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GENERAL MEMORANDUM 11-027

GENERAL MEMORANDUM 11-027
Indian Health Service Proposed FY 2012 Budget; House Interior Appropriations Hearings for Public Witnesses on Indian Programs

On February14, 2011, President Obama submitted to Congress his proposed FY 2012 budget. In this Memorandum we report on the proposed budget for the Indian Health Service.

The page numbers in this Memorandum refer to the FY 2012 IHS Budget Justification. The budget describes increases and decreases relative to FY 2010 enacted levels as no FY 2011 appropriations bills have yet been enacted into law. All federal agencies are currently operating under a Continuing Resolution (CR) at FY 2010 levels. FY 2010 figures in this Memorandum do not include Recovery Act funding.

Hearings. The House Interior, Environment, and Related Agencies Appropriations Subcommittee has set April 12 and 13, 2011, as hearing dates for public witnesses on Indian programs under their jurisdiction (including IHS, BIA, BIE). The April 12 sessions will begin at 9:30 a.m. and 1 p.m., while the April 13 session will be in the morning only. Persons wishing to testify in person should e-mail the Subcommittee at INApprop@mail.house.gov. You should indicate who will testify, the subject of the testimony and contact information. Or you may fax your request to the Subcommittee at (202) 225-9069; if you submit your request by fax you should call the Subcommittee at (202) 225-3081 to let them know you are doing this. The deadline to submit a request to testify is March 15, 2011. We expect the Subcommittee will continue its practice of limiting written testimony to four pages.

The Subcommittee states that in determining the witness list it will consider factors including "the timeliness of each request, recent opportunities to testify, and regional diversity of those testifying."

FUNDING OVERVIEW

While the President has announced a five-year funding freeze for most domestic non-security programs, such a freeze was not applied to the Indian Health Service.

Increases. The Administration requested a 14.1 percent increase for the IHS over the FY 2010 enacted level. The Administration recommended increases for: Contract Health Services; Contract Support Costs; Indian Health Care Improvement Fund; Chronic Care Initiative; Business Operations Support; Alcohol and Substance Abuse; Direct Operations; Health Care Facilities Construction; Health Information Technology; and implementation of new Indian Health Care Improvement Act requirements ($1 million to assist urban programs to increase third party collections and $1 million to assess the feasibility of acquiring facilities through modular construction).

Decreases. Proposed funding decreases consist of $7 million from grants and $19.6 million from sanitation facilities construction. The proposed grants reduction consists of Health Promotion/Disease Prevention ($1.1 million); National Congress of American Indians' healthy youth lifestyles initiative ($1 million); Institute for Healthcare Improvement chronic care ($835,000); Elder Health Long Term Care ($700,000); Children and Youth ($600,000); Women's Health ($600,000); Domestic Violence/ Sexual Assault Grant to Urban Programs ($524,000); National Indian Health Board ($500,000); and National Native American EMS Association ($90,000).

Built-in Costs. The Administration requested $327.5 million for built-in costs consisting of: $4.1 million for pay costs increase (1.4 percent for Commissioned Officers); $155.3 million for inflation (3.6 percent medical, 1.5 percent non-medical); $96.6 million for anticipated population growth (1.3 percent); and staffing and operation for new facilities ($71.5 million). Congress has enacted legislation to freeze salaries of civilian federal employees, thus the IHS budget has no funding allocated for federal and tribal employee pay increases.

The FY 2012 amounts requested for inflation and population growth may appear large in relation to past years but that is because the numbers combine the FYs 2011 and 2012 built-in costs requests.

Staffing of New Facilities. As mentioned above, the proposed budget includes $71.5 million for the staffing and operating costs for the following new facilities: $9.8 million as a placeholder for two joint venture projects; $6.5 million for the Carl Albert Hospital in Ada, OK; $3 million for the Lake County Tribal Health Center in Lakeport, CA; $8.4 million for the Elbowoods Health Center in New Town, ND; $26.1 million for the Cheyenne River Health Center in Eagle Butte, SD; $9 million for the Absentee Shawnee Health Center in Little Axe, OK; and $8.7 million for the Cherokee Nation Vinita Health Center in Vinita, OK.

Many of the FY 2012 requests for staffing and operations of new facilities replicate those made in FY 2011 due to uncertainty of whether new staffing/operations monies will be appropriated for FY 2011.

