106TH CONGRESS,

2d Session

REPT. 106-818, Part 1

HOUSE OF REPRESENTATIVES

**ALASKA NATIVE AND AMERICAN INDIAN DIRECT REIMBURSEMENT ACT OF 1999**

> SEPTEMBER 6, 2000- 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

R E P O R T

**\[To accompany S. 406\]**

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

The Committee on Resources, to whom was referred the bill (S. 406) to
amend the Indian Health Care Improvement Act to make permanent the
demonstration program that allows for direct billing of medicare,
medicaid, and other third party payors, and to expand the eligibility
under such program to other tribes and tribal organizations, having
considered the same, report favorably thereon without amendment and
recommend that the bill do pass.

PURPOSE OF THE BILL

The purpose of S. 406 is to amend the Indian Health Care Improvement Act
to make permanent the demonstration program that allows for direct
billing of medicare, medicaid, and other third party payors, and to
expand the eligibility under such programs to other tribes and tribal
organizations.

BACKGROUND AND NEED FOR LEGISLATION

The purpose of S. 406 is to make permanent a direct billing
demonstration program authorized by the Indian Health Care Improvement
Act Amendments of 1988, Public Law 100-713. The bill makes the program
permanent for the four demonstration programs and expands the
eligibility to other tribes and tribal organizations which operate
Indian Health Service (IHS) hospitals and clinics. It provides that all
funds received through the program be used specifically to maintain
accreditation or, if that has been secured, to address the lack of
health resources available to that tribe. The bill recognizes the
success of the demonstration program, and that the program enhances and
reinforces the ideas contained in the Indian Self-Determination and
Assistance Act (Public Law 93-638, 25 U.S.C. 450 et seq.) to strengthen
the government-to-government relationship between tribes and the federal
government.

BACKGROUND

In exchange for the cession of millions of acres of land to which Indian
tribes held aboriginal title, the United States entered into treaties
with Indian nations. Many of the treaties provided that health care
services would be guaranteed to the citizens of Indian country in
perpetuity. The federal obligation for the provision of health care
services in Indian country also arises out of the special trust
relationship between the United States and Indian tribes, as reflected
in Article I, Section 8, Clause 3 of the U.S. Constitution, which has
been given form and substance by numerous treaties, laws, Supreme Court
decisions, and Executive Orders.

In 1976, the Indian Health Care Improvement Act (IHCIA, Public Law
94-437, 25 U.S.C. 1601 et seq.) became law. IHCIA was the first
comprehensive statute specifically addressing the provision of health
care in Indian country and the federal administration of health care of
Native Americans. In 1988, amendments to IHCIA provided for the creation
of a medicare and medicaid direct billing demonstration program which is
made permanent by this legislation.

THE IHS AND BILLING PRACTICES

Prior to 1988, tribes who operated IHS hospitals and clinics submitted
their requests for reimbursement for medicare and medicaid outlays or
expenditures to the IHS. The submission of that request began a complex,
arduous process which did not always result in payment.

Once a patient was seen by the IHS facility, a claim was generated and
sent to the IHS Area Office. The Area Office, in turn, made a claim to
the Fiscal Intermediary, the agent responsible for processing medicare
and medicaid claims (oftentimes a state). Once the Fiscal Intermediary
paid the IHS Area Office, the funds were deposited in the federal
reserve and sent to the Department of the Treasury, where payment was
apportioned back to the IHS headquarters. The Area Office would then
request funds from IHS headquarters, and once the amount an Area Office
would receive was determined, the Area Office would modify the tribe\'s
contract to reflect the actual amount received from IHS headquarters and
which was to be paid to the tribe. When the payment was finally received
by the tribe operating the IHS facility, it was always difficult, if not
impossible, for the tribe to determine which of the submitted claims had
been paid and which had been denied, as there was no list provided which
identified claim numbers to the tribe. Often, according to tribal
officials, if a payment register was received, it would not be for
months or years after the original claim was made and no attempt could
be made to resubmit the claim. Officials reported periods as long as two
years between submission of a claim and reimbursement or denial of the
claim.

Tribal officials also claimed that for a period of time the problems
with a claim resulted from incorrect submissions made by the IHS, whose
computer system had malfunctioned. A medicare audit later uncovered the
errors, and tribes were made to repay the overpayment claimed by the IHS
system, along with penalties, even though they had no control over the
submission to the Fiscal Intermediary, nor any way of determining that
they had in fact received an overpayment. 1

\[Footnote\]

\[Footnote 1: See Department of Health and Human Services, Report to
Congress on the tribal Demonstration Program on Direct Billing for
Medicare, Medicaid and Other Third Party Payors, Appendix D, December
15, 1998.\]

