Department of Health and Human Services

OFFICE OF 

INSPECTOR GENERAL 

 

IHS CONTRACT HEALTH 

SERVICES PROGRAM: 

OVERPAYMENTS AND POTENTIAL 

SAVINGS 

 

Daniel R. Levinson 

Inspector General 

September 2009 

OEI-05-08-00410 
The Office of Counsel to the Inspector General (OCIG) provides general legal services to 

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The Office of Audit Services (OAS) provides auditing services for HHS, either by conducting 

audits with its own audit resources or by overseeing audit work done by others. Audits 

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Office of Inspector General 

http://oig.hhs.gov 

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 the following operating components: 
Δ INTRODUCTION EXECUTIVE S EXECUTIVE SUMMARY 

OBJECTIVES

1. To determine the extent to which the Indian Health Service 

(IHS) and tribes paid for Contract Health Services (CHS) 

program hospital claims above the required Medicare rate. 

2. To assess the potential savings if CHS program nonhospital 

claims were paid at the Medicare rate. 

BACKGROUND 

In fiscal year 2008, IHS was given a budget of $3.35 billion to provide 

health care to approximately 1.9 million American Indians and 

Alaska Natives belonging to federally recognized tribes. IHS can 

provide health care directly or tribes can operate their own health 

care programs. IHS and tribes provide direct health care to American 

Indians and Alaska Natives mainly at small health clinics offering 

routine health care. 

When an IHS or tribal health-care facility is not available or does not 

provide required emergency or specialty care, IHS and tribes rely on 

the CHS program. IHS manages the CHS program through 84 area 

offices and local service units. Tribes manage the CHS program 

through 175 tribally operated service units. 

Pursuant to the Medicare Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) and IHS’s implementing 

regulations, all Medicare-participating hospitals must accept 

reimbursement no greater than the Medicare rate as payment in full 

for patients eligible for CHS. Nonhospital providers, such as 

physicians, are not covered by this MMA provision. 

We analyzed 716 paid CHS claims for services delivered between 

January and March 2008. For each claim, we determined the 

Medicare rate. We then calculated the difference between the 

Medicare rate and the CHS payment. We projected all statistics to 

IHS and the 63 percent of tribes from which we received claims. 

FINDINGS 

IHS and tribes paid above the Medicare rate for 22 percent of 

hospital claims between January and March 2008, resulting in 

$1 million in overpayments. While 22 percent of hospital claims 

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 EXECUTIVE SUMMARY EXECUTIVE SUMMARY 

were paid above the Medicare rate, the resulting overpayments only 

accounted for 3 percent of the total $33 million that IHS and tribes 

spent on hospital claims between January and March 2008. Most 

overpayments were for hospital outpatient claims. Tribes accounted 

for most dollars overpaid. 

If IHS and tribal payments for nonhospital claims were capped at 

the Medicare rate, they could have saved as much as $13 million 

between January and March 2008. IHS and tribes paid above the 

Medicare rate for 71 percent of nonhospital claims. Most of these 

claims paid above the Medicare rate were for physician services. 

RECOMMENDATIONS 

IHS and tribes should take appropriate action regarding overpaid 

CHS hospital claims. We have forwarded all IHS hospital claims 

that we determined were overpaid to IHS, and all tribal hospital 

claims that we determined were overpaid to tribes.

IHS should direct its fiscal intermediary to ensure that all future 

CHS hospital claims are paid at or below the Medicare rate. We 

found that the IHS fiscal intermediary paid $231,000 over the 

Medicare rate for hospital claims. 

IHS should provide technical assistance to tribes to ensure proper 

payments of hospital claims. As a first step, IHS and tribes could 

work together to determine why hospital claims were paid over the 

Medicare rate. IHS could then develop guidance to prevent future 

overpayments. 

IHS should seek legislative authority to cap payments for CHS 

nonhospital services. The passage of the MMA provision helped 

ensure lower rates for hospital services. A separate provision may be 

necessary to ensure lower rates for nonhospital services. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

IHS concurred with all four of our recommendations. We did not 

make any changes based on IHS comments. 
Δ TABLE OF CONTENTS 

EXECUTIVE SUMMARY .....................................i

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

FINDINGS .................................................8 

IHS and tribes paid above the Medicare rate for 22 percent of 

hospital claims between January and March 2008, resulting in 

$1 million in overpayments ...............................8 

If IHS and tribal payments for nonhospital claims were capped 

at the Medicare rate, IHS and tribes could have saved as much as 

$13 million between January and March 2008 ................9 

 

RECOMMENDATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 

Agency Comments and Office of Inspector General Response . . . 13 

APPENDIXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 

 A: Detailed Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 

 B: Estimates and Confidence Intervals. . . . . . . . . . . . . . . . . . . . . 19 

 C: Agency Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 

ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 
Δ INTRODUCTION INTRODUCTION 

OBJECTIVES 

1. To determine the extent to which the Indian Health Service 

(IHS) and tribes paid for Contract Health Services (CHS) 

program hospital claims above the required Medicare rate. 

2. To assess the potential savings if CHS program nonhospital 

claims were paid at the Medicare rate. 

BACKGROUND 

Indian Health Service 

IHS provides health care to approximately 1.9 million American 

Indians and Alaska Natives belonging to federally recognized tribes. 

IHS can provide health care directly or may fund tribes to 

independently deliver health care. The Indian Self-Determination 

and Education Assistance Act (ISDEAA) allows individual tribes, or 

consortia of tribes, the option to operate health care programs in lieu 

of IHS through self-determination contracts or self-governing 

compacts with IHS.1 

In fiscal year (FY) 2008, IHS’s budget was $3.35 billion.2 With this, 

IHS and tribes provided health care directly at more than 

700 facilities across the country, mainly on reservations or in rural 

communities.3 Most of these facilities were small health clinics 

providing routine health care. In addition, IHS and tribes directly 

funded 46 hospitals, of which 20 had operating rooms.4 

Contract Health Services 

When an IHS or tribal facility is not available or does not provide 

required emergency or specialty care, IHS and tribes rely on the CHS 

program. Over 17 percent of the IHS budget went to fund the CHS 

program in FY 2008. 

