S. 406

One Hundred Sixth Congress

of the

United States of America

AT THE SECOND SESSION

Begun and held at the City of Washington on Monday,

the twenty-fourth day of January, two thousand

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.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

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

Indian Direct Reimbursement Act of 2000’’.

SEC. 2. FINDINGS.

Congress finds the following:

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

Health Care Improvement Act (25 U.S.C. 1645) that established

a demonstration program to authorize 4 tribally-operated

Indian Health Service hospitals or clinics to test methods for

direct billing and receipt of payment for health services provided to patients eligible for reimbursement under the medicare

or medicaid programs under titles XVIII and XIX of the Social

Security Act (42 U.S.C. 1395 et seq.; 1396 et seq.), and other

third party payors.

(2) The 4 participants selected by the Indian Health Service

for the demonstration program began the direct billing and

collection program in fiscal year 1989 and unanimously

expressed success and satisfaction with the program. Benefits

of the program include dramatically increased collections for

services provided under the medicare and medicaid programs,

a significant reduction in the turn-around time between billing

and receipt of payments for services provided to eligible

patients, and increased efficiency of participants being able

to track their own billings and collections.

(3) The success of the demonstration program confirms

that the direct involvement of tribes and tribal organizations

in the direct billing of, and collection of payments from, the

medicare and medicaid programs, and other third party payor

reimbursements, is more beneficial to Indian tribes than the

current system of Indian Health Service-managed collections.

(4) Allowing tribes and tribal organizations to directly manage their medicare and medicaid billings and collections, rather

than channeling all activities through the Indian Health

Service, will enable the Indian Health Service to reduce its

administrative costs, is consistent with the provisions of the

Indian Self-Determination Act, and furthers the commitment
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of the Secretary to enable tribes and tribal organizations to

manage and operate their health care programs.

(5) The demonstration program was originally to expire

on September 30, 1996, but was extended by Congress, so

that the current participants would not experience an interruption in the program while Congress awaited a recommendation

from the Secretary of Health and Human Services on whether

to make the program permanent.

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

and to Indian tribes, tribal organizations, and Alaska Native

organizations to provide permanent status to the demonstration

program and to extend participation in the program to other

Indian tribes, tribal organizations, and Alaska Native health

organizations who operate a facility of the Indian Health

Service.

SEC. 3. DIRECT BILLING OF MEDICARE, MEDICAID, AND OTHER THIRD

PARTY PAYORS.

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

Health Care Improvement Act (25 U.S.C. 1645) is amended to

read as follows:

‘‘(a) ESTABLISHMENT OF DIRECT BILLING PROGRAM.—

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

under which Indian tribes, tribal organizations, and Alaska

Native health organizations that contract or compact for the

operation of a hospital or clinic of the Service under the Indian

Self-Determination and Education Assistance Act may elect

to directly bill for, and receive payment for, health care services

provided by such hospital or clinic for which payment is made

under title XVIII of the Social Security Act (42 U.S.C. 1395

et seq.) (in this section referred to as the ‘medicare program’),

under a State plan for medical assistance approved under title

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

this section referred to as the ‘medicaid program’), or from

any other third party payor.

‘‘(2) APPLICATION OF 100 PERCENT FMAP.—The third sentence of section 1905(b) of the Social Security Act (42 U.S.C.

1396d(b)) shall apply for purposes of reimbursement under

the medicaid program for health care services directly billed

under the program established under this section.

‘‘(b) DIRECT REIMBURSEMENT.— ‘‘(1) USE OF FUNDS.—Each hospital or clinic participating

in the program described in subsection (a) of this section shall

be reimbursed directly under the medicare and medicaid programs for services furnished, without regard to the provisions

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

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

so reimbursed shall first be used by the hospital or clinic

for the purpose of making any improvements in the hospital

or clinic that may be necessary to achieve or maintain compliance with the conditions and requirements applicable generally

to facilities of such type under the medicare or medicaid programs. Any funds so reimbursed which are in excess of the

amount necessary to achieve or maintain such conditions shall

be used—

‘‘(A) solely for improving the health resources deficiency

level of the Indian tribe; and
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‘‘(B) in accordance with the regulations of the Service

applicable to funds provided by the Service under any

contract entered into under the Indian Self-Determination

Act (25 U.S.C. 450f et seq.).

‘‘(2) AUDITS.—The amounts paid to the hospitals and clinics

participating in the program established under this section

shall be subject to all auditing requirements applicable to programs administered directly by the Service and to facilities

participating in the medicare and medicaid programs.

‘‘(3) SECRETARIAL OVERSIGHT.—The Secretary shall monitor

the performance of hospitals and clinics participating in the

program established under this section, and shall require such

hospitals and clinics to submit reports on the program to the

Secretary on an annual basis.

