II

106TH CONGRESS

1ST SESSION S. 406

To amend the Indian Health Care Improvement Act to make permanent

the demonstration program that allows for direct billing of medicare,

medicaid, and other third party payors, and to expand the eligibility

under such program to other tribes and tribal organizations.

IN THE SENATE OF THE UNITED STATES

FEBRUARY 10, 1999

Mr. MURKOWSKI (for himself, Mr. LOTT, Mr. BAUCUS, Mr. INHOFE, Mr.

COCHRAN, Mr. CAMPBELL, and Mr. INOUYE) introduced the following

bill; which was read twice and referred to the Committee on Indian Affairs

A BILL

To amend the Indian Health Care Improvement Act to make

permanent the demonstration program that allows for

direct billing of medicare, medicaid, and other third party

payors, and to expand the eligibility under such program

to other tribes and tribal organizations.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Alaska Native and

5 American Indian Direct Reimbursement Act of 1999’’.
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1 SEC. 2. FINDINGS.

2 Congress finds the following:

3 (1) In 1988, Congress enacted section 405 of

4 the Indian Health Care Improvement Act (25 U.S.C.

5 1645) that established a demonstration program to

6 authorize 4 tribally-operated Indian Health Service

7 hospitals or clinics to test methods for direct billing

8 and receipt of payment for health services provided

9 to patients eligible for reimbursement under the

10 medicare or medicaid programs under titles XVIII

11 and XIX of the Social Security Act (42 U.S.C. 1395

12 et seq.; 1396 et seq.), and other third-party payors.

13 (2) The 4 participants selected by the Indian

14 Health Service for the demonstration program began

15 the direct billing and collection program in fiscal

16 year 1989 and unanimously expressed success and

17 satisfaction with the program. Benefits of the pro18 gram include dramatically increased collections for

19 services provided under the medicare and medicaid

20 programs, a significant reduction in the turn-around

21 time between billing and receipt of payments for

22 services provided to eligible patients, and increased

23 efficiency of participants being able to track their

24 own billings and collections.

25 (3) The success of the demonstration program

26 confirms that the direct involvement of tribes and
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1 tribal organizations in the direct billing of, and col2 lection of payments from, the medicare and medicaid

3 programs, and other third payor reimbursements, is

4 more beneficial to Indian tribes than the current

5 system of Indian Health Service-managed collec6 tions.

7 (4) Allowing tribes and tribal organizations to

8 directly manage their medicare and medicaid billings

9 and collections, rather than channeling all activities

10 through the Indian Health Service, will enable the

11 Indian Health Service to reduce its administrative

12 costs, is consistent with the provisions of the Indian

13 Self-Determination Act, and furthers the commit14 ment of the Secretary to enable tribes and tribal or15 ganizations to manage and operate their health care

16 programs.

17 (5) The demonstration program was originally

18 to expire on September 30, 1996, but was extended

19 by Congress, so that the current participants would

20 not experience an interruption in the program while

21 Congress awaited a recommendation from the Sec22 retary of Health and Human Services on whether to

23 make the program permanent.

24 (6) It would be beneficial to the Indian Health

25 Service and to Indian tribes, tribal organizations,
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1 and Alaska Native organizations to provide perma2 nent status to the demonstration program and to ex3 tend participation in the program to other Indian

4 tribes, tribal organizations, and Alaska Native

5 health organizations who operate a facility of the In6 dian Health Service.

7 SEC. 3. DIRECT BILLING OF MEDICARE, MEDICAID, AND

8 OTHER THIRD PARTY PAYORS.

9 (a) PERMANENT AUTHORIZATION.—Section 405 of

10 the Indian Health Care Improvement Act (25 U.S.C.

11 1645) is amended to read as follows:

12 ‘‘(a) ESTABLISHMENT OF DIRECT BILLING PRO13 GRAM.—

14 ‘‘(1) IN GENERAL.—The Secretary shall estab15 lish a program under which Indian tribes, tribal or16 ganizations, and Alaska Native health organizations

17 that contract or compact for the operation of a hos18 pital or clinic of the Service under the Indian Self19 Determination and Education Assistance Act may

20 elect to directly bill for, and receive payment for,

21 health care services provided by such hospital or

22 clinic for which payment is made under title XVIII

23 of the Social Security Act (42 U.S.C. 1395 et seq.)