LEGISLATIVE PROVISIONS

No Extension of the Restriction of IHS Funds in Alaska to Regional Native Organizations. The Administration proposes to not include the provision, enacted as part of FY 2010 Interior Appropriations (PL 111-88), that provided (through FY 2011) that IHS funds for Alaska be made available only to regional Alaska Native health organizations (with some exceptions).

Contract Support Costs Cap. The proposed budget, consistent with previous appropriations acts, would continue a statutory cap on IHS contract support costs – $461,837,000.

IDEA Data Collection Language. The proposed budget would continue language to authorize the BIA to collect data from the IHS and tribes regarding disabled children in order to assist with the implementation of the Individuals with Disabilities Education Act (IDEA):

Provided further, That the Bureau of Indian Affairs may collect from the Indian Health Service and tribes and tribal organizations operating health facilities pursuant to Public Law 93-638 such individually identifiable health information relating to disabled children as may be necessary for the purpose of carrying out its functions under the Individuals with Disabilities Education Act, 20 U.S.C. 1400, et. seq.

Prohibition on Implementing Eligibility Regulations. The prohibition on the implementation of the eligibility regulations published on September 16, 1987, would be continued.

Services for non-Indians. The provision that allows the IHS and tribal facilities to extend health care services to non-Indians, subject to charges, would be continued. The provision states:

In accordance with the provisions of the Indian Health Care Improvement Act, non-Indian patients may be extended health care at all tribally administered or Indian Health Service facilities, subject to charges, and the proceeds along with funds recovered under the Federal Medical Care Recovery Act (42 U.S.C. 2651-2653) shall be credited to the account of the facility providing the service and shall be available without fiscal year limitation.

Assessments by DHHS. The Administration again proposes to not include the provision that has been in the Interior appropriations act for a number of years which provides that no IHS funds can be used for any assessments or charges by DHHS "unless identified in the budget justification and provided in this Act, or approved by the House and Senate Committees on Appropriations through the reprogramming process." The Administration has held the provision would restrict the Department's flexibility in managing overall resources for the Agency.

Limitation on No-Bid Contracts. The Administration proposes to continue the provision from FY 2010 regarding the use of no-bid contracts. The provision specifically exempts Indian Self-Determination agreements and reads:

Sec. 415. None of the funds appropriated or otherwise made available by this Act to executive branch agencies may be used to enter into any Federal contract unless such contract is entered into in accordance with the requirements of the Federal Property and Administrative Service Act of 1949 (41 U.S.C. 253) or chapter 137 of title 10, United States Code, and the Federal Acquisition Regulations, unless:
(1) Federal law specifically authorizes a contract to be entered into without regard for these requirements, including formula grants for States, or federally recognized Indian tribes; or
(2) such contract is authorized by the Indian Self-Determination and Education and Assistance Act (Public Law 93-638, 25 U.S.C. 450 et seq., as amended) or by any other Federal laws that specifically authorize a contract within an Indian tribe as defined in section 4(e) of that Act (25 U.S.C. 450b(3)); or
(3) Such contract was awarded prior to the date of enactment of this Act.

FUNDING FOR INDIAN HEALTH SERVICES

FY 2010 Enacted $3,657,618,000
FY 2012 Admin. Request $4,166,139,000

SPECIAL DIABETES PROGRAM FOR INDIANS

While the entitlement funding for the Special Diabetes Program for Indians (SDPI) is not part of the IHS appropriations process, those funds are administered through the IHS. The SDPI is currently funded through FY 2013 at $150 million annually (PL 111-309).

HOSPITALS AND CLINICS

FY 2010 Enacted $1,754,383,000
FY 2012 Admin. Request $1,963,886,000

Built-In Costs. $149.9 million is for built-in costs consisting of $2.3 million for Commissioned Officers' pay increase, $50.6 million for inflation, $45.9 million for population growth and $51.8 million for the staffing and operations of new facilities.

Staffing of New Facilities. Within the total, the following amounts are for the staffing and operation of new facilities: Joint Venture Place Holder, $9.8 million; Absentee Shawnee Health Center, $5.5 million; Elbowoods Health Center, $6.4 million; Carl Albert Hospital, $4 million; Lake County Tribal Health Center, $1.9 million; Cherokee Nation Health Center, $5.4 million; and Cheyenne River Health Center, $17.9 million.

