Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
TRIBAL CONTRACTING 
FOR INDIAN HEALTH SERVICES 
JUNE GIBBS BROWN 
Inspector General 
MARCH 1996 
OEI-09-93-00350  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity of the Department of Health and Human Services (HHS) 
programs as well as the health and welfare of beneficiaries served by those programs.  This 
statutory mission is carried out through a nationwide network of audits, investigations, and 
inspections conducted by three OIG operating components:  the Office of Audit Services, the Office 
of Investigations, and the Office of Evaluation and Inspections.  The OIG also informs the 
Secretary of HHS of program and management problems and recommends courses to correct them. 
OFFICE OF AUDIT SERVICES 
The OIGs Office of Audit Services (OAS) provides all auditing services for HHS, either by 
conducting audits with its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying out their 
respective responsibilities and are intended to provide independent assessments of HHS programs 
and operations in order to reduce waste, abuse, and mismanagement and to promote economy and 
efficiency throughout the Department. 
OFFICE OF INVESTIGATIONS 
The OIGs Office of Investigations (OI) conducts criminal, civil, and administrative investigations 
of allegations of wrongdoing in HHS programs or to HHS beneficiaries and of unjust enrichment 
by providers.  The investigative efforts of OI lead to criminal convictions, administrative sanctions, 
or civil money penalties.  The OI also oversees State Medicaid fraud control units which investigate 
and prosecute fraud and patient abuse in the Medicaid program. 
OFFICE OF EVALUATION AND INSPECTIONS 
The OIGs Office of Evaluation and Inspections (OEI) conducts short-term management and 
program evaluations (called inspections) that focus on issues of concern to the Department, the 
Congress, and the public.  The findings and recommendations contained in these inspection reports 
generate rapid, accurate, and up-to-date information on the efficiency, vulnerability, and 
effectiveness of departmental programs.  The report was prepared in the San Francisco regional 
office under the direction of Kaye D. Kidwell, Regional Inspector General, and Paul A. Gottlober, 
Deputy Regional Inspector General.  Project staff included: 
SAN FRANCISCO  HEADQUARTERS 
Robert Gibbons  Alan Levine, Program Specialist

Don Loeb

Brian Pattison
 E X E C U T I V E   S U M M A R Y 

PURPOSE 
This inspection provides feedback from Indian tribes on how the Indian Health Service can 
best support and enhance 638 contracting. 
BACKGROUND 
The Indian Health Services (IHS) Office of the Director asked that the Office of Inspector 
General (OIG) evaluate efforts by IHS and Indian tribes to implement the Indian Self-
Determination and Education Assistance Act, Public Law (P.L.) 93-638.1 
Within the Department of Health and Human Services, IHS is the primary provider of 
health care to tribes.  Through a contract, tribes can receive the money that IHS would 
have used to provide direct health services for tribal members.  Tribes can use these funds 
to provide directly, or through another entity, a broad range of health services.  This option 
was part of P.L. 93-638 and is commonly known as "638 contracting." 
The extent of 638 contracting varies widely among tribes and IHS areas, ranging from as 
much as 91 percent to as little as 1 percent of an Area Offices budget.  According to 1994 
IHS data, tribes and tribal organizations operate 9 hospitals and 342 health centers, 
stations, and clinics.  The IHS operates 119 health centers, stations, and clinics and 
oversees 40 hospitals.  Tribes contract for nearly 32 percent of the total IHS budget, which 
is approximately $1.7 billion.2 
We conducted telephone and in-person interviews regarding a wide range of 
638 contracting issues with 70 tribes, 12 tribal organizations (representing an additional 
154 tribes), 44 IHS headquarters and Area Office staff, and 10 Indian health boards.  The 
majority of these interviews were conducted from January through April 1995.  Our 
sample included the universe of noncontracting tribes and a stratified sample of contracting 
tribes. 
FINDINGS 
Because tribes view 638 contracting as an opportunity to customize and improve 
health care for their communities, almost 75 percent of them want to increase the 
number and scope of their contracts. 
1  Indian tribe means any Indian tribe, band, nation, or other organized group (including any Alaska 
Native village or corporation) that is eligible for the special programs and services provided by the United 
States to Indians because of their status as Indians. 
2  This figure includes all appropriations except facilities, which totals $279 million. 
i  In addition to contracting for health services, one-half of the tribes want to contract 
for their shares of Area Office and headquarters functions. 
Although the 1994 amendments enable tribes to increase their level of 
contracting, many of the smaller noncontracting tribes face barriers that the 
amendments do not address. 
The barriers include tribes relatively small size, geographic isolation, program 
funding concerns, termination fears, and, what they perceive to be, reluctance on 
the part of some IHS staff to support or promote contracting. 
Many tribes remain poorly informed about the 638 contracting process. 
Noncontracting tribes and tribes that contract through tribal organizations lack basic 
knowledge about 638 contracting and related IHS initiatives.  They are less 
knowledgeable than contracting tribes on subjects such as the 1994 amendments, 
the Indian Health Design Team, the tribal management grant program, and IHS 
contracting staff. 
Well-informed tribes rely on Indian health boards, consulting firms, other tribes, 
and attorneys for 638 contracting information, technical assistance, training, and 
contract monitoring. 
RECOMMENDATION 
The IHS should continue and expand its efforts to increase tribal awareness and foster 
self-determination. 
The goal of the P.L. 93-638 legislation and subsequent amendments is to enable tribes to 
exercise their self-determination rights.  In order to accomplish this, tribes need to be fully 
informed and administrative barriers must be eliminated.  The IHS can best serve tribal 
self-determination efforts by: 
continuously informing tribes about their 638 contracting options,

