Calendar No. 272

106TH CONGRESS

1ST SESSION S. 406

[Report No. 106–152]

A BILL

To amend the Indian Health Care Improvement

other tribes and tribal organizations.expand the eligibility under such program tomedicaid, and other third party payors, and togram that allows for direct billing of medicare,Act to make permanent the demonstration proSEPTEMBER 8, 1999

Reported with an amendment
II

Calendar No. 272

106TH CONGRESS

1ST SESSION S. 406

[Report No. 106–152]

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, Mr. INOUYE, and Mr. HATCH) introduced the

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

SEPTEMBER 8, 1999

Reported by Mr. CAMPBELL, with an amendment

[Strike out all after the enacting clause and insert the part printed in italic]

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.
2

•S 406 RS

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’’.

6 SEC. 2. FINDINGS.

7 Congress finds the following:

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

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

10 1645) that established a demonstration program to

11 authorize 4 tribally-operated Indian Health Service

12 hospitals or clinics to test methods for direct billing

13 and receipt of payment for health services provided

14 to patients eligible for reimbursement under the

15 medicare or medicaid programs under titles XVIII

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

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

18 (2) The 4 participants selected by the Indian

19 Health Service for the demonstration program began

20 the direct billing and collection program in fiscal

21 year 1989 and unanimously expressed success and

22 satisfaction with the program. Benefits of the pro23 gram include dramatically increased collections for

24 services provided under the medicare and medicaid

25 programs, a significant reduction in the turn-around
3

•S 406 RS

1 time between billing and receipt of payments for

2 services provided to eligible patients, and increased

3 efficiency of participants being able to track their

4 own billings and collections.

5 (3) The success of the demonstration program

6 confirms that the direct involvement of tribes and

7 tribal organizations in the direct billing of, and col8 lection of payments from, the medicare and medicaid

9 programs, and other third payor reimbursements, is

10 more beneficial to Indian tribes than the current

11 system of Indian Health Service-managed collec12 tions.

13 (4) Allowing tribes and tribal organizations to

14 directly manage their medicare and medicaid billings

15 and collections, rather than channeling all activities

16 through the Indian Health Service, will enable the

17 Indian Health Service to reduce its administrative

18 costs, is consistent with the provisions of the Indian

19 Self-Determination Act, and furthers the commit20 ment of the Secretary to enable tribes and tribal or21 ganizations to manage and operate their health care

22 programs.

23 (5) The demonstration program was originally

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

25 by Congress, so that the current participants would
4

•S 406 RS

1 not experience an interruption in the program while

2 Congress awaited a recommendation from the Sec3 retary of Health and Human Services on whether to

4 make the program permanent.

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

6 Service and to Indian tribes, tribal organizations,

7 and Alaska Native organizations to provide perma8 nent status to the demonstration program and to ex9 tend participation in the program to other Indian

10 tribes, tribal organizations, and Alaska Native

11 health organizations who operate a facility of the In12 dian Health Service.

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

14 OTHER THIRD PARTY PAYORS.

15 (a) PERMANENT AUTHORIZATION.—Section 405 of

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

17 1645) is amended to read as follows:

18 ‘‘(a) ESTABLISHMENT OF DIRECT BILLING PRO19 GRAM.—

20 ‘‘(1) IN GENERAL.—The Secretary shall estab21 lish a program under which Indian tribes, tribal or22 ganizations, and Alaska Native health organizations

23 that contract or compact for the operation of a hos24 pital or clinic of the Service under the Indian Self25 Determination and Education Assistance Act may
5

•S 406 RS

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

2 health care services provided by such hospital or

3 clinic for which payment is made under title XVIII

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

5 (in this section referred to as the ‘medicare pro6 gram’), under a State plan for medical assistance

7 approved under title XIX of the Social Security Act

8 (42 U.S.C. 1396 et seq.) (in this section referred

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

10 third party payor.