Indian Health Care Improvement Fund. The Administration proposed $54 million for the Indian Health Care Improvement Fund (IHCIF), which is $9 million above the FY 2010 level. The IHS notes that an evaluation of the Fund's distribution methodology was completed in 2010 and that proposals for six technical improvements were recommended. The IHS is consulting with tribes regarding updating the formula:

The Director has initiated tribal consultation on 4 topics related to the Indian Health Care Improvement Fund (IHCIF) and potentially updating the formula:
1. Should IHS change the IHCIF formula?
2. Should IHS adopt technical improvements recommended by a joint IHS/Tribal evaluation of the formula that was completed in 2010?
3. Should services newly authorized in IHCIA, be added to the formula before or after funding for all tribes reach a minimum funding percentage of 55 percent?
4. How should IHS consult with Tribes on the questions above?
The existing formula will be used until any changes are adopted as a result of tribal consultation on the questions listed above. (CJ-59)

Epidemiology Centers. The proposed budget would provide $5.7 million for the 12 Epidemiology Centers, which is $1 million over the FY 2010 level. The funding will, according to the budget document, help pay for inflation for 12 cooperative agreements. Each Epidemiology Center would be funded at approximately $440,000 except for the California Rural Health Board which would receive $420,000.

Domestic Violence Initiative. The budget proposes $10 million for the Domestic Violence Initiative, the same as in FY 2010.
Bill language provides that the funds are to be allocated at the discretion of the IHS Director and are to remain available until expended. The IHS describes the use of these funds:

The DVPI funding represents an opportunity to effectively address the dual crises of domestic violence and sexual assault in Indian Country. The IHS is using these funds to further expand its outreach advocacy programs into AI/AN communities, expand the Domestic Violence and Sexual Assault Pilot project, and provide for training and the purchase of forensic equipment to support the Sexual Assault Nurse Examiner (SANE) and Sexual Assault Forensic Examiner (SAFE) programs. The funding has been distributed via a competitive process to ensure funds are targeted to communities with the greatest need. The sixty-five awarded projects will adhere to reporting requirements established by the IHS and report on data and evidence-based outcome measures designed to help determine the most effective means for combating these issues in Tribal communities. The completion of a national, independent evaluation of the DVPI will allow identification of successful evidence-based and practice-based programs that can be replicated across the Indian health system. (CJ-57-8)

Chronic Care Initiative. The budget proposes a $2.5 million increase for the Chronic Care Initiative. Of that amount, $1.5 million would be for efforts to prevent and treat obesity ($1.25 million to test and evaluate intervention by pediatricians and primary care teams in medical office and school-based health center settings and $250,000 for an I/T/U staff Healthy Weight for Life Workgroup to facilitate "marketing, implementation and evaluation of the Healthy Weight for Life Strategy."

The remaining $1 million would be for efforts to reduce smoking rates through provider training, clinic-based cessation programs and public education.

Health Information Technology (HIT). The Administration proposes a $4 million program increase and a $2.7 million inflationary increase for a total of $179 million. This compares to an FY 2010 level of $131 million, which makes it appear to be a proposed $48 million increase. The IHS explains that reporting changes have resulted in funding previously reflected in the facilities budget now being reported under Hospitals and Clinics.

The $4 million increase is for health information technology security maintenance and enhancements. Bill language provides that the increase would continue to be allocated at the discretion of the IHS Director.

Business Operations Support. The Administration proposes a $6 million increase for Business Operations Support. Five million dollars would be used to improve the processing of Contract Health Service claims, enroll patients in programs created by the new health care laws and improve billing efficiency. Most funds would go to the Service Unit and clinic levels. An additional $1 million would be utilized for training and technical assistance to Area office and facility staff on how to negotiate lower rates for health care services contracted to the private sector.

DENTAL SERVICES

FY 2010 Enacted $152,634,000
FY 2012 Admin. Request $170,859,000

Built-in Costs. $18.2 million is proposed for built-in costs consisting of $544,000 for Commissioned Officers' pay increase, $6.2 million for inflation, $4.4 million for population growth and $7.1 million for the staffing of new facilities.

Staffing of New Facilities. Within the total, the following amounts are for the staffing and operation of new facilities: Absentee Shawnee Health Center, $1.5 million; Elbowoods Health Center, $614,000; Carl Albert Hospital, $836,000; Lake County Health Center, $195,000; Cherokee Nation Health Center, $1.4 million; and Cheyenne River Health Center, $2.5 million.

MENTAL HEALTH

FY 2010 Enacted $72,786,000
FY 2012 Admin. Request $81,117,000

Built-in Costs. $7.3 million is proposed for built-in costs consisting of $71,000 for Commissioned Officers' pay increase, $2.2 million for inflation, $2.1 million for population growth, and $2.9 million for the staffing of new facilities.

