104TH CONGRESS, 2d Session

H.Rept. 104-742, Part 1

U.S. HOUSE OF REPRESENTATIVES

**EXTENSION OF INDIAN HEALTH CARE DEMONSTRATION PROGRAM**

**August 1, 1996**- Committed to the Committee of the Whole House

on the State of the Union and ordered to be printed

Mr. YOUNG of Alaska, from the Committee on Resources,

submitted the following

REPORT

***\[To accompany H.R. 3378**\]*

\[Including cost estimate of the Congressional Budget Office\]

The Committee on Resources, to whom was referred the bill (H.R. 3378) to
amend the Indian Health Care Improvement Act to extend the demonstration
program for direct billing of Medicare, Medicaid, and other third party
payors, having considered the same, report favorably thereon without
amendment and recommend that the bill do pass.

PURPOSE OF THE BILL

The purpose of H.R. 3378 is to amend the Indian Health Care Improvement
Act to extend the demonstration program for direct billing of Medicare,
Medicaid, and other third party payers.

BACKGROUND AND NEED FOR LEGISLATION

In 1988, the Indian Health Care Improvement Act authorized a
demonstration program to allow up to four tribally-operated Indian
Health Service (IHS) hospitals or clinics to test methods for direct
billing for and receipt of payment for health services provided to
Medicare and Medicaid eligible patients. The program was established to
determine whether collections could be increased through direct
involvement of the tribal health care providers versus the current
practice which required billings and collections be routed through the
IHS.

The law requires IHS to report to Congress on the demonstration program
at the end of the 1996 fiscal year (September 30, 1996). This report is
to evaluate whether the objectives have been fulfilled, and whether
direct billing should be allowed for other tribal providers who operate
an entire IHS facility.

Bristol Bay Area Health Corporation (BBAHC) is one of the four
facilities which was selected to participate in the demonstration
program. The BBAHC has expressed success and satisfaction with the
program. It reports dramatically increased collections for Medicaid and
Medicare services, thereby providing additional revenues for Indian
health programs at these facilities. In addition, there has been a
significant reduction in the turn-around time between billing and
receipt of payment. Finally, BBAHC reports increased efficiency by being
able to track their own billings and collections and being able to
respond quickly to resolve problems and answer questions.

All participants want to extend the demonstration program authority for
two more years to give Congress time to review the IHS report on the
program and to determine the future course of the program. Without this
extension, the four participants would have to close down their direct
billing/collection departments and return to the old system of
IHS-managed collection departments. This would mean the dismantling of
highly specialized administrative staff and would have an immediate
negative impact on revenue collection.

COMMITTEE ACTION

H.R. 3378 was introduced by Congressman Don Young (R-AK) on May 1, 1996,
and referred primarily to the Committee on Resources and additionally to
the Committee on Commerce. Congressman G.V. \`Sonny\' Montgomery (D-MS)
was added as a cosponsor on May 21, 1996. On June 19, 1996, the full
Committee on Resources met to mark up H.R. 3378. The bill was ordered
reported with no amendments by voice vote.

SECTION-BY-SECTION ANALYSIS

SECTION 1. EXTENSION OF CERTAIN DEMONSTRATION PROGRAM

Section 1 amends the Indian Health Care Improvement Act to extend the
direct billing demonstration program for two years, through Fiscal Year
1998.

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

With respect to the requirements of clause 2(l)(3) of rule XI of the
Rules of the House of Representatives, and clause 2(b)(1) of rule X of
the Rules of the House of Representatives, the Committee on Resources\'
oversight findings and recommendations are reflected in the body of this
report.

INFLATIONARY IMPACT STATEMENT

Pursuant to clause 2(l)(4) of rule XI of the Rules of the House of
Representatives, the Committee estimates that the enactment of H.R. 3378
will have no significant inflationary impact on prices and costs in the
operation of the national economy.

COST OF THE LEGISLATION

Clause 7(a) of rule XIII of the Rules of the House of Representatives
requires an estimate and a comparison by the Committee of the costs
which would be incurred in carrying out H.R. 3378. However, clause 7(d)
of that rule provides that this requirement does not apply when the
Committee has included in its report a timely submitted cost estimate of
the bill prepared by the Director of the Congressional Budget Office
under section 403 of the Congressional Budget Act of 1974.

COMPLIANCE WITH HOUSE RULE XI

1\. With respect to the requirement of clause 2(l)(3)(B) of rule XI of
the Rules of the House of Representatives and section 308(a) of the
Congressional Budget Act of 1974, H.R. 3378 does not contain any new
budget authority, spending authority, credit authority, or an increase
or decrease in revenues or tax expenditures.

2\. With respect to the requirement of clause 2(l)(3)(D) of rule XI of
the Rules of the House of Representatives, the Committee has received no
report of oversight findings and recommendations from the Committee on
Government Reform and Oversight on the subject of H.R. 3378.

3\. With respect to the requirement of clause 2(l)(3)(C) of rule XI of
the Rules of the House of Representatives and section 403 of the
Congressional Budget Act of 1974, the Committee has received the
following cost estimate for H.R. 3378 from the Director of the
Congressional Budget Office.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

U.S. Congress,

Congressional Budget Office

Washington, DC

July 24, 1996.