HISTORY OF THE DEMONSTRATION PROGRAM

In 1988, the Indian Health Care Improvement Act was amended to authorize
a limited demonstration program for direct billing by tribes. In the
course of gathering information regarding the IHCIA, several tribal
leaders submitted comments regarding their desire to streamline the
process for billing medicare and medicaid reimbursements. Specifically,
Indian tribes and tribal organizations who contracted the operation and
administration of IHS facilities stated that:

should they be allowed to retain all of the funds they collect from
Medicaid and Medicare reimbursements and third party insurers, they
could better control their own cost accounting systems and accounts
receivable, and that they could thereby maximize and increase the
amounts collected from such sources. Tribes and tribal organizations
believe that the policy of self-determination dictates this step toward
a degree of financial autonomy that will better equip them to one day
assume the full range of responsibilities that are associated with the
provision of health care. Evidence submitted by tribal contractors in
Alaska would indicate that because of certain legal impediments that
exist to the collection of third party resources by the Indian Health
Service, tribal contractors can in fact collect amounts from third party
sources far in excess of the amounts that Indian Health Service is able
to collect.

Senate Report 100-508, 100th Cong., 2nd Sess. 1988, 1988 U.S.C.C.A.N.
6183.

In 1996, Congress, based on evidence presented to it regarding the
success of the IHCIA demonstration program, extended the program for two
more years to allow time for the Department of Health and Human Services
to make its report to Congress. The program was extended again in 1998,
based upon a favorable report made to Congress by the Department.

DEMONSTRATION PROGRAM RESULTS

Four facilities were chosen to participate in the demonstration program:
the Southeast Alaska Regional Health Consortium (SEARHC), Sitka, Alaska;
the Bristol Bay Area Health Corporation, Dillingham, Alaska; the Choctaw
Nation of Oklahoma, Durant, Oklahoma; and the Mississippi Band of
Choctaw Indians, Philadelphia, Mississippi.

Under the terms of the demonstration program, the participants were
authorized to make claims directly to the Fiscal Intermediary for
reimbursement. To become a participant, the tribe\'s facility had to
meet IHS requirements for operation of its own programs and the facility
needed to be accredited by the Joint Commission on Accreditation of
Healthcare Organizations.

All funds reimbursed were required to be used for specific purposes. The
first priority for the funds received was to make improvements within
the facility which would allow it to maintain compliance with the
conditions and requirements applicable generally to all facilities under
medicare and medicaid programs (to continue to be accredited). If funds
remained after compliance was maintained, the excess was to be used only
to improve the health resources available to the Indian tribe. All funds
were to be expended in accordance with IHS regulations applicable to
funds provided by the IHS under a contract entered into under the Indian
Self-Determination Act (25 U.S.C. 450 et seq.).

The Medicare and Medicaid Direct Billing Demonstration Program was, by
all accounts, a success. The Department of Health and Human Services, in
a report delivered to Congress in December of 1998, stated that the
\`demonstration project has been a success as it has simplified,
streamlined, and increased collections.\'

The Department reported that the direct billing process had positive
effects for the four participating tribes. First, medicare and medicaid
collections increased dramatically at all four facilities. The increase
in collections for both medicaid and medicare combined ranged from 152%
at the SEARHC facility to 364% at the Bristol Bay facility. Second, the
increased collections were used by all four tribes to address compliance
issues at their facilities. During the term of the demonstration
project, all four facilities reported increases in their status and
ratings with the accrediting body and three of the projects reported
significant increases in their standing. SEARHC reported receiving the
highest score possible. The SEARHC facility also received the highest
ranking possible for the years 1996 and 1997. Third, three of the four
participants also reported that they expended excess funds to improve
the health resources available to the tribe. Most of these funds were
used to improve facilities, to acquire additional medical equipment, and
to hire additional staff. The Mississippi Band of Choctaw Indians
reported that additional funds were used to open three new clinics,
geared toward tuberculosis, diabetes and Women\'s Wellness. The Choctaw
Nation of Oklahoma reported program expansions at three locations, the
opening of a diabetes treatment center and the use of an improved
information system. The remaining participants reported that the
increased collections were used to hire new staff and implement projects
that both improved their accreditation rating and improved the health
resources offered by the tribe. Finally, all projects reported a large
decrease in the amount of time between billing and collection. Each
tribe reported saving at least two months time, and one tribe reported
saving up to eight months time between billing and collection. This was
largely due to increased, direct contact with the Fiscal Intermediary.
The participants reported that the direct contact with the Fiscal
Intermediary allowed them to \`improve billings and collection
practices, improve management of accounts receivable, reduce the time
between billing and collection, and improve management planning on use
of collections.\' 2

\[Footnote\]

\[Footnote 2: See Department of Health and Human Services, Report to
Congress on the Tribal Demonstration Program on Direct Billing for
Medicare, Medicaid and Other Third Party Payors, page 9, December 15,
1998.\]

The Department of Health and Human Services recommended that the
demonstration program be made permanent and that the program be open to
an expanded number of participants. S. 406 creates a more efficient and
effective means for the medicare and medicaid reimbursement to tribes.
But more importantly, it is a recognition of the government to
government relationship that exists between the federal government and
Indian tribes, and furthers the policy of tribal self-determination by
allowing tribes to best determine the allocation and use of funds
received.

