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When the Cochiti Pueblo of New Mexico objected to the development of hydropower at the Cochiti Dam, Hobbs Straus helped the Tribe secure legislation blocking its development (1990).

General Memorandum 13-038

General Memorandum 13-038
Indian Health Service Proposed FY 2014 Appropriations; Proposal to Cap Contract Support Costs and Circumvent the Ability to Recover Shortfalls

On April 10, 2013, President Obama submitted to Congress his proposed FY 2014 budget for federal agencies. In this Memorandum we report on proposed FY 2014 appropriations for the Indian Health Service (IHS). We do not report final FY 2013 IHS funding levels as they are not yet officially available, but generally FY 2013 funding is the FY 2012 level minus 5.1 percent.

The page numbers in this Memorandum are from the IHS Congressional Budget Justification book; the section numbers on legislative proposals are from the Appendix to the (federal) Budget for Fiscal Year 2014.

FUNDING OVERVIEW

Increases. The Administration proposes $124 million over the FY 2012 enacted level. This amount consists of $6 million for pay increases; $35 million for medical inflation for the Purchased/Referred Care program; $5.8 million for Contract Support Costs; and $77.3 million for staffing and operating costs for ten newly constructed health care facilities.

While the budget proposes no literal decreases, the IHS makes a point of the inadequacy of the Maintenance and Improvement budget given the increase in health care facility space. The IHS states it may lead to a reduction in funding per square meter of supported space and curtailment of necessary maintenance and repair work.

Staffing of New Facilities. The proposed budget (Services and Facilities accounts combined) includes $77.3 million for staffing and operations costs for the following new facilities: Norton Sound Regional Hospital in Nome, AK ($13.59 million); Chickasaw Nation Health Clinic in Ardmore, OK ($8.95 million); Cherokee Nation Health Center in Vinita, OK ($1.75 million); Chickasaw Nation Health Clinic in Tishomingo, OK ($5.29 million); Southcentral Foundation Valley Primary Care Center in Wasilla, AK ($17.68 million); Tanana Chiefs Conference Interior Health Center in Fairbanks, AK ($20.42 million); Copper River Health Clinic in Tazlina, AK ($500,000); Kenaitze Dena'ina Health Clinic in Kenai, AK ($1 million); Samuel Simmonds Hospital in Barrow, AK ($6.84 million); and San Carlos Health Center in AZ ($1.32 million).

The budget justification notes that the above amounts are estimates and may be adjusted due to changing dates of beneficial occupancy of the facilities. (CJ-10) It also states throughout the IHS budget justification that the proposal for staffing for new health care facilities is the amount IHS has determined "as its minimum potential request for
FY 2014."

Little Funding for Built-in Costs. The Administration's proposal includes funding for a 3.7 percent medical inflation rate for Contract Health Services (now renamed Purchased/Referred Care) totaling $35 million. It also proposes funding for a one percent pay increase for federal and tribal employees, totaling $6 million. There is no funding for population growth or inflation except for Purchased/Referred Care. These costs, as with fiscal years 2011, 2012 and 2013, will need to be absorbed from existing program funds. By contrast, Congress appropriated for fiscal years 2007 through 2010 IHS funding for pay increases, inflation and population growth.

The IHS increasingly emphasizes, in its budget book and in testimony, the opportunity for tribes to receive third party collections, perhaps as a way to explain IHS budget proposals that fall short of need.

LEGISLATIVE PROVISIONS

Contract Support Costs (CSC). The biggest news in the FY 2014 IHS budget is the Administration's proposal that would cap each tribe's payment of CSC (this would apply to the IHS and the Bureau of Indian Affairs (BIA)), with the intent of limiting the federal government's liability for recovery of CSC shortfalls through Contract Dispute Act claims in the court. The individual tribal caps would be imposed by tables created by the agencies and incorporated by reference into the appropriations act. The proposal, which the Administration describes as a "short term" plan is in reaction to the Supreme Court decision in Salazar v. Ramah Navajo Chapter, has been roundly criticized by tribes. The House Appropriations Subcommittee on Interior, Environment and Related Agencies and the Senate Committee on Indian Affairs have had budget hearings since the Administration's CSC proposal was released and heard testimony from many tribal leaders strongly critical of the substance of the proposal and of the lack of tribal consultation on this matter.

