text: Background Indian Health Service IHS was established within the Public Health Service in 1955 in order to meet federal treaty obligations to provide health services to members of federally recognized AI/AN tribes primarily in rural areas on or near reservations. IHS oversees its provision of health care services through a decentralized system of 12 area offices, which are led by area directors and located in 12 geographic areas. IHS’s headquarters office is responsible for setting national health care policy, ensuring the delivery of quality comprehensive health services, and advocating for the health needs and concerns of AI/AN people. The area offices are responsible for monitoring federally operated IHS facilities’ operations and finances, and providing guidance and technical assistance. IHS’s 12 area offices oversee 168 service units which provide care at the local level through a total of 742 federally operated and tribally operated hospitals, health centers, and other health facilities. The types of services offered by these facilities vary, but most commonly include primary care and emergency care, as well as some ancillary and specialty services. Table 1 displays the number of federally operated and tribally operated facilities as of February 2019. PRC Program If federally operated or tribally operated facilities are unable to provide needed care, they may contract for health services from private providers through the PRC program. Patients must meet certain eligibility and administrative requirements in order to qualify for this care—including having exhausted all other health care resources available to them and living on a federally recognized Indian reservation or within a designated PRC delivery area. The PRC program is funded through the annual appropriations process and administered at the local level by individual PRC programs that are often affiliated with local facilities. Individual PRC programs may be federally or tribally administered, and as of fiscal year 2018, IHS administered 39 percent of PRC appropriations, and tribes administered the remaining 61 percent. PRC funding is limited and has traditionally been reserved for the most critical cases. IHS has established five medical priority levels. Funds permitting, federally administered PRC programs first pay for all of the highest priority services, and then all or some of the lower priority services. IHS’s five PRC medical priority levels are 1. Emergent and acutely urgent care services, which include treatment for threats to life, limb, or senses; 2. Preventive care services, which include prenatal care and 3. Primary and secondary care services, which include scheduled ambulatory services for nonemergent conditions, and specialty consultations; 4. Chronic tertiary and extended care services, which include rehabilitation care, skilled nursing facility care, and organ transplants; and 5. Excluded services, which include cosmetic and experimental procedures. PPACA Health Coverage Expansion Provisions for AI/AN Beginning in 2014, PPACA allowed states to expand Medicaid eligibility to non-elderly, non-pregnant adults who are not eligible for Medicare and whose income does not exceed 133 percent of the federal poverty level. As of September 2018, there were 32 “expansion states”—those states including the District of Columbia that chose to expand Medicaid eligibility to this additional adult population—and 19 “non-expansion states”—those that had not expanded Medicaid eligibility. PPACA also required the establishment of health insurance exchanges in 2014—marketplaces where individuals may compare and select among health insurance plans offered by participating private insurers. PPACA included a number of provisions that reduced these plans’ costs— including premiums and cost-sharing, such as deductibles and copayments—for eligible enrollees, including certain AI/AN. Health Insurance Coverage and Third- Party Collections at Federally Operated IHS Facilities Increased from 2013 to 2018; Tribal Facility Officials Also Reported Increases IHS Data Show Increase in Percent of Patients with Health Insurance Coverage at Federally Operated IHS Facilities from 2013 through 2018 Our analysis of IHS data shows that from fiscal year 2013 through fiscal year 2018, the percent of patients at 73 federally operated IHS hospitals and health centers who reported having health insurance coverage increased an average of 14 percentage points, from 64 percent in fiscal year 2013 to 78 percent in fiscal year 2018. The majority of coverage gains occurred in fiscal years 2014 through 2016 (see fig. 1). Patients at federally operated IHS facilities reported obtaining health insurance coverage from several sources. The largest increase in coverage occurred among those reporting Medicaid coverage. On average, 41 percent of IHS patients in fiscal year 2013 reported they had coverage through Medicaid at some point during the year; this number increased to 53 percent in fiscal year 2018. In comparison, the percent of patients at each facility who reported having Medicare and the percent who reported having private insurance at some point during the year each increased an average of two percentage points from fiscal years 2013 to 2018. (See fig. 2.) While the average percent of patients reporting health care coverage increased across all federally operated IHS facilities, our