ACTIVITY/MECHANISM BUDGET SUMMARY

Department of Health and Human Services

Indian Health Services - 75-0390-0-1-551

**PUBLIC AND PRIVATE COLLECTIONS**

[Program Authorization]{.underline}: Program authorized by Economy Act
of 31 U.S.C. 686 Section 301, P.L. 94-437, Title IV of Indian Health
Care Improvement Act.

+--------------+------------+-------------+-------------+-------------+
|              | 2002       | 2003        | 2004        | Increase    |
|              |            |             |             |             |
|              | Actual     | President's | Estimate    | or Decrease |
|              |            |             |             |             |
|              |            | Budget      |             |             |
+--------------+------------+-------------+-------------+-------------+
| Medicare     | \$         | \           | \           | +           |
|              | 89,624,281 | $95,635,000 | $96,773,000 | \$1,138,000 |
+--------------+------------+-------------+-------------+-------------+
| Tribal       | 6,986,000  | 6,986,000   | 6,986,000   | 0           |
| Medicare     |            |             |             |             |
+--------------+------------+-------------+-------------+-------------+
| Tribal       | 12,831,000 | 12,831,000  | 12,831,000  | 0           |
| Medicare\*   |            |             |             |             |
+--------------+------------+-------------+-------------+-------------+
|              |            |             |             |             |
+--------------+------------+-------------+-------------+-------------+
| Medicaid     | 3          | 346,307,000 | 352,134,000 | +           |
|              | 26,697,724 |             |             | \$5,827,000 |
+--------------+------------+-------------+-------------+-------------+
| Tribal       | 22,217,000 | 22,217,000  | 22,217,000  | 0           |
| Medicaid     |            |             |             |             |
+--------------+------------+-------------+-------------+-------------+
| Tribal       | 26,336,000 | 26,336,000  | 26,336,000  | 0           |
| Medicaid\*   |            |             |             |             |
+--------------+------------+-------------+-------------+-------------+
| Subtotal     | \$4        | \$          | \$          | +           |
|              | 84,692,005 | 510,312,000 | 517,277,000 | \$6,965,000 |
+--------------+------------+-------------+-------------+-------------+
|              |            |             |             |             |
+--------------+------------+-------------+-------------+-------------+
| Private      | 44,442,693 | 44,443,000  | 44,443,000  | 0           |
| Insurance    |            |             |             |             |
+--------------+------------+-------------+-------------+-------------+
| Total        | \$5        | \$          | \$          | +           |
|              | 29,134,693 | 554,755,000 | 561,720,000 | \$6,965,000 |
+--------------+------------+-------------+-------------+-------------+
|              |            |             |             |             |
+--------------+------------+-------------+-------------+-------------+
| FTE          | 3,950      | 3,950       | 3,950       | 0           |
+--------------+------------+-------------+-------------+-------------+

+----------------------------+-------------+-------------+-------------+
| [Reimbursable]{.underline} | FY 2002     | FY 2003     | ####        |
|                            |             |             |             |
| [Obligation:]{.underline}  | Enacted     | Pres.       | FY 2004     |
| (\$000)                    |             |             |             |
|                            |             | #### Budget | #####       |
|                            |             |             | ## Estimate |
+----------------------------+-------------+-------------+-------------+
| Personnel Benefits &       | \$264,501   | \$279,209   | \$283,207   |
| Compensation               |             |             |             |
|                            | 3,744       | 3,952       | 4,008       |
| Travel & Trans.            |             |             |             |
|                            | 1,480       | 1,562       | 1,585       |
| Trans. Of Things           |             |             |             |
|                            | 4,169       | 4,400       | 4,463       |
| Comm./Util./Rents          |             |             |             |
|                            | 213         | 225         | 228         |
| Printing & Repro.          |             |             |             |
|                            | 101,267     | 106,897     | 108,428     |
| Other Contractual          |             |             |             |
|                            | 65,943      | 69,610      | 70,607      |
| Services                   |             |             |             |
|                            | 7,594       | 8,017       | 8,132       |
| Supplies                   |             |             |             |
|                            | 7,167       | 7,566       | 7,674       |
| Equipment                  |             |             |             |
|                            | 4,031       | 4,255       | 4,316       |
| Land & Structures          |             |             |             |
|                            | 601         | 641         | 650         |
| Grants                     |             |             |             |
|                            | [49]{       | [52]{       | [52]{       |
| Insur./Indemnities         | .underline} | .underline} | .underline} |
|                            |             |             |             |
| Interest/Dividends         | \$460,765   | \$486,385   | \$493,350   |
|                            |             |             |             |
| Sub-Total                  |             |             |             |
+----------------------------+-------------+-------------+-------------+
| Tribal Collections         | \$68,730    | \$68,730    | \$68,730    |
+----------------------------+-------------+-------------+-------------+
| Total Collections          | \$529,135   | \$554,755   | \$561,720   |
+----------------------------+-------------+-------------+-------------+

## 

## 

## PURPOSE AND METHOD OF OPERATION

# 

The collection of third party revenue is essential to maintaining
facility accreditation through the Joint Commission of Accreditation of
Hospitals and Organizations (JCAHO). Third party revenue represents
about 15 percent of our overall budget.

# Medicare/Medicaid

The FY 2004 Medicare/Medicaid (M/M) budget estimates reflect the CY 2002
rate increase. Tribal collections are an estimate based on historical
data because there are no requirements for Tribes operating their own
facilities to report this data to IHS.

The FY 2004 DHHS Submission assumes that the current 2002 rates will
continue into CY 2004. Future IHS rate adjustments and projections will
be adjusted following analysis of the FY 2001 hospital cost reports
which will be completed this fall.

In 2002 and 2003, the IHS will continue to focus on strengthening
business office management practices including provider documentation
training, procedural coding, processing claims and information systems
improvements.

IHS wide efforts will continue to improve each hospital's capability to
identify patients who are eligible or may become eligible for third
party reimbursement. A major part of this activity includes the
identification of all children who may be eligible for participation in
the Children's Health Insurance Program (CHIP). For 2002 and 2003, the
IHS will continue working with CMS and the State Medicaid Offices to
help ensure the success of this effort. Other business management
practices in progress, including automating Medicare and Medicaid
billings and collections will assist IHS in its efforts to increase
collections.

The use of the M/M reimbursements will be in accordance with approved
JCAHO/CMS survey plans of correction and with identified maintenance and
repair projects. The IHS will continue to place the highest priority on
maintaining JCAHO accreditation standards for its health facilities.
Specific Service Unit plans will be developed to respond to these
projects. These include projects on IHS' backlog of essential
maintenance and repair list that effect JCAHO/CMS standards, including
health and safety.

[Private Third Party Collections]{.underline}

During FY 2003 and in FY 2004, IHS will continue its efforts to improve
each health facility's capability to identify patients who have private
insurance coverage and claims processing to increase private insurance
billings and collections. Funds collected will be used by the local
Service Units to improve services, including the purchase of medical
supplies and equipment, and to improve local service unit business
management practices.

> **[ACCOMPLISHMENTS]{.underline}**
>
> For 2002, IHS, in collaboration with CMS, continues to improve its
> cost reports to base 2003 Medicare and Medicaid rates. Business office
> improvements included training on certified procedural coding of
> professional services using industry standards, patient benefits
> access, and accounts receivable follow-up. The IHS continues to
> improve its information system to process claims electronically and
> auto post payments in the accounts receivable system. For 2002, IHS
> plans to improve the processing of claims and a rewrite of its third
> party billing package to make it HIPAA compliant and to process claims
> under the new Medicare authority to bill Part B, the professional
> services component.
>
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