1 Titles I and V of the Indian Self-Determination and Education Assistance Act, 

P.L. No. 93-638 (as amended). 

2 IHS, “FY 2009 Budget Justification.” Available online at 

http://www.ihs.gov/NonMedicalPrograms/BudgetFormulation/bf_cong_justifications.asp. 

Accessed on March 24, 2009. 

3 IHS, “Fact Sheets: Facilities Construction.” Available online at 

http://info.ihs.gov/FcltCnstr.asp. Accessed on March 24, 2009. 

4 “Access to Contract Health Services in Indian Country: Hearing Before the U.S. Senate 

Committee on Indian Affairs,” 107th Cong. 4 (2008). Statement of Robert McSwain, Director 

of IHS. 

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INTRODUCTION 

The CHS program contracts with private providers, such as hospitals 

and physicians, to deliver health care. CHS program staff try to 

negotiate the lowest price possible to deliver services to the American 

Indian and Alaska Native population in their area. Historically, IHS 

and tribes have had difficulty negotiating low rates due to the 

relatively small number of eligible individuals and because there are 

few private providers in rural areas.5

The CHS program is administered and managed through 

259 IHS- and tribally operated service units. Service units contain 

one or more hospital, health clinic, or other health care facility. IHS 

manages the CHS program through 84 area offices and local service 

units. Tribes manage the CHS program through 175 tribally operated 

service units. Compacting tribes can supplement and reallocate CHS 

funds without IHS approval.6 

CHS medical priorities. Due to limited funding, the CHS program can 

typically only fund the highest medical priority care, such as 

emergency care.7 The CHS program often defers or denies 

lower-priority services, including specialty care. Among IHS CHS 

programs, an estimated 200,000 services were deferred or denied in 

2008. This figure only includes IHS CHS programs and thus would 

likely be significantly greater if tribes were included. 

CHS payments. The CHS program is the payer of last resort.8 If an 

American Indian or Alaska Native receiving CHS has other insurance 

coverage such as Medicare or Medicaid, that insurance pays first and 

CHS funds pay for any remaining costs.9 If a patient does not have 

other insurance, the CHS program pays for claims in full or at a rate 

negotiated with a provider as long as there are CHS program funds to 

do so. 

Generally, IHS and tribes use different claims processing and 

reimbursement systems to pay private providers. IHS contracts with 

BlueCross BlueShield of New Mexico as a centralized fiscal 

5 IHS, “Contract Health Services.” Available online at http://info.ihs.gov/CHS.asp. 

Accessed on March 24, 2009. 

6 ISDEAA § 506(e), 25 U.S.C. § 458aaa-5(e). 

7 IHS, “Fact Sheets.” Available online at http://info.ihs.gov/CHS.asp. Accessed on 

April 14, 2009. 42 CFR § 136.23(e). 

8 42 CFR § 136.61. 

9 42 CFR § 136.30(g). 

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INTRODUCTION 

3 

 pay 

intermediary to process CHS claims.10 Eight tribes also use this 

fiscal intermediary. The remaining tribes use other systems to

providers. 

CHS and Hospital Services 

Pursuant to the Medicare Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) and its implementing regulations, 

all Medicare-participating hospitals must accept reimbursement no 

greater than the Medicare rate as payment in full for patients eligible 

for CHS.11 This change took effect on July 5, 2007. 

The MMA provision applies to both hospital inpatient overnight stays 

and same-day hospital outpatient visits. Hospital facilities include 

acute care hospitals, psychiatric hospitals, critical-access hospitals, 

and long-term care hospitals.12 We consider all claims for services 

provided in these facilities to be “hospital claims.” 

CHS and Nonhospital Services 

The MMA provision does not apply to nonhospital facilities. For 

instance, independent laboratories, ambulatory surgical centers, and 

independent ambulance providers are not covered and therefore are 

free to bill and receive payment above the Medicare rate for patients 

eligible for CHS. Additionally, physician services, including those 

provided in a hospital, are not covered by the MMA provision. We 

consider all claims for physician services and services provided in 

nonhospital facilities to be “nonhospital claims.” 

Related Reports 

A 1999 Office of Inspector General (OIG) study found that in 

1995, the CHS program paid almost $5 million more than the 

Medicare rate to hospitals. That study focused on hospital inpatient 

stays funded only by IHS. It did not review claims from tribes, or any 

claims for hospital outpatient visits.13 Subsequent to that study, IHS 

required Medicare-participating hospitals to accept reimbursement 

10 IHS, “Contract Health Services Data Quality Workgroup, CHS 101.” Available online 

at http://www.ihs.gov/NonMedicalPrograms/dqwg/dqwg-section1-home.asp. Accessed on 

March 24, 2009. 

11 Medicare Prescription Drug, Improvement, and Modernization Act of 2003 § 506, 

P.L. No. 108-173; 42 CFR § 136.30. 

12 42 CFR § 489(b). 

13 OIG, “Review of the Indian Health Service’s Contract Health Service Program,” 

A-15-97-50001, January 1999. 

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INTRODUCTION 

equal to or lower than the Medicare rate for patients eligible for CHS, 

pursuant to the authority granted in the MMA provision. 

METHODOLOGY 

Below we provide a basic description of our methodological approach. 

See Appendix A for a more detailed description of our methodology. 

Scope 

We analyzed paid CHS claims for services provided between 

January and March 2008. We excluded claims for services that did 

not have a corresponding Medicare rate and claims in which the 

patient had another form of insurance, such as Medicare, Medicaid, or 

private insurance. 

While we calculated the extent to which claims were paid at a rate 

greater than the Medicare rate for hospital and nonhospital services, 

we did not make a causal determination as to why some claims were 

overpaid. 

Sample and Data Collection 

We requested paid CHS claims from the IHS fiscal intermediary and 

the 167 tribes that do not use the fiscal intermediary for services 

delivered between January and March 2008. We requested that 

programs submit only CHS claims that were not covered by another 

type of insurance. We also requested that programs separate hospital 

and nonhospital claims. 