Contract Support Costs Cap. The Administration proposes, consistent with previous appropriations acts, to continue a statutory cap on IHS Contract Support Costs – $477,205,000.
Contract Support Limitation. The Administration proposes, consistent with the Interior appropriations acts for FYs 1999-2013, to attempt 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.
Proposal to Exempt from Gross Income the Benefits under the Health Professions Scholarship and the Health Professions Loan Repayment Program. The IHS is proposing legislation that would allow participants in the IHS Health Professions Scholarship Program (Section 104 of the IHCIA) and the IHS Loan Repayment Program (Section 108 of the IHICA) to exclude the benefits from those programs from gross income under sections 117c(2) and 108 (f)(4) of the Internal Revenue Code. The legislative language is not part of the proposed FY 2014 IHS Appropriations Act.
(CJ-200-201)

Maintain the Restriction of IHS Funds in Alaska to Regional Native Organizations. The Administration proposes to continue the provision that provides that IHS funds for Alaska be made available only to regional Alaska Native health organizations (with some exceptions).

Sec. 415. (a) Notwithstanding any other provision of law and until October 1, 2013, the Indian Health Service may not disburse funds for the provision of health care services pursuant to Public Law 93-638 (25 U.S.C. 450 et. seq.) to any Alaska Native village or Alaska Native village corporation that is located within the area served by an Alaska Native regional health entity.

(b) Nothing in this section shall be construed to prohibit the disbursal of funds to any Alaska Native village or Alaska Native village corporation under any contract or compact entered into prior to May 1, 2006, or to prohibit the renewal of any such agreement.

(c) For the purpose of this section, Eastern Aleutian Tribes, Inc., the Council of Athabascan Tribal Governments, and the Native Village Eyak shall be treated as Alaska Native regional health entities to which funds may be disbursed under this section.
IDEA Data Collection Language. The Administration proposes to continue 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:
Provided, 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 proposes to continue bill language that has been in the Interior appropriations act for a number of years which provides that no IHS funds may be used for any assessments or charges by the Department of Health and Human Services "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."
Limitation on No-Bid Contracts. The Administration proposes to continue the provision regarding the use of no-bid contracts. The provision specifically exempts Indian Self-Determination agreements and reads:

Sec. 410. 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 Chapter 33 of title 41 United States 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(e)); or
(3) Such contract was awarded prior to the date of enactment of this Act.

FUNDING FOR INDIAN HEALTH SERVICES

FY 2012 Enacted $3,866,181,000
FY 2014 Admin. Request $3,982,498,000

The Administration lists its request for IHS Services as $3,505,293,000 because it proposes to pull Contract Support Costs (CSC)/Purchase/Referred Care (PRC) out of the Services account and list it as its own account. We keep CSC/PRC as part of the Services account in this Memorandum.

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 2014 at $150 million, minus a 2 percent reduction due to the sequestration. (PL 112-240).
HOSPITALS AND CLINICS

FY 2012 Enacted $1,810,966,000
FY 2014 Admin. Request $1,865,630,000

Built-In Costs. The Administration proposes $3.8 million for pay increases. The $50.87 million for staffing and operation of new facilities is listed as follows: Norton Sound Regional Hospital ($9.8 million); Chickasaw Nation Health Clinic in Ardmore ($5.4 million); Cherokee Nation Health Center ($600,000); Chickasaw Nation Health Clinic in Tishomingo ($2.75 million); Southcentral Foundation Valley Primary Care Center ($11.46 million); Tanana Chiefs Conference Interior Health Center ($14.1 million); Copper River Health Clinic ($281,000); Kenaitze Tribe Dena'ina Health Clinic ($508,000); Samuel Simmonds Hospital ($5.32 million); and San Carlos Health Center ($611,000).

Health Information Technology (HIT). The amount in the IHS budget for HIT is $172 million, which is the same as the FY 2012 level. Most of the funding is in the Hospitals and Clinics account. The IHS notes that the HIT program will face an increased workload and costs in FY 2014.

The IHS describes the principal FY 2014 HIT priorities to be the "completion of the system-wide transition to version 10 of the International Classification of Diseases (ICD-10) and developing EHR enhancements that will be required in preparation for Meaningful Use (MU)… ." (CJ-74) Other priorities are also listed.