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

section 1880(c) of the Social Security Act (42 U.S.C. 1395qq(c))

or section 402(a), no payment may be made out of the special

funds described in such sections for the benefit of any hospital

or clinic during the period that the hospital or clinic participates

in the program established under this section.

‘‘(c) REQUIREMENTS FOR PARTICIPATION.—

‘‘(1) APPLICATION.—Except as provided in paragraph (2)(B),

in order to be eligible for participation in the program established under this section, an Indian tribe, tribal organization,

or Alaska Native health organization shall submit an application to the Secretary that establishes to the satisfaction of

the Secretary that—

‘‘(A) the Indian tribe, tribal organization, or Alaska

Native health organization contracts or compacts for the

operation of a facility of the Service;

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

or medicaid programs under section 1880 or 1911 of the

Social Security Act (42 U.S.C. 1395qq; 1396j);

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

to programs operated directly by the Service; and

‘‘(D) the facility—

‘‘(i) is accredited by an accrediting body as eligible

for reimbursement under the medicare or medicaid

programs; or

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

approved by the Secretary, for achieving such accreditation.

‘‘(2) APPROVAL.— ‘‘(A) IN GENERAL.—The Secretary shall review and

approve a qualified application not later than 90 days

after the date the application is submitted to the Secretary

unless the Secretary determines that any of the criteria

set forth in paragraph (1) are not met.

‘‘(B) GRANDFATHER OF DEMONSTRATION PROGRAM

PARTICIPANTS.—Any participant in the demonstration program authorized under this section as in effect on the

day before the date of enactment of the Alaska Native

and American Indian Direct Reimbursement Act of 1999

shall be deemed approved for participation in the program

established under this section and shall not be required

to submit an application in order to participate in the

program.
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‘‘(C) DURATION.—An approval by the Secretary of a

qualified application under subparagraph (A), or a deemed

approval of a demonstration program under subparagraph

(B), shall continue in effect as long as the approved

applicant or the deemed approved demonstration program

meets the requirements of this section.

‘‘(d) EXAMINATION AND IMPLEMENTATION OF CHANGES.—

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

Service, and with the assistance of the Administrator of the

Health Care Financing Administration, shall examine on an

ongoing basis and implement—

‘‘(A) any administrative changes that may be necessary

to facilitate direct billing and reimbursement under the

program established under this section, including any

agreements with States that may be necessary to provide

for direct billing under the medicaid program; and

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

participants in the program established under this section

to provide to the Service medical records information on

patients served under the program that is consistent with

the medical records information system of the Service.

‘‘(2) ACCOUNTING INFORMATION.—The accounting information that a participant in the program established under this

section shall be required to report shall be the same as the

information required to be reported by participants in the demonstration program authorized under this section as in effect

on the day before the date of enactment of the Alaska Native

and American Indian Direct Reimbursement Act of 1999. The

Secretary may from time to time, after consultation with the

program participants, change the accounting information

submission requirements.

‘‘(e) WITHDRAWAL FROM PROGRAM.—A participant in the program established under this section may withdraw from participation in the same manner and under the same conditions that

a tribe or tribal organization may retrocede a contracted program

to the Secretary under authority of the Indian Self-Determination

Act (25 U.S.C. 450 et seq.). All cost accounting and billing authority

under the program established under this section shall be returned

to the Secretary upon the Secretary’s acceptance of the withdrawal

of participation in this program.’’.

(b) CONFORMING AMENDMENTS.—(1) Section 1880 of the Social

Security Act (42 U.S.C. 1395qq) is amended by adding at the

end the following:

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

tribes, tribal organizations, and Alaska Native health organizations

to elect to directly bill for, and receive payment for, health care

services provided by a hospital or clinic of such tribes or organizations and for which payment may be made under this title, see

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

1645).’’.

(2) Section 1911 of the Social Security Act (42 U.S.C. 1396j)

is amended by adding at the end the following:

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

tribes, tribal organizations, and Alaska Native health organizations

to elect to directly bill for, and receive payment for, health care

services provided by a hospital or clinic of such tribes or organizations and for which payment may be made under this title, see
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section 405 of the Indian Health Care Improvement Act (25 U.S.C.

1645).’’.

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

shall take effect on October 1, 2000.

SEC. 4. TECHNICAL AMENDMENT.

(a) IN GENERAL.—Effective November 9, 1998, section 405 of

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

reenacted as in effect on that date.

(b) REPORTS.—Effective November 10, 1998, section 405 of the

Indian Health Care Improvement Act is amended by striking subsection (e).

Speaker of the House of Representatives.

Vice President of the United States and

President of the Senate.