We received claims from the fiscal intermediary for all 84 IHS area 

offices and local service units administering the CHS program and 

the 8 tribes processing claims through the fiscal intermediary. We 

received information directly from 102 of the 167 tribes that do not 

use the fiscal intermediary. Despite repeated requests, we did not 

receive any information from 65 tribes. 

Next, we reviewed the claims submitted by IHS and tribes and 

excluded any claims that were outside of our scope. After this, we had 

80,043 claims. 

From these 80,043 claims, we pulled a stratified random sample of 

800 claims. The four strata were: IHS hospital, tribal hospital, IHS 

nonhospital, and tribal nonhospital. Each stratum contained 

200 claims. To improve the precision of our estimates, we further 

stratified the 80,043 claims by the amount paid (small, medium, and 

large). 

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INTRODUCTION 

We also collected and reviewed all relevant laws, regulations, and 

guidance regarding CHS programs and Medicare pricing for services. 

Data Analysis 

In total, we analyzed 716 of the 800 sampled claims. We excluded the 

remaining 84 claims primarily because, upon further review, they fell 

outside of our scope. Unless otherwise noted, we project all statistics 

to IHS and the 63 percent of tribes from which we received claims. 

See Appendix B for a list of 95-percent confidence intervals for all 

statistical projections. 

Determining the Medicare rate. To determine the Medicare rate, we 

used the appropriate pricing software and fee schedules for 2008. For 

inpatient hospital claims, the Medicare rate is based on the inpatient 

prospective payment system (IPPS).14 We used the Centers for 

Medicare & Medicaid Services’ (CMS) publicly available IPPS pricing 

software system to determine the Medicare rate for inpatient CHS 

claims. 

For outpatient hospital claims, the Medicare rate is based on an 

outpatient prospective payment system.15 Most services are classified 

into clinically similar groups called Ambulatory Payment 

Classifications (APC). For hospital outpatient claims, we used pricing 

software developed by MediRegs16 to determine the APC price. 

However, some services do not use an APC code. In these cases, we 

used various fee schedules, including the 2008 clinical laboratory fee 

schedule. 

For claims from cost-based facilities, such as critical-access hospitals, 

the Medicare rate is based on each hospital’s per diem and 

cost-to-charge ratio. We relied on the per diem and cost-to-charge 

ratio from the most recently settled cost report to determine the 

Medicare rate for cost-based facilities. 

For nonhospital claims, the Medicare rate is based on a variety of 

methods, including Relative Value Units (RVU) for physician services 

and fee schedules for other nonhospital services. We used the 

14 42 CFR § 136.30(c). 

15 42 CFR § 136.30(c). 

16 MediRegs is a private company that developed health care compliance software in 

collaboration with the National Institutes of Health’s Health Services Research Library. 

Mediregs, “Coding and Reimbursement Resources.” Available online at 

http://hsrl.mediregs.com/cgi-bin/_trial/index_gen?page=q. Accessed on August 22, 2008. 

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INTRODUCTION 

MediRegs RVU pricing software for physician services and various 

Medicare fee schedules, including the 2008 ambulance fee schedule, 

for other nonhospital services. 

Determining the difference between CHS payments and the Medicare 

rate. After we calculated the Medicare rate for sampled hospital 

claims, we calculated the difference between the Medicare rate and 

CHS payment. We calculated the percentage of claims paid above the 

Medicare rate. We determined whether there was a difference in the 

percentage of claims paid above the Medicare rate between IHS and 

tribes. We tested whether the difference was statistically significant 

at the 95-percent confidence level. If the paid amount was above the 

Medicare rate, we determined by how much. We also calculated the 

percentage of claims paid at or below the Medicare rate. 

We performed a similar analysis of nonhospital claims to determine 

any potential savings. 

We also estimated the number of additional claims IHS and tribes 

could have paid with hospital overpayments and the potential 

nonhospital savings. To do this, we calculated an average Medicare 

rate for hospital claims in our sample. We then divided total 

overpayments for hospital claims by our calculated, average hospital 

Medicare rate. We performed a similar analysis for potential savings 

from nonhospital claims. 

Limitations 

When determining the Medicare rate for sampled claims, we priced 

the services as they were coded. We did not attempt to check the 

accuracy of the coding. IHS and tribes may have applied edits to 

incorrectly coded claims. We expect that most of these edits would 

reduce CHS payments because IHS and tribes would likely apply 

edits to ensure that providers did not bill at higher rates than 

appropriate. Thus, we expect that in most cases, edits reduce 

payments to providers. Therefore, if IHS and tribes performed edits 

on claims in our sample, we expect that it would only affect the 

distribution between claims paid at the Medicare rate and claims 

below the Medicare rate. We do not expect that it affected our 

estimates of claims paid above the Medicare rate. 

We were unable to determine the exact wage index to apply to 

hospital claims. The wage index adjusts for health-care costs across 

geographic regions and types of hospitals. A hospital’s wage index 

changes slightly within a year, changing its Medicare rate. We 

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INTRODUCTION 

controlled for this by using multiple versions of the inpatient and 

outpatient pricing software. As a result, we expect any differences 

attributable to changing wage indexes to be minimal. 

When determining the Medicare rate, we did not consider whether 

services were provided in a Health Professional Shortage Area17 or 

Physician Scarcity Area.18 Medicare pays providers in these areas 

quarterly bonuses based on their volume of claims. Thus, the total 

Medicare payments for claims in these areas may be slightly higher 

than the Medicare rate we calculated. 

Standards 

This study was conducted in accordance with the “Quality Standards 

for Inspections” approved by the Council of the Inspectors General on 

Integrity and Efficiency. 

 

7 

17 A Health Professional Shortage Area is a federally designated area reflecting a 

shortage of primary medical care, dental, or mental health providers. Providers in these 

areas are paid a 10-percent quarterly bonus on all claims. See SSA § 1833(m). 

18 A Physician Scarcity Area is an area with a shortage of primary care physicians or 

specialty care physicians. Physicians in these areas are paid a 5-percent quarterly bonus on 

all claims. See SSA § 1833(u). 