analysis of IHS data showed substantial variation in the magnitude of these increases. Specifically, from fiscal year 2013 through fiscal year 2018, increases at each of the 73 facilities ranged from a low of 2 to a high of 31 percentage points. Forty-four federally operated IHS facilities experienced an increase in the percent of patients with coverage over this time period of more than 10 percentage points (see fig. 3). Our analysis of IHS data shows that federally operated IHS facilities in states that expanded Medicaid had larger increases in health insurance coverage compared with such facilities in states that had not expanded Medicaid. Specifically, federally operated IHS facilities in Medicaid expansion states experienced an average 17 percentage point increase in patients reporting any form of health coverage, compared with an average 8 percentage point increase at federally operated IHS facilities in states that did not expand Medicaid. However, these increases in coverage were not spread evenly among the facilities. (See fig. 4.) IHS officials we interviewed also reported that a variety of factors in addition to Medicaid expansion likely affected the number of patients at federally operated IHS facilities who reported having health insurance coverage. Specifically, officials we interviewed at all of the 11 selected federally operated IHS facilities cited efforts at their facilities that helped increase coverage, such as increasing the number of onsite patient benefits coordinators to help enroll patients in all forms of health coverage and enhancing efforts to ensure that all patients were screened for coverage. For example, one federally operated IHS facility reported renovating its office to, among other things, move the patient benefits coordinator near the waiting room, which allowed patients to be immediately screened after walking in for an appointment. Officials we interviewed at nearly all of the selected federally operated IHS facilities also noted that their outreach and education efforts about the importance of health insurance coverage may have helped to increase enrollment. Officials we interviewed at all of the selected federally operated IHS facilities said they were engaged in such activities which included broadcasting public service announcements, posting newspaper advertisements, and promoting insurance during community events. Officials from most of the 12 IHS area offices also reported collaborating with tribes to conduct outreach and education to enhance enrollment. Officials at many IHS area offices also noted that external factors may have also played a role in increasing coverage levels, such as improvements in the local economy, which officials said led to increases in the number of patients with private health insurance. Additionally, entities outside of IHS also implemented initiatives to increase coverage for patients at federally operated IHS facilities. For example, IHS officials stated that some patients obtained health insurance through the health insurance exchanges, and in some cases, the tribe paid all premiums, coinsurance, and deductibles for these plans. In addition, a number of area Indian health boards worked together to develop a train-the-trainer program to disseminate information and resources to encourage enrollment and share information on the benefits of having health coverage. Total Third-Party Collections at Federally Operated IHS Facilities Increased 51 Percent from Fiscal Years 2013 through 2018 Third-party collections across all federally operated IHS facilities increased 51 percent from fiscal year 2013 through fiscal year 2018, according to our analysis of IHS data. Specifically, total third-party collections increased from $708 million in fiscal year 2013 to about $1.07 billion in fiscal year 2018 while the number of patients seeking care remained constant. Medicaid collections accounted for 65 percent of the total $360 million increase, though collections from Medicare, private insurance, and Veterans Affairs also increased during this period. For example, Medicaid collections grew 47 percent, from $496 million in fiscal year 2013 to $729 million in fiscal year 2018. (See fig. 5.) While third-party collections at federally operated IHS facilities collectively increased from fiscal year 2013 through 2018, there was significant variation in changes for individual facilities. IHS officials we interviewed noted several reasons why third-party collections may vary over time and by location, including the size of the facility and any changes in the number of providers, patients, or business office staff that process billing and collections; the ability to collect payment from certain tribal health insurance, which may opt to not pay for services provided to enrolled members; and the number of patients enrolled in Medicaid managed care plans, which may identify IHS facilities as out-of-network providers and not pay for covered services. IHS and federally operated facility officials we interviewed noted that gains in health insurance coverage during this time period contributed to increases in collections. In addition, officials we interviewed from most of the 12 area offices and 11 selected federally operated IHS facilities described steps they took to enhance collections. More specifically, officials from seven area offices discussed initiating