COMMITTEE ACTION

S. 406 was introduced on February 10, 1999, by Senator Frank Murkowski
(R-AK). The bill was passed by the Senate on September 15, 1999, with
amendments by unanimous consent. The bill was referred primarily to the
Committee on Resources, and additionally to the Committee on Commerce
and the Committee on Ways and Means. On April 5, 2000, the Committee met
to consider the bill. No amendments were offered and the bill was then
ordered favorably reported by voice vote to the House of
Representatives.

SECTION BY SECTION ANALYSIS

SECTION 1. SHORT TITLE

This section provides the short title of bill, the Alaska Native and
American Indian Direct Reimbursement Act of 1999.

SECTION 2. FINDINGS

This section describes the history and of benefits of the direct billing
program.

SECTION 3. DIRECT BILLING OF MEDICARE, MEDICAID, AND OTHER THIRD PARTY
PAYORS

Subsection (a) amends Section 405 of IHCIA (25 U.S.C. 1645) to provide
for the permanent authorization and establishment of the direct billing
program. Specifically, the amendments to Section 405 of IHCIA are as
follows:

Subsection (a)(1) authorizes tribes to directly bill for payment to be
made under the medicare program (Title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.)), state plans for medical assistance approved
under Title XIX of the Social Security Act, and third party payors.

Subsection (a)(2) provides for direct billing from the medicaid program
(section 1905(b) of the Social Security Act, 42 U.S.C. 1396(b)).

Subsection (b)(1) specifies that the funds reimbursed will first be used
by the hospital or clinic for the purpose of making any improvements in
the hospital or clinic that may be necessary to achieve or maintain
compliance with the conditions and requirements applicable to facilities
of such type under the medicare or medicaid programs.

Subsection (b)(2) states that all tribal hospitals and clinics
participating in the program shall be subject to all auditing
requirements applicable to programs administered directly by the IHS.

Subsection (b)(3) provides for Secretarial (of the Department of Health
and Human Services) oversight of the program by requiring the submission
of annual reports by participants of the program.

Subsection (b)(4) ensures that no payments will be made out of the
special funds described in Section 1880(c) of the Social Security Act
(42 U.S.C. 1395qq(c)) or section 402(a) of IHCIA.

Subsection (c)(1) establishes the eligibility requirements for
participation in the program.

Subsection (c)(2) sets forth the required contents of the tribal
application for participation in the program; the timeline for approval
of the submitted applications; allows for the continued, uninterrupted
participation of the demonstration program participants; and states the
duration of the approved application.

Subsection (d)(1) gives the authority to the Secretary of the Department
of Health and Human Services for the implementation of any
administrative changes that may be necessary to facilitate direct
billing and reimbursement.

Subsection (d)(2) sets out the reporting requirements for accounting
information that a participant will have to submit to the Secretary, and
provides for periodic changes in the required information.

Subsection (e) allows for a participant to withdraw from the program in
the same manner that a tribe retrocedes a contracted program to the
Secretary of Health and Human Services under authority of the Indian
Self-Determination Act (25 U.S.C. 450 et seq.)

The remaining subsections provide for conforming amendments and an
effective date of October 1, 2000.

COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of rule XIII of
the Rules of the House of Representatives, the Committee on Resources\'
oversight findings and recommendations are reflected in the body of this
report.

CONSTITUTIONAL AUTHORITY STATEMENT

Article I, section 8 of the Constitution of the United States grants
Congress the authority to enact this bill.

COMPLIANCE WITH HOUSE RULE XIII

1\. Cost of Legislation. Clause 3(d)(2) 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 this
bill. However, clause 3(d)(3)(B) 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 402 of the Congressional
Budget Act of 1974.

2\. Congressional Budget Act. As required by clause 3(c)(2) of rule XIII
of the Rules of the House of Representatives and section 308(a) of the
Congressional Budget Act of 1974, this bill does not contain any new
budget authority, credit authority, or an increase or decrease in
revenue or tax expenditures. According to the Congressional Budget
Office, enactment of S. 406 would increase federal outlays by \$8-9
million in each of fiscal years 2001 through 2005.

3\. Government Reform Oversight Findings. Under clause 3(c)(4) of rule
XIII 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 on this bill.

4\. Congressional Budget Office Cost Estimate. Under clause 3(c)(3) of
rule XIII 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 this bill from the Director of the
Congressional Budget Office:

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

U.S. Congress,

Congressional Budget Office,

Washington, DC

May 1, 2000.

Hon. DON YOUNG,

Chairman, Committee on Resources,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the
enclosed cost estimate for S. 406, the Alaska Native and American Indian
Direct Reimbursement Act of 1999.

If you wish further details on this estimate, we will be pleased to
provide them. The CBO staff contacts for federal costs and
intergovernmental mandates are Eric Rollins and Leo Lex, respectively.

Sincerely,

Barry B. Anderson

(For Dan L. Crippen, Director).

Enclosure.