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ΔFINDINGS FINDINGS 

IHS and tribes paid above the Medicare rate for Despite the MMA provision, 

IHS and tribes overpaid for 22 percent of hospital claims between January and 

22 percent of hospital claims March 2008, resulting in $1 million in overpayments between January and March 

2008. As a result, IHS and tribes overpaid $1 million in this period. 

IHS and tribes could have used this money to pay for approximately 

570 additional hospital claims, based on the average Medicare rate of 

$1,900 per hospital claim. These overpayments could have paid for 

hospital services that might otherwise have been deferred or denied. 

On the other hand, this $1 million only accounts for 3 percent of the 

total $33 million that IHS and tribes spent on hospital services 

between January and March 2008. In fact, most claims were paid in 

accordance with the MMA provision just 6 months after its 

implementing regulation went into effect. 

IHS and tribes paid at or below the Medicare rate for 78 percent of 

hospital claims. Specifically, IHS and tribes paid at the Medicare rate 

for 59 percent of hospital claims and paid below the Medicare rate for 

19 percent of hospital claims. 

When hospital claims were overpaid, most overpayments were 

modest. The median amount overpaid was $24. The average 

overpayment was $280. Yet, there were a few significant 

overpayments. In our sample, IHS and tribes overpaid between 

$10,000 and $34,000 on four hospital claims. The largest 

overpayment was for a claim covering primarily laboratory tests and 

drugs. 

Most overpaid hospital claims were for outpatient services 

Ninety percent of the overpaid hospital claims were for hospital 

outpatient claims, totaling $752,000. In addition, hospital outpatient 

claims were overpaid 24 percent of the time. In contrast, inpatient 

claims were overpaid only 12 percent of the time. 

Some overpayments for outpatient services may be attributable to 

varying pricing software or to confusion about the payment 

methodology. Because there is no publicly available outpatient claims 

pricing software, IHS and tribes use a variety of pricing software. IHS 

generally recommends purchasing pricing software from a commercial 

vendor or contracting with a fiscal intermediary. Varieties of pricing 

software differ in their comprehensiveness. For example, one type of 

software only calculates the Medicare rate for services with an APC 

code, requiring the user to access additional fee schedules for services 
FINDINGS 

without an APC code. On the other hand, another type of software 

calculates the Medicare rate for all services, including those without an 

APC code. 

Only 10 percent of claims paid over the Medicare rate were for 

inpatient hospital services. For pricing inpatient claims, IHS 

recommends the use of CMS’s IPPS pricing software. IHS has worked 

with CMS to provide a step-by-step guide to pricing inpatient claims 

using this software, including guidance on how often to download the 

most recent version of the CMS software. 

Tribes accounted for most dollars overpaid 

Tribal CHS hospital claims accounted for 79 percent of the $1 million 

overpaid for hospital claims.19 Tribes paid $860,000 above the Medicare 

rate while IHS paid $231,000 above the Medicare rate for hospital 

claims. 

There is no statistically significant difference between IHS and tribes in 

the percentage of claims paid above the Medicare rate; however, tribes 

paid higher amounts above the Medicare rate for hospital claims. On 

average, tribes overpaid $534 per overpaid hospital claim. IHS overpaid 

$101 per overpaid hospital claim. 

If payments for nonhospital 

claims were capped at the 

Medicare rate, potential 

savings to IHS and tribes 

would have ranged from 

$10 million to $13 million. 

IHS and tribes paid $13 million above the Medicare rate for 

nonhospital claims, representing 71 percent of claims. IHS and tribes 

are not required to pay for nonhospital services at or below the 

Medicare rate. Instead, IHS and tribes pay nonhospital claims in full 

or at rates negotiated with the provider. There is no statistically 

significant difference in the percentage of claims paid above the 

Medicare rate between IHS and tribes. 

If IHS and tribal payments for nonhospital claims 

were capped at the Medicare rate, IHS and tribes could 

have saved as much as $13 million between 

January and March 2008 

If all nonhospital claims were paid at the Medicare rate, including 

those claims that were paid below the Medicare rate, IHS and tribes 

would still have realized a net savings of $10 million between 

9 

19 The total amount overpaid for hospital claims was $1.1 million. This explains why 

79 percent equals $860,000. 

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FINDINGS 

January and March 2008. While the majority of nonhospital claims 

were paid above the Medicare rate, 29 percent were paid at or below 

the Medicare rate. Of these, 14 percent were paid at the Medicare 

rate. Additionally, for 15 percent of claims, providers accepted CHS 

payments below the Medicare rate. This 15 percent of claims total 

$3 million below the Medicare rate. 

Imposing a cap may result in claims that are currently being paid 

below the Medicare rate rising to the Medicare rate. However, IHS 

and tribes proved that it is possible to successfully negotiate rates 

lower than the Medicare rate when a payment cap is in effect. For 

instance, 19 percent of hospital claims were paid below the Medicare 

rate after the MMA provision went into effect. Thus, it is possible 

that IHS and tribes could have saved $13 million if nonhospital 

services were capped at Medicare rates. 

The $13 million paid above the Medicare rate for nonhospital claims 

represents almost half of the total $28 million spent on nonhospital 

claims during this period. IHS and tribes could have used the 

$13 million in savings to pay for approximately 41,000 additional 

nonhospital claims between January and March 2008, based on the 

average Medicare rate of $321 per nonhospital claim. Among IHS 

CHS programs, an estimated 200,000 services were deferred or denied 

in 2008.20 This figure only includes IHS CHS programs and thus 

would likely be significantly greater if tribes were included. 

The median amount paid above the Medicare rate for nonhospital 

claims was $98 and the average was $327. There were some 

particularly large payments over the Medicare rate. In our sample, 

IHS and tribes paid between $10,000 and $49,000 above the Medicare 

rate on 14 nonhospital claims. The largest payment above the 

Medicare rate was for a claim covering physician services from a 

cardiothoracic surgical group. 

10 

20 As we only know the number of services deferred or denied, we cannot determine the 

number of claims deferred or denied. One claim can include many services. 

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FINDINGS 

Ninety-one percent of nonhospital claims paid above the Medicare 

rate were for physician services. Overall, physician services made up 

88 percent of all nonhospital claims. The remaining 9 percent of 

nonhospital claims paid above the Medicare rate were for ambulance 

services, durable medical equipment, and services provided in 

ambulatory surgical centers. 