Indian Health Care Improvement Fund. The budget does not make specific mention of the Indian Health Care Improvement Fund, but the FY 2012 level was $57.5 million.

Other. Funding for the 12 epidemiology centers would be $4.7 million, the same as the FY 2012 enacted level. There is no specific funding level requested for the Domestic Violence Initiative but bill language would be continued providing that funding made available for the methamphetamine and suicide prevention and treatment and the domestic violence prevention initiatives are to be allocated at the discretion of the Director. The IHS notes that it 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 and Sexual Assault Forensic Examiner programs" (CJ-64)


DENTAL SERVICES

FY 2012 Enacted $159,440,496
FY 2014 Admin. Request $168,225,000

Built-In Costs. The Administration proposes $415,000 for pay increases. The $8.78 million for staffing and operation of new facilities is listed as follows: Norton Sound Regional Hospital ($1.1 million); Chickasaw Nation Health Clinic in Ardmore ($1.14 million); Cherokee Nation Health Center ($508,000); Chickasaw Nation Health Clinic in Tishomingo ($611,000); Southcentral Foundation Valley Primary Care Center ($2 million); Tanana Chiefs Conference Interior Health Center ($2.19 million); Copper River Health Clinic ($125,000); Kenaitze Tribe Dena'ina Health Clinic ($135,000); Samuel Simmonds Hospital ($405,000); and San Carlos Health Center ($93,000).

MENTAL HEALTH

FY 2012 Enacted $75,588,864
FY 2014 Admin. Request $79,873,000

Built-In Costs. The Administration proposes $185,000 for pay increases. The $4.09 million for staffing and operation of new facilities is listed as follows: Norton Sound Regional Hospital ($420,000); Chickasaw Nation Health Clinic in Ardmore ($559,000); Cherokee Nation Health Center ($94,000); Chickasaw Nation Health Clinic in Tishomingo ($562,000); Southcentral Foundation Valley Primary Care Center ($1.08 million); Tanana Chiefs Conference Interior Health Center ($815,000); Copper River Health Clinic ($94,000); Kenaitze Tribe Dena'ina Health Clinic ($126,000); Samuel Simmonds Hospital ($250,000); and San Carlos Health Center ($96,000).

The IHS notes that in FY 2014 they will "continue to focus on integration of behavioral health into primary care. IHS supports changing the paradigm of mental health services from being episodic, fragmented, specialty, and/or disease focused to being part of primary care and the 'Medical Home'." (CJ-83)

ALCOHOL AND SUBSTANCE ABUSE

FY 2012 Enacted $194,296,627
FY 2014 Admin. Request $196,405,000

Built-In Costs. The Administration proposes $415,000 for pay raises. The $1.69 million for staffing and operation of new facilities is listed as follows: Norton Sound Regional Hospital ($96,000); Chickasaw Nation Health Clinic in Ardmore ($273,000); Cherokee Nation Health Center ($91,000); Chickasaw Nation Health Clinic in Tishomingo ($273,000); Southcentral Foundation Valley Primary Care Center ($400,000); Tanana Chiefs Conference Interior Health Center ($257,000); Samuel Simmonds Hospital ($211,000); and San Carlos Health Center ($92,000).
PURCHASE/REFERRED CARE
(Formerly Contract Health Services)

FY 2012 Enacted $843,575,117
FY 2014 Admin. Request $878,575,000

Congressional committees have expressed to the IHS their view that the terms Contract Health Services and Contract Health Costs are often confused. In response, IHS has renamed the Contract Health Services account as the Purchase/Referred Care (PRC) program.

Built-In Costs. The Administration proposes $35 million for the cost of medical inflation, which was calculated at 3.7 percent. The funding is described as being enough to maintain the current level of services. The Administration's requests in FYs 2012 and 2013 for inflationary and program increases totaling $179 million were not approved by Congress.

The IHS reports that due to increases since FY 2010, some programs have been able to approve referrals in priorities below those of Priority One (life or limb care). However, in FY 2012 PRC denied an estimated 186,353 referral services. It is well-recognized by IHS and tribal healthcare providers that many cases are not reported for referral because the funding has been exhausted.

The IHS also notes that the demand for PRC, 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 PRC funding.