Staffing of New Facilities. Within the total, the following amounts are for the staffing and operation of new facilities: Absentee Shawnee Health Center, $785,000; Carl Albert Hospital, $564,000; Lake County Health Center, $353,000; Cherokee Nation Health Center, $410,000; and Cheyenne River Health Center, $812,000.

Program Increase. The Administration proposes a $1 million program increase to implement Section 723 of the Indian Health Care Improvement Act which authorizes demonstration tele-mental health projects targeting prevention of youth suicide. The IHS proposes to award three $250,000 four-year grants:

Section 723 of the Indian Health Care Improvement Act authorizes funding to underwrite demonstration tele-mental health service projects targeting Indian youth suicide prevention. The grants will be awarded to Tribes and Tribal organizations that operate one or more facilities located in an area with documented disproportionately high rates of suicide; reporting active clinical tele-health capabilities; or offering school-based tele-mental health services to Indian youth. Tele-mental health services may include mental health services provided through technological means remotely; educational material distribution; and data collection. In addition, such services may include activities intended to support and promote traditional health care practices as identified by the tribal communities served. Three sites will be awarded $250,000 each for a period of up to 4 years, renewable upon availability of appropriations in subsequent years. The Tele-Behavioral Health Center of Excellence will be awarded $250,000 to provide technical assistance, implementation, training, and evaluation support over the same period. Priority consideration will be given to Tribes and Tribal organizations that serve a particular community or geographic area in which there is a demonstrated need to address Indian youth suicide; enter into collaborative partnerships with IHS and other Tribal health programs or facilities to provide services under this demonstration project, serve isolated communities or geographic areas that have limited or no access to behavioral health services; or operate detention facilities where Indian youth are detained. IHS will consult with SAMHSA in the development and planning of this demonstration project. (CJ-82)

ALCOHOL AND SUBSTANCE ABUSE

FY 2010 Enacted $194,409,000
FY 2012 Admin. Request $211,693,000

Built-in Costs. $13.3 million is proposed for built-in costs consisting of $31,000 for Commissioned Officers' pay increase, $7.5 million for inflation, $5.6 million for population growth, and $199,000 for staffing of the Cherokee health center.

Suicide and Methamphetamine Treatment and Prevention Initiative. The Administration proposes to continue the methamphetamine and suicide prevention and treatment initiative at the $16.4 million level. Funds are distributed to 127 pilot projects in Indian Country. Bill language provides that the funds are to be allocated at the discretion of the IHS Director.

Program Increase. An increase of $4 million is proposed for competitive grants to expand access to and improve the quality of substance abuse treatment programs.

CONTRACT HEALTH SERVICES

FY 2010 Enacted $779,347,000
FY 2012 Admin. Request $948,646,000

Built-in Costs. $79.7 million is proposed for built-in costs consisting of
$56.8 million for inflation and $22.9 million for population growth.

Program Increase. The Administration proposes a program increase of
$89.6 million. IHS states that this increase would purchase the following additional services over the FY 2010 levels: 5,732 inpatient admissions; 218,070 outpatient visits, and 7,930 one-way patient travel trips.

IHS also notes that the demand for Contract Health Services, which always exceeds the available funding, will be even more in demand as five hospitals have been or are planned to be replaced by ambulatory health centers with no inpatient services. Those health centers will be required to purchase inpatient care from the private sector using Contract Health Services funding.

CHEF. Within the total amount is $58 million for the Catastrophic Health Emergency Fund (CHEF), a $10 million increase over the FY 2010 enacted level. The increase is expected to fund an additional 400 high cost cases.

PUBLIC HEALTH NURSING

FY 2010 Enacted $64,071,000
FY 2012 Admin. Request $70,613,000

Built-in Costs. $6.5 million is proposed for built-in costs consisting of $114,000 for Commissioned Officers' pay increase, $1.8 million for inflation, $1.8 million for population growth, and $2.8 million for staffing of new facilities.

Staffing of New Facilities. Within the total, the following amounts are for the staffing and operation of new facilities: Absentee Shawnee Health Center, $453,000; Carl Albert Hospital, $303,000; Lake County, CA Health Center, $235,000; Cherokee Nation Health Center, $442,000; the Elbowoods Health Center, $230,000; and the Cheyenne River Health Center, $1.1 million.

HEALTH EDUCATION

FY 2010 Enacted $16,682,000
FY 2012 Admin. Request $18,190,000

Built-in Costs. $1.5 million is proposed for built-in costs consisting of $3,000 for Commissioned Officers' pay increase, $593,000 for inflation, $477,000 for population growth, and $435,000 for staffing of new facilities.