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ΔFINDINGS RECOMMENDATIONS 

Within 6 months after the MMA requirement went into effect, IHS 

and tribes paid above the Medicare rate for 22 percent of hospital 

claims. As a result, IHS and tribes overpaid $1 million for hospital 

claims between January and March 2008. The majority of overpaid 

claims were for hospital outpatient services. 

If IHS and tribal payments for nonhospital claims were capped at the 

Medicare rate, IHS and tribes could have saved as much as 

$13 million between January and March 2008. These savings could 

have allowed IHS and tribes to pay for a significant number of 

services to American Indians and Alaska Natives who might 

otherwise have gone without needed health care. 

Our findings led us to the following recommendations: 

IHS and Tribes Should Take Appropriate Action Regarding Overpaid 

CHS Hospital Claims 

IHS and tribes paid above the Medicare rate for 22 percent of 

hospitals claims, in violation of the MMA provision. We have 

forwarded all IHS hospital claims that we determined were overpaid 

to IHS for followup. We have forwarded all tribal hospital claims that 

we determined were overpaid to tribes. IHS should take action to 

collect any overpayments paid through the IHS fiscal intermediary. 

Tribes should do likewise. 

IHS Should Direct Its Fiscal Intermediary To Ensure That All Future 

CHS Hospital Claims Are Paid at or Below the Medicare Rate 

We found that the IHS fiscal intermediary paid $231,000 over the 

Medicare rate for hospital claims. IHS should direct the fiscal 

intermediary to ensure that no future hospital claims are paid above 

the Medicare rate. In addition, IHS could review the claims that we 

determined were overpaid to pinpoint specific problem areas that led 

to overpayments. 

IHS Should Provide Technical Assistance to Tribes To Ensure Proper 

Payments of Hospital Claims 

We found that tribes paid $860,000 over the Medicare rate for 

hospital claims. IHS should provide tribes with technical assistance 

in determining the Medicare rate for hospital claims. Because IHS 

receives limited information from tribes, it should determine why 

tribes paid over the Medicare rate. It can determine this using a 

variety of techniques. We have sent IHS basic service information 

about tribal claims paid over the Medicare rate. IHS could review 

these claims to pinpoint specific problem areas that led to 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 12 
RECOMMENDATIONS 

overpayments. In addition, it could survey tribes to determine their 

challenges and successful practices in determining the Medicare rate. 

Once IHS determines potential barriers to proper payments, IHS 

could develop guidance to prevent future overpayments. For example, 

it could share the identified challenges and successful practices with 

all tribes. 

IHS Should Seek Legislative Authority To Cap Payments for CHS 

Nonhospital Services 

Historically, IHS and tribes have had difficulty negotiating low rates 

for CHS due to the relatively small number of American Indians and 

Alaska Natives and because there are few private providers in rural 

areas. The passage of the MMA provision helped ensure lower rates 

for hospital services. A separate provision may be necessary to 

ensure lower rates for nonhospital services. Whatever method IHS 

uses to cap payments reasonably and accurately should be 

determined after careful determination of the impact of the new rates 

on the provider community, as well as other potential barriers to 

implementing the new rates. 

One option would be to extend Medicare rate requirements to 

nonhospital services. We have shown that IHS and tribes would have 

realized considerable savings if they had paid at the Medicare rate for 

nonhospital services. In fact, IHS and tribes could have saved 

up to $13 million if nonhospital claims were capped at Medicare rates. 

These savings could also have paid for nonhospital claims for 

American Indians and Alaska Natives who might otherwise be denied 

CHS health-care services. 

IHS could also pursue other methods to cap payments to nonhospital 

providers. For instance, IHS could create a national fee schedule for 

nonhospital CHS services or adapt other, existing payment 

methodologies for health-care services. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

IHS concurred with all four of our recommendations. IHS also noted 

two potential weaknesses with the pricing software that we used to 

calculate Medicare rates for hospital outpatient claims. We did not 

make any changes to the report based on IHS’s comments. For the 

full text of IHS’s comments, see Appendix C. 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 13 
RECOMMENDATIONS 

In response to our first recommendation, that IHS and tribes take 

appropriate action regarding overpaid CHS hospital claims, IHS stated 

that it will direct the fiscal intermediary to review the claims identified 

by OIG as overpaid and, where appropriate, initiate refunds. 

In response to our second recommendation, that IHS direct its fiscal 

intermediary to ensure that all future CHS hospital claims are paid at 

or below the Medicare rate, IHS stated that it will instruct the fiscal 

intermediary to conduct random claims sampling for financial and 

claims processing accuracy. The findings from these monthly audits will 

be submitted to IHS and used to track improvement in this area. 

In response to our third recommendation, that IHS provide technical 

assistance to tribes to ensure proper payments of hospital claims, IHS 

stated that a thorough review of our report, along with any additional 

agency findings, will enable IHS to tailor training to address claims 

identified as overpaid and provide guidance to help tribes more 

consistently calculate claims payments in accordance with regulations. 

In response to our fourth recommendation, that IHS seek legislative 

authority to cap payments for CHS nonhospital services, IHS stated 

that it will continue to meet with tribes and tribal organizations to 

develop a plan to cap payments for nonhospital services. 

IHS noted that the MediRegs Ambulatory Payment Classification 

software OIG used to calculate outpatient hospital claims payment 

does not include outlier payments or the 7.1-percent add-on for rural 

sole community hospitals. OIG recognizes that some differences in 

the Medicare price may be attributed to different pricing software. 

Specifically, we acknowledge, in the limitations section, that when 

determining the Medicare rate for sampled claims, we priced the 

services as they were coded and did not attempt to check the accuracy 

of the coding. Thus, we could not identify outlier payments. 

We also acknowledge, in the limitations section, that we did not take 

shortage or scarcity area bonuses into account when calculating the 

Medicare rate for hospital claims. This could have caused the total 

Medicare payments for claims in these areas to be slightly higher 

than the Medicare rate we calculated. 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 14 
Δ APPENDIX ~ A 

DETAILED METHODOLOGY 

Sample 

We pulled a stratified random sample of 800 claims. The four strata 

were: Indian Health Services (IHS) hospital, tribal hospital, IHS 

nonhospital, and tribal nonhospital. We further stratified by the 

amount paid. We categorized paid amounts as small, medium, or 

large. See Table A-1 for claims sampled by strata. 