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

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

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

14 purposes of reimbursement under the medicaid pro15 gram for health care services directly billed under

16 the program established under this section.

17 ‘‘(b) DIRECT REIMBURSEMENT.—

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

19 participating in the program described in subsection

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

21 the medicare and medicaid programs for services

22 furnished, without regard to the provisions of section

23 1880(c) of the Social Security Act (42 U.S.C.

24 1395qq(c)) and sections 402(a) and 813(b)(2)(A),

25 but all funds so reimbursed shall first be used by the
6

•S 406 RS

1 hospital or clinic for the purpose of making any im2 provements in the hospital or clinic that may be nec3 essary to achieve or maintain compliance with the

4 conditions and requirements applicable generally to

5 facilities of such type under the medicare or med6 icaid programs. Any funds so reimbursed which are

7 in excess of the amount necessary to achieve or

8 maintain such conditions shall be used—

9 ‘‘(A) solely for improving the health re10 sources deficiency level of the Indian tribe; and

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

12 the Service applicable to funds provided by the

13 Service under any contract entered into under

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

15 450f et seq.).

16 ‘‘(2) AUDITS.—The amounts paid to the hos17 pitals and clinics participating in the program estab18 lished under this section shall be subject to all audit19 ing requirements applicable to programs adminis20 tered directly by the Service and to facilities partici21 pating in the medicare and medicaid programs.

22 ‘‘(3) SECRETARIAL OVERSIGHT.—

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

24 subparagraph (B), the Secretary shall monitor

25 the performance of hospitals and clinics partici-
7

•S 406 RS

1 pating in the program established under this

2 section, and shall require such hospitals and

3 clinics to submit reports on the program to the

4 Secretary on a quarterly basis during the first

5 2 years of participation in the program and an6 nually thereafter.

7 ‘‘(B) ANNUAL REPORTS.—Any participant

8 in the demonstration program authorized under

9 this section as in effect on the day before the

10 date of enactment of the Alaska Native and

11 American Indian Direct Reimbursement Act of

12 1999 shall only be required to submit annual

13 reports under this paragraph.

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

15 Notwithstanding section 1880(c) of the Social Secu16 rity Act (42 U.S.C. 1395qq(c)) or section 402(a), no

17 payment may be made out of the special funds de18 scribed in such sections for the benefit of any hos19 pital or clinic during the period that the hospital or

20 clinic participates in the program established under

21 this section.

22 ‘‘(c) REQUIREMENTS FOR PARTICIPATION.—

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

24 paragraph (2)(B), in order to be eligible for partici25 pation in the program established under this section,
8

•S 406 RS

1 an Indian tribe, tribal organization, or Alaska Na2 tive health organization shall submit an application

3 to the Secretary that establishes to the satisfaction

4 of the Secretary that—

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

6 or Alaska Native health organization contracts

7 or compacts for the operation of a facility of the

8 Service;

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

10 the medicare or medicaid programs under sec11 tion 1880 or 1911 of the Social Security Act

12 (42 U.S.C. 1395qq; 1396j);

13 ‘‘(C) the facility meets the requirements

14 that apply to programs operated directly by the

15 Service; and

16 ‘‘(D) the facility is accredited by an ac17 crediting body designated by the Secretary or

18 has submitted a plan, which has been approved

19 by the Secretary, for achieving such accredita20 tion.

21 ‘‘(2) APPROVAL.—

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

23 review and approve a qualified application not

24 later than 90 days after the date the applica25 tion is submitted to the Secretary unless the
9

•S 406 RS

1 Secretary determines that any of the criteria set

2 forth in paragraph (1) are not met.

3 ‘‘(B) GRANDFATHER OF DEMONSTRATION

4 PROGRAM PARTICIPANTS.—Any participant in

5 the demonstration program authorized under

6 this section as in effect on the day before the

7 date of enactment of the Alaska Native and

8 American Indian Direct Reimbursement Act of

9 1999 shall be deemed approved for participa10 tion in the program established under this sec11 tion and shall not be required to submit an ap12 plication in order to participate in the program.