Staffing of New Facilities. Within the total, the following amounts are for the staffing and operation of new facilities: Carl Albert Hospital, $106,000; Elbowoods Health Center, $86,000; Cherokee Nation Health Center, $66,000; and Cheyenne River Health Center, $177,000.

IHS reports that the number of patient visits in which health education was provided has tripled from FY 2004 to FY 2010. The funding supports 23 IHS health education field positions and 75 tribal health education staff. Areas of emphasis in FY 2012 are to strengthen the development of standardized nationwide patient and health education programs through the integration of IHS Patient Educating Protocols throughout the system and to increase health education literacy.

COMMUNITY HEALTH REPRESENTATIVES

FY 2010 Enacted $61,628,000
FY 2012 Admin. Request $65,746,000

Built-in Costs. $4.1 million is proposed for built-in costs consisting of $2,000 for Commissioned Officers' pay increase, $2.4 million for inflation, and $1.8 million for population growth.

All but three of the 264 Community Health Representatives programs are administered by tribes under the authority of the Indian Self-Determination and Education Assistance Act. The programs train and support 1,600 community health paraprofessionals to provide preventive and direct health care.

VIRAL HEPATITIS/HEMOPHILUS INFLUENZA
IMMUNIZATION PROGRAMS IN ALASKA

FY 2010 Enacted $1,934,000
FY 2012 Admin. Request $2,064,000

Built-in costs. $130,000 is proposed for built-in costs consisting of $75,000 for inflation and $55,000 for population growth.

The IHS states that it intends to increase to 3.5 days its outpatient clinic at the Alaska Native Medical Center in order to focus on the increased number of cases of chronic Hepatitis C. Because many patients have primary care givers outside Anchorage, the IHS plans to have "a venue for the education/training of providers utilizing the established statewide Tribal Health System telehealth system (video-conferencing)" in order to assist in the cure and management hepatitis and liver disease patients. Regional field clinics are conducted at 13 sites in Alaska.

URBAN INDIAN HEALTH

FY 2010 Enacted $43,139,000
FY 2012 Admin. Request $46,745,000

Built-in costs. $2.6 million is proposed for built-in costs consisting of $22,000 for Commissioned Officers' pay increase, $1.4 million for inflation, and $1.16 million for population growth.

Program Increase. The Administration, as it did in FY 2011, proposes a $1 million increase for "competitive grants to assist urban Indian clinics in improving third party collections. The grants will be used for training, on site technical assistance, and off-site technical assistance via conference calls and webinars. Additional program support will increase revenue and services for the AI/AN populations served." (CJ-114).

INDIAN HEALTH PROFESSIONS

FY 2010 Enacted $40,743,000
FY 2012 Admin. Request $42,016,000

Built-in Costs. Of the total amount, $1.27 million is proposed for built-in costs, consisting of $4,000 for Commissioned Officers' pay increase and $1.3 million for inflation. IHS notes that there is a 7.7 percent increase in tuition costs.

IHS proposes to reduce funding for the Section 103 Health Professions Preparatory and Pre-Graduate Scholarship Programs and the Section 108 Loan Repayment Program and to increase funding for the Section 104 Health Professions Scholarships.

The proposed Indian Health Professions programs and their funding levels are:

• Section 103 Health Professions Preparatory and Pre-Graduate Scholarships – $3,183,444 (a $721,652 decrease)
• Section 104 Health Professions Scholarships – $12,802,769 (a $2.17 million increase)
• Extern Program – $1,181,932
• Loan Repayment Program – $21,159,653 (a $179,231 decrease)
• Quentin N. Burdick American Indians into Nursing Program – $1,768,497
• INMED Program – $1,162,319
• Indians into Psychology Program – $757,386

Bill language allows for up to $42 million to be utilized for the loan repayment program – IHS Area Offices and Service Units are authorized to provide supplemental funds for loan repayment program participants for use in their areas, but the total amount cannot exceed $42 million when combined with the $21 million proposed for FY 2012.

