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 OIG’s 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 OIG’s 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 OIG’s 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

EXECUTIVE SUMMARY


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 Service’s (IHS) Office of the Director asked that the Office of Inspector 

General (OIG) evaluate efforts by IHS and Indian tribes to implement the Indian SelfDetermination 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 Office’s 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 
TABLE OF CONTENTS


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

INTRODUCTION


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 Service’s (IHS) Office of the Director asked that the Office of Inspector 

General (OIG) evaluate efforts by IHS and Indian tribes to implement the Indian SelfDetermination 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 selfdetermination 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 

tribe’s 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

FINDINGS


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 threequarters 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 facility’s 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

 These interviews were conducted from January through April 1995. 13

9

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. While these amendments passed in October 13

1994, 18 percent of noncontracting tribes and 24 percent of tribes that contract through 

tribal organizations had not heard of the amendments. 

tribes in our sample who knew of the amendments had not heard of them until January 

1995 or later, 3 months after passage. 

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. 

representatives and one-third senior IHS staff. 

tribes about their opinions on IHS reorganization using a one-page questionnaire. 

tribes responded.

Furthermore, 37 percent of the 

Interestingly, 2 IHS Area Office project officers 

The team is comprised of two-thirds tribal 

The team surveyed IHS employees and 

Few 
10

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. 

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. 

sector. 

shares, giving them additional funds to access these outside sources.

Tribes typically 

Tribes sometimes use non-IHS funds to purchase services from the private 

With the passage of the 1994 amendments, tribes are able to contract for tribal 
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 nonIHS 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