13 ‘‘(C) DURATION.—An approval by the Sec14 retary of a qualified application under subpara15 graph (A), or a deemed approval of a dem16 onstration program under subparagraph (B),

17 shall continue in effect as long as the approved

18 applicant or the deemed approved demonstra19 tion program meets the requirements of this

20 section.

21 ‘‘(d) EXAMINATION AND IMPLEMENTATION OF

22 CHANGES.—

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

24 through the Service, and with the assistance of the

25 Administrator of the Health Care Financing Admin-
10

•S 406 RS

1 istration, shall examine on an ongoing basis and

2 implement—

3 ‘‘(A) any administrative changes that may

4 be necessary to facilitate direct billing and re5 imbursement under the program established

6 under this section, including any agreements

7 with States that may be necessary to provide

8 for direct billing under the medicaid program;

9 and

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

11 enable participants in the program established

12 under this section to provide to the Service

13 medical records information on patients served

14 under the program that is consistent with the

15 medical records information system of the Serv16 ice.

17 ‘‘(2) ACCOUNTING INFORMATION.—The ac18 counting information that a participant in the pro19 gram established under this section shall be required

20 to report shall be the same as the information re21 quired to be reported by participants in the dem22 onstration program authorized under this section as

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

24 the Alaska Native and American Indian Direct Re25 imbursement Act of 1999. The Secretary may from
11

•S 406 RS

1 time to time, after consultation with the program

2 participants, change the accounting information sub3 mission requirements.

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

5 in the program established under this section may with6 draw from participation in the same manner and under

7 the same conditions that a tribe or tribal organization may

8 retrocede a contracted program to the Secretary under au9 thority of the Indian Self-Determination Act (25 U.S.C.

10 450 et seq.). All cost accounting and billing authority

11 under the program established under this section shall be

12 returned to the Secretary upon the Secretary’s acceptance

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

14 (b) CONFORMING AMENDMENTS.—

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

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

17 following:

18 ‘‘(e) For provisions relating to the authority of cer19 tain Indian tribes, tribal organizations, and Alaska Native

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

21 payment for, health care services provided by a hospital

22 or clinic of such tribes or organizations and for which pay23 ment may be made under this title, see section 405 of the

24 Indian Health Care Improvement Act (25 U.S.C. 1645).’’.
12

•S 406 RS

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

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

3 following:

4 ‘‘(d) For provisions relating to the authority of cer5 tain Indian tribes, tribal organizations, and Alaska Native

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

7 payment for, health care services provided by a hospital

8 or clinic of such tribes or organizations and for which pay9 ment may be made under this title, see section 405 of the

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

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

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

13 SECTION 1. SHORT TITLE.

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

15 American Indian Direct Reimbursement Act of 1999’’.

16 SEC. 2. FINDINGS.

17 Congress finds the following:

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

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

20 1645) that established a demonstration program to

21 authorize 4 tribally-operated Indian Health Service

22 hospitals or clinics to test methods for direct billing

23 and receipt of payment for health services provided

24 to patients eligible for reimbursement under the

25 medicare or medicaid programs under titles XVIII
13

•S 406 RS

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

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

3 (2) The 4 participants selected by the Indian

4 Health Service for the demonstration program began

5 the direct billing and collection program in fiscal

6 year 1989 and unanimously expressed success and

7 satisfaction with the program. Benefits of the pro8 gram include dramatically increased collections for

9 services provided under the medicare and medicaid

10 programs, a significant reduction in the turn-around

11 time between billing and receipt of payments for

12 services provided to eligible patients, and increased

13 efficiency of participants being able to track their

14 own billings and collections.