helping tribes increase their use of non-IHS sources of information, technical

assistance, training, and contract monitoring, and

facilitating the transfer of health services and administrative functions.

The IHS could take a number of actions to improve tribal awareness, including: 
(1) providing 638 contracting orientations to tribes that need them, (2) simplifying 
communications and increasing personal contact, (3) distributing individual tribal budget 
information annually, and (4) informing tribes of their option to use existing community 
health services. 
ii  AGENCY COMMENTS 
The IHS provided comments on the draft report and agreed with our recommendation to 
continue and expand its efforts to increase tribal awareness and foster self-determination. 
We have made minor revisions to the report based on IHS technical comments.  As IHS 
mentioned in its comments, it has initiated multiple communication activities including use 
of the Internet to better convey contracting and other information to Indian tribes.  In our 
review of the Internet home page, we were impressed with the design of the page and the 
quantity of information.  The home page includes a section entitled "IHS Communications 
Page" that gives detailed and up-to-date information on legislative activities, agency 
operations such as the Indian Health Design Team, and comments by leading IHS officials. 
The full text of IHS comments appears in Appendix B. 
iii  T A B L E   O F   C O N T E N T S 

PAGE

EXECUTIVE SUMMARY

INTRODUCTION  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5

Customized and improved health care  . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5

Increased contracting and barriers  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

Lack of knowledge  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

Use of non-IHS sources for administrative functions  . . . . . . . . . . . . . . . . .   10

RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15

APPENDICES

A:  Detailed Description of Methodology  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   A-1

B:  Agency Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
 I N T R O D U C T I O N 

PURPOSE 
This inspection provides feedback from Indian tribes on how the Indian Health Service can 
best support and enhance 638 contracting. 
BACKGROUND 
The Indian Health Services (IHS) Office of the Director asked that the Office of Inspector 
General (OIG) evaluate efforts by IHS and Indian tribes to implement the Indian Self-
Determination and Education Assistance Act, Public Law (P.L.) 93-638.3 
Indian Self-Determination and Education Assistance Act 
In 1975, Congress gave tribes the option to contract for programs provided by the 
Secretaries of the Department of Health and Human Services and the Department of 
Interior for the benefit of Indians because of their status as Indians.4  This option was 
part of P.L. 93-638 and is commonly known as "638 contracting."  In developing 
P.L. 93-638, Congress recognized its responsibility to: 
...respond to the strong expression of the Indian people for self-
determination by assuring maximum Indian participation in the direction of 
educational as well as other Federal services to Indian communities so as to 
render such services more responsive to the needs and desires of those 
communities.5 
Within the Department of Health and Human Services, IHS is the primary provider of 
health care to tribes.6  Through contracts, tribes can receive the money that IHS would 
have used to provide direct health services for tribal members.  Tribes can use these funds 
to provide directly, or through another entity, a broad range of health services.  The 
health services could include community health representatives, treatment for alcohol and 
substance abuse, outpatient clinics, hospitals, and contract health services dollars, which 
are used to pay for care rendered by non-IHS providers (i.e., referrals to specialists and 
3  Indian tribe means any Indian tribe, band, nation, or other organized group (including any Alaska 
Native village or corporation) that is eligible for the special programs and services provided by the United 
States to Indians because of their status as Indians. 
4  Indian means a person who is a member of an Indian tribe. 
5  P.L. 93-638, Section 3(a), as amended. 
6  The Bureau of Indian Affairs within the Department of the Interior is responsible for education, law 
enforcement, and tribal government activities. 
1  private hospitals).  Tribes decide whether they want to contract under P.L. 93-638, and a 
tribes informed decision not to contract is an equal expression of self-determination. 
Subsequent amendments to P.L. 93-638 
Congress significantly amended P.L. 93-638 in 1988.  These amendments (1) added

timeframes for IHS and the Bureau of Indian Affairs (BIA) to approve or decline contract

proposals and (2) clarified that most contracts would be exempted from the cumbersome

Federal acquisition regulations which govern procurement contracts.  The amendments also

required IHS and BIA to promulgate new regulations with the active participation of tribes

within 10 months.  These draft regulations were not published until

January 1994.

