers.

Title XIX (Medicaid) of the Social Security Act (SSAct) is amended to terminate the limitations on general Medicaid funding, as well as the specific federal medical assistance percentage (FMAP, or matching rate), beginning FY2017 for Puerto Rico, the Virgin Islands of the United States, Guam, the Northern Mariana Islands, and American Samoa (territories).

The authority to waive or modify certain Medicaid requirements in American Samoa and the Northern Mariana Islands shall now extend as well to Puerto Rico, the U.S. Virgin Islands, and Guam.

Federal financial participation shall not be available to a territory, however, for medical assistance (with certain exceptions) for an individual whose family income exceeds 100% percent of the official poverty line.

The bill prescribes a formula for Medicaid disproportionate share hospital (DSH) payments to the territories beginning FY2017, and revises a formula element for calculating Medicare DSH payments under the inpatient prospective payment system (IPPS) for subsection (d) hospitals in Puerto Rico. (Generally, a subsection [d] hospital is an acute care hospital, particularly one that receives payments under Medicare's IPPS when providing covered inpatient services to eligible beneficiaries.)

The bill repeals the exclusion of Puerto Rico residents from deemed enrollment under part B (Supplementary Medical Insurance Benefits), permitting them now to be deemed enrolled. The Department of Health and Human Services (HHS) shall extend such residents a special seven-month enrollment period. The late enrollment penalty shall be recalculated to 15% of the usual penalty for residents of Puerto Rico who are current enrollees or who enroll during a specified transition period.

HHS shall increase the geographic adjustment practice expense index for Puerto Rico.

The blended benchmark component of payments to Medicare+Choice organizations for an area in a territory under SSAct title XVIII part C (Medicare+Choice) shall be at least 80% of the national average of specified base payment amounts for the year (but never more than the lowest blended benchmark amount).

The bill also eliminates the exclusion from eligibility for premium and cost-sharing subsidies of territory residents otherwise eligible for Medicare part D (Voluntary Prescription Drug Benefit Program) benefits.

HHS shall report to Congress on:

• the treatment of territories under Medicare part D, and
• the adverse impacts in each territory from practical exclusion from the establishment of American Health Benefit Exchanges or the administration of a federally facilitated exchange.