15 (3) The success of the demonstration program

16 confirms that the direct involvement of tribes and

17 tribal organizations in the direct billing of, and col18 lection of payments from, the medicare and medicaid

19 programs, and other third payor reimbursements, is

20 more beneficial to Indian tribes than the current

21 system of Indian Health Service-managed collec22 tions.

23 (4) Allowing tribes and tribal organizations to

24 directly manage their medicare and medicaid billings

25 and collections, rather than channeling all activities
14

•S 406 RS

1 through the Indian Health Service, will enable the

2 Indian Health Service to reduce its administrative

3 costs, is consistent with the provisions of the Indian

4 Self-Determination Act, and furthers the commit5 ment of the Secretary to enable tribes and tribal or6 ganizations to manage and operate their health care

7 programs.

8 (5) The demonstration program was originally

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

10 by Congress, so that the current participants would

11 not experience an interruption in the program while

12 Congress awaited a recommendation from the Sec13 retary of Health and Human Services on whether to

14 make the program permanent.

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

16 Service and to Indian tribes, tribal organizations,

17 and Alaska Native organizations to provide perma18 nent status to the demonstration program and to ex19 tend participation in the program to other Indian

20 tribes, tribal organizations, and Alaska Native

21 health organizations who operate a facility of the In22 dian Health Service.
15

•S 406 RS

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

2 OTHER THIRD PARTY PAYORS.

3 (a) PERMANENT AUTHORIZATION.—Section 405 of

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

5 1645) is amended to read as follows:

6 ‘‘(a) ESTABLISHMENT OF DIRECT BILLING PRO7 GRAM.—

8 ‘‘(1) IN GENERAL.—The Secretary shall estab9 lish a program under which Indian tribes, tribal or10 ganizations, and Alaska Native health organizations

11 that contract or compact for the operation of a hos12 pital or clinic of the Service under the Indian Self13 Determination and Education Assistance Act may

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

15 health care services provided by such hospital or

16 clinic for which payment is made under title XVIII

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

18 (in this section referred to as the ‘medicare pro19 gram’), under a State plan for medical assistance

20 approved under title XIX of the Social Security Act

21 (42 U.S.C. 1396 et seq.) (in this section referred

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

23 third party payor.

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

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

26 Security Act (42 U.S.C. 1396d(b)) shall apply for
16

•S 406 RS

1 purposes of reimbursement under the medicaid pro2 gram for health care services directly billed under

3 the program established under this section.

4 ‘‘(b) DIRECT REIMBURSEMENT.—

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

6 participating in the program described in subsection

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

8 the medicare and medicaid programs for services

9 furnished, without regard to the provisions of section

10 1880(c) of the Social Security Act (42 U.S.C.

11 1395qq(c)) and sections 402(a) and 813(b)(2)(A),

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

13 hospital or clinic for the purpose of making any im14 provements in the hospital or clinic that may be nec15 essary to achieve or maintain compliance with the

16 conditions and requirements applicable generally to

17 facilities of such type under the medicare or med18 icaid programs. Any funds so reimbursed which are

19 in excess of the amount necessary to achieve or

20 maintain such conditions shall be used—

21 ‘‘(A) solely for improving the health re22 sources deficiency level of the Indian tribe; and

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

24 the Service applicable to funds provided by the

25 Service under any contract entered into under
17

•S 406 RS

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

2 450f et seq.).

3 ‘‘(2) AUDITS.—The amounts paid to the hos4 pitals and clinics participating in the program estab5 lished under this section shall be subject to all audit6 ing requirements applicable to programs adminis7 tered directly by the Service and to facilities partici8 pating in the medicare and medicaid programs.

9 ‘‘(3) SECRETARIAL OVERSIGHT.—The Secretary

10 shall monitor the performance of hospitals and clin11 ics participating in the program established under

12 this section, and shall require such hospitals and

13 clinics to submit reports on the program to the Sec14 retary on an annual basis.