The 1988 amendments further allowed tribes to use another funding option commonly

known as self-governance.  A self-governance tribe is relatively free from IHS oversight in

both the design of its programs and the way it utilizes and distributes program funds.

These tribes receive an annual lump-sum amount for their health programs.  Self-

governance is a demonstration program for IHS but is permanent for BIA.

At the request of tribes, Congress further amended the 638 contracting law in 1994.  The

1994 amendments supersede the January 1994 draft regulations.  These new amendments

give tribes almost the same latitude under contracting as they have under self-governance.

Among other things, tribes can (1) contract for their shares of IHS Area Office and

headquarters functions, (2) shift funding from one health program to another, (3) redesign

health programs, (4) utilize a simple model format for every contract, and (5) receive

annual lump-sum payments.  The amendments limit the Department of Health and Human

Services and the Department of Interior to promulgating regulations for a few specified

areas and require that they produce these regulations within 18 months.  The Indian Self-

Determination Negotiated Rulemaking Committee, comprised of tribal and Federal

representatives, oversaw the development of the draft regulations which were published in

the Federal Register on January 24th, 1996.

Tribal contracting efforts 
The extent of 638 contracting varies widely among tribes and IHS areas.  Some tribes 
contract for millions of dollars for the construction, renovation, and operation of entire 
hospitals and outpatient clinics.  Tribes also contract for contract health services dollars to 
pay for referrals to outside specialists and often have small contracts for emergency 
medical services and community health representative programs.  According to 1994 IHS 
data, tribes and tribal organizations operate 9 hospitals and 342 health centers, stations, and 
clinics.  The IHS operates 119 health centers, stations, and clinics and oversees 
40 hospitals.  Tribes contract for nearly 32 percent of the total IHS budget, which is 
approximately $1.7 billion.7  As the map on the next page shows, the level of 
7  This figure includes all appropriations except facilities, which totals $279 million. 
2  638 contracting among Area Offices ranges from as much as 91 percent to as little as 
1 percent of their annual budgets.8 
IHS contracting roles and responsibilities 
Within IHS, 12 Area Offices have the primary responsibility for working directly with 
tribes on 638 contracting. 9 Staff in these Area Offices are responsible for (1) informing 
8  All figures are based on 1994-1995 data except for the number of IHS Area Office employees which 
is based on data from January 1996. Further, the number of IHS Area Office employees does not include 
current reduction in force activities in three Area Offices. 
9  The 12 Area Offices are: Aberdeen, Albuquerque, Alaska, Bemidji, Billings, California, Nashville, 
Navajo, Oklahoma City, Phoenix, Portland, and Tucson. We have included Tucson as an Area Office since 
it has contracting responsibilities for the two tribes in its area. 
3  tribes about the contracting process, (2) providing technical assistance, and (3) overseeing 
both programmatic and financial aspects of specific contracts. 
The IHS uses a number of methods to share 638 contracting information with tribes.  The 
IHS headquarters sends "Dear Tribal Leader" letters and holds annual IHS/tribal 
consultation conferences.  In addition, the IHS contracts with the National Indian Health 
Board to provide consultation and information dissemination services, including a quarterly 
newsletter.  The board is composed of tribal representatives from each area.  The board 
disseminates information both directly to tribes and through its local chapters, which are 
called area Indian health boards and inter-tribal councils.  These local boards vary in size, 
organization, and funding levels.  The IHS Area Office staff communicate directly with 
tribes through letters, faxes, telephone calls, and area meetings, and also route information 
through the Indian health boards and inter-tribal councils.  Within an area office, the 
contract proposal liaison officer is the primary contact person for all 
638 contract proposals and is responsible for the dissemination of information to tribes. 
Project officers communicate with their respective contracting tribes regarding more 
detailed contract and programmatic issues.  Contracting officers award the contracts and 
oversee and monitor the financial aspects of each contract. 
METHODOLOGY 
We conducted telephone and in-person interviews regarding a wide range of 
638 contracting issues with tribal leaders, tribal organization officials, IHS headquarters 
and Area Office staff, and Indian health board directors.  We completed 70 tribal, 
12 tribal organization, 44 IHS, and 10 Indian health board interviews.  The tribal 
organizations we interviewed provide services to an additional 154 tribes.  We interviewed 
the universe of noncontracting tribes and a stratified sample of contracting tribes.  The 
majority of these interviews were conducted from January through April 1995.  For each 
interview, the tribal leader or tribal organization director designated specific respondents to 
represent the 638 contracting views of the tribe or organization.  The respondents included 
tribal leaders, business officers, and health directors who were interviewed individually or 
as a group.  The statistics in this report are based on our sample of tribes, not on a 
projection to the total population.  Appendix A contains a detailed description of the 
methodology. 
For most of this report, our findings are based on the distinctions between contracting and 
noncontracting tribes.  For some issues, however, the data revealed important differences 
among groups of tribes.  Therefore, we conducted additional analysis to refine the 
findings and provide information necessary for IHS to be responsive to all tribes.  As a 
result, in a few instances, we made a distinction between contracting tribes that contract 
with IHS directly and those that contract through tribal organizations to receive health 
services. 
4
 F I N D I N G S 