New bill language proposes to use funds collected on defaults from the loan repayment and health professions scholarship programs to recruit health professionals for Indian communities:

Provided further, That the amounts collected by the Federal Government as authorized by sections 104 and 108 of the Indian Health Care Improvement Act (25 U.S.C. 1613a and 1616a) during the preceding fiscal year for breach of contracts shall be deposited to the Fund authorized by section 108A of the Act (25 U.S.C. 1616a-1) and shall remain available until expended and, notwithstanding section 108A(c) of the Act (25 U.S.C. 1616a-1(c)), funds shall be available to make new awards under the loan repayment and scholarship programs under sections 104 and 108 of the Act (25 U.S.C. 1613a and 1616a)

TRIBAL MANAGEMENT

FY 2010 Enacted $2,586,000
FY 2012 Admin. Request $2,762,000

Funding is for new and continuation grants for the purpose of evaluating the feasibility of contracting the IHS programs, developing tribal management capabilities, and evaluating health services. The $176,000 increase is for inflation. The IHS estimated 27 awards in FY 2012, the same as in FY 2010, but also states that the budget will fund 102 additional new grants. The FY 2011 IHS Budget Justification estimated 32 awards.

DIRECT OPERATIONS

FY 2010 Enacted $68,720,000
FY 2012 Admin. Request $73,636,000

The IHS stated in its budget submission that 56.5 percent of the Direct Operations budget would go to Headquarters and 43.5 percent to the 12 area offices. Tribal Shares funding for Title I contracts and Title V compacts are also included.

Built-in Costs. $1.5 million is proposed for built-in costs consisting of $174,000 for Commissioned Officers' pay increase and $1.3 million for inflation.

Program Increase. The Administration proposes a program increase of $3.4 million for the following purposes:

Program expansion will fund: (a) continuing investments to improve the IHS' capacity for providing oversight and accountability in key administrative areas such as property, financial, and human resources management; (b) addressing unfunded mandates for national initiatives associated with privacy requirements, facilities, and personnel security; and (c) for improving responsiveness to external authorities such as OMB and Congress, including but not limited to the implementation and continuing accountability for new permanent authorities of the reauthorization of the Indian Health Care Improvement Act. Recent congressional oversight as well as reports issued by the General Accountability Office and the Office of Inspector General demonstrate the importance of making improvements in these areas. (CJ-127)

SELF-GOVERNANCE

FY 2010 Enacted $6,066,000
FY 2012 Admin. Request $6,329,000

The budget justification this year does not, as in the past, break down Self-Governance funding in the categories of those monies that fund the Office of Self-Governance and those that act as a shortfall reserve.

The Self-Governance budget supports, among other things, implementation of the IHS Tribal Self-Governance Program and funds tribal shares required under Self-Governance.

The IHS projects that in FY 2012 approximately $1.5 billion will be transferred to support 108 tribal compacts and 129 funding agreements.

Built-in Costs. $263,000 is proposed for inflation.

CONTRACT SUPPORT COSTS

FY 2010 Enacted $398,490,000
FY 2012 Admin. Request $461,837,000

Built-in Costs. $13.1 million is proposed for inflation.

Program Increase. A program increase of $50 million is proposed. The IHS Budget Justification states the entire increase is for existing contracts and compacts:

Contract Support Costs: +$50,000,000 will be applied against projected CSC shortfalls of $171 million (FY 2012) associated with ongoing 329 contracts and compacts. After applying the FY 2012 funding allocation for CSC, the IHS projects that the FY 2012 CSC shortfall will be approximately $153 million. The projected CSC Level of Need Funded after applying the increase will be 75 percent, a 3.49 percent decrease from FY2010 funding.
Unfunded CSC associated with program increases and new staffing continues to be the greatest factor contributing to increased CSC shortfalls in recent years. The CSC need associated with program increases included in the FY 2012 budget and the CSC need associated with new or expanded programs assumed by Tribes and Tribal Organizations in FY 2012 is projected to be approximately $34 million. Therefore, the projected CSC LNF is not expected to change much between FY 2011 and 2012.
The budget request represents the amount of CSC funding that will be allocated among the contracting/compacting Tribes. Although the budget request represents an increase in CSC funding, the LNF may not increase. The LNF decreases when the overall CSC need rises more quickly than the funding for CSC. IHS addresses the difference between CSC funding and CSC need in the shortfall report, which is required by Congress to inform them of the difference. (CJ-135)

Indian Self-Determination (ISD) Fund. The proposed bill would authorize up to $10 million of the total for the Indian Self-Determination Fund which the IHS may use to support new or expanded self-determination contracts, grants, self-governance compacts or annual funding agreements. The IHS has made it clear that they do not intend to allocate any contract support for new or expanded agreements as long as there is a shortfall for existing agreements unless Congress requires it to do so.