steps to improve billing and collections functions for federally operated IHS facilities in their area; at one area office this involved creating a new area-level position focused on revenue enhancement at federally operated IHS facilities. Additionally, officials we interviewed at six federally operated IHS facilities identified steps they took to enhance the accuracy and efficiency of facilities’ collections, noting efforts such as improving training related to coding and billing. For example, officials at one of these facilities described convening a team to review why all claims related to a specific service were being rejected. The team then instituted changes to their billing procedures that resulted in the facility collecting payments for these services. Officials from Selected Tribally Operated Facilities and Tribal Organizations Described Increases in Health Insurance Coverage and Third-Party Collections at Some Tribal Facilities Officials we interviewed at selected tribally operated facilities and tribal organizations—including national tribal organizations and area Indian health boards—described increases in health insurance coverage and collections at some tribally operated facilities that occurred from 2013 through 2018. Specifically, some tribal organization officials reported increases in coverage at facilities located in states that had expanded their Medicaid programs, compared with those that had not. For example, officials at one tribally operated facility noted that the percent of their patients with health coverage increased by 10 percentage points from 2013 to 2018. Similar to federally operated IHS facilities, officials we interviewed from some tribally operated facilities said they focused on screening patients for coverage at the time of service, including by increasing the number of patient benefits coordinators and always having staff available to help enroll patients in coverage. These officials also noted that they conducted outreach and enrollment activities to inform patients of the importance of having coverage and benefitting from outreach and education activities conducted directly by local tribes, including through messages that emphasized the importance of coverage for the tribe and tribally operated facility. Officials from a national tribal organization told us that one tribally operated facility placed stickers on all equipment purchased with third- party collections as a way to educate patients about the benefits of having health insurance coverage and to encourage further enrollment in coverage. Officials we interviewed at selected tribally operated facilities and national tribal organizations also described increases in third-party collections that occurred from 2013 through 2018 at many tribally operated facilities— particularly those located in Medicaid expansion states. For example, officials from one tribally operated facility told us that they anticipated that their third-party collections for 2018 would be more than twice the amount they collected for 2013. Similar to federally operated IHS facilities, officials we interviewed from some tribally operated facilities noted that their facilities had enhanced collections by making improvements to their billing processes and taking steps to increase patient volume. For example, officials at one tribally operated facility said they recently began allowing non-tribal members to receive care at their facility—an option available to tribally operated facilities but not to federally operated IHS facilities—as a way to increase third-party collections and bolster the facility’s long-term sustainability. Some officials also noted that not all tribally operated facilities experienced increases in collections, in part because of decreases or limitations in the number of providers, patients, or business office staff that process billing and collections. Similar to federally operated IHS facilities, officials from tribally operated facilities noted that the enrollment of patients in Medicaid managed care plans also reduced their ability to collect payment for covered services because these plans often identify the facilities as out-of-network providers and therefore do not pay for covered services provided onsite. Increases in Coverage and Collections Reportedly Helped Selected Federally Operated and Tribally Operated Facilities to Continue Operations and Expand Services Officials we interviewed from selected federally operated and tribally operated facilities stated that increases in coverage and third-party collections helped them to (1) continue their facilities’ operations, (2) expand the services they offer onsite at their facilities, and (3) expand the services they cover offsite through IHS’s PRC program. Continued Operations Officials we interviewed from all 17 selected federally operated and tribally operated facilities noted that they used increased third-party collections to fund their continued operations. Even as officials we interviewed from nearly all of the 11 selected federally operated IHS facilities reported that their facilities’ third-party collections had grown from fiscal years 2013 to 2018, officials from most of these facilities also said they relied more heavily on these collections to support their continued operations. Officials we interviewed from all of the IHS area offices told us that third-party collections