Table A-1: Stratified Sample Structure 

Stratum 

Description 

Small 

Claims: 

Population 

Medium 

Claims: 

Population 

Large 

Claims: 

Population 

Small 

Claims: 

Sample 

Medium 

Claims: 

Sample 

Large 

Claims: 

Sample 

Total 

Number 

of Claims 

per 

Stratum 

Hospital claims 

Paid 

amount 

<=$1,000 

Paid 

amount 

$1,000.01–

$10,000 

Paid 

amount 

>$10,000 

Paid 

amount 

<=$1,000 

Paid 

amount 

$1,000.01–

$10,000 

Paid 

amount 

>$10,000 

 IHS hospital 8, 748 2, 587 443 65 65 70 200 

 Tribal hospital 5, 973 1, 526 193 65 65 70 200 

Nonhospital claims 

Paid 

amount 

<=$500 

Paid 

amount 

$500.01–

$4,000 

Paid 

amount > 

$4,000 

Paid 

amount 

<=$500 

Paid 

amount 

$500.01–

$4,000 

Paid 

amount > 

$4,000 

 IHS nonhospital 25,475 7,919 996 65 65 70 200 

 Tribal nonhospital 22,119 3,711 353 65 65 70 200 

 Total 62,315 15,743 1,985 260 260 280 800 

Source: Office of Inspector General (OIG) analysis, 2009. 

Data Collection 

We collected paid claims from the Contract Health Services (CHS) 

program for services delivered between January and March 2008. We 

chose this period for two reasons. First, most claims during this 

period should have been processed and paid by the time we requested 

them in October 2008. Second, limiting our scope to 3 months 

lessened the resource burden on IHS and tribes, while providing a 

reliable snapshot of CHS payments. 

We selected claims for services delivered during this period rather 

than claims paid in this period to ensure that all claims were covered 

under the Medicare Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) provision. There is a delay 

between when services are provided and when IHS and tribes pay the 

claim. Thus, hospital claims paid during this time may have been for 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 15 
APPENDIX ~ A 

services delivered prior to July 2007 and thus not covered by the 

MMA provision. 

Data Analysis 

For each analyzed claim, we calculated the Medicare rate for each line 

item. A claim can have multiple line items representing separate 

services provided in one provider visit. Next, we added the Medicare 

rate for each line item to determine the total Medicare rate for the 

claim and compared that to the total CHS payment for the claim. 

We could not analyze 84 of the 800 claims in our sample. Of these, 

56 were for services that were outside of our scope. For instance, they 

did not have a corresponding Medicare rate or were outside of our 

time period. The remaining claims were missing information needed 

to determine a Medicare rate, such as service codes. 

Twenty-three sampled claims were incorrectly labeled hospital or 

nonhospital and thus placed in an incorrect stratum. We recognized 

that they were incorrect by the type of bill or the provider name. We 

analyzed these claims in their correct strata. This explains why there 

are more IHS hospital claims analyzed than sampled. See 

Table A-2 for the number of claims analyzed and the number removed 

from analysis in each of the four strata. 

Table A-2: Claims Analyzed and Removed From Analysis Within Each 

Stratum 

Stratum of Claims Sampled Analyzed Removed From 

Analysis 

IHS hospital 200 205 0 

Tribal hospital 200 169 35 

IHS nonhospital 200 182 13 

Tribal nonhospital 200 160 36 

 Total 800 716 84 

Source: OIG analysis of CHS claims, 2009. 

Determining the Medicare rate for hospital services. We used separate 

methods to determine the Medicare rate for hospital inpatient 

services, hospital outpatient services, and services provided in 

cost-based hospitals. 

To determine the Medicare rate for inpatient services, we used the 

Centers for Medicare & Medicaid Services’ (CMS) Inpatient 

Prospective Payment System. We used this system because IHS 

recommended it. In addition, we referenced IHS guidance on 

determining a Medicare rate for hospital inpatient services. 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 16 
APPENDIX ~ A 

To determine a Medicare rate for outpatient services, we used 

MediRegs’ Ambulatory Payment Classifications (APC) pricing 

software. It calculates a Medicare rate for outpatient claims based on 

the service code, provider name, and date of claim. We included 

copayments when determining the Medicare rate for hospital 

outpatient claims because the CHS program covers all costs of the 

visit, including copayments. We also took into account all modifiers 

and status indicators, relying on CMS manuals and MediRegs data to 

determine how they affected the Medicare rate. 

MediRegs’ APC pricing software only accounts for hospital outpatient 

services with an APC code. For other services on a hospital 

outpatient claim, we referenced the corresponding fee schedule, such 

as the clinical laboratory fee schedule and the durable medical 

equipment fee schedule. We chose MediRegs because the company 

has a history of providing support to Government entities, including 

the National Institutes of Health Library.21 According to MediRegs, 

more than 800 hospitals and thousands of health-care professionals 

also use MediRegs pricing software.22

To determine the Medicare rate for cost-based hospitals, we used the 

per-diem and cost-to-charge rates from the most recently settled cost 

report. We received these rates from the IHS fiscal intermediary. 

Some new critical-access hospitals in our sample did not yet have a 

settled cost report. This occurred for 12 hospital claims. For these 

hospitals, we used the amount that IHS or tribes paid as the 

Medicare rate. 

Controlling for the provider wage index. The Medicare rate changes at 

various times throughout the year when a provider’s wage index 

changes. Therefore, we controlled for wage index changes when 

determining the Medicare rate for inpatient and outpatient claims. 

For inpatient claims, we priced each claim using the two different 

versions of CMS’s 2008 Inpatient Prospective Payment System. 

Because we sampled based on service date, we do not know when IHS 

or tribes paid for each claim and thus what version of the Inpatient 

21 Federal Business Opportunities, “Medi-regs Database.” Available online at: 

https://www.fbo.gov/index?s=opportunity&mode=form&id=b36a4365c874323eba878548dd6f

4b5b&tab=core&_cview=0. Accessed on April 7, 2009. 