TRIBES VIEW 638 CONTRACTING AS AN OPPORTUNITY TO CUSTOMIZE 
AND IMPROVE HEALTH CARE FOR THEIR COMMUNITIES 
According to tribes, 638 contracting for health services can result in (1) improved 
quality, (2) expanded coverage, and (3) easier access.  Contracting enables tribes to 
accomplish these changes by allowing them to: 
improve the management of their health programs, 
redesign programs to address local needs, 
develop and use alternative funding sources, and 
access non-IHS health care systems. 
Once tribes take control of their health programs, they can manage them in ways that 
dramatically improve services.  They can also more easily supplement IHS funding. 
Tribes can (1) increase their third party billing, (2) redesign parts of direct health care 
programs, (3) improve their contract health services management, and (4) utilize other 
sources such as State funding, grants, and tribal gaming funds.  For example, one IHS 
official described a tribe that used 638 contracting to turn a run-down clinic into a "plush" 
and fully-functioning outpatient clinic without additional IHS funds.  The tribe increased 
its third party funding by serving private paying members of the community.  When 
another tribe took over its contract health services dollars, it was able to negotiate better 
rates with local providers and increase the number of providers willing to take its patients. 
Many IHS Area Office staff also believe that some tribes manage their health care better 
and are able to respond to local needs more quickly and effectively than IHS ever could. 
To address access and/or quality concerns, some tribes use 638 contracting funds to 
purchase non-IHS health care in their local communities.  During our interviews, 
35 percent of contracting tribes and 22 percent of noncontracting tribes volunteered that 
they would prefer to use local providers instead of IHS health care systems but were not 
aware of their options to do so.  The following are examples of tribes that have used 
638 contracting to purchase non-IHS health care: 
One tribe purchases primary care services from local physicians for a fixed monthly 
fee.  Tribal members benefit from this arrangement, because the closest IHS 
outpatient clinic is 70 miles away. 
Another tribe sponsors a weekly night clinic, so tribal members do not have to 
drive 20 miles to the nearest IHS clinic. 
Several tribes purchase health maintenance organization or preferred provider 
organization insurance plans that provide a comprehensive range of services for all 
of their members. 
5
 INCREASED CONTRACTING, THE GOAL OF MORE THAN HALF OF THE 
TRIBES, WILL BE EASIER FOR SOME THAN OTHERS 
The majority of tribes want to increase their level of contracting for both health services 
and IHS administrative functions.  Tribes want to contract, among other reasons, because 
they are dissatisfied with IHS health care and administrative services.  Following the 
1994 amendments, contracting tribes face few barriers to additional contracting, but 
noncontracting tribes still face substantial barriers. 
Most tribes want to increase their level of contracting for direct health programs and 
IHS administrative functions 
Almost three-quarters of both contracting and noncontracting tribes want to contract for 
more health services, but few have specific plans.10  Some of these tribes want to contract 
for outpatient, mental health, alcohol and substance abuse, and dental services.  They also 
want to assume responsibility for their contract health services dollars.  At present, few 
tribes are considering 638 contracting for the remaining IHS hospitals. 
Most tribes are dissatisfied with the health care they receive directly from IHS.  More than 
half of contracting tribes and one-third of noncontracting tribes rate their IHS health care 
as below average (lower than "3" on a scale of 1 to 5).11  In contrast, only 
18 percent of contracting tribes rate their 638 contracted health care as below average. 
Tribes are dissatisfied with IHS health care for several reasons including the waiting time, 
the travel distance, and, in their opinion, the poor attitudes of some IHS health care 
providers.  One tribe complained that, even with an appointment, tribal members have to 
wait up to 8 hours at the IHS hospital for a primary care visit.  Another tribe that uses the 
same IHS hospital claimed that supplies are outdated and there are too many interns and 
not enough experienced physicians.  Some tribes also noted that the IHS fiscal 
intermediary that processes contract health services claims is so slow that providers have 
referred tribal members to collection agencies and refused to see additional patients. 
One-half of tribes want to contract for their shares of Area Office and headquarters 
functions.12  These functions include, among other things, technical assistance, training, 
monitoring, and information dissemination.  Some tribes mentioned that they plan to 
contract selectively for these shares depending on the cost of hiring outside sources to 
perform the functions. 
10  This statistic does not include tribes that are fully contracting or are now part of the self-governance 
program. 
11  Ibid. 
12  This statistic does not include tribes that already contract for their tribal shares or tribes that did not 
know of their right to do so at the time of our interviews. 
6  The 1994 amendments will allow many tribes to increase their level of contracting with 
few barriers 