24 (in this section referred to as the ‘medicare pro25 gram’), under a State plan for medical assistance
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1 approved under title XIX of the Social Security Act

2 (42 U.S.C. 1396 et seq.) (in this section referred

3 to as the ‘medicaid program’), or from any other

4 third party payor.

5 ‘‘(2) APPLICATION OF 100 PERCENT FMAP.—

6 The third sentence of section 1905(b) of the Social

7 Security Act (42 U.S.C. 1396d(b)) shall apply for

8 purposes of reimbursement under the medicaid pro9 gram for health care services directly billed under

10 the program established under this section.

11 ‘‘(b) DIRECT REIMBURSEMENT.—

12 ‘‘(1) USE OF FUNDS.—Each hospital or clinic

13 participating in the program described in subsection

14 (a) of this section shall be reimbursed directly under

15 the medicare and medicaid programs for services

16 furnished, without regard to the provisions of section

17 1880(c) of the Social Security Act (42 U.S.C.

18 1395qq(c)) and sections 402(a) and 813(b)(2)(A),

19 but all funds so reimbursed shall first be used by the

20 hospital or clinic for the purpose of making any im21 provements in the hospital or clinic that may be nec22 essary to achieve or maintain compliance with the

23 conditions and requirements applicable generally to

24 facilities of such type under the medicare or medic25 aid programs. Any funds so reimbursed which are in
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1 excess of the amount necessary to achieve or main2 tain such conditions shall be used—

3 ‘‘(A) solely for improving the health re4 sources deficiency level of the Indian tribe; and

5 ‘‘(B) in accordance with the regulations of

6 the Service applicable to funds provided by the

7 Service under any contract entered into under

8 the Indian Self-Determination Act (25 U.S.C.

9 450f et seq.).

10 ‘‘(2) AUDITS.—The amounts paid to the hos11 pitals and clinics participating in the program estab12 lished under this section shall be subject to all audit13 ing requirements applicable to programs adminis14 tered directly by the Service and to facilities partici15 pating in the medicare and medicaid programs.

16 ‘‘(3) SECRETARIAL OVERSIGHT.—

17 ‘‘(A) QUARTERLY REPORTS.—Subject to

18 subparagraph (B), the Secretary shall monitor

19 the performance of hospitals and clinics partici20 pating in the program established under this

21 section, and shall require such hospitals and

22 clinics to submit reports on the program to the

23 Secretary on a quarterly basis during the first

24 2 years of participation in the program and an25 nually thereafter.
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1 ‘‘(B) ANNUAL REPORTS.—Any participant

2 in the demonstration program authorized under

3 this section as in effect on the day before the

4 date of enactment of the Alaska Native and

5 American Indian Direct Reimbursement Act of

6 1999 shall only be required to submit annual

7 reports under this paragraph.

8 ‘‘(4) NO PAYMENTS FROM SPECIAL FUNDS.—

9 Notwithstanding section 1880(c) of the Social Secu10 rity Act (42 U.S.C. 1395qq(c)) or section 402(a), no

11 payment may be made out of the special funds de12 scribed in such sections for the benefit of any hos13 pital or clinic during the period that the hospital or

14 clinic participates in the program established under

15 this section.

16 ‘‘(c) REQUIREMENTS FOR PARTICIPATION.—

17 ‘‘(1) APPLICATION.—Except as provided in

18 paragraph (2)(B), in order to be eligible for partici19 pation in the program established under this section,

20 an Indian tribe, tribal organization, or Alaska Na21 tive health organization shall submit an application

22 to the Secretary that establishes to the satisfaction

23 of the Secretary that—

24 ‘‘(A) the Indian tribe, tribal organization,

25 or Alaska Native health organization contracts
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1 or compacts for the operation of a facility of the

2 Service;

3 ‘‘(B) the facility is eligible to participate in

4 the medicare or medicaid programs under sec5 tion 1880 or 1911 of the Social Security Act

6 (42 U.S.C. 1395qq; 1396j);

7 ‘‘(C) the facility meets the requirements

8 that apply to programs operated directly by the

9 Service; and

10 ‘‘(D) the facility is accredited by an ac11 crediting body designated by the Secretary or

12 has submitted a plan, which has been approved

13 by the Secretary, for achieving such accredita14 tion.