22 MediRegs, “Our Clients: Testimonials.” Available online at 

http://www.mediregs.com/clients/our-clients. Accessed on April 6, 2009. 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 17 
APPENDIX ~ A 

Prospective Payment System was used. Therefore, we determined 

that the claim was paid at the Medicare rate if the amount paid 

matched either version of the Medicare rate. If the amount paid did 

not match either version, we determined the Medicare rate using the 

pricing software in effect between January and October 2008. 

For outpatient claims, we priced each claim using both the 2008 and 

2009 MediRegs’ APC pricing software. MediRegs updates the 

outpatient pricer annually to account for wage index changes. We 

took a conservative approach and accepted the amount paid as the 

Medicare rate if it fell within 2008 and 2009 prices. If the amount 

paid was not within that range, we compared the amount paid to the 

2008 Medicare rate. 

Determining the Medicare rate for nonhospital services. Each type of 

nonhospital service required a different process to determine the 

Medicare rate. For physician services, we used MediRegs’ Relative 

Value Unit calculator to determine the Medicare rate. We took into 

account all modifiers on the claims, relying on CMS manuals to 

determine how physician modifiers affect the Medicare rate. For all 

other nonphysician services, we used the appropriate source to 

determine the Medicare rate. See Table A-3 for the systems that we 

used to determine the Medicare rate for nonhospital services. 

Table A-3: Identifying the Medicare Rate for Nonhospital Services 

Nonhospital Service CMS Pricing Source, 2008 

Anesthesiologist Anesthesia base units and conversion factor 

Ambulance Ambulance fee schedule 

Durable medical equipment Durable medical equipment fee schedule 

Ambulatory surgical center 

Ambulatory surgical center fee schedule and MediRegs’ ambulatory surgical 

center wage index 

Independent laboratories Clinical laboratory fee schedule 

End-stage renal disease center End-stage renal disease center prospective payment calculator 

Source: OIG analysis of the systems used for determining the Medicare rate, 2009. 

 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 18 
ΔAPPENDIX ~ B APPENDIX B 

ESTIMATES AND CONFIDENCE INTERVALS 

See Tables B-1–B-4 for the point estimates and confidence intervals 

for the results discussed in the first finding. 

Table B-1: Hospital Claims Paid At, Below, and Above the Medicare Rate 

Estimate Description Sample Size Point Estimate 

95-Percent Confidence 

Interval 

Percentage of hospital claims paid above the 

Medicare rate 374 22.0% 16.1%–27.9% 

Percentage of hospital claims paid at or 

below the Medicare rate 374 78.0% 72.1%–83.9% 

Percentage of hospital claims paid at the 

Medicare rate 374 59.4%* 52.4%–66.3% 

Percentage of hospital claims paid below the 

Medicare rate 374 18.7%* 13.2%–24.1% 

* Numbers do not add up to exactly 78.0 due to rounding. 

Source: Office of Inspector General (OIG) analysis of hospital claims, 2009. 

Table B-1a: Indian Health Service Hospital Claims Paid At, Below, and Above the 

Medicare Rate 

Estimate Description Sample Size Point Estimate 

95-Percent Confidence 

Interval 

Percentage of Indian Health Service (IHS) 

hospital claims paid above the Medicare rate 205 18.7% 11.5%–25.9% 

Percentage of IHS hospital claims paid at or 

below the Medicare rate 205 81.3% 74.1%–88.5% 

Source: OIG analysis of IHS hospital claims, 2009. 

Table B-1b: Tribal Hospital Claims Paid At, Below, and Above the Medicare Rate 

Estimate Description Sample Size Point Estimate 

95-Percent Confidence 

Interval 

Percentage of tribes’ hospital claims paid 

above the Medicare rate 169 29.1% 18.7%–39.5% 

Percentage of tribes’ hospital claims paid at 

or below the Medicare rate 169 70.9% 60.5%–81.3% 

Source: OIG analysis of tribes’ hospital claims, 2009. 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 19 
APPENDIX ~ B 

Table B-2: Dollars Spent on Hospital Claims 

Estimate Description Sample Size Point Estimate 

95-Percent Confidence 

Interval 

Dollars spent above the Medicare rate for 

hospital claims 80 $1.1 million $0.8 million–$1.4 million 

Dollars spent on hospital claims 374 $32.8 million $29.6 million–$36.0 million 

Average Medicare rate per claim 374 $1,907 $1,691–$2,124 

Average amount overpaid among hospital 

claims paid above the Medicare rate 80 $280 $179–$382 

Tribes’ dollars spent above the Medicare rate 

for hospital claims 48 $860,446 $585,443–$1.1 million 

IHS dollars spent above the Medicare rate for 

hospital claims 32 $230,682 $139,931–$321,432 

Tribes’ average amount overpaid among 

hospital claims paid above the Medicare rate 48 $534 $363–$705 

IHS average amount overpaid among 

hospital claims paid above the Medicare rate 32 $101 $61–$141 

Source: OIG analysis of hospital claims, 2009. 

Table B-3: Hospital Claims Paid Over the Medicare Rate by Type of Claim 

Estimate Description Sample Size Point Estimate 

95-Percent Confidence 

Interval 

Percent of overpaid claims that were 

outpatient 80 90.5% 86.2%–94.7% 

Percent of overpaid claims that were inpatient 80 9.5% 5.3%–13.8% 

Percentage of outpatient claims that were 

paid over the Medicare rate 174 24.0% 17.2%–30.9% 

Percentage of inpatient claims that were paid 

over the Medicare rate 200 12.0% 6.1%–18.0% 

Source: OIG analysis of hospital claims, 2009. 

Table B-4: Dollars Spent Over the Medicare Rate for Outpatient Claims 

Estimate Description Sample Size Point Estimate 

95-Percent Confidence 

Interval 

Dollars spent above the Medicare rate for 

outpatient services 174 $751,633 $468,218–$1.0 million 

Source: OIG analysis of hospital claims, 2009. 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 20 
APPENDIX ~ B 

See Tables B-5–B-7 for the point estimates and confidence intervals 

for the results discussed in the second finding. 

