Supreme Court orders IHS to settle its debts

In a recent 5 to 4 Supreme Court decision in the case of San Carlos Apache Tribe v. Becerra, the court ruled that the Indian Health Service must reimburse tribally-run health programs for overhead costs associated with billing insurance companies. This victory clarified the obligations under the Indian Self-Determination Act and could potentially result in an additional $2 billion for the health agency.

The ruling raises questions about how the underfunded federal health agency will cover these costs and whether it will impact smaller nations that rely on direct-service facilities. The Indian Health Service operates these facilities, with many tribes opting for direct services due to factors such as lack of resources and infrastructure.

Nearly 80% of Indian health programs in the U.S., totaling 1,008 programs, are operated by tribes as of June 2023, with 792 being tribally-run through various arrangements. Additionally, 140 programs are federally run by the Indian Health Service (IHS). The recent Supreme Court ruling on the Indian Self-Determination Act was not addressed by self-proclaimed textualist justices, focusing instead on potential negative outcomes for the federal government regarding funding obligations and tribal impacts.

The ruling clarified the support of contract costs necessary to uphold the purpose of the contract, akin to overhead costs for a business. The Indian Self-Determination Act, established in 1975, allowed tribal nations to operate various programs with federal funding, leading to increased autonomy and successful tribal management of over 50% of federal Indian programs.

The federal government initially hesitated to reimburse tribes for health program costs, despite legal mandates. Before 2012, contracts between the Indian Health Service (IHS) and tribes were unenforceable, until a Supreme Court decision required IHS to reimburse tribes for fulfilled contracts, including contract-support costs. Following this, a dispute arose over overhead costs for third-party insurance billing.

This led to new litigation ultimately resolved in the recent Supreme Court ruling in the San Carlos Apache Tribe v. Becerra case, which clarified obligations under the Indian Self-Determination Act. Concerns raised by Justices included annual budget appropriations and the impact on direct-service tribes. However, previous cases have shown that funding for tribally-run health programs does not affect funding for federally-run programs. Efforts are being made in Congress to address funding issues and potentially establish automatic funding for IHS, ensuring stable financial support beyond yearly appropriations.

In cases involving mandatory funding, Congress is required to pass laws to allocate funds to programs like Social Security, Medicare, veteran’s services, and income security programs. Tribal attorney Lloyd Miller raised concerns about a potential double standard favoring non-tribal government contract cases over tribal cases, emphasizing the importance of honoring contractual obligations. He referenced the Winstar v. United States case where the Supreme Court ruled in favor of the plaintiff due to a breach of contract by the government. In the road to the Supreme Court, different decisions were made by federal appeals courts regarding reimbursement of overhead costs for billing insurance companies in tribal health programs. Ultimately, the Ninth Circuit Court of Appeals ruled in favor of the San Carlos Apache Tribe, while the Tenth Circuit Court of Appeals favored the Northern Arapaho Tribe.

There was a conflict between appellate courts in the West and East regarding underpayment of tribes, which the Supreme Court resolved in favor of the tribes. This underpayment forced tribally-run health programs to cover fixed overhead costs, impacting staffing and services. Reimbursements were crucial for these programs to operate effectively. The San Carlos Apache and Northern Arapaho tribes collaborated on their separate cases, presenting a unified front in the Supreme Court, which acknowledged their individual interests and granted a divided argument. This collaborative effort led to a significant victory for the tribes.

The post Supreme Court orders IHS to settle its debts first appeared on Native Sun News Today.

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