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

16 Notwithstanding section 1880(c) of the Social Secu17 rity Act (42 U.S.C. 1395qq(c)) or section 402(a), no

18 payment may be made out of the special funds de19 scribed in such sections for the benefit of any hos20 pital or clinic during the period that the hospital or

21 clinic participates in the program established under

22 this section.

23 ‘‘(c) REQUIREMENTS FOR PARTICIPATION.—

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

25 paragraph (2)(B), in order to be eligible for partici-
18

•S 406 RS

1 pation in the program established under this section,

2 an Indian tribe, tribal organization, or Alaska Na3 tive health organization shall submit an application

4 to the Secretary that establishes to the satisfaction

5 of the Secretary that—

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

7 or Alaska Native health organization contracts

8 or compacts for the operation of a facility of the

9 Service;

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

11 the medicare or medicaid programs under sec12 tion 1880 or 1911 of the Social Security Act

13 (42 U.S.C. 1395qq; 1396j);

14 ‘‘(C) the facility meets the requirements

15 that apply to programs operated directly by the

16 Service; and

17 ‘‘(D) the facility—

18 ‘‘(i) is accredited by an accrediting

19 body as eligible for reimbursement under

20 the medicare or medicaid programs; or

21 ‘‘(ii) has submitted a plan, which has

22 been approved by the Secretary, for achiev23 ing such accreditation.

24 ‘‘(2) APPROVAL.—
19

•S 406 RS

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

2 review and approve a qualified application not

3 later than 90 days after the date the applica4 tion is submitted to the Secretary unless the

5 Secretary determines that any of the criteria set

6 forth in paragraph (1) are not met.

7 ‘‘(B) GRANDFATHER OF DEMONSTRATION

8 PROGRAM PARTICIPANTS.—Any participant in

9 the demonstration program authorized under

10 this section as in effect on the day before the

11 date of enactment of the Alaska Native and

12 American Indian Direct Reimbursement Act of

13 1999 shall be deemed approved for participa14 tion in the program established under this sec15 tion and shall not be required to submit an ap16 plication in order to participate in the program.

17 ‘‘(C) DURATION.—An approval by the Sec18 retary of a qualified application under subpara19 graph (A), or a deemed approval of a dem20 onstration program under subparagraph (B),

21 shall continue in effect as long as the approved

22 applicant or the deemed approved demonstra23 tion program meets the requirements of this

24 section.
20

•S 406 RS

1 ‘‘(d) EXAMINATION AND IMPLEMENTATION OF

2 CHANGES.—

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

4 through the Service, and with the assistance of the

5 Administrator of the Health Care Financing Admin6 istration, shall examine on an ongoing basis and

7 implement—

8 ‘‘(A) any administrative changes that may

9 be necessary to facilitate direct billing and re10 imbursement under the program established

11 under this section, including any agreements

12 with States that may be necessary to provide

13 for direct billing under the medicaid program;

14 and

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

16 enable participants in the program established

17 under this section to provide to the Service

18 medical records information on patients served

19 under the program that is consistent with the

20 medical records information system of the Serv21 ice.

22 ‘‘(2) ACCOUNTING INFORMATION.—The ac23 counting information that a participant in the pro24 gram established under this section shall be required

25 to report shall be the same as the information re-
21

•S 406 RS

1 quired to be reported by participants in the dem2 onstration program authorized under this section as

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

4 the Alaska Native and American Indian Direct Re5 imbursement Act of 1999. The Secretary may from

6 time to time, after consultation with the program

7 participants, change the accounting information sub8 mission requirements.

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

10 in the program established under this section may with11 draw from participation in the same manner and under

12 the same conditions that a tribe or tribal organization may

13 retrocede a contracted program to the Secretary under au14 thority of the Indian Self-Determination Act (25 U.S.C.