S. 406\--Alaska Native and American Indian Direct Reimbursement Act of
1999

Summary: S. 406 would extend indefinitely an Indian Health Service (IHS)
demonstration project that allows four tribally operated IHS facilities
to bill the Medicare and Medicaid programs directly, rather than
submitting their claims through the IHS. The act also would allow all
other tribally operated IHS facilities to bill Medicare and Medicaid
directly. CBO estimates that S. 406 would raise federal outlays by \$8
million to \$9 million in each of fiscal years 2001 through 2005.
(Federal Medicare outlays would be higher by about \$2 million a year,
and federal Medicaid outlays would be higher by about \$6 million a
year.) Because the act would affect direct spending, pay-as-you-go
procedures would apply.

S. 406 contains no private-sector or intergovernmental mandates as
defined in the Unfunded Mandates Reform Act (UMRA). Participation in the
direct billing program would improve the cash-flow of health facilities
operated by tribal governments and increase their total Medicaid
funding.

Estimated cost to the Federal Government: The estimated budgetary impact
of S. 406 is shown in the following table. The costs of this legislation
fall within budget functions 550 (health) and 570 (Medicare).

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

Outlays, by fiscal year, in millions of dollars\--

2000 2001 2002 2003 2004 2005

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

CHANGES IN DIRECT SPENDING

Medicare 0 3 2 2 2 2

Medicaid 0 6 6 5 5 6

Total 0 9 8 8 8 8

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

Basis of Estimate: Under current law, four tribally operated Indian
Health Service demonstration sites are authorized to bill the Medicare
and Medicaid programs directly rather than submitting their claims
through the IHS. The demonstration authority expires on September 30,
2000. S. 406 would allow all tribally operated IHS facilities to bill
Medicare and Medicaid directly.

According to IHS, seven hospitals are tribally operated and would likely
choose to bill Medicare and Medicaid directly. In 1999, Medicare and
Medicaid collections totaled \$56 million in these facilities. In
addition, more than 150 health stations, health centers, and clinics
would be eligible to bill directly under the legislation. CBO assumes
that all of the hospitals would choose to bill directly over the next
several years but that only a few of the largest of the other facilities
would develop the infrastructure necessary to adopt direct billing. CBO
further assumes that a few additional hospitals would become tribally
operated and begin to bill directly.

Based on information from the IHS on the experiences in the
demonstration sites, CBO expects that direct billing would increase
Medicare and Medicaid payments for two reasons. First, the demonstration
sites report a reduction in the amount of time between filing
reimbursement claims and receiving payment. CBO therefore assumes that
in the first year a facility participated in direct billing, it would
receive one to two extra months worth of Medicare and Medicaid payments.
The legislation would also accelerate federal spending for the four
existing demonstration sites because under current law they are required
to return to billing Medicare and Medicaid through IHS and will
therefore experience a one- to two-month slow-down in Medicare and
Medicaid collections. Of the \$41 million in estimated Medicare and
Medicaid costs over the 2001-2005 period, \$10 million is attributable
to the one-time acceleration of payments.

Second, demonstration sites also reported increased Medicare and
Medicaid payments under direct billing because of improved claims
processing. The sites reported that they were better able to track their
claims and correct errors under direct billing than when they filed
their claims through the IHS. Medicare and Medicaid payments have grown
dramatically in both demonstration sites and nondemonstration IHS
facilities in the 11 years since the demonstration was authorized. Much
of the growth stems from higher Medicare and Medicaid reimbursement
rates for IHS facilities, efforts by IHS to improve its Medicare and
Medicaid collections, and general growth in medical costs and
enrollment, rather than from direct billing. Nonetheless, based on the
experience in the demonstration sites, CBO estimates that the improved
claims processing procedures that would result from direct billing would
increase Medicare and Medicaid payments by about 10 percent for the
facilities that choose to undertake it.

In addition, direct billing may slightly reduce IHS administrative
costs, which are subject to annual appropriation.

Pay-As-You-Go Considerations: The Balanced Budget and Emergency Deficit
Control act sets up pay-as-you-go procedures for legislation affecting
direct spending or receipts. The net changes in outlays that are subject
to pay-as-you-go procedures are shown in the following table. (S. 406
would not affect receipts.) For the purposes of enforcing pay-as-you-go
procedures, only the effects in the current year, the budget year, and
the succeeding four years are counted.

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

By fiscal year, in millions of dollars\--

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

Changes in outlays 0 9 8 8 8 8 9 9 10 10 11

Changes in receipts

(10)Not applicable

\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\-\--

Estimated impact on State, local, and tribal governments: S. 406
contains no intergovernmental mandates as defined in UMRA. by allowing
all tribally operated IHS facilities to directly bill the Department of
Health and Human Services for Medicare and Medicaid services, the act
would shorten the period of time for receiving reimbursements and
improve processing procedures. CBO estimates that those facilities would
receive a total of between \$5 million and \$7 million annually in
additional Medicaid reimbursements. Since the federal medical assistance
percentage is 100 percent for tribal health facilities, S. 406 would
increase total funding and improve the cash-flow position of facilities
that chose to participate in the direct billing program.

