A Conversation on Indigenous Health Equity: Supreme Court to Hear Indian Health Services Reimbursement Cases

• March 22, 2024

• Taylor Crossley , Husch Blackwell LLP
• Anna Schroer , Husch Blackwell LLP
• Peggy Barlett , Husch Blackwell LLP

The U.S. Supreme Court will hear oral argument March 25 on whether Native American tribes are entitled to repayment of administrative expenses incurred in connection with the Indian Health Services program. On November 20, 2023, the Court announced it would hear a consolidated pair of cases pertaining to this issue: Becerra v. San Carlos Apache Tribe and Becerra v. Northern Arapaho Tribe (Cases). In recent years, the Court has addressed many different aspects of the trust relationship between Indian tribes and the federal government. This article addresses the issues to be decided in these Cases and how a ruling overturning the lower court orders would further the disparities inherent to native health care systems.

As used throughout this article, the Authors refer to those people who are members of one of the 574 federally recognized tribes as “American Indians and/or Alaska Natives” or “Indians.” The term “Federal Indian Law” is also used throughout this article. The term “Indian” is a legally defined term. An individual who is a citizen of a federally recognized tribe is an “Indian” for purposes of “Federal Indian Law.” The use of this term is consistent with the terminology used by the Indian Health Service.

Principles of Indian Law

To understand the importance of these Cases and their impact on health equity for Indians, one must appreciate the unique relationship that the federal government has with Indian tribes. The following discussion provides a brief overview of Federal Indian Law.

The federal Indian trust responsibility is a legally enforceable fiduciary duty on the part of the United States federal government to protect tribal treaty rights, lands, assets, and resources. The trust responsibility also requires the federal government to carry out the mandates of federal law with respect to American Indian and Alaska Native tribes. The trust obligation was first introduced in Cherokee Nation v. Georgia, which held that Indian tribes are not a foreign state as understood in the Constitution.[1] Instead, Chief Justice Marshall opined that tribes are “domestic dependent nations” whose relationship to the federal government “resembles that of a ward to his guardian.”[2] This language is foundational to the federal trust responsibility to Indian tribes. Over the years, the Court has developed the trust relationship, requiring the United States to act with “moral obligations of the highest responsibility and trust” toward Indian tribes.[3]

The concept of tribal self-governance, or sovereignty, was also recognized by the Court in Cherokee Nation v. Georgia. Specifically, the Court articulated that an Indian tribe is “a distinct political society, separated from others, capable of managing its own affairs and governing itself[.]”[4] Tribal sovereignty encompasses each tribe’s right to govern its people by forming, implementing, and enforcing laws. Central to numerous Supreme Court cases, both the trust responsibility and tribal sovereignty are central to the Cases discussed in this article.

Tribal sovereignty and federal law have a long-standing and complex relationship. At the heart of this complex relationship is the right of tribes, through their sovereignty status, to govern and control within their tribal communities. On the other hand, the federal government has legal duties and obligations to “protect” the tribe under its trust responsibility, which often conflicts with the tribe's right to govern itself. As expected, this results in complex intersections between tribes and the federal government, and those complexities have long impacted the health and well-being of indigenous communities.

Indian Health Service (IHS)

Founding of the IHS

To provide requisite background on the stage for which the Cases are set, the ensuing discussion provides a brief overview on the mechanics of the Indian Health Service (IHS). Initially established in 1955 as part of the constitutionally based government-to-government relationship between the federal government and the Indian tribes, the IHS has the continued mission to raise the physical, mental, social, and spiritual health of American Indians and Alaska Natives to the highest level. In the most general sense, the IHS is an agency within the Department of Health and Human Services (HHS) and is responsible for providing federal health services to American Indians and Alaska Natives. Currently, the IHS provides a comprehensive health service delivery system to approximately 2.6 million beneficiaries who belong to 574 federally recognized tribes in 37 states.[5]

Health Care Delivery Under the IHS

The IHS provides an array of medical services, including inpatient, ambulatory, emergency, dental, public health, nursing, and preventive health care via five primary facility types (1) hospitals[6], (2) health centers, (3) health stations, (4) Alaska village clinics, and (5) youth regional treatment centers. Mechanically, the IHS is divided into 12 areas of the United States: Alaska, Albuquerque, Bemidji, Billings, California, Great Plains, Nashville, Navajo, Oklahoma, Phoenix, Portland, and Tucson. Within these 12, the IHS has health care facilities located throughout, consisting of 26 hospitals, 59 health centers, and 32 health stations, all of which mainly operate on an out-patient basis. These facilities are administered through area offices and service units that are then managed by either by the IHS directly, Indian Tribes, or Tribal Organizations (approximately 40% of IHS' total appropriation is administered by tribes).