Table B-5: Dollars Spent on Nonhospital Claims 

Estimate Description Sample Size Point Estimate 

95-Percent Confidence 

Interval 

Dollars spent above the Medicare rate for 

nonhospital claims 273 $13.1 million $11.4 million–$14.9 million 

Dollars spent below the Medicare rate for 

nonhospital claims 36 $3.2 million $500,000–$5.9 million 

Dollars spent on nonhospital claims 342 $28 million $25.3 million–$30.7 million 

Average overpaid among nonhospital claims 

above the Medicare rate 273 $327 $281–$374 

Average Medicare rate 342 $321 $256–$386 

Source: OIG analysis of nonhospital claims, 2009. 

Table B-6: Nonhospital Claims Paid At, Below, and Above the Medicare Rate 

Estimate Description Sample Size Point Estimate 

95-Percent Confidence 

Interval 

Percentage of nonhospital claims paid above 

the Medicare rate 342 71.4% 64.6%–78.2% 

Percentage of nonhospital claims that were 

paid at or below the Medicare rate 342 28.6% 21.9%–35.4% 

Percentage of nonhospital claims paid at the 

Medicare rate 342 14.0% 8.8%–19.1% 

Percentage of nonhospital claims paid below 

the Medicare rate 342 14.6% 9.5%–19.7% 

Source: OIG analysis of nonhospital claims, 2009. 

Table B-6a: IHS Nonhospital Claims Paid At, Below, and Above the Medicare Rate 

Estimate Description Sample Size Point Estimate 

95-Percent Confidence 

Interval 

Percentage of IHS nonhospital claims paid 

above the Medicare rate 182 71.2% 62.1%–80.3% 

Percentage of IHS nonhospital claims paid at 

or below the Medicare rate 182 28.8% 19.7%–37.9% 

Source: OIG analysis of IHS nonhospital claims, 2009. 

Table B-6b: Tribal Nonhospital Claims Paid At, Below, and Above the Medicare Rate 

Estimate Description Sample Size Point Estimate 

95-Percent Confidence 

Interval 

Percentage of tribes’ nonhospital claims paid 

above the Medicare rate 160 73.3% 63.1%–83.5% 

Percentage of tribes’ nonhospital claims paid 

at or below the Medicare rate 160 26.7% 16.5%–36.9% 

Source: OIG analysis of tribes’ nonhospital claims, 2009. 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 21 
APPENDIX ~ B 

Table B-7: Payments for Physician Services 

Estimate Description Sample Size Point Estimate 

95-Percent Confidence 

Interval 

Percentage of nonhospital claims paid over 

the Medicare rate that were for physician 

claims 273 90.8% 87.1%–94.5% 

Percentage of all nonhospital claims that 

were for physician claims 342 88.4% 84.5%–92.3% 

Source: OIG analysis of nonhospital claims, 2009. 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 22 
AGENCY COMMENTS 

Δ APPENDIX C 

 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 23 
 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 24 

APPENDIX ~ C 
A P PEN 0 x c

Plle 3 - Iipotor Genera

r.ations with denstrons ~wUn how to cacula difer,nt McdiCl .burscment

metodologi.. ,_ '

In Iui 2008, tM AgOl reI_ad anIHS-dovolope Web site Untitled "McdcIU.iib Rates

rnfonnon," tòprvi4e Tribo an Trl~ otpntions with an overvew of th nigury

cba~, along with other teclu resour.. Inorion aval~l. frm th Weo page

includ th, folloWing: ML Freuently Ased Quetioii sale ptovidet le_ to issit

Tribal ørons in noting ptovi_ oerate chages; ust\ lin to reaton rolòVan

CFR sIte, et. The Web sito iill is htt:/l\,ih.lJv/noniciiro~in.

Thugut tb yeà an 2010, in conjuicûgn with other Agay trg semi cudy

bl:SPlaied th topic Wil be inlud IS II rcur¡ ii¡ei itent

Attch at Tab D is th agon for tl most reenty scheuled CMS TratUii Sein,held _

May 12 t1ugl is, 2009, in Denvet, Colota, and MLR Web site infortion.

4. TIl. JH should seekloplativ. aullority to oa'P payienta for CH Iloiiosplta somiiii.

The IH concur with t1 reoinndaon. 'fe Aiienoy reiz the potential1inetlts of,

extendbith. Medcll Prption Druiilirovellnt iid Modoniztion Aç oi2D03

ro¡uliitions iid ha be dig th. and rolate isues with Trbe at varous 1age-le

meeti sub. as the Direct Seri~ Tribø IUd the National Indi Health BoW Confernc.

ThëUlS wil contue to met with Trlbt ll Triba Orgaizaons to devcdop a plan to ca

paymts fo nonhspitá sltCC

TI you for aloWÎS th,1H to providá coinen on tM oro's dr report .

Yvette Raubidwe MD., M.P.H.

Attcbilita

Tab A Septo~ 1" 1008 Momoraum .t CMS "Claficaon for ModiCl-iike Rato Re¡utiù. . . ' ,

Tab B May 12.15, 2009 CHS Tra Soøû Aionda øn ML Web site iifomon

OEI-OS-OS.00410 IHS CONTRACT HEALTH SERVICES PROGRAM: OVERPAYMENTS AND POTENTIAL SAVINGS 25
 O E I - 0 5 - 0 8 - 0 0 4 1 0 I H S C ONTRACT HEALTH S ERVICES P ROGRAM : OVERPAYMENTS AND P OTENTIAL S AVINGS 26 

Δ ACKNOWLEDGMENTS 

This report was prepared under the direction of Ann Maxwell, 

Regional Inspector General for Evaluation and Inspections in the 

Chicago regional office, and Thomas Komaniecki, Deputy Regional 

Inspector General. 

Anne Bracken served as the team leader for this study and Beth 

McDowell served as the lead analyst. Other principal Office of 

Evaluation and Inspections staff from the Chicago regional office who 

contributed to the report include Di Zhang; other central office staff 

who contributed include Robert Gibbons and Talisha Searcy.