15 450 et seq.). All cost accounting and billing authority

16 under the program established under this section shall be

17 returned to the Secretary upon the Secretary’s acceptance

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

19 (b) CONFORMING AMENDMENTS.—

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

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

22 following:

23 ‘‘(e) For provisions relating to the authority of cer24 tain Indian tribes, tribal organizations, and Alaska Native

25 health organizations to elect to directly bill for, and receive
22

•S 406 RS

1 payment for, health care services provided by a hospital

2 or clinic of such tribes or organizations and for which pay3 ment may be made under this title, see section 405 of the

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

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

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

7 following:

8 ‘‘(d) For provisions relating to the authority of cer9 tain Indian tribes, tribal organizations, and Alaska Native

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

11 payment for, health care services provided by a hospital

12 or clinic of such tribes or organizations and for which pay13 ment may be made under this title, see section 405 of the

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

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

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

17 SECTION 1. SHORT TITLE.

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

19 American Indian Direct Reimbursement Act of 1999’’.

20 SEC. 2. FINDINGS.

21 Congress finds the following:

22 (1) In 1988, Congress enacted section 405 of the

23 Indian Health Care Improvement Act (25 U.S.C.

24 1645) that established a demonstration program to

25 authorize 4 tribally-operated Indian Health Service
23

•S 406 RS

1 hospitals or clinics to test methods for direct billing

2 and receipt of payment for health services provided to

3 patients eligible for reimbursement under the medi4 care or medicaid programs under titles XVIII and

5 XIX of the Social Security Act (42 U.S.C. 1395 et

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

7 (2) The 4 participants selected by the Indian

8 Health Service for the demonstration program began

9 the direct billing and collection program in fiscal

10 year 1989 and unanimously expressed success and

11 satisfaction with the program. Benefits of the pro12 gram include dramatically increased collections for

13 services provided under the medicare and medicaid

14 programs, a significant reduction in the turn-around

15 time between billing and receipt of payments for serv16 ices provided to eligible patients, and increased effi17 ciency of participants being able to track their own

18 billings and collections.

19 (3) The success of the demonstration program

20 confirms that the direct involvement of tribes and

21 tribal organizations in the direct billing of, and col22 lection of payments from, the medicare and medicaid

23 programs, and other third payor reimbursements, is

24 more beneficial to Indian tribes than the current sys25 tem of Indian Health Service-managed collections.
24

•S 406 RS

1 (4) Allowing tribes and tribal organizations to

2 directly manage their medicare and medicaid billings

3 and collections, rather than channeling all activities

4 through the Indian Health Service, will enable the In5 dian Health Service to reduce its administrative

6 costs, is consistent with the provisions of the Indian

7 Self-Determination Act, and furthers the commitment

8 of the Secretary to enable tribes and tribal organiza9 tions to manage and operate their health care pro10 grams.

11 (5) The demonstration program was originally

12 to expire on September 30, 1996, but was extended by

13 Congress, so that the current participants would not

14 experience an interruption in the program while Con15 gress awaited a recommendation from the Secretary

16 of Health and Human Services on whether to make

17 the program permanent.

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

19 Service and to Indian tribes, tribal organizations,

20 and Alaska Native organizations to provide perma21 nent status to the demonstration program and to ex22 tend participation in the program to other Indian

23 tribes, tribal organizations, and Alaska Native health

24 organizations who operate a facility of the Indian

25 Health Service.
25

•S 406 RS

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

2 OTHER THIRD PARTY PAYORS.

3 (a) PERMANENT AUTHORIZATION.—Section 405 of the

4 Indian Health Care Improvement Act (25 U.S.C. 1645) is

5 amended to read as follows:

6 ‘‘(a) ESTABLISHMENT OF DIRECT BILLING PRO7 GRAM.—

8 ‘‘(1) IN GENERAL.—The Secretary shall establish

9 a program under which Indian tribes, tribal organi10 zations, and Alaska Native health organizations that

11 contract or compact for the operation of a hospital or

12 clinic of the Service under the Indian Self-Determina13 tion and Education Assistance Act may elect to di14 rectly bill for, and receive payment for, health care

15 services provided by such hospital or clinic for which

16 payment is made under title XVIII of the Social Se17 curity Act (42 U.S.C. 1395 et seq.) (in this section re18 ferred to as the ‘medicare program’), under a State

19 plan for medical assistance approved under title XIX

20 of the Social Security Act (42 U.S.C. 1396 et seq.)

