More Risk, Less Funding: The Reality for Puerto Rico’s Healthcare Providers

For healthcare providers, insurers, and administrators in Puerto Rico, the One Big Beautiful Bill Act (OBBBA) is reshaping the Medicaid operating environment. While the territory avoids some of the most burdensome mandates imposed on states, the requirements that do apply bring significant compliance costs—without any increase in federal funding.

This combination of more rules and no new dollars is especially challenging for a program already constrained by a capped federal allotment.

The New Compliance Landscape

Several OBBBA provisions will directly impact Puerto Rico’s healthcare ecosystem:

• Payment Error Rate Measurement (PERM) Program Puerto Rico is now participating in the PERM program for the first time. Stricter definitions of “erroneous payments” take effect in FY 2030, increasing the risk of financial penalties for even minor documentation or eligibility errors.

• Duplicate Enrollment Monitoring Medicaid systems must connect to a new federal duplicate-enrollment hubby October 1, 2029. This means building automated data feeds, updating eligibility rules, and preparing for higher disenrollment rates as overlaps are identified.

• Non-Citizen Eligibility Verification Starting in FY 2027, Puerto Rico must apply more restrictive federal eligibility rules for lawfully present non-citizens and use the SAVE system to confirm status—changes that will require updates to IT systems, training, and workflow.

Why This Is a Bigger Problem in Puerto Rico

Unlike the states, Puerto Rico’s Medicaid program operates under a capped federal block grant. Any new administrative costs—from IT upgrades to expanded audit readiness—must be absorbed without additional federal funding. This limits flexibility and forces tough trade-offs between compliance and service delivery.

In recent years, funding shortfalls have already led to delays in covering key services like nursing facility care. Under OBBBA, the gap between program demands and available resources is likely to widen.

What Healthcare Providers in Puerto Rico Need to Know

For healthcare providers, this is a moment to:

1. Assess Compliance Readiness – Audit current systems against new OBBBA requirements.

2. Plan for IT Upgrades – Budget now for data hub connections, SAVE integration, and PERM reporting capabilities.

3. Strengthen Documentation & Training – Reduce audit risk by standardizing eligibility determinations and provider enrollment processes.

4. Engage in Strategic Advocacy – Work with industry associations to address funding and policy gaps at the federal level.

   
   

The Bottom Line

The OBBBA shifts Puerto Rico’s Medicaid program into a more regulated, higher-stakes environment—without increasing the funds to meet those demands. For providers, the cost of compliance is about to rise. Strategic preparation now will protect both operations and patient care in the years ahead.

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