Catastrophic Emergency Health Fund (CHEF). Within the total PRC amount is $51.5 million for CHEF, the same as the FY 2012 enacted level. In FY 2012 there were 1,879 high costs cases reimbursed at a cost of $51.5 million while 641 CHEF-eligible cases totaling $13.6 million were not able to be reimbursed. (CJ-94)

PUBLIC HEALTH NURSING

FY 2012 Enacted $66,632,218
FY 2014 Admin. Request $71,194,000

Built-In Costs. The Administration proposes $179,000 for pay increases. The $4.38 million for staffing and operation of new facilities is listed as follows: Norton Sound Regional Hospital ($640,000); Chickasaw Nation Health Clinic in Ardmore ($720,000); Cherokee Nation Health Center ($121,000); Chickasaw Nation Health Clinic in Tishomingo ($486,000); Southcentral Foundation Valley Primary Care Center ($1.25 million); Tanana Chiefs Conference Interior Health Center ($884,000); Samuel Simmonds Hospital ($165,000); and San Carlos Health Center ($120,000).
HEALTH EDUCATION

FY 2012 Enacted $17,056,666
FY 2014 Admin. Request $17,677,000

Built-In Costs. The Administration proposes $40,000 for pay increases. The $580,000 for staffing and operation of new facilities is listed as follows: Norton Sound Regional Hospital ($96,000); Chickasaw Nation Health Clinic in Ardmore ($91,000); Chickasaw Nation Health Clinic in Tishomingo ($61,000); Southcentral Foundation Valley Primary Care Center ($114,000); and Tanana Chiefs Conference Interior Health Center ($218,000).

The IHS reports that the number of patient visits in which health education was provided has increased from approximately 777,000 visits in 2004 to 2,953,473 visits as of November 2012, a 280 percent increase in visits. The funding supports 23 IHS health education field positions and 75 tribal health education staff. Areas of emphasis in FY 2014 include the development of "standardized, nationwide patient and health education programs through the integration of IHS Patient Education Protocols into all IHS software packages … .", increasing the proportion of AI/AN people with access to health information, and improving AI/AN health literacy. (CJ-107)

COMMUNITY HEALTH REPRESENTATIVES (CHR)

FY 2012 Enacted $61,406,592
FY 2014 Admin. Request $61,661,000

Built-In Costs. The Administration proposes $134,000 for pay raises and $120,000 for staffing and operations costs for the Cherokee Nation Health Center.

Of the total amount, $59.4 million is for administration of the CHR program through Self-Determination contacts and compacts. An additional $2.1 million is for training, information technology and special projects.

Issues to be addressed in FY 2014 include development of an appropriate online training system, coordinating data validations, improving connectivity for remote sites, and ensuring federal security requirements for tribal members to request access to Resource and Patient Management System (RPMS).

HEPATITIS B and HAEMOPHILUS
IMMUNIZATION (Hib) PROGRAMS IN ALASKA

FY 2012 Enacted $1,927,000
FY 2014 Admin. Request $1,931,000

The IHS reports that in 2012 at least 60 percent of American Indian/Alaska Natives in Alaska with chronic Hepatitis B or C infection were screened for liver cancer and inflammation. There continues to be an increase in newly diagnosed Hepatitis C, and IHS states it "may be due in part to the CDC recommendation to screen (without assessment of risk) all 'baby boomers' for hepatitis C infection." The IHS estimates that within 5-10 years, an estimated 25-33 percent of person with chronic Hepatitis C will need therapy for Hepatitis C. (CJ-113-114)

URBAN INDIAN HEALTH

FY 2012 Enacted $42,984,115
FY 2014 Admin. Request $43,049,000

Built-In Costs. The Administration proposes $65,000 for pay raises.

Among the priorities for FY 2014 are to increase outreach to assure that urban AI/ANs are utilizing the benefits of the Indian Health Care Improvement Act; provide third party billing training; increase the number of urban Indian health programs using RPMS/Electronic Health Records; and to increase the number of accredited programs.

Among the 41 urban Indian health sites which receive IHS funds, there are 21 full ambulatory facilities, seven limited ambulatory programs, and five outreach and referral programs.

INDIAN HEALTH PROFESSIONS

FY 2012 Enacted $40,595,942
FY 2014 Admin. Request $40,602,000

Built-In Costs. The Administration proposes $6,000 for pay raises.