Cap on Contract Support Costs. Consistent with past Appropriations acts, proposed bill language would continue language regarding a cap on contract support costs:

Provided further, That, notwithstanding any other provision of law, of the amounts provided herein, not to exceed $461,837,000 shall be for payments to tribes and tribal organizations for contract or grant support costs associated with contracts, grants, self-governance compacts or annual funding agreements between the Indian Health Service and a tribe or tribal organization pursuant to the Indian Self-Determination Act of 1975, as amended, prior to or during fiscal year 2012, of which not to exceed $10,000,000 may be used for contract support costs associated with new or expanded self-determination contracts, grants, self-governance compacts or annual funding agreements.

Contract Support Limitation. The Act, consistent with the Interior Appropriations Acts for FYs 1999-2010 attempts to limit the ability of the IHS and BIA to fund past-year shortfalls in contract support funding from remaining unobligated balances for those fiscal years:

SEC. 408. Notwithstanding any other provision of law, amounts appropriated to or otherwise designated in committee reports for the Bureau of Indian Affairs and the Indian Health Service by Public Laws 103-138, 103-332, 104-134, 104-208, 105-83, 105-277, 106-113, 106-291, 107-63, 108-7, 108-108, 108-447, 109-54, 109-289, division B and Continuing Appropriations Resolution, 2007 (division B of Public Law 109-289, as amended by Public Law 110-5 and 110-28), Public Laws 110-92, 110-116, 110-137, 110-149, 110-161, 110-329, 111-6, 111-8 and 111-88, and ___ for payments for contract support costs associated with self-determination or self-governance contracts, grants, compacts, or annual funding agreements with the Bureau of Indian Affairs or the Indian Health Service as funded by such Acts, are the total amounts available for fiscal years 1994 through 2011 for such purposes, except that for the Bureau of Indian Affairs federally recognized tribes and tribal organizations of federally recognized tribes may use their tribal priority allocations for unmet contract support costs of ongoing contracts, grants, self-governance compacts or annual funding agreements.

FUNDING FOR INDIAN HEALTH FACILITIES

FY 2010 Enacted $394,757,000
FY 2012 Admin. Request $457,669,000

MAINTENANCE AND IMPROVEMENT

FY 2010 Enacted $53,915,000
FY 2012 Admin. Request $57,078,000

Built-in Costs. $3.2 million is proposed for built-in costs consisting of $1.6 million for inflation and $1.5 million for population growth.

Maintenance and Improvement funds are provided to Area offices for distribution to projects in their regions. Funding is for the following purposes: 1) approximately $53 million for routine maintenance; 2) approximately $400,000 for major M&I programs on the Backlog of Essential Maintenance (BEMAR) list; 3) approximately $3 million for environmental compliance; and 4) approximately $500,000 for demolition of vacant or obsolete health care facilities replaced through federal funding.

The IHS estimates that as of October 2010, the BEMAR is $472 million.

FACILITIES AND ENVIRONMENTAL HEALTH SUPPORT

FY 2010 Enacted $193,087,000
FY 2012 Admin. Request $210,992,000

Built-in costs. $17.9 million is proposed for built-in costs consisting of $835,000 for Commissioned Officers' pay increase, $4.5 million for inflation, $5.5 million for population growth, and $7 million for staffing of new facilities.

Staffing of New Facilities. Within the total, the following amounts are for the staffing and operation of new facilities: Absentee Shawnee Health Center, $755,000; Carl Albert Hospital, $678,000; Lake County, CA Health Center, $305,000; Elbowoods Health Center, $1 million; Cheyenne River Health Center, $3.5 million; and Cherokee Nation Health Center, $786,000.

MEDICAL EQUIPMENT

FY 2010 Enacted $22,664,000
FY 2012 Admin. Request $24,705,000

Built-in Costs. $2 million is proposed for built-in costs consisting of $1.4 million for inflation and $648,000 for population growth.

The IHS notes that they expect to distribute the FY 2012 funds as follows: $18.7 million for routine replacement medical equipment at over 1,600-federally and tribally-operated health care facilities; $5 million for new medical equipment in tribally-constructed health care facilities; and $1 million for the TRANSAM and ambulance programs.

CONSTRUCTION

Construction of Sanitation Facilities

FY 2010 Enacted $95,857,000
FY 2012 Admin. Request $79,710,000
Built-in Costs. $3.5 million is proposed for built-in costs, consisting of $764,000 for inflation and $2.7 million for population growth.