15 ‘‘(2) APPROVAL.—

16 ‘‘(A) IN GENERAL.—The Secretary shall

17 review and approve a qualified application not

18 later than 90 days after the date the applica19 tion is submitted to the Secretary unless the

20 Secretary determines that any of the criteria set

21 forth in paragraph (1) are not met.

22 ‘‘(B) GRANDFATHER OF DEMONSTRATION

23 PROGRAM PARTICIPANTS.—Any participant in

24 the demonstration program authorized under

25 this section as in effect on the day before the
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1 date of enactment of the Alaska Native and

2 American Indian Direct Reimbursement Act of

3 1999 shall be deemed approved for participa4 tion in the program established under this sec5 tion and shall not be required to submit an ap6 plication in order to participate in the program.

7 ‘‘(C) DURATION.—An approval by the Sec8 retary of a qualified application under subpara9 graph (A), or a deemed approval of a dem10 onstration program under subparagraph (B),

11 shall continue in effect as long as the approved

12 applicant or the deemed approved demonstra13 tion program meets the requirements of this

14 section.

15 ‘‘(d) EXAMINATION AND IMPLEMENTATION OF

16 CHANGES.—

17 ‘‘(1) IN GENERAL.—The Secretary, acting

18 through the Service, and with the assistance of the

19 Administrator of the Health Care Financing Admin20 istration, shall examine on an ongoing basis and

21 implement—

22 ‘‘(A) any administrative changes that may

23 be necessary to facilitate direct billing and re24 imbursement under the program established

25 under this section, including any agreements
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1 with States that may be necessary to provide

2 for direct billing under the medicaid program;

3 and

4 ‘‘(B) any changes that may be necessary to

5 enable participants in the program established

6 under this section to provide to the Service

7 medical records information on patients served

8 under the program that is consistent with the

9 medical records information system of the Serv10 ice.

11 ‘‘(2) ACCOUNTING INFORMATION.—The ac12 counting information that a participant in the pro13 gram established under this section shall be required

14 to report shall be the same as the information re15 quired to be reported by participants in the dem16 onstration program authorized under this section as

17 in effect on the day before the date of enactment of

18 the Alaska Native and American Indian Direct Re19 imbursement Act of 1999. The Secretary may from

20 time to time, after consultation with the program

21 participants, change the accounting information sub22 mission requirements.

23 ‘‘(e) WITHDRAWAL FROM PROGRAM.—A participant

24 in the program established under this section may with25 draw from participation in the same manner and under
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1 the same conditions that a tribe or tribal organization may

2 retrocede a contracted program to the Secretary under au3 thority of the Indian Self-Determination Act (25 U.S.C.

4 450 et seq.). All cost accounting and billing authority

5 under the program established under this section shall be

6 returned to the Secretary upon the Secretary’s acceptance

7 of the withdrawal of participation in this program.’’.

8 (b) CONFORMING AMENDMENTS.—

9 (1) Section 1880 of the Social Security Act (42

10 U.S.C. 1395qq) is amended by adding at the end the

11 following:

12 ‘‘(e) For provisions relating to the authority of cer13 tain Indian tribes, tribal organizations, and Alaska Native

14 health organizations to elect to directly bill for, and receive

15 payment for, health care services provided by a hospital

16 or clinic of such tribes or organizations and for which pay17 ment may be made under this title, see section 405 of the

18 Indian Health Care Improvement Act (25 U.S.C. 1645).’’.

19 (2) Section 1911 of the Social Security Act (42

20 U.S.C. 1396j) is amended by adding at the end the

21 following:

22 ‘‘(d) For provisions relating to the authority of cer23 tain Indian tribes, tribal organizations, and Alaska Native

24 health organizations to elect to directly bill for, and receive

25 payment for, health care services provided by a hospital
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1 or clinic of such tribes or organizations and for which pay2 ment may be made under this title, see section 405 of the

3 Indian Health Care Improvement Act (25 U.S.C. 1645).’’.

4 (c) EFFECTIVE DATE.—The amendments made by

5 this section shall take effect on October 1, 2000.

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