Board clash with Rosselló spreads to healthcare

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The Puerto Rico Oversight Board’s clash with Gov. Ricardo Rosselló escalated as the panel said one of his government's new healthcare laws may be too expensive.

The board sent a letter Wednesday to Rosselló, Senate Pres. Thomas Rivera Schatz and House Speaker Carlos Méndez Núñez arguing that Act 47, a measure for patients’ rights, wasn't properly certified in compliance with the Puerto Rico Oversight, Management, and Economic Stability Act.

The rebuke came two days after the board filed a suit against Rosselló seeking a court order requiring furloughs and pension cuts.

Cumberland Advisors portfolio manager Shaun Burgess said the board faces a continuing battle from the local authorities as it seeks to reduce spending.

Section 204 (a) of PROMESA requires the governor to provide an explanation of the fiscal impact of passed laws and a certification that the impact is consistent with the existing board-approved fiscal plan.

Among other things, Act 47 gives a patient advocate expanded powers to commence “Summary Proceedings” to stay a health insurance company’s determination. It allows the advocate to issue regulations to guide when the Summary Proceedings would be started. Since the regulations haven’t been released, their fiscal impact cannot be determined, the board said.

“It appears unrealistic to expect that Act 47 will not increase medical costs,” the board wrote to the Puerto Rican leaders.

The board-approved fiscal plan assumes that Puerto Rico government spending on healthcare will be reduced by a total of $6.1 billion in fiscal years 2018 through 2026.

In its letter the board tells the governor that his fiscal impact estimate of Act 47 is inadequate and that he should submit a better one within seven days after a patient advocate issues regulations.

Staff for Rosselló didn’t immediately respond to a request for a comment.

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PROMESA Commonwealth of Puerto Rico Puerto Rico Infrastructure Financial Authority Puerto Rico Public Finance Corporation Puerto Rico