Programs funded under Indian Health Professions and their estimated FY 2014 amounts are: Health Professions Prepatory and Pre-Graduate Scholarships ($3.57 million); Health Professions Scholarships ($10.7 million); Extern Program ($1.18 million); Loan Repayment Program ($21.4 million); Quentin N. Burdick American Indians Into Nursing Program ($1.77 million – five grants); Indians Into Medicine Program ($1.16 million – three grants); and American Indians into Psychology
($757,386 – three grants).

Proposed bill language allows for up to $36 million to be utilized for the Loan Repayment Program – IHS Area Offices and Service Units are authorized to provide supplemental funds. In FY 2012 the Loan Repayment Program received $5.2 million from the Hospitals and Clinics program.

The Administration proposes to continue allowing funds collected on defaults from the Loan Repayment and Health Professions Scholarship programs to be used 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)

With regard to scholarship programs, the IHS states that it reduced from 140 to 90 days the time to complete the process of when the completed request is submitted to the Department's Capital Human Resources Program to when the person enters on duty.

As mentioned elsewhere in the Memorandum, the Administration is supporting a change in the law that would allow participants in the IHS Health Professions Scholarship Program and the IHS Loan Repayment Program to exclude the benefits from those programs in determining gross income under sections 117c(2) and 108 (f)(4) of the Internal Revenue Code.

TRIBAL MANAGEMENT

FY 2012 Enacted $2,577,000
FY 2014 Admin. Request $2,577,000

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. Funding priorities are, in order, 1) tribes that have received federal recognition or restoration within the past five years; 2) tribes/tribal organizations that are addressing audit material weaknesses; and 3) all other tribes/tribal organizations. The IHS estimates they will make ten noncompeting continuation grants and 17 new awards in FY 2014.

DIRECT OPERATIONS

FY 2012 Enacted $71,653,171
FY 2014 Admin. Request $71,845,000

The IHS states 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. The Administration proposes $192,000 for pay raises.
Priorities include:

(1) Continuing investments to maintain improvements and reforms made to-date and to continue enhancements in the IHS’ capacity for providing comprehensive oversight and accountability in key administrative areas such as human resources, property, financial management, performance management and PRC program improvements developed through PRC consultation recommendations on improving business practices related to PRC and third party reimbursements; (2) Addressing recent Congressional oversight and reports issued by the General Accountability Office (GAO) and the Office of Inspector General (OIG) to make improvements in management of IHS programs, such as the PRC program (3) Addressing requirements for national initiatives associated with privacy requirements, facilities, and personnel security; and (4) Improving responsiveness to external authorities such as Congress, GAO, OIG on questions related to oversight recommendations and the implementation and continuing accountability for new permanent authorities of the reauthorization of the IHCIA.
The IHS has placed a high priority on the issues raised in the Senate Committee on Indian Affairs (SCIA) investigation of the IHS Aberdeen Area, and, in addition to implementing a corrective action plan to address findings in the Aberdeen Area, IHS established a schedule to conduct comprehensive reviews of all IHS Areas to ensure that the findings of the investigation are not global IHS issues. In December 2012, the IHS completed management reviews of all 12 IHS Areas on schedule. IHS will continue to implement and monitor improvements and corrective actions related to the findings of the Area reviews. (CJ-134)

SELF-GOVERNANCE

FY 2012 Enacted $6,044,314
FY 2014 Admin. Request $6,049,000

The Self-Governance budget supports implementation of the IHS Tribal Self-Governance Program including funding required for Tribal Shares; oversight of the IHS Director's Agency Lead negotiators; technical assistance on tribal consultation activities; analysis of Indian Health Care Improvement Act new authorities; and funding to support the activities of the IHS Director's Tribal Self-Governance Advisory Committee.

The IHS projects that in FY 2013 approximately $1.5 billion will be transferred to support 87 tribal compacts and 112 funding agreements. The IHS projects an additional five tribes will enter into Self-Governance compacts and funding agreements in FY 2014.

The $5,000 increase over FY 2012 is for pay raises.


