Comment on CMS-2026-1256-0002
Mennonite General Hospital, Inc.OpposeAdvocacy
Summary: Sistema de Salud Menonita, a healthcare organization in Puerto Rico, argues that the proposed FY 2027 IPPS rule fails to address structural inequities and significant underpayments affecting hospitals in the territory. They request specific policy changes, including corrections to the wage index, increased Medicare Advantage benchmarks, and the establishment of a hospital stabilization fund for Puerto Rico.
Executive Summary
On behalf of Sistema de Salud Menonita, we respectfully submit these comments in response to the FY 2027 Hospital Inpatient Prospective Payment System (IPPS) Proposed Rule (CMS-1849-P), issued on April 10, 2026, and published on April 14, 2026. We recognize CMS’s effort to update payment policies and improve quality within the Medicare program. However, we must express serious concern that the proposed rule does not address longstanding structural inequities affecting hospitals in Puerto Rico, particularly those arising from the application of the Medicare wage index, disproportionate share provisions and the unique reliance on Medicare Advantage within the territory.
Hospitals in Puerto Rico do not seek preferential treatment. Rather, we seek equitable treatment under a federal program designed to ensure access to care for all Medicare beneficiaries. The record is clear: the wage index has documented vulnerabilities; Medicare Advantage funding is materially lower in Puerto Rico; and CMS has previously recognized the need to address inequities. The FY 2027 proposed rule presents an opportunity to begin addressing these structural issues. We respectfully urge CMS to do so.
Recommendations to CMS
1.Address Wage Index Structural Limitations. Develop a policy that corrects structural underpayment in geographically isolated labor markets such as Puerto Rico, including potential territorial adjustments or revised methodologies.
2.Restore or Replace Low-Wage Protections. Implement a lawful and sustainable alternative to the prior low wage index policy that continues to mitigate disparities for hospitals at the lower end of the wage index distribution.
3.Evaluate Medicare Advantage Payment Equity. Conduct a targeted evaluation of Medicare Advantage funding levels in Puerto Rico relative to the mainland to ensure alignment with beneficiary needs and health system costs.
4.Incorporate a Territorial Equity Framework. Explicitly assess the impact of IPPS and MA policies on U.S. territories, ensuring that federal payment methodologies do not perpetuate unintended disparities.
5.Increase the Medicare Advantage Benchmark in Puerto Rico to achieve parity with mainland rates, addressing the current $446 gap that directly affects plan benefits and provider reimbursements.
6.Establish a Hospital Stabilization Fund specifically for territories, providing supplemental payments to offset the revenue gap created by the unfavorable payer mix.
Please see attached comment letter for details