Dear USET/USET SPF Family,
The deadline for filing potential claims against the Indian Health Service (IHS) for Contract Support Costs (CSC) on healthcare services funded by third-party revenues is September 30, 2022. For years, IHS and Tribal Nations have fought over whether the IHS must fund CSC only on appropriated funds that IHS transfers to Tribal Nations, or if the agency must pay the Centers for Disease Control (CDC) on the portion of a Tribal Nation’s healthcare that is funded through third-party revenues such as Medicare, Medicaid, or private insurance.
While the litigation is expected to continue for some time, there is a six-year statute of limitations on these disputes set by the Contract Disputes Act (P.L. 95-563). As such, Tribal Nations are encouraged to file claims for FY 2016 by September 30, 2022.
In a memorandum distributed on August 22, 2022, Hobbs, Straus, Dean and Walker, LLP (“Hobbs”) explained the rationale behind filing and provided instructions to Tribal Nations on filing a claim. The basic claim within the litigation is that the IHS breached its obligations under the Indian Self-Determination and Education Assistance Act (ISDEAA) by failing to pay the full CSC required under the statute. Tribal Nations are arguing that the IHS has failed in its obligations by only paying direct costs and not costs incurred through contract or compacts with third-party vendors.
This issue has been litigated in the past, with varying success for Tribal Nations. In one case, a New Mexico Federal Court sided with a Tribal Organization stating that, “expenditures made with third-party revenues in support of programs administered under [ISDEAA] are spent on the federal program.” In this case the “federal program” is a blend of appropriations and third-party revenues for healthcare programs supported by the IHS. In two other cases, courts have sided with the IHS’s claims that the agency does not have to pay CSC on healthcare services funded by third-party revenues, which Tribal Nations have appealed. These appeals have been fully briefed and argued with decisions coming any day.
While filing a claim does not commit a Tribal Nation to litigation, the potential benefits for Tribal Nations that generate significant third-party revenues are large. It is also relatively easy and inexpensive to file a claim. For more information and instructions on filing a claim please view the memo from Hobbs.
For more information on this issue, please contact Ashton Martin, USET SPF Health Policy Analyst, at email@example.com.