CONTRACT SUPPORT COSTS

FY 2012 Enacted $471,437,491
FY 2014 Admin. Request $477,205,000

Increase. The Administration proposes a $5.8 million increase for Contract Support Costs (CSC). While the budget justification does not list the current CSC shortfall, the IHS estimates that the shortfall at the end of FY 2013 will exceed $100 million. The IHS states that the proposed $5.8 million increase will be applied to the CSC shortfall associated with ongoing contracts and compacts.

Proposal to Cap Individual Contract Support Costs Payments. As mentioned earlier in this Memorandum, the Administration has proposed to legislatively cap each tribe's payment of CSC below full funding. The individual tribal caps would be imposed by tables created by the agencies and incorporated by reference into the appropriations act. The proposal, which the Administration describes as a "short term" plan, is in reaction to the U.S. Supreme Court's Salazar v. Ramah Navajo Chapter decision. It is designed to limit the federal government's liability and prevent tribes from being able to recover CSC shortfalls through the courts. The proposed bill language, which would replace earlier years' statutory overall CSC cap language, is:

For payments of contract support costs associated with ongoing Indian Self-Determination Act agreements with the Indian Health Service for fiscal or calendar year 2014, not to exceed [$471,437,000], $477,205,000;
Provided, That, notwithstanding any other provision of law, the amount available for contract support costs associated with each ongoing Indian Self-Determination Act agreement with the Indian Health Service for fiscal or calendar year 2014 shall not exceed the amount identified in the "Indian Health Service Contract Support Costs" table submitted by the Secretary of Health and Human Services to the House and Senate Committees on Appropriations;
In addition, not to exceed [$10,000,000], $500,000 shall be available for payments for contract support costs associated with new or expanded Indian Self-Determination Act agreements with the Indian Health Service for fiscal or calendar year 2014.

Indian Self-Determination (ISD) Fund. The Administration proposes that up to $500,000 of CSC funds shall be available for an Indian Self-Determination Fund to support new or expanded self-determination contracts, grants, self governance compacts or annual funding agreements. This compares with the FY 2013 proposal that up to $10 million may be available for an ISD fund.

Contract Support Limitation. The Administration proposes, consistent with the Interior appropriations acts for FYs 1999-2013, to attempt 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, 112-10, 112-74 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 2014 for such purposes, except that for the Bureau of Indian Affairs, tribes and tribal organizations may use their tribal priority allocations for unmet contract support costs of ongoing contracts, grants, self-governance compacts or annual funding agreements.

The above quote is from the FY 2014 IHS Budget Justification (CJ-22). The FY 2014 Budget Appendix for the entire federal government identifies this provision as Sec. 406, and references fiscal years 1994 through 2013 (rather than 2014).

FUNDING FOR INDIAN HEALTH FACILITIES

FY 2012 Enacted $440,346,317
FY 2014 Admin. Request $448,139,000

MAINTENANCE AND IMPROVEMENT

FY 2012 Enacted $53,721,000
FY 2014 Admin. Request $53,721,000.

Maintenance and Improvement (M&I) funds are provided to Area Offices for distribution to projects in their regions. Funding is for the following purposes: 1) routine maintenance; 2) M&I Projects to reduce the backlog of maintenance; 3) environmental compliance; and 4) demolition of vacant or obsolete health care facilities. Of the total funding requested, $51.3 million will be allocated to sustain the condition of federal and tribal healthcare facilities buildings, $2 million for environmental compliance projects, and $500,000 for demolition projects. No funds will be allocated "to improve the condition of the healthcare facilities or make improvements to support healthcare delivery." (CJ-150)

The IHS estimates that as of October 2012, the Backlog of Essential Maintenance list is $462 million (up $35 million from October 2011).

The IHS is clear that this budget request is wholly inadequate, stating it will only "enable the IHS to maintain the condition of the IHS real property portfolio at, or slightly below the existing level … does not provide for the expected increase in health care facility space…and is not adequate to achieve the goals of the Energy Policy Act of 2005, the Energy Independence and Security Act of 2007 and Executive Orders 13423 and 13524 regarding energy security." (CJ 149-150)

The IHS further states:

Further, the FY 2014 Budget Request does not provide for the expected increase in health care facility space. Health care space increases by approximately three percent annually with the construction of new and expanded Federal and Tribal healthcare facilities. Consequently as new space becomes eligible for M&I funds, the overall funding per square meter of supported space is reduced and some necessary maintenance and repair work may need to be curtailed. Curtailing maintenance, routine repairs, and major repair projects lead to more costly repairs in the future and potentially catastrophic failure of major equipment (e.g., failure of boiler) that may affect the delivery of healthcare services and the current accreditation status of IHS-operated hospitals and major health centers. (CJ-150)