Estimated impact on the private sector: S. 406 contains no
private-sector mandates as defined in UMRA.

Previous CBO estimate: On August 27, 1999, CBO estimated that S. 406, as
ordered reported by the Senate Committee on Indian Affairs on August 4,
1999, would increase direct spending by \$37 million over the 2000-2004
period. The language in the Senate version of S. 406 is substantively
the same as that in the version that was ordered reported by the House
Committee on Resources. CBO has updated its earlier estimate to include
more recent data on Medicare and Medicaid collections by IHS facilities
(which were lower than expected) and to show the legislation\'s effects
in 2005.

Estimate prepared by: Federal costs: Eric Rollins; impact on State,
local, and tribal governments: Leo Lex; impact on the private sector:
Stuart Hagen.

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for
Budget Analysis.

COMPLIANCE WITH PUBLIC LAW 104-4

This bill contains no unfunded mandates.

PREEMPTION OF STATE, LOCAL OR TRIBAL LAW

This bill is not intended to preempt any State, local or tribal law.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) 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. \[Struck out-\>\]\[ (a) The Secretary shall establish a
demonstration program under which Indian tribes, tribal organizations,
and Alaska Native health organizations, which are contracting the entire
operation of an entire hospital or clinic of the Service under the
authority of the Indian Self-Determination Act, shall directly bill for,
and receive payment for, health care services provided by such hospital
or clinic for which payment is made under title XVIII of the Social
Security Act (medicare), under a State plan for medical assistance
approved under title XIX of the Social Security Act (medicaid), or from
any other third-party payor. The last sentence of section 1905(b) of the
Social Security Act shall apply for purposes of the demonstration
program. \]\[\<-Struck out\]

\[Struck out-\>\]\[ (b)(1) Each hospital or clinic participating in the
demonstration program described in subsection (a) shall be reimbursed
directly under the medicare and medicaid programs for services
furnished, without regard to the provisions of section 1880(c) of the
Social Security Act and sections sections 402(a) and 813(b)(2)(A) of
this Act, but all funds so reimbursed shall first be used by the
hospital or clinic for the purpose of making any improvements in the
hospital or clinic that may be necessary to achieve or maintain
compliance with the conditions and requirements applicable generally to
facilities of such type under the medicare or medicaid program. Any
funds so reimbursed which are in excess of the amount necessary to
achieve or maintain such conditions or requirements shall be used\--
\]\[\<-Struck out\]

\[Struck out-\>\]\[ (A) solely for improving the health resources
deficiency level of the Indian tribe, and \]\[\<-Struck out\]

\[Struck out-\>\]\[ (B) in accordance with the regulations of the
Service applicable to funds provided by the Service under any contract
entered into under the Indian Self-Determination Act. \]\[\<-Struck
out\]

\[Struck out-\>\]\[ (2) The amounts paid to the hospitals and clinics
participating in the demonstration program described in subsection (a)
shall be subject to all auditing requirements applicable to programs
administered directly by the Service and to facilities participating in
the medicare and medicaid programs. \]\[\<-Struck out\]

\[Struck out-\>\]\[ (3) The Secretary shall monitor the performance of
hospitals and clinics participating in the demonstration program
described in subsection (a), and shall require such hospitals and
clinics to submit reports on the program to the Secretary on a quarterly
basis (or more frequently if the Secretary deems it to be necessary).
\]\[\<-Struck out\]

\[Struck out-\>\]\[ (4) Notwithstanding section 1880(c) of the Social
Security Act or section 402(a) of this Act, no payment may be made out
of the special fund described in section 1880(c) of the Social Security
Act, or section 402(a) of this Act, for the benefit of any hospital or
clinic participating in the demonstration program described in
subsection (a) during the period of such participation. \]\[\<-Struck
out\]

\[Struck out-\>\]\[ (c)(1) In order to be considered for participation
in the demonstration program described in subsection (a), a hospital or
clinic must submit an application to the Secretary which establishes to
the satisfaction of the Secretary that\-- \]\[\<-Struck out\]

\[Struck out-\>\]\[ (A) the Indian tribe, tribal organization, or Alaska
Native health organization contracts the entire operation of the Service
facility; \]\[\<-Struck out\]

\[Struck out-\>\]\[ (B) the facility is eligible to participate in the
medicare and medicaid programs under sections 1880 and 1911 of the
Social Security Act; \]\[\<-Struck out\]

\[Struck out-\>\]\[ (C) the facility meets any requirements which apply
to programs operated directly by the Service; and \]\[\<-Struck out\]

\[Struck out-\>\]\[ (D) the facility is accredited by the Joint
Commission on Accreditation of Hospitals, or has submitted a plan, which
has been approved by the Secretary, for achieving such accreditation
prior to October 1, 1990. \]\[\<-Struck out\]