21 (in this section referred to as the ‘medicaid pro22 gram’), or from any other third party payor.

23 ‘‘(2) APPLICATION OF 100 PERCENT FMAP.—The

24 third sentence of section 1905(b) of the Social Secu25 rity Act (42 U.S.C. 1396d(b)) shall apply for pur26 poses of reimbursement under the medicaid program
26

•S 406 RS

1 for health care services directly billed under the pro2 gram established under this section.

3 ‘‘(b) DIRECT REIMBURSEMENT.—

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

5 participating in the program described in subsection

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

7 the medicare and medicaid programs for services fur8 nished, without regard to the provisions of section

9 1880(c) of the Social Security Act (42 U.S.C.

10 1395qq(c)) and sections 402(a) and 813(b)(2)(A), but

11 all funds so reimbursed shall first be used by the hos12 pital or clinic for the purpose of making any im13 provements in the hospital or clinic that may be nec14 essary to achieve or maintain compliance with the

15 conditions and requirements applicable generally to

16 facilities of such type under the medicare or medicaid

17 programs. Any funds so reimbursed which are in ex18 cess of the amount necessary to achieve or maintain

19 such conditions shall be used—

20 ‘‘(A) solely for improving the health re21 sources deficiency level of the Indian tribe; and

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

23 the Service applicable to funds provided by the

24 Service under any contract entered into under
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1 the Indian Self-Determination Act (25 U.S.C.

2 450f et seq.).

3 ‘‘(2) AUDITS.—The amounts paid to the hos4 pitals and clinics participating in the program estab5 lished under this section shall be subject to all audit6 ing requirements applicable to programs administered

7 directly by the Service and to facilities participating

8 in the medicare and medicaid programs.

9 ‘‘(3) SECRETARIAL OVERSIGHT.—The Secretary

10 shall monitor the performance of hospitals and clinics

11 participating in the program established under this

12 section, and shall require such hospitals and clinics to

13 submit reports on the program to the Secretary on an

14 annual basis.

15 ‘‘(4) NO PAYMENTS FROM SPECIAL FUNDS.—Not16 withstanding section 1880(c) of the Social Security

17 Act (42 U.S.C. 1395qq(c)) or section 402(a), no pay18 ment may be made out of the special funds described

19 in such sections for the benefit of any hospital or clin20 ic during the period that the hospital or clinic par21 ticipates in the program established under this sec22 tion.

23 ‘‘(c) REQUIREMENTS FOR PARTICIPATION.—

24 ‘‘(1) APPLICATION.—Except as provided in para25 graph (2)(B), in order to be eligible for participation
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1 in the program established under this section, an In2 dian tribe, tribal organization, or Alaska Native

3 health organization shall submit an application to the

4 Secretary that establishes to the satisfaction of the

5 Secretary that—

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

7 or Alaska Native health organization contracts

8 or compacts for the operation of a facility of the

9 Service;

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

11 the medicare or medicaid programs under sec12 tion 1880 or 1911 of the Social Security Act (42

13 U.S.C. 1395qq; 1396j);

14 ‘‘(C) the facility meets the requirements that

15 apply to programs operated directly by the Serv16 ice; and

17 ‘‘(D) the facility—

18 ‘‘(i) is accredited by an accrediting

19 body as eligible for reimbursement under the

20 medicare or medicaid programs; or

21 ‘‘(ii) has submitted a plan, which has

22 been approved by the Secretary, for achiev23 ing such accreditation.

