106TH CONGRESS 

1ST SESSION S. 406 

AN ACT 

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 to 

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

4 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 med25 icaid programs. Any funds so reimbursed which are 


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1 in excess of the amount necessary to achieve or 

2 maintain 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.—The Secretary 

17 shall monitor the performance of hospitals and clin18 ics participating in the program established under 

19 this section, and shall require such hospitals and 

20 clinics to submit reports on the program to the Sec21 retary on an annual basis. 

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

23 Notwithstanding section 1880(c) of the Social Secu24 rity Act (42 U.S.C. 1395qq(c)) or section 402(a), no 

25 payment may be made out of the special funds deVerDate Aug 31 2005 12:53 May 08, 2006 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\PICKUP\S406.ES S406

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1 scribed in such sections for the benefit of any hos2 pital or clinic during the period that the hospital or 

3 clinic participates in the program established under 

4 this section. 

5 ‘‘(c) REQUIREMENTS FOR PARTICIPATION.— 

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

7 paragraph (2)(B), in order to be eligible for partici8 pation in the program established under this section, 

9 an Indian tribe, tribal organization, or Alaska Na10 tive health organization shall submit an application 

11 to the Secretary that establishes to the satisfaction 

12 of the Secretary that— 

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

14 or Alaska Native health organization contracts 

15 or compacts for the operation of a facility of the 

16 Service; 

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

18 the medicare or medicaid programs under sec19 tion 1880 or 1911 of the Social Security Act 

20 (42 U.S.C. 1395qq; 1396j); 

21 ‘‘(C) the facility meets the requirements 

22 that apply to programs operated directly by the 

23 Service; and 

24 ‘‘(D) the facility— 


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1 ‘‘(i) is accredited by an accrediting 

2 body as eligible for reimbursement under 

3 the medicare or medicaid programs; or 

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

5 been approved by the Secretary, for achiev6 ing such accreditation. 

7 ‘‘(2) APPROVAL.— 

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

9 review and approve a qualified application not 

10 later than 90 days after the date the applica11 tion is submitted to the Secretary unless the 

12 Secretary determines that any of the criteria set 

13 forth in paragraph (1) are not met. 

14 ‘‘(B) GRANDFATHER OF DEMONSTRATION

15 PROGRAM PARTICIPANTS.—Any participant in 

16 the demonstration program authorized under 

17 this section as in effect on the day before the 

18 date of enactment of the Alaska Native and 

19 American Indian Direct Reimbursement Act of 

20 1999 shall be deemed approved for participa21 tion in the program established under this sec22 tion and shall not be required to submit an ap23 plication in order to participate in the program. 

24 ‘‘(C) DURATION.—An approval by the Sec25 retary of a qualified application under subparaVerDate Aug 31 2005 12:53 May 08, 2006 Jkt 049200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\PICKUP\S406.ES S406

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1 graph (A), or a deemed approval of a dem2 onstration program under subparagraph (B), 

3 shall continue in effect as long as the approved 

4 applicant or the deemed approved demonstra5 tion program meets the requirements of this 

6 section. 

7 ‘‘(d) EXAMINATION AND IMPLEMENTATION OF

8 CHANGES.— 

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

10 through the Service, and with the assistance of the 

11 Administrator of the Health Care Financing Admin12 istration, shall examine on an ongoing basis and im13 plement— 

14 ‘‘(A) any administrative changes that may 

15 be necessary to facilitate direct billing and re16 imbursement under the program established 

17 under this section, including any agreements 

18 with States that may be necessary to provide 

19 for direct billing under the medicaid program; 

20 and 

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

22 enable participants in the program established 

23 under this section to provide to the Service 

24 medical records information on patients served 

25 under the program that is consistent with the 


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1 medical records information system of the Serv2 ice. 

3 ‘‘(2) ACCOUNTING INFORMATION.—The ac4 counting information that a participant in the pro5 gram established under this section shall be required 

6 to report shall be the same as the information re7 quired to be reported by participants in the dem8 onstration program authorized under this section as 

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

10 the Alaska Native and American Indian Direct Re11 imbursement Act of 1999. The Secretary may from 

12 time to time, after consultation with the program 

13 participants, change the accounting information sub14 mission requirements. 

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

16 in the program established under this section may with17 draw from participation in the same manner and under 

18 the same conditions that a tribe or tribal organization may 

19 retrocede a contracted program to the Secretary under au20 thority of the Indian Self-Determination Act (25 U.S.C. 

21 450 et seq.). All cost accounting and billing authority 

22 under the program established under this section shall be 

23 returned to the Secretary upon the Secretary’s acceptance 

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

25 (b) CONFORMING AMENDMENTS.— 


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

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

3 following: 

4 ‘‘(e) 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 (2) Section 1911 of the Social Security Act (42 

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

13 following: 

14 ‘‘(d) For provisions relating to the authority of cer15 tain Indian tribes, tribal organizations, and Alaska Native 

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

17 payment for, health care services provided by a hospital 

18 or clinic of such tribes or organizations and for which pay19 ment may be made under this title, see section 405 of the 

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

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

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


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1 SEC. 4. TECHNICAL AMENDMENT. 

2 (a) IN GENERAL.—Effective November 9, 1998, sec3 tion 405 of the Indian Health Care Improvement Act (25 

4 U.S.C. 1645(e)) is reenacted as in effect on that date. 

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

6 405 of the Indian Health Care Improvement Act is 

7 amended by striking subsection (e). 

Passed the Senate September 15, 1999. 

Attest: 

Secretary. 


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106TH CONGRESS 

1ST SESSION S. 406 

AN ACT 

To amend the Indian Health Care Improvement 

other tribes and tribal organizations. expand the eligibility under such program to medicaid, and other third party payors, and to gram that allows for direct billing of medicare, Act to make permanent the demonstration proVerDate Aug 31 2005 12:53 May 08, 2006 Jkt 049200 PO 00000 Frm 00013 Fmt 6651 Sfmt 6651 E:\PICKUP\S406.ES S406

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