provide a vital source of funding for federally operated IHS facilities in their area. These collections allowed them to maintain a level of operations that would otherwise be challenging, for reasons such as increasing costs of payroll and of maintaining an aging infrastructure. In addition, officials we interviewed from most of the selected federally operated IHS facilities reported using third-party collections to fund a substantial and increasing portion of their payroll costs. Officials at many of the IHS area offices and most of the selected federally operated IHS facilities we interviewed also reported using third-party collections to ensure that their facility met all required standards, including those required for ongoing accreditation, or to undertake any needed maintenance such as by repairing roofs and heating systems. Some of these officials also reported using third-party collections to repair or replace medical equipment that was broken or had exceeded its intended lifespan. Table 2 displays examples of how selected federally operated and tribally operated facilities reported using third-party collections. Expanded Services Onsite Officials we interviewed from most of the 17 selected federally operated and tribally operated facilities told us they used increased third-party collections to expand the volume or scope of services they offered onsite as a way to better meet patients’ medical needs. With respect to increasing the volume of services provided, officials at most of these facilities said they added providers and medical equipment to provide patients with more timely access to services. In one example, officials from a federally operated IHS hospital said they added about 30 additional nurses from 2013 to 2018 as a result of increased third-party collections. As a result of increases in the number of providers at their facilities, officials we interviewed from several federally operated IHS facilities said they were able to schedule appointments for patients more quickly, which reduced wait times for an appointment—including two facilities that reported being able to newly offer same-day appointments. Officials from facilities that expanded the scope of services provided said they did so by adding new specialties, such as behavioral health and dentistry, purchasing new medical equipment such as hospital beds, dental chairs, and magnetic resonance imaging machines, and funding health promotion and education activities such as those related to diabetes education. (See fig. 6.) To support efforts to expand services and bolster their sustainability, officials from most of the 17 federally operated and tribally operated facilities said they used third-party collections to offer more competitive salaries and bonuses for providers. In addition, officials from a few of the 12 IHS area offices told us that federally operated facilities in their area used third-party collections to fund projects to construct nearby housing for providers. In another example, officials from a national tribal organization noted that the use of third-party collections to enhance provider salaries at one facility led to a decrease in provider turnover from about 40 percent prior to 2014 to 14 percent in 2018. In addition, officials from many of the IHS area offices told us that some federally operated facilities in their area reported using third-party collections accumulated over multiple years to make investments in expanding their facilities to provide the space necessary to support these additional services. For example, according to IHS officials, one federally operated IHS facility reported using $7 million in third- party collections to fund an over 11,000 square foot expansion to house an expanded emergency room and a new urgent care clinic; two federally operated IHS facilities reported using third-party collections to purchase modular buildings to provide medical services such as audiology, behavioral health, and dental services; and one federally operated IHS facility reported saving third-party collections for six years to fund the construction of a new 23,000 square foot building to provide additional space for an increased volume of services, including dental, optometry and physical therapy services, and to pay for the new medical equipment to support these services (see fig. 7). Officials from some IHS area offices stated that the extent to which federally operated IHS facilities in their area invested in expanding onsite services largely depended on the level of facilities’ third-party collections. Specifically, facilities experiencing larger increases in collections, such as larger facilities or those located in Medicaid expansion states, were able to invest more heavily in an expansion of onsite services compared to those that had lower increases in collections, according to these officials. To identify their facilities’ needs, officials from federally operated and tribally operated facilities reported using a variety of approaches. For example, officials from three IHS area offices and one tribally operated facility said they analyzed PRC data to identify the services that patients were obtaining through that program, and worked to bring those services onsite. Officials from two federally operated IHS facilities also noted that they incorporated local tribal input as they identified local needs and