24 ‘‘(2) APPROVAL.—
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1 ‘‘(A) IN GENERAL.—The Secretary shall re2 view and approve a qualified application not

3 later than 90 days after the date the application

4 is submitted to the Secretary unless the Secretary

5 determines that any of the criteria set forth in

6 paragraph (1) are not met.

7 ‘‘(B) GRANDFATHER OF DEMONSTRATION

8 PROGRAM PARTICIPANTS.—Any participant in

9 the demonstration program authorized under

10 this section as in effect on the day before the date

11 of enactment of the Alaska Native and American

12 Indian Direct Reimbursement Act of 1999 shall

13 be deemed approved for participation in the pro14 gram established under this section and shall not

15 be required to submit an application in order

16 to participate in the program.

17 ‘‘(C) DURATION.—An approval by the Sec18 retary of a qualified application under subpara19 graph (A), or a deemed approval of a demonstra20 tion program under subparagraph (B), shall

21 continue in effect as long as the approved appli22 cant or the deemed approved demonstration pro23 gram meets the requirements of this section.

24 ‘‘(d) EXAMINATION AND IMPLEMENTATION OF

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

2 through the Service, and with the assistance of the

3 Administrator of the Health Care Financing Admin4 istration, shall examine on an ongoing basis and

5 implement—

6 ‘‘(A) any administrative changes that may

7 be necessary to facilitate direct billing and reim8 bursement under the program established under

9 this section, including any agreements with

10 States that may be necessary to provide for di11 rect billing under the medicaid program; and

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

13 enable participants in the program established

14 under this section to provide to the Service med15 ical records information on patients served

16 under the program that is consistent with the

17 medical records information system of the Serv18 ice.

19 ‘‘(2) ACCOUNTING INFORMATION.—The account20 ing information that a participant in the program

21 established under this section shall be required to re22 port shall be the same as the information required to

23 be reported by participants in the demonstration pro24 gram authorized under this section as in effect on the

25 day before the date of enactment of the Alaska Native
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1 and American Indian Direct Reimbursement Act of

2 1999. The Secretary may from time to time, after

3 consultation with the program participants, change

4 the accounting information submission requirements.

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

6 in the program established under this section may with7 draw from participation in the same manner and under

8 the same conditions that a tribe or tribal organization may

9 retrocede a contracted program to the Secretary under au10 thority of the Indian Self-Determination Act (25 U.S.C.

11 450 et seq.). All cost accounting and billing authority under

12 the program established under this section shall be returned

13 to the Secretary upon the Secretary’s acceptance of the with14 drawal of participation in this program.’’.

15 (b) CONFORMING AMENDMENTS.—

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

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

18 following:

19 ‘‘(e) For provisions relating to the authority of certain

20 Indian tribes, tribal organizations, and Alaska Native

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

22 payment for, health care services provided by a hospital or

23 clinic of such tribes or organizations and for which pay24 ment may be made under this title, see section 405 of the

25 Indian Health Care Improvement Act (25 U.S.C. 1645).’’.
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1 (2) Section 1911 of the Social Security Act (42

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

3 following:

4 ‘‘(d) For provisions relating to the authority of certain

5 Indian tribes, tribal organizations, and Alaska Native

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

7 payment for, health care services provided by a hospital or

8 clinic of such tribes or organizations and for which pay9 ment may be made under this title, see section 405 of the

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

11 (c) EFFECTIVE DATE.—The amendments made by this

12 section shall take effect on October 1, 2000.

13 SEC. 4. TECHNICAL AMENDMENT.

14 (a) IN GENERAL.—Effective November 9, 1998, section

15 405 of the Indian Health Care Improvement Act (25 U.S.C.

16 1645(e)) is reenacted as in effect on that date.

17 (b) REPORTS.—Effective November 10, 1998, section

18 405 of the Indian Health Care Improvement Act is amended

19 by striking subsection (e).