Program Decrease. A decrease of $19.6 million is requested for construction of sanitation facilities. The IHS budget justification refers to it as a "one-year decrease" and notes that Recovery Act funds for this program should lessen the impact of such a reduction.

Distribution of Funds. Four types of sanitation facilities projects are funded by the IHS: 1) projects to serve new or like-new housing; 2) projects to serve existing homes; 3) special projects such as studies, training, or other needs related to sanitation facilities construction; and 4) emergency projects. The IHS sanitation facilities construction funds cannot be used to provide sanitation facilities in HUD-built homes.

The IHS projects that the FY 2012 funds at the requested level would be allocated as follows (maximum amounts as they total $103 million, whereas the budget request is for $79 million).

• $2 million to be reserved at the IHS headquarters. Of that amount $1 million is for special projects and emergencies, $500,000 is for projects in three Areas per year to collect homeowner data and other demographic information to strengthen verification mechanics within the Community Deficiency Profiles; and $500,000 is for improving data collection systems, providing training, funding a national automated computer aided drafted contract, and for an Alaska Native and American Indian Water Resource Center. The Center is to develop teaching materials and techniques for homeowners and communities to improve usage and support sanitation systems. IHS states that an annual funding stream of $250,000 is needed to develop a teaching system, in partnership with the Alaska Native Tribal Health Consortium, which can be used IHS-wide (CJ-154).

• $48 million for new and like-new homes

• $48 million to be distributed to IHS Areas for prioritized projects to serve existing homes, and

• $5 million for projects to clean up and replace open dumps on Indian lands pursuant to the Indian Lands Open Dump Cleanup Act of 1994

Construction of Health Care Facilities

FY 2010 Enacted $29,234,000
FY 2012 Admin. Request $85,184,000

Health facilities proposed to be funded are: Barrow Hospital in Alaska, $62,184,000; Kayenta Health Center in Arizona, $10 million; San Carlos Health Center in Arizona, $10 million; and a Youth Residential Treatment Center in Hemet, CA, $2 million. In addition, $1 million is requested to assess the feasibility of modular construction for health facilities per a requirement of the Indian Health Care Improvement Act.

As with the requests for staffing/operations of new facilities and given the uncertainty of FY 2011 appropriations, some of the requests for FY 2012 health care facilities construction duplicate the requests from FY 2011.

OTHER

Transam Equipment, Ambulances, Demolition Fund. The proposed budget would continue funding of up to $500,000 to purchase TRANSAM equipment from the Department of Defense and $500,000 to be deposited in a Demolition Fund to be used for the demolition of vacant and obsolete federal buildings. Funding for the purchase of ambulances would be $2.7 million.
THIRD PARY COLLECTIONS

Below is the chart from the IHS budget justification regarding third party collections.

FY 2010
Enacted
FY 2011
CR
FY 2012
Request
Medicare:
Federal
Tribal1
Tribal2
Subtotal:
$133,144,000
6,986,000
52,648,000
192,748,000
$130,804,000
6,986,000
57,244,000
195,034,000
$130,804,000
6,986,000
57,244,000
195,034,000
Medicare:
Federal
Tribal1
Tribal2
Subtotal:
487,263,000
22,217,000
107,759,000
617,239,000
485,275,000
22,217,000
124,203,000
631,695,000
485,275,000
22,217,000
124,203,000
631,695,000
Medicare/Medicaid Total: 809,987,000 826,729,000 826,729,000
Private Insurance 81,006,000 81,006,000 81,006,000
TOTAL: $890,993,000 $907,735,000 $907,735,000
FTE 6,471 6,471 6,471
1 Represents CMS Tribal collection estimates.
2 Represents estimates of Tribal collections due to direct billing that began in FY 2002.

The IHS states that the FY 2011 and FY 2012 estimates are based primarily on the FY 2010 actual collections and the estimated full year FY 2011 impact of the Calendar Year 2010 Medicare and Medicaid rate changes. IHS further states:

The CY 2010 rate increase is expected to increase FY 2011 Medicare collections by $2,286,000 and Medicaid collections by $14,456,000. In addition, estimates reflect increased Tribal assumptions of major health care programs that will impact federal collections. IHS will continue to place a high priority of finalizing CY 2011 rates and the development of FY 2010 Medicare cost reports to set future rates." (CJ-137)

If we may be of further assistance regarding the FY 2012 Indian Health Service appropriations, please contact us at the information below.

# # #

Inquiries may be directed to:
Karen Funk (kfunk@hobbsstraus.com)

Available Documents for Download ( any referenced attachments are included in download )


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