The 1994 amendments will greatly benefit tribes that want to increase contracting.  Of the 
contracting tribes in our sample, 80 percent think that the amendments will make it easier 
for them to contract.  The amendments have given tribes much more control over the 
638 contracting process, both for health services and for tribal shares of Area Office and 
headquarters functions.  While some tribes and IHS staff see the need for some technical 
revisions to clarify the differences between contracting and self-governance, the response 
to the amendments was overwhelmingly positive.  Some contracting tribes believe now that 
nothing stands in the way of increased contracting. 
Noncontracting tribes face several barriers that have not been addressed by the 
1994 amendments 
Noncontracting tribes face many barriers including tribal size and geographic location, 
program funding issues, tribal termination fears, and IHS staff attitudes. 
Size of Tribe 
Small tribes have a more difficult time contracting for their health services.  Almost three-
quarters of noncontracting tribes have fewer than 500 members each.  These small tribes 
are less likely to contract, because they lack administrative staff and management 
capabilities.  Also, they are concerned that available 638 funding may be insufficient to 
provide complete health services to their tribal members. 
Small tribes are not able to take advantage of economies of scale, and political differences 
can prevent them from forming consortiums.  Small tribes also tend to have less-developed 
governmental systems, and tribal council turnover may impede the contracting process. 
Geographic Isolation 
Geographically isolated tribes often do not attempt to contract, because it is very difficult 
for them to recruit providers and they face almost insurmountable transportation problems. 
Remote locations also make it difficult for tribes to form consortiums with other tribes and 
to participate in 638 contracting meetings and training.  Some tribes are located in such 
remote areas as the bottom of the Grand Canyon and the northern slope of Alaska. 
Funding Issues 
Many noncontracting tribes perceive various funding issues as barriers.  Some tribes will 
not contract for what they believe to be underfunded IHS programs and are not convinced 
that efficiencies can be gained through contracting.  Other tribes complained about 
inequitable funding distribution.  These tribes believe that Area Offices allocate funds 
differently and that some tribes and areas are favored.  Still other tribes and Area Office 
7
 staff noted what they called "double-dipping" problems which create inefficiencies and 
affect tribal perceptions of contracting.  This double-dipping occurs when tribes take their 
share of funds from a clinic or hospital that serves multiple tribes while their members 
continue to use the facilitys services. 
Fear of Termination 
More than half of the tribes are concerned that increased contracting will lead to 
termination of Federal funding for health services.  Some tribes in the Aberdeen and 
Billings areas flatly refuse to contract for more health services until the termination issue is 
resolved.  Some Area Office staff, including a few contract proposal liaison officers, also 
believe that contracting may lead to the termination of Federal support.  Tribal suggestions 
to alleviate these fears ranged from fully funding Indian health care to creating a separate 
51st Indian State, making one separate Federal Indian Department, or making health care 
an entitlement rather than a discretionary program. 
IHS Staff Attitudes 
Almost all of the tribal and IHS respondents believe that IHS should be proactive in 
informing tribes of their 638 contracting options.  Many tribes and some IHS employees 
even suggested that IHS encourage tribes to contract.  However, most Area Offices supply 
detailed information on contracting only when tribes request it.  Both tribal and Area 
Office staff believe that some IHS staff may be reluctant to promote or authorize 
maximum contracting as they fear losing their Federal jobs. 
MANY TRIBES REMAIN POORLY INFORMED ABOUT THE 
638 CONTRACTING PROCESS 
The data revealed important distinctions among tribes levels of knowledge and needs for 
assistance.  Therefore, we conducted additional analysis to refine the findings and provide 
information necessary for IHS to be responsive to all tribes.  Based on our additional 
analysis and for purposes of clarifying this finding, we have subdivided the contracting 
tribes into (1) tribes that contract directly with IHS and (2) those that contract through 
tribal organizations. 
Many noncontracting tribes and tribes that contract through tribal organizations lack basic 
knowledge about 638 contracting and IHS initiatives.  In contrast, contracting tribes tend to 
be very knowledgeable about these subjects.  Further, 82 percent of noncontracting tribes 
believe they do not have enough information to make informed decisions regarding 
contracting.  To assess tribes knowledge, we asked a series of questions on the 
1994 amendments, the Indian Health Design Team, the tribal management grant program, 
and the Area Office contracting staff. 
8
 1994 Amendments
Although most tribes had heard of the 1994 amendments at the time of our interviews, 
few noncontracting tribes and tribes that contract through tribal organizations understood
them, as illustrated in the following chart.13  While these amendments passed in October 
1994, 18 percent of noncontracting tribes and 24 percent of tribes that contract through 