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

\[Struck out-\>\]\[ (d)(1) Upon the enactment of the Indian Health Care
Amendments of 1988, the Secretary, acting through the Service, shall
commence an examination of\-- \]\[\<-Struck out\]

\[Struck out-\>\]\[ (A) any administrative changes which may be
necessary to allow direct billing and reimbursement under the
demonstration program described in subsection (a), including any
agreements with States which may be necessary to provide for such direct
billing under the medicaid program; and \]\[\<-Struck out\]

\[Struck out-\>\]\[ (B) any changes which may be necessary to enable
participants in such demonstration program to provide to the Service
medical records information on patients served under such demonstration
program which is consistent with the medical records information system
of the Service. \]\[\<-Struck out\]

\[Struck out-\>\]\[ (2) Prior to the commencement of the demonstration
program described in subsection (a), the Secretary shall implement all
changes required as a result of the examinations conducted under
paragraph (1). \]\[\<-Struck out\]

\[Struck out-\>\]\[ (3) Prior to October 1, 1990, the Secretary shall
determine any accounting information which a participant in the
demonstration program described in subsection (a) would be required to
report. \]\[\<-Struck out\]

\[Struck out-\>\]\[ (f) The Secretary shall provide for the retrocession
of any contract entered into between a participant in the demonstration
program described in subsection (a) and the Service under the authority
of the Indian Self-Determination Act. All cost accounting and billing
authority shall be retroceded to the Secretary upon the Secretary\'s
acceptance of a retroceded contract. \]\[\<-Struck out\]

\(a\) ESTABLISHMENT OF DIRECT BILLING PROGRAM-

\(1\) IN GENERAL- The Secretary shall establish a program under which
Indian tribes, tribal organizations, and Alaska Native health
organizations that contract or compact for the operation of a hospital
or clinic of the Service under the Indian Self-Determination and
Education Assistance Act may elect to directly bill for, and receive
payment for, health care services provided by such hospital or clinic
for which payment is made under title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.) (in this section referred to as the \`medicare
program\'), under a State plan for medical assistance approved under
title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) (in this
section referred to as the \`medicaid program\'), or from any other
third party payor.

\(2\) APPLICATION OF 100 PERCENT FMAP- The third sentence of section
1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) shall apply for
purposes of reimbursement under the medicaid program for health care
services directly billed under the program established under this
section.

\(b\) DIRECT REIMBURSEMENT-

\(1\) USE OF FUNDS- Each hospital or clinic participating in the program
described in subsection (a) of this section shall be reimbursed directly
under the medicare and medicaid programs for services furnished, without
regard to the provisions of section 1880(c) of the Social Security Act
(42 U.S.C. 1395qq(c)) and sections 402(a) and 813(b)(2)(A), but all
funds so reimbursed shall first be used by the hospital or clinic for
the purpose of making any improvements in the hospital or clinic that
may be necessary to achieve or maintain compliance with the conditions
and requirements applicable generally to facilities of such type under
the medicare or medicaid programs. Any funds so reimbursed which are in
excess of the amount necessary to achieve or maintain such conditions
shall be used\--

\(A\) solely for improving the health resources deficiency level of the
Indian tribe; and

\(B\) in accordance with the regulations of the Service applicable to
funds provided by the Service under any contract entered into under the
Indian Self-Determination Act (25 U.S.C. 450f et seq.).

\(2\) AUDITS- The amounts paid to the hospitals and clinics
participating in the program established under this section shall be
subject to all auditing requirements applicable to programs administered
directly by the Service and to facilities participating in the medicare
and medicaid programs.

\(3\) SECRETARIAL OVERSIGHT- The Secretary shall monitor the performance
of hospitals and clinics participating in the program established under
this section, and shall require such hospitals and clinics to submit
reports on the program to the Secretary on an annual basis.

\(4\) NO PAYMENTS FROM SPECIAL FUNDS- Notwithstanding section 1880(c) of
the Social Security Act (42 U.S.C. 1395qq(c)) or section 402(a), no
payment may be made out of the special funds described in such sections
for the benefit of any hospital or clinic during the period that the
hospital or clinic participates in the program established under this
section.

\(c\) REQUIREMENTS FOR PARTICIPATION-

\(1\) APPLICATION- Except as provided in paragraph (2)(B), in order to
be eligible for participation in the program established under this
section, an Indian tribe, tribal organization, or Alaska Native health
organization shall submit an application to the Secretary that
establishes to the satisfaction of the Secretary that\--

\(A\) the Indian tribe, tribal organization, or Alaska Native health
organization contracts or compacts for the operation of a facility of
the Service;

\(B\) the facility is eligible to participate in the medicare or
medicaid programs under section 1880 or 1911 of the Social Security Act
(42 U.S.C. 1395qq; 1396j);

\(C\) the facility meets the requirements that apply to programs
operated directly by the Service; and

\(D\) the facility\--

\(i\) is accredited by an accrediting body as eligible for reimbursement
under the medicare or medicaid programs; or

\(ii\) has submitted a plan, which has been approved by the Secretary,
for achieving such accreditation.