FACILITIES AND ENVIRONMENTAL HEALTH SUPPORT

FY 2012 Enacted $199,413,427
FY 2014 Admin. Request $207,206,000

Built-In Costs. The Administration proposes $565,000 for pay increases. $7.2 million for staffing and operation of new facilities is listed as follows: Norton Sound Regional Hospital ($1.39 million); Chickasaw Nation Health Clinic in Ardmore ($774,000); Cherokee Nation Health Center ($220,000); Chickasaw Nation Health Clinic in Tishomingo ($541,000); Southcentral Foundation Valley Primary Care Center ($1.32 million); Tanana Chiefs Conference Interior Health Center ($1.96 million); Kenaitze Tribe Dena'ina Health Clinic ($231,000) Samuel Simmonds Hospital ($480,000); and San Carlos Health Center ($305,000).

MEDICAL EQUIPMENT

FY 2012 Enacted $22,582,000
FY 2014 Admin. Request $22,582,000

The IHS notes that they expect to distribute the FY 2014 funds as follows: $16.6 million for new and routine replacement medical equipment at over 1,500 federally- and tribally-operated health care facilities; $5 million for new medical equipment in tribally-constructed health care facilities; and $500,000 each for the TRANSAM and ambulance programs.


CONSTRUCTION

Construction of Sanitation Facilities

FY 2012 Enacted $79,582,000
FY 2014 Admin. Request $79,582,000

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 proposes to distribute up to $48 million to the Area Offices for prioritized projects to serve existing homes; up to $5 million for projects to clean up and replace open dumps on Indian lands; and $2 million will be reserved at IHS Headquarters ($1 million for special projects and emergency needs; $500,000 to collect homeowner data and demographic information in three IHS Areas; and $500,000 for improving data collection systems to help fund a Water Resource Center to develop teaching materials and techniques for homeowners and communities to support usage in a way that promotes health). The Water Resource Center is in partnership with the Alaska Native Tribal Health Consortium which received $250,000 in FY 2012 and is expected to be funded for five years through FY 2016.

Construction of Health Care Facilities

FY 2012 Enacted $85,048,000
FY 2014 Admin. Request $85,048,000

The Administration proposes no new health care facilities starts, but would fund the following:

• Kayenta Health Center - continue construction of the health care facility and begin construction of the staff quarters ($57 million)
• San Carlos Health Center - complete construction of the staff quarters ($12.5 million)
• Southern California Regional Youth Treatment Center in Hemet – complete construction ($15.5 million).

The IHS notes the strong tribal interest in the Joint Venture Construction Program:

The Joint Venture Construction Program (JVCP) allows IHS to enter into agreements with Tribes that construct their own health facilities. The funding for the construction of the health facility comes from the Tribe through their own resources, financing or other funding sources; IHS health care facility construction appropriations are not used for construction of facilities in the JVCP. Tribes apply for the JVCP during a competitive process and projects that are approved enter into agreements with IHS. Upon projected completion of construction by the respective Tribe, the IHS agrees to request Congressional appropriations for additional staffing and operations based on the Tribes' projected dates of completion, fully executed beneficial occupancy and opening.
Between FY 2001 and FY 2012, seventeen joint venture project agreements signed by IHS and Tribes were initiated and nine have been completed. The JVCP continues to receive strong support by Tribes based upon the 55 positive responses to the FY 2009 congressionally directed solicitation for the JVCP FY 2010-FY 2012 cycle. (CJ-156)

OTHER

TRANSAM Equipment, Ambulances, Demolition Fund. The Administration proposes to 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. Up to $2.7 million is proposed for the purchase of ambulances.

THIRD PARY COLLECTIONS

The IHS estimates a total IHS and tribal Medicare, Medicaid and private insurance collections of $1,081,038,000 in FY 2014:

Medicare: $140 million federal; $64 million tribal
Medicaid: $612 million federal; $166 million tribal
Private Insurance: $90 million

If we may provide additional information or assistance regarding FY 2014 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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