tribal organizations had not heard of the amendments.  Furthermore, 37 percent of the 
tribes in our sample who knew of the amendments had not heard of them until January 
1995 or later, 3 months after passage.   Interestingly, 2 IHS Area Office project officers 
had not heard of the amendments 1 month after they passed.
Indian Health Design Team
In late 1994, the Indian Health Design Team began to explore IHS organizational changes 
that will be needed in the future.  The team is comprised of two-thirds tribal 
representatives and one-third senior IHS staff.  The team surveyed IHS employees and 
tribes about their opinions on IHS reorganization using a one-page questionnaire.  Few 
tribes responded.
     13  These interviews were conducted from January through April 1995.
9 Tribal Management Grant Program 
The tribal management grant program is a $5 million competitive grant program designed 
to help tribes build the capacity to contract or decide whether to contract.  Tribes typically 
use these funds to hire consultants, conduct feasibility studies, train staff, purchase 
computers, and improve financial and program systems.  
Area Office Contracting Staff
Without knowledge of the roles and responsibilities of key Area Office staff such as the
contract proposal liaison officer and project officer, tribes may not know whom to 
approach when considering contracting.
TRIBES RELY ON ORGANIZATIONS OTHER THAN IHS FOR 
638 CONTRACTING INFORMATION, TECHNICAL ASSISTANCE, TRAINING,
AND CONTRACT MONITORING
While IHS information sharing methods are effective for some tribes, many tribes are
dissatisfied with these methods and complain of the lack of a formal feedback mechanism.  
As a result, many contracting tribes utilize non-IHS sources for various administrative 
services.  Tribes sometimes use non-IHS funds to purchase services from the private 
sector.  With the passage of the 1994 amendments, tribes are able to contract for tribal 
shares, giving them additional funds to access these outside sources.
10 Many tribes are dissatisfied with the 638 contracting information that IHS now provides 
More than half of both noncontracting and contracting tribes rate the information they 
receive from IHS as below average. Tribes are unhappy with the quality, quantity, and 
timeliness of the information. Furthermore, tribes are not satisfied with the methods IHS 
uses to share information, noting the absence of 638 contracting orientations, varying 
Indian health board systems, incomplete budget information, few local meetings, poor 
written communication, and a lack of formal feedback mechanisms. 
638 Contracting Orientations 
Although 638 contracting has existed for 20 years, many tribes still need a basic 
orientation on the law, process, and options. More than half of noncontracting tribes need 
this kind of orientation. In contrast, contracting tribes want specialized training on 
programmatic and financial issues and on the 1994 amendments. Area Office staff 
concurred, noting that many tribes, new tribal councils, and new health directors do not 
get the necessary training on 638 contracting and IHS responsibilities. 
Tribes, as well as IHS staff, believe that a training videotape could provide tribes with 
basic 638 contracting information. While more than 80 percent of noncontracting and the 
majority of contracting tribes agree that a videotape should be distributed to tribes, only 
9 percent of all tribes have seen or heard of the IHS 1990 videotape on 638 contracting. 
Area Office staff who have seen the video agree that, although dated, it could be useful 
for many tribes. This video was produced in response to a recommendation from the 
1990 Quality Management P.L. 93-638 Implementation Work Group. 
Indian Health Boards 
Area Indian health boards and inter-tribal councils vary in how effectively they distribute 
638 contracting information to tribes. The IHS formally contracts with the National 
Indian Health Board to disseminate information to tribes, area Indian health boards, and 
inter-tribal councils. Area Office staff send information directly to these organizations as 
well. The area Indian health boards vary in strength, size, organization, and 
effectiveness. In some locations, they are well funded and even contract for additional 
administrative and direct health programs, while in other locations they have little staff 
and few responsibilities. The efforts of the Indian health boards are not always 
coordinated with IHS headquarters and Area Offices. Therefore, some tribes receive 
duplicate copies of information, while others receive no information at all. 
Budget Information 
Tribes and Area Office staff often have difficulty obtaining complete funding information 
for 638 contracting. Some tribes complained that they were not given timely and accurate 
data. Area Office staff added that they often encountered internal problems in compiling 
complete budget data. Some contract proposal liaison officers receive incomplete 
information from area program and service unit staff and have to piece together complete 
11
 budgets for tribes. Typically, the original budget information is missing costs for 
peripheral items such as transportation and phone service. Although the law requires that 
IHS annually provide tribes with complete funding information, few Area Offices do so 
unless requested. 
Written Communication 
Tribes are dissatisfied with the information IHS mails to them for several reasons: 

