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Addressing Critical Concerns of Healthcare Systems Serving American Indians/Alaska Natives

Public Sector Resources


Elmer Brewster, M.S.W., M.P.H. (Paiute, Chippewa Cree), Health Administrator, Headquarters East, Indian Health Service (IHS), U.S. Department of Health and Human Services, Rockville, MD.

Mary Kay Smith, M.A.S., Senior Advisor, Indian Health Care, Health Care Financing Administration (HCFA), U.S. Department of Health and Human Services, Baltimore, MD.

Robert S. Kroll, M.P.A., Deputy Administrator, Southwest Office of Native American Programs, Office of Public and Indian Housing, U.S. Department of Housing and Urban Development (HUD), Phoenix, AZ.

Indian Health Service (IHS)

Among IHS facilities, third-party collections have increased significantly over the past several years. The increases are attributable to better documenting, coding, and billing management, as well as to negotiated Medicaid and Medicare rate increases. In 1999, $265 million was collected from Medicaid, $86 million from Medicare, and $38 million from private insurers.

Medicaid and the State Children's Health Insurance Program (SCHIP): Health systems serving Medicaid- and SCHIP-eligible Indian clients can bill for a broad range of services. Under the HCFA/IHS Memorandum of Agreement (MOA), these services are 100-percent covered by the Federal Government, so it is in the interest of both the provider and the State to encourage people who are Medicaid- or SCHIP-eligible to apply. Mr. Brewster also encouraged participants to get involved in development and revisions to waivers (1115, 1915(b) and 1915(c)), or to become Federally Qualified Health Centers (FQHCs), clinic providers, or network providers.

Medicare: Health systems can bill for both Part A and Part B services. There are 638 facilities that can receive FQHC encounter rates. Within IHS facilities, Medicare cost-reporting has almost doubled since 1996; future cost-reporting will be required to maintain rates and receive inflationary increases. Within the next 3 years, IHS billing practices will change to account for Medicare prospective payment system (PPS) and ambulatory payment classification (APC) rates.

Private insurance: Dealing with private insurers requires eligibility verification, billing for all services (including supplies), and followup by staff from Accounts Receivable. Facilities can also become network providers for managed care organizations.

In some cases, American Indians/Alaska Natives (AI/AN) Medicare beneficiaries enroll in managed care organizations yet continue to receive care from IHS/tribal/urban Indian providers (I/T/Us). In order to be reimbursed for these services, Mr. Brewster suggested billing as an out-of-network provider. However, if the particular managed care organization does not reimburse out-of-network providers, it is much more difficult to be reimbursed. New regulations would have to be developed in order to bill Medicare directly for those services.

Suggestions for maximizing third-party revenue include:

  • Making the right investment—staffing, equipment, software upgrades, training—will pay for itself.
  • Developing a plan for increasing third-party revenue. Think in terms of the entire facility generating revenue.
  • Training to build new skills in transitioning to a business environment.
  • Maintaining appropriate staffing levels.
  • Appointing staff to stay abreast of Federal/State/private managed care initiatives.
  • Tracking reimbursement levels, setting reporting requirements, and identifying clinical improvements.
  • Developing committees to evaluate and manage third-party issues.
  • Sharing innovations.
  • Supporting information system (IS) development to capture all services (i.e., provider, ancillary, supplies, facility charges). Develop a better understanding of who your clients are, what services they need, the costs of those services, and who will pay for them.

Health Care Financing Administration (HCFA)

HCFA's relationship with Indian healthcare systems has been changing over the past several years. Regional offices are the "front line" in understanding how HCFA programs (Medicaid, Medicare, SCHIP) are working. A Policy Development Component is being planned to track and analyze policy as it relates to AI/AN health, so that policies are consistent among HCFA regions. A high-level staff person will head this group. Moreover, to further the relationship with the tribes, the deputy administrators of HCFA and IHS meet regularly.

HCFA is close to decisions on a number of policy issues affecting AI/AN. Ms. Smith stressed that the decisions have not been finalized as of June 2000.

Reimbursement issues to be addressed include:

  • Application of the all-inclusive rate, by standardizing the definition of what is included in an encounter. Payment may be retroactive.
  • Some relief may be possible for facilities that serve both AI/AN and non-AI/AN clients by having two facility rates.
  • Reimbursement rules mandating that services be provided through an IHS facility may be greatly liberalized.
  • Home health services may include community health representatives (CHRs) as qualified providers.
  • Cost-sharing for SCHIP has been eliminated; cost-sharing for Medicaid and Medicare will require legislation.
  • In direct billing conflicts between HCFA and IHS, policies may be resolved through legislation.
  • IHS and HCFA are collaborating on a series of training sessions for I/T/U providers on cost-reporting/cost-accounting.
  • Opportunities for covering traditional medicine may become available.