\(2\) APPROVAL-

\(A\) IN GENERAL- The Secretary shall review and approve a qualified
application not later than 90 days after the date the application is
submitted to the Secretary unless the Secretary determines that any of
the criteria set forth in paragraph (1) are not met.

\(B\) GRANDFATHER OF DEMONSTRATION PROGRAM PARTICIPANTS- Any participant
in the demonstration program authorized under this section as in effect
on the day before the date of enactment of the Alaska Native and
American Indian Direct Reimbursement Act of 1999 shall be deemed
approved for participation in the program established under this section
and shall not be required to submit an application in order to
participate in the program.

\(C\) DURATION- An approval by the Secretary of a qualified application
under subparagraph (A), or a deemed approval of a demonstration program
under subparagraph (B), shall continue in effect as long as the approved
applicant or the deemed approved demonstration program meets the
requirements of this section.

\(d\) EXAMINATION AND IMPLEMENTATION OF CHANGES-

\(1\) IN GENERAL- The Secretary, acting through the Service, and with
the assistance of the Administrator of the Health Care Financing
Administration, shall examine on an ongoing basis and implement\--

\(A\) any administrative changes that may be necessary to facilitate
direct billing and reimbursement under the program established under
this section, including any agreements with States that may be necessary
to provide for direct billing under the medicaid program; and

\(B\) any changes that may be necessary to enable participants in the
program established under this section to provide to the Service medical
records information on patients served under the program that is
consistent with the medical records information system of the Service.

\(2\) ACCOUNTING INFORMATION- The accounting information that a
participant in the program established under this section shall be
required to report shall be the same as the information required to be
reported by participants in the demonstration program authorized under
this section as in effect on the day before the date of enactment of the
Alaska Native and American Indian Direct Reimbursement Act of 1999. The
Secretary may from time to time, after consultation with the program
participants, change the accounting information submission requirements.

\(e\) WITHDRAWAL FROM PROGRAM- A participant in the program established
under this section may withdraw from participation in the same manner
and under the same conditions that a tribe or tribal organization may
retrocede a contracted program to the Secretary under authority of the
Indian Self-Determination Act (25 U.S.C. 450 et seq.). All cost
accounting and billing authority under the program established under
this section shall be returned to the Secretary upon the Secretary\'s
acceptance of the withdrawal of participation in this program.

SOCIAL SECURITY ACT

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

TITLE XVIII\--HEALTH INSURANCE FOR THE AGED AND DISABLED

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

PART D\--MISCELLANEOUS PROVISIONS

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

INDIAN HEALTH SERVICE FACILITIES

SEC. 1880. (a) \* \* \*

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

\(e\) For provisions relating to the authority of certain Indian tribes,
tribal organizations, and Alaska Native health organizations to elect to
directly bill for, and receive payment for, health care services
provided by a hospital or clinic of such tribes or organizations and for
which payment may be made under this title, see section 405 of the
Indian Health Care Improvement Act (25 U.S.C. 1645).

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

TITLE XIX\--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS

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

INDIAN HEALTH SERVICE FACILITIES

SEC. 1911. (a) \* \* \*

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

\(d\) For provisions relating to the authority of certain Indian tribes,
tribal organizations, and Alaska Native health organizations to elect to
directly bill for, and receive payment for, health care services
provided by a hospital or clinic of such tribes or organizations and for
which payment may be made under this title, see section 405 of the
Indian Health Care Improvement Act (25 U.S.C. 1645).

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

APPENDIX

House of Representatives,

Committee on Resources,

Washington, DC

June 13, 2000.

Hon. TOM BLILEY

Chairman, Committee on Commerce,

Rayburn HOB

Washington, DC.

DEAR MR. CHAIRMAN:

On April 5, 2000, the Committee on Resources ordered reported without
amendment S. 406, the Alaska Native and American Indian Direct
Reimbursement Act of 1999. The Senate passed the bill by unanimous
consent on September 15, 1999. The purpose of the bill is to make
permanent a very successful demonstration program under the Indian
Health Care Improvement Act Amendments (Public Law 100-713) that allows
tribes to directly bill for Medicare and Medicaid reimbursements. S. 406
was primarily referred to the Committee on Resources and additionally to
the Committee on Commerce and the Committee on Ways and Means.

Because of the limited numbers of days remaining in the 106th Congress,
I seek your help in allowing S. 406 to be scheduled for consideration by
the House of Representatives without further action by the Committee on
Commerce. I would propose to pass the Senate bill without amendment and
forward it to the President for signature.

Of course, by allowing this to occur, the Committee on Commerce does not
waive its jurisdiction over S. 406 or any other similar matter, and this
action should not be seen as precedent for any other Senate bills which
affect the Committee on Commerce\'s jurisdiction. I can place this
letter and your response in the Committee on Resources\' bill report or
to insert our exchange of letters in the Congressional Record during
consideration of the bill on the Floor to document this agreement.

