Law Street Media

Alaska Native Tribal Health Consortium Sues HHS Over Indian Health Services’ Failure to Pay

A river runnning through a boreal forest.

Aerial View of Boreal Nature Forest in Summer, Quebec, Canada

On Monday a case was filed in the District of Alaska by Alaska Native Tribal Health Consortium against Xavier Becerra in his role as Secretary of Health and Human Services.  The case is regarding the failure of Indian Health Services, under the auspices of HHS, to pay support costs for Alaska Native Medical Center as per contract.

Indian Health Services is statutorily responsible for providing for medical needs of Native American citizens. The complaint explained that in Alaska, this requirement is handled through direct contract with a local provider, Alaska Native Medical Center, under the Indian Self-Determination and Education Assistance Act (ISDA).

This outsourcing has been upheld in several prior cases, per the plaintiff, and those same cases also found that failure to pay the full support costs was a breach of the statute. To calculate these costs, the IHS formula is “direct costs of medical services” multiplied by a specific factor known as the “indirect cost rate” which is specialized for each participating facility and represents the overhead costs such as taxes, maintenance, staffing, janitorial, and other expenses that are not directly billed as charges on a patients invoice.

The consortium argues that IHS has been underpaying this amount by only applying the formula to tribal patients who only have IHS coverage, and not including tribal members who also have Medicare or Medicaid coverage, contrary to the direct language of both the IHS manual for providers as well as the direct language of the statute.

The plaintiffs are suing for breach of contract as well as direct breach of the statute. Plaintiffs are represented by Sonosky, Chambers, Sachse, Miller & Monkman

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