Hon. DON YOUNG,

Chairman, Committee on Resources,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: At your request, the Congressional Budget Office
(CBO) has reviewed H.R. 3378, which would amend the Indian Health Care
Improvement Act by extending a demonstration program for direct billing
of Medicare, Medicaid, and other third party payers. The bill was
ordered reported by the Committee on Resources on June 19, 1996. Because
this bill would not affect direct spending or receipts, pay-as-you-go
procedures would not apply. The bill contains no private-sector or
intergovernmental mandates as defined in Public Law 104-4.

The demonstration program was created in 1988 to allow participants to
bill directly, and receive reimbursements from, third-party payers for
services rendered. The program is limited to four hospitals or clinics
operated under the Indian Self-Determination Act by tribes, tribal
organizations, or Alaska Native health organizations. H.R. 3378 would
extend the demonstration program by two years, through September 30,
1998. Tribally-operated facilities that do not participate in the
program can operate as Federally-Qualified Health Centers (FQHCs) or can
choose to file claims through the Indian Health Service (IHS).

Participating facilities report that the program has had a favorable
impact on their budgets by increasing the efficiency and decreasing the
turn-around time of the billing and payment processes. They are also
entitled to the Medicare and Medicaid reimbursement rates that the IHS
has negotiated with HCFA. By allowing participants to bill directly for
services rendered, rather than working through the IHS for
reimbursement, the demonstration program may reduce IHS administrative
costs slightly.

If you wish further details on this estimate, we will be pleased to
provide them. The staff contacts are Anne Hunt (federal estimate); Julia
Matson (private sector mandate analysis); and John Patterson
(intergovernmental mandate analysis).

Sincerely,

James L. Blum,

(For June O\'Neill, Director).

COMPLIANCE WITH PUBLIC LAW 104-4

H.R. 3378 contains no unfunded mandates.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3 of rule XIII of the Rules of the House of
Representatives, changes in existing law made by the bill, as reported,
are shown as follows (existing law proposed to be omitted is enclosed in
black brackets, new matter is printed in italic, existing law in which
no change is proposed is shown in roman):

SECTION 405 OF THE INDIAN HEALTH CARE IMPROVEMENT ACT

DEMONSTRATION PROGRAM FOR DIRECT BILLING OF MEDICARE, MEDICAID, AND
OTHER THIRD PARTY PAYORS

SEC. 405. (a) \* \* \*

\* \* \* \* \* \* \*

(c)(1) \* \* \*

\(2\) From among the qualified applicants, the Secretary shall, prior to
October 1, 1989, select no more than 4 facilities to participate in the
demonstration program described in subsection (a). The demonstration
program described in subsection (a) shall begin by no later than October
1, 1991, and end on September 30, \[Struck out-\>\]\[ 1996 \]\[\<-Struck
out\] 1998.

\* \* \* \* \* \* \*

A P P E N D I X

House of Representatives,

Committee on Commerce,

Washington, DC,

August 1, 1996.

Hon. DON YOUNG,

Chairman, Committee on Resources,

Longworth House Office Building, House of Representatives, Washington,
DC.

DEAR MR. CHAIRMAN:

On June 19, 1996, the Committee on Resources ordered reported H.R. 3378,
a bill to amend the Indian Health Care Improvement Act to extend the
demonstration program for direct billing of Medicare, Medicaid, and
other third party payors. It is my understanding that you would like the
Committee on Commerce to be discharged from consideration of this
measure.

I have a number of concerns about proceeding in this manner. As you
know, this Committee has invested countless hours in Medicaid reform
legislation. The status of our reform efforts makes separate
consideration of H.R. 3378 somewhat awkward. Despite my position on this
matter, I do understand your interest in having H.R. 3378 move forward
expeditiously, since authorization for these demonstration projects ends
September 30, 1996. Therefore, the Committee on Commerce will agree to
be discharged from consideration of this legislation.

By agreeing to be discharged from consideration, this Committee does not
waive its jurisdictional interest in the matter. I reserve the right to
seek equal conferees during any House-Senate conference that may be
convened on this legislation.

I want to thank you and your staff for your assistance in providing the
Commerce Committee with a timely opportunity to review its interests in
H.R. 3378. I would appreciate your including this letter as a part of
the Resource Committee\'s report on H.R. 3378, and as part of the record
during consideration of this bill by the House.

Sincerely,

THOMAS J. BLILEY, Jr., Chairman.

/////\*\*\*\*\*/////\*\*\*\*\*/////

House of Representatives,

Committee on Resources,

Washington, DC

August 1, 1996.

Hon. THOMAS J. BLILEY, Jr.,

Chairman, Committee on Commerce, Rayburn House Office Building,
Washington, DC.

DEAR MR. CHAIRMAN: I appreciate your willingness to have the Committee
on Commerce discharged from further consideration of H.R. 3378, a bill
to amend the Indian Health Care Improvement Act to extend a
demonstration program for direct billing of Medicare, Medicaid and other
third party payors.

I understand your concerns relating to the larger issue of Medicaid
reform but believe it is the right to do to allow this very limited
demonstration program, which has improved efficiency and saved money for
those involved, to be extended beyond its expiration at the end of next
month.

Thank you again for your cooperation and that of your staff in this very
busy time for us all. I look forward to bringing this bill to the Floor
in early September with your help.

Sincerely,

DON YOUNG, CHAIRMAN.