I appreciate your continued cooperation and that of your staff in moving
this important Native American bill, as well as several others this
session of Congress.

Sincerely,

DON YOUNG, CHAIRMAN

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

House of Representatives,

Committee on Commerce,

Washington, DC

June 13, 2000.

Hon. DON YOUNG

Chairman, Committee on Resources,

Longworth House Office Building,

Washington, DC.

DEAR DON:

I am writing with regard to S. 406, the Alaska Native and American
Indian Direct Reimbursement Act of 1999. As you know, Rule X of the
Rules of the House of Representatives grants the Committee on Commerce
jurisdiction over public health and quarantine. Accordingly, legislation
addressing the interaction of the Indian Health Service with the
Medicare and Medicaid programs fall within the Committee\'s
jurisdiction.

Section 3 of S. 406, as ordered reported by the Committee on Resources,
makes permanent a demonstration project permitting Indian Health Service
(IHS) facilities to bill the Medicare and Medicaid programs directly,
rather than requiring all such billing to be routed through IHS.

Because of the importance of this legislation, I recognize your desire
to bring it before the House in an expeditious manner, and I will not
exercise the Committee\'s right to exercise its referral. By agreeing to
waive its consideration of the bill, however, the Committee on Commerce
does not waive its jurisdiction over S. 406. In addition, the Commerce
Committee reserves its authority to seek conferees on any provisions of
the bill that are within its jurisdiction during any House-Senate
conference that may be convened on this legislation, should it be
amended. I ask for your commitment to support any request by the
Commerce Committee for conferees on S. 406 or similar legislation.

I request that you include this letter and your response in your
committee report on the bill and as part of the Record during
consideration of the legislation on the House floor.

Thank you for your attention to these matters.

Sincerely,

TOM BLILEY, CHAIRMAN.

House of Representatives,

Committee on Resources

Washington, DC

July 28, 2000

Hon. BILL ARCHER,

Chairman, Committee on Ways and Means,

Longworth HOB, Washington, DC.

DEAR MR. CHAIRMAN:

On April 5, 2000, the Committee on Resources ordered reported without
amendment S. 406, the Alaska native and American Indian Direct
Reimbursement Act of 1999. The Senate passed the bill by unanimous
consent on September 15, 1999. The purpose of the bill is to make
permanent a very successful demonstration program under the Indian
Health Care Improvement Act Amendments that allows tribes to directly
bill for Medicare and Medicaid reimbursements. S. 406 was primarily
referred to the Committee on Resources and additionally to the
Committees on Commerce and Ways and Means.

Because of the limited numbers of days remaining in the 106th Congress,
I seek your help in allowing S. 406 to be scheduled for consideration by
the House of Representatives without further action by the Committee on
Ways and Means. As you outlined in your letter, I propose to pass the
Senate bill without amendment under suspension of the bills and forward
it to the President for signature. Chairman Bill Bliley of the Committee
on Commerce has agreed to this procedure.

Of course, by allowing this to occur, the Committee on Ways and Means
does not waive its jurisdiction over S. 406 or any other similar matter,
and this action should not be seen as precedent for any other Senate
bills which affect your Committee\'s jurisdiction. I can place this
letter and your response in the Committee on Resources\' bill report to
document this agreement.

I appreciate your continued cooperation and that of your staff in moving
this important Native American bill.

Sincerely,

DON YOUNG, CHAIRMAN.

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

House of Representatives,

Committee on Ways and Means,

Washington, DC

July 28, 2000.

Hon. DON YOUNG,

Chairman, Committee on Resources,

Longworth House Office Building,

Washington, DC.

DEAR MR. CHAIRMAN:

I am writing in regard to S. 406, the Alaska Native and American Indian
Direct Reimbursement Act of 1999, as ordered reported by the Committee
on Resources.

The bill would make permanent a demonstration project permitting Indian
Health Service (IHS) facilities to bill the Medicare program directly,
rather than requiring all billing to be routed through the IHS. As you
know, legislation addressing the interaction of the Indian Health
Service with the Medicare program would fall within the jurisdiction of
the Committee on Ways and Means.

Normally, the committee would meet to consider such legislation.
However, in order to expedite consideration of S. 406, I will not object
to this legislation, and, for this reason, it will not be necessary for
the committee on Ways and means to meet to consider the bill.

However, this is being done with the understanding that you will bring
the bill to the floor under suspension of the rules for final action
prior to transmission of the bill to the President, and that you have
agreed to accept no additional changes on these or any other matters of
concern to this Committee during further consideration of this
legislation. This action is also being done with the understanding that
it will not prejudice the jurisdictional prerogatives of the Committee
on Ways and Means on these provisions or any other similar legislation
and will not be considered as precedent for consideration of matters of
jurisdictional interest to my Committee in the future.

Finally, I would ask that you include a copy of our exchange of letters
on this matter in your Committee Report on the legislation. Thank you
for your assistance and cooperation in this matter. With warm personal
regards,

Sincerely,

BILL ARCHER, CHAIRMAN.