Health services are provided directly by the IHS, through tribally contracted and operated health programs, and through services purchased from private providers. Federal law also permits tribes to negotiate their contracts with the IHS to allow the tribe to bill its members’ insurance (whether private insurance, federal Medicare or Medicaid, workers’ compensation, or other category) for the services provided. Under federal law, tribes are allowed to keep insurance payments so long as they spend the proceeds on health care-related costs. Further, IHS facilities may supplement funding for services provided directly using reimbursements collected from Medicare, Medicaid, the State Children's Health Insurance Program, the Department of Veterans Affairs, and from non-federal sources (e.g., private insurance). Through this organization, the IHS is able to retain these reimbursements to supplement the agency’s annual appropriation.

Contract Support Costs

In this arrangement, and at issue in the Cases, costs incurred in connection with administration of the program, both direct and indirect, and paid by the tribes or tribal organizations (Contract Support Costs or CSC), are to be paid back by the IHS. This CSC repayment system is not isolated to the delivery of IHS programs; instead, CSC is a concept that runs through other federally-funded programs administered by tribes and tribal organizations, including, Bureau of Indian Affairs law enforcement, realty, housing, and other government programs under the Indian Self-Determination and Education Assistance Act (ISDA).[7] A shortfall to this system though, is that for decades, the IHS has underpaid the amount of CSC due to Tribes and Tribal organizations that contract to operate IHS clinics and hospitals. The result is hundreds of millions of dollars’ worth of unpaid CSC claims. This is a pertinent issue in the face of the Cases discussed herein, where the question of whether CSC payments must also include services covered by insurance could have an impact between $800 million and $2 billion annually.

Health Equity Concerns for American Indians and Alaska Natives

While the IHS set out with altruistic goals, the reality of health care delivery under the IHS many times paints a much different picture. As discussed in more detail later, IHS users experience among the worst health outcomes compared to any other group in the United States.[8] While the issue is multifaceted, it in part stems from lack of adequate funding for the IHS. Year over year funding for the IHS has been less than half of what is needed to provide adequate health care services, and as of 2017, the Government Accountability Office found that IHS per capita spending was $4,078.00, as compared with $8,109.00 for Medicaid, $13,185.00 for Medicare, and $8,600.00 for federal prisoners. With such discrepancies in funding, as well as widespread acknowledgment of the poor health outcomes for American Indians and Alaska Natives, this poses larger questions of how we got here and what can be done to fix the issue.

Overview of the Cases

As discussed above, the ISDA allows tribes to enter into a contract with IHS to assume responsibility to run their own health care programs. The tribe receives federal funding for the health care programs that it operates in the amount IHS would have otherwise spent on the tribe’s health care. Moreover, federal law permits tribes to bill their members' insurance directly for services provided.[9] The tribe can keep the third-party insurance revenue so long as they spend it on health care.[10]

The San Carlos Apache Tribe and Northern Arapaho (Tribes) brought these Cases seeking reimbursement for administrative costs associated with their third-party insurance revenue. Both Tribes have entered into contracts with IHS to operate a federal health care program. Under the contracts, the tribe is to provide health care services and IHS is to reimburse the tribe for certain categories of expenditures, including Contract Support Costs. The contracts anticipate that the Tribes would bill third-party insurers.

The issue in the Cases revolves around the overhead costs associated with administering this third-party billing infrastructure and the administrative costs associated with recirculating the third-party revenue received.[11] The Tribes contend that these costs qualify as reimbursable CSC under the ISDA; IHS disagrees. In both Cases, the district court agreed with IHS and granted the government’s motion to dismiss. The Tribes appealed.

On appeal, both the Ninth and Tenth Circuits reversed the district court’s decision and reinstated the Tribes’ suits. The Ninth Circuit, in San Carlos Apache Tribe v. Becerra, concluded that the ISDA requires that IHS reimburse the tribe for CSC associated with its third-party insurance revenue.[12] The Ninth Circuit explained that the tribe must spend revenue it earns from third parties on health care programs to comply with both its IHS contract and the ISDA. Moreover, the relevant statutory provision in the ISDA is ambiguous regarding costs associated with this contractual and statutory requirement. To resolve the ambiguity, the court applied the statutory cannon of construction that ambiguous language must be construed in favor of the tribe and found that the ISDA requires that IHS cover the CSC.  The Tenth Circuit, in Northern Arapaho Tribe v. Becerra, also found that IHS must reimburse these costs.[13]

The Ninth and Tenth Circuit decision in these Cases conflict with a decision reached by the D.C. Circuit on the same issue. A uniform answer to the question of Contract Support Costs matters deeply to both federal and tribal interests, and as discussed below, will have important consequences on health equity for Indians.