	 The information is not written in lay terms. For example, a respondent noted that 
"one usually needs to be an attorney to understand the documents from IHS." 

	 The quantity of information is overwhelming, not identified by priorities, and lacks 
personal follow-up. Many tribes complained that IHS sends significant amounts of 
written information without any personal follow-up to ensure that they understand 
the information and its importance. 

	 Although one-quarter of contracting tribes have access to electronic mail, IHS does 
not use it to communicate with them. Further, IHS does not foster development of 
state-of-the-art computer and telecommunication systems. 
National and Area Meetings 
Because of travel costs and logistics, tribes sometimes are unable to attend national and 
area meetings. The IHS routinely convenes (1) an annual national IHS/tribal consultation 
conference and (2) quarterly areawide meetings. Recently, IHS has begun to host smaller 
meetings within and across areas to reduce tribes' transportation costs and to increase 
personal contact. According to some tribes, these meetings foster better attendance, and 
tribal representatives are more likely to speak up in front of smaller groups of people they 
know. 
IHS Feedback Mechanisms 
The IHS does not routinely ask tribes for customer feedback about the quality of IHS 
information, training, and technical assistance. Almost all tribes and most IHS employees 
believe IHS should conduct regular customer surveys. Two Area Offices use an 
evaluation survey form that allows tribes to rate the technical assistance and training they 
receive from IHS; however, like all other Area Offices, most feedback occurs at the time 
of the program evaluation. Asking for feedback during the program evaluation presents a 
possible conflict of interest, as tribes may be hesitant to critique the agency that is 
evaluating them. Tribal and IHS suggestions ranged from having regular survey forms and 
phone calls to including tribal reviews in individual IHS employee evaluations. The 
IHS is working on a 3-year customer survey initiative that may address this need. 
12
 Tribes rely on Indian health boards, consulting firms, other tribes, and attorneys for 
638 contracting information 
Ninety-six percent of contracting tribes and 71 percent of noncontracting tribes use non-
IHS sources in addition to IHS. More than one-half of the tribes that are familiar with the 
1994 amendments learned about them from a source other than IHS. Even Area Office 
staff rely on non-IHS sources for 638 information such as codified copies of the 
1994 amendments. Many IHS Area Office staff admitted that tribes often know more than 
they do. The chart below illustrates which sources tribes most frequently use for 
contracting information. 
Many tribes consider these sources superior to IHS for 638 contracting information. 
More than half of contracting tribes and 18 percent of noncontracting tribes rated another 
source of information better than IHS. 
13
 Most tribes want to purchase technical assistance and training from sources other than 
IHS 
Almost three-quarters of contracting tribes and 69 percent of noncontracting tribes want 
IHS to provide funding so they can contract with sources other than IHS for technical 
assistance and training. Some of these same tribes also want IHS to continue providing 
some technical assistance and training. 
Some tribes want IHS Area Offices to provide the initial orientation on the 
638 contracting process. Then, following the initial orientation, they want to have 
funding they can use to hire non-IHS sources for more detailed training and technical 
assistance specific to their needs. These tribes prefer using outside sources to explore the 
feasibility of contracting for various health services. 
Some tribes and IHS employees want IHS to change the way it monitors tribal health 
programs 
Nine percent of contracting tribes volunteered that they want to use professionals such as 
the Joint Commission on the Accreditation of Healthcare Organizations (JCAHO) to 
conduct their program evaluations instead of IHS. The JCAHO offers voluntary 
accreditation programs involving on-site surveys of health care organizations. As an 
example, one of the tribes routinely has its 638-contracted health services reviewed by a 
State agency as well as IHS. According to the tribe, the State agency uses higher 
standards than IHS--much more like JCAHO's standards--in its review. This provides the 
tribe with valuable information about how to improve its health services. 
14
 RECOMMENDATION