Administrative issues to be addressed include:

  • Tribal consultation must continue, as exemplified in the 15 "Listening Sessions", which were held across the country and produced a set of recommendations that HCFA intends to implement.
  • HCFA may provide I/T/Us serving clients across State or international borders with technical support.
  • Tribes are encouraged to seek assistance from HCFA regional offices in obtaining Certificates of Need (CoNs) for nursing facilities (although States have unilateral authority over CoNs).
  • HCFA is forming an AI/AN long-term care workgroup, which will initially focus on home and community-based services.
  • AI/AN elders have asked to be exempted from Social Security's "40 quarters" rule. The U.S. Department of Health and Human Services and the Social Security Administration will explore the implications of the Federal Trust responsibility as it applies to this rule.
  • Regulations regarding out-stationing of eligibility workers may change to give States 100 percent Federal match to place workers with tribes.
  • Tribes wishing to operate their own Medicaid or CHIP plans will need legislation. Current law does not recognize a tribal government in the same capacity as a State in administering these programs.

Managed care issues to be addressed include:

  • More tribal input is needed on whether to exempt AI/AN from mandatory Medicaid managed care enrollment.
  • More AI/AN input is also needed on the rights of tribes and urban Indians in managed care.

U.S. Department of Housing and Urban Development (HUD)

Robert Kroll discussed the grant programs available through the HUD Office of Native American Programs (ONAP). ONAP has six area offices (Anchorage, Chicago, Denver, Oklahoma City, Phoenix, and Seattle); the national program office is located in Denver. Two principle grant programs are administered:

The Indian Housing Block Grant (IHBG) program awards approximately $650 million annually. Primarily targeted to creating affordable housing, this fund could also be used to combat environmentally related healthcare issues (e.g., improving sanitation systems) and, under certain circumstances, constructing healthcare facilities and social service offices. It is awarded through a formula based on need and existing housing stock. Awards range from $25,000-$88 million per tribe. Details are found in 24 CFR Part 1000.

The Indian Community Development Block Grant (ICDBG) program awards approximately $65 million annually. Grants are awarded through a competitive process in six categories (greater details are found in 24 CFR Part 1003):

  • Community buildings (including healthcare facilities).
  • Land acquisition.
  • New housing.
  • Housing rehabilitation.
  • Infrastructure.
  • Economic development.

Entities considering applying for Indian Community Development Block Grants should understand the following:

  • The Notice of Funding Availability (NOFA) comes out in early Spring; applications are due late Spring. Awards are announced in September.
  • ONAP grants are to be used on reservations or within Indian areas; thus, urban Indian programs could apply, sponsored by a tribe.
  • All construction activity must be completed within the 2-year grant period.
  • The eligible applicant unit is the tribal government. They can designate the implementation and operation of the awarded project to another entity.
  • Grant ceilings are based on the size of the on-reservation population. The maximum grant amount is $5 million. (Mr. Kroll noted that some smaller tribes have formed consortia to pool grant funds in order to build a healthcare facility in a central location.)
  • Approximately 45-50 percent of applications are approved.
  • Applications are scored by a HUD panel on such areas as project need, quality of the proposal, leveraging, performance, and administrative capacity. Funding scores range from 75 to 100 (the maximum score is 100).


Memorandum of agreement between the Indian Health Service and the Health Care Financing Administration. Washington (DC): U.S. Department of Health and Human Services; 1996 Jul.

Proposed Indian health care improvement act: Title 4—access to health services. Washington (DC): National Steering Committee for the Reauthorization of the Indian Health Care Improvement Act; 1999 Oct.

Indian health care and preferred provider agreements: a guidebook concerning common clauses having special considerations in Indian healthcare settings. Rockville (MD): Indian Health Service, U.S. Department of Health and Human Services; 1998.

Indian Health Service: fact sheet. Rockville (MD): Indian Health Service, U.S. Department of Health and Human Services; 1998 Sep.

Schneider A, Martinez J. Native Americans and Medicaid: coverage and financing issues. Washington (DC): The Kaiser Commission on the Future of Medicaid; 1997 Dec.

Office of Native American programs: office locations. Phoenix (AZ): U.S. Department of Housing and Urban Development, Office of Native American Programs; 1997.

Indian community development block grant program. Phoenix (AZ): U.S. Department of Housing and Urban Development, Office of Native American Programs; 2000 Mar.

Indian housing block grant program. Phoenix (AZ): U.S. Department of Housing and Urban Development, Office of Native American Programs; 1997 Oct.

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