Conversation on Health Equity

Conversations surrounding health equity within American Indian and Alaskan Native communities are dynamic and are best confronted through an intersectional lens comprehensive of disparate health outcomes, poverty, generational trauma, race, gender, sexuality, housing instability, rurality, and age.[14] Combined, these intersectionalities contribute to the statistic that American Indian and Alaskan Native people born today have a life expectancy that is 4.4 years less than all race populations in the United States.

In addition, while not exclusive to the IHS, staff recruitment and retention remain high areas of concern in the wake of the current health equity crisis. As of 2018 the IHS had a 25% vacancy rate for health professionals. Such vacancies have resulted in many locations unable to remain operational year-round or offer a full suite of services. A report published by the IHS said many of the staffing issues result from struggles such as IHS facilities being located in hard to access rural areas, a lack of rural or reservation housing for health care personnel, lack of IHS physician residency programs, and the sometimes-limiting Indian preference requirements in hiring.[15] To group all tribal experiences into one reality though ignores the vastly different lived experiences of tribe members who utilized IHS services. Services, that like in other health care delivery systems, often times differ vastly based on one’s geographical location and other intersectionalities as described above.

Peggy Barlett, Senior Counsel at Husch Blackwell LLP collaborated on this article--Peggy and several of her family members are members of the Sault Ste. Marie Tribe of Chippewa Indians in Michigan’s Upper Peninsula. Peggy’s primary practice industry is also health care.

The following perspectives offered by Peggy provide insight into her, and her family’s experience with the IHS:

As almost everyone in the health care industry knows (and many individuals outside of it), current processes around the administration of health care often feel burdensome, even broken at times. From identifying what care is needed, where the care is available, processing any referral(s), submitting necessary paperwork, and everything in between, staff and patients have to allocate the time necessary to work through the appropriate channels. Despite best intentions, the IHS is no exception.

Until I permanently relocated out of state, I received care through our tribal health center (and other centers) in the Upper Peninsula – everything from vaccinations to physicals. While I did not fully understand it at the time, there was a delicate dance in place with the health care coverage I had through my dad’s employer and the coverage and health care services from the tribe. As an adult, I gained further insight as I watched my mom continue this dance for her care under Medicare and the tribe.  My family’s tribe covers multiple counties in the Upper Peninsula, which means there are multiple tribal health centers. It is not unusual for my mom (and other tribal patients) to visit different tribal health centers depending on the services needed. For example, I needed a procedure in college that required me to travel to a nearby county because our local health center could not perform it. My mom and I were (and continue to be) fortunate that we had the resources to tackle these situations and the processes, paperwork, and administrative time required to successfully get the care we needed and have it covered. Depending on the location (frequently rural), the patient, and the medical issue, there are many tribal patients who do not have access to those necessary resources and ultimately get lost in the process itself. Further, one of my extended family members was a nurse with the tribal health center for decades. In our discussion about the IHS, Purchased Referred Care, and various processes related to the same, it became apparent that the health care staff and personnel carry a significant burden in not only providing medical services but helping patients maneuver through this complex system and processes. Obviously, we still have work to do.

Overall, to engage in conversations surrounding health equity within American Indian and Alaskan Native communities is to engage in a conversation that aims to address how we best handle health disparities for our nation’s most vulnerable. In this, we must ask questions that challenge the status quo and look towards innovative solutions to better deliver comprehensive and equitable health care.

Looking Forward

The Cases are set for oral argument on March 25. When the Court originally agreed to hear the Cases, it allotted a total of one hour for arguments.[16] On February 26, the Court granted the Tribes' joint motion for divided arguments, allowing each tribe their own 15 minutes to make arguments.[17]

Many will be awaiting the Court’s decision and its impact on health equity for American Indian and Alaskan Native communities going forward remains to be seen.

ARTICLE TAGS

• In-House Counsel Practice Group
• Diversity, Equity, and Inclusion in Health Care Hub