THE IHS SHOULD CONTINUE AND EXPAND ITS EFFORTS TO INCREASE 
TRIBAL AWARENESS AND FOSTER SELF-DETERMINATION 
The goal of the P.L. 93-638 legislation and subsequent amendments is to enable tribes to 
exercise their self-determination rights. In order to accomplish this, tribes need to be 
fully informed and administrative barriers must be eliminated. The IHS can best serve 
tribal self-determination efforts by: 
Continuously informing tribes about their 638 contracting options 
Tribes are likely to increase 638 contracting when they are more aware of their options. 
The IHS could take a number of actions to improve tribal awareness, including: 

  Providing 638 contracting orientations to tribes that need them 
These orientations could include basic information about 638 contracting such as 
the law, the roles of IHS staff, health care options, other sources of technical 
assistance and training, and the steps needed to proceed with contracting. One 
component of the orientation could be distribution of the 1990 video on 
638 contracting along with information about the impact of the 
1994 amendments. 

  Simplifying communications and increasing personal contact 
Written communications to tribes should be directed to the appropriate tribal staff, 
and the language should be such that all can understand. Further, IHS should 
increase its personal contact with tribes by (1) having more area and local 
meetings, (2) following dissemination of significant written materials with 
telephone calls, and (3) encouraging use of electronic mail and other emerging 
communication technologies. 

  Distributing individual tribal budget information annually 
The annual budget information should include each tribe's share of health services 
and IHS Area Office and headquarters functions. 

  Informing tribes of their option to use existing community health services 
The IHS could give each tribe a description of all options available to them. This 
description would include an explanation of the tribe's option to use 
638 contracting to pay for existing non-IHS health services. The IHS could help 
tribes that are interested in these existing community services to learn from other 
tribes that already have used this option. 
15
 Helping tribes increase their use of non-IHS sources of information, technical 
assistance, training, and contract monitoring 
The IHS should inform tribes (particularly noncontracting tribes) about other sources of 
expertise and how tribes can get IHS funding to use these sources. For example, the 
tribal management grant program and tribal shares of IHS administrative functions can be 
used to fund feasibility studies, training sessions, technical assistance, and health program 
evaluations. The IHS could act as an information clearinghouse about these sources of 
expert assistance. 
Facilitating the transfer of health services and administrative functions 
Many tribes are ready to contract for more health services and Area Office and 
headquarters functions. The IHS should (1) provide complete budgetary information, 
(2) distribute the funds to interested tribes, and then (3) reduce staff and reorganize 
accordingly. 
16
 APPENDIX A

DETAILED DESCRIPTION OF METHODOLOGY 
We randomly selected our sample of tribes through a four-step process: 
1.  We divided the total population of tribes into two groups:  (1) tribes that 
contract under 638 for health services and (2) tribes that either do not contract or 
contract only for community health representative and/or emergency medical 
services programs (hereafter referred to as "noncontracting tribes"). 
2.  We divided the Area Offices into 3 groups based on the percentage of each Area 
Office's budget that is contracted under 638. We assigned the "contracting" tribes 
(from step 1) to these three groups according to their Area Office. 
3.  We randomly selected 20 tribes from each of the 3 "contracting" strata. We 
selected all 34 of the "noncontracting" tribes. 
4.  If the tribe was contracting through a tribal organization, we interviewed the 
organization as well. This resulted in interviews with 12 tribal organizations. 
The four groups (or strata) of tribes are illustrated in the following table: 
A - 1
 The response rate was 74 percent (70 interviews completed out of 94). The majority of 
non-responders were noncontracting tribes and tribes that contract through tribal 
organizations. Our fieldwork spanned 4 months, since many tribes were extremely 
difficult to contact and interview. 
Out of the 12 IHS Area Offices, our sample contained tribes from 10 of them. For each 
of these 10 Area Offices we attempted to interview a representative from the area Indian 
health board. We also interviewed IHS officials from the respective Area Offices 
including project officers, contracting officers, contract proposal liaison officers, and area 
directors. 
A - 2
 APPENDIX B

AGENCY COMMENTS 
The IHS provided comments on the draft report and agreed with our recommendation to 

continue and expand its efforts to increase tribal awareness and foster self-determination. We 

have made minor revisions to the report based on IHS' technical comments. As IHS mentioned 

in its comments, it has initiated multiple communication activities including use of the Internet to

better convey contracting and other information to Indian tribes. In our review of the 

Internet home page, we were impressed with the design of the page and the quantity of 

information. The home page includes a section entitled "IHS Communications Page" that gives

detailed and up-to-date information on legislative activities, agency operations such as the Indian

Health Design Team, and comments by leading IHS officials. The full text of IHS' comments 

begins on the next page.

B - 1
 B - 2
 B - 3
 B - 4