projects to fund. For example, these officials told us that their facilities were in the process of adding new specialty services onsite, including acupuncture, chiropractor, and eye clinic services, at the request of their local tribes. The recent growth in third-party collections has made it possible for many federally operated IHS facilities to consider funding a range of projects, and IHS officials said they relied on established procedures to fund these projects. According to IHS officials, local facility officials draft annual spending proposals to identify the resources, including third-party collections, that they would like to use to address their facilities’ needs. These proposals are provided to each facility’s governing board for review; the governing board is comprised of area office and facility officials whose top priority is maintaining accreditation and ensuring patient safety at each facility, according to IHS officials. Once these basic needs are met, IHS officials told us that facilities may begin to identify and fund projects to expand access to health services. Expanding Services Offsite Officials from IHS, as well as some of the 17 selected federally operated and tribally operated facilities, told us that increased coverage and collections allowed for an expansion in the complexity of services provided offsite through the PRC program. Specifically, officials reported that an increase in the percent of patients with health insurance, coupled with facilities’ enhanced onsite services, has led PRC programs to be able to expand the level of care that they can offer. For example, they stated that increases in the health insurance coverage of patients have led to a smaller percent of patients needing to access PRC, since patients may use their coverage to obtain needed services directly from other private providers. In addition, an expansion of available services onsite at federally operated and tribally operated facilities resulting from increased collections reduced the need for some patients to use PRC. From 2013 through 2018, most IHS-administered PRC programs moved from covering only the most acute and emergent cases to funding nearly all types of care covered through the PRC program, according to our analysis of IHS data and interviews with agency officials. Specifically, IHS officials we interviewed told us that prior to 2014, most PRC programs administered by the agency were only able to fund care for the most acute and emergent cases—referred to as priority level 1. Our analysis of IHS data showed that these PRC programs were increasingly able to fund additional medical priority levels of care each year from fiscal year 2015— the first year that such data were available—through fiscal year 2018, with most IHS-administered programs funding care through priority level 4 in fiscal year 2018. (See fig. 8.) Officials we interviewed at some of the 17 selected federally operated and tribally operated facilities that had been able to both expand services onsite and offsite through PRC funds told us that these changes have made a large impact on patients’ health and quality of life. For example, officials at some federally operated IHS facilities reported that having more providers onsite has allowed them to offer patients more rapid access to care, and officials from some tribally operated facilities reported that an expansion of onsite services has allowed them to serve more patients. Officials at some of the selected federally operated and tribally operated facilities reported that an expansion of onsite services has also reduced the need for some patients to travel long distances to obtain diagnostic services and specialty care through the PRC program. In addition, officials from two IHS area offices noted that PRC has been able to pay for services such as patients’ long-awaited knee and hip replacements, which have enabled patients to return to normal activities of life and reduce their need for pain management. Agency Comments We provided a draft of this report for review and comment to the Secretary of Health and Human Services. The Department did not have any comments on the draft report. As agreed with your offices, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date. At that time, we will send copies to the Secretary of the Department of Health and Human Services and other interested parties. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-7114 or farbj@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix II. Appendix I: Estimated Health Insurance Coverage of the American Indian and Alaska Native Population, 2013 through 2017 In the years since the Patient Protection and Affordable Care Act (PPACA) authorized states to expand access to Medicaid and offer health insurance through the exchanges in 2014, the percent of American Indian and Alaska Native (AI/AN) in the general population with health insurance has increased. Specifically, according to an analysis of U.S. Census Bureau’s American Community Survey data, the percent of nonelderly AI/ANs with health insurance coverage increased from 70 percent in 2013 to 78 percent in 2017. (See fig. 9.) While the estimated percent of AI/AN nationwide reporting health insurance coverage increased from 2013 to 2017, these increases in coverage were not evenly distributed among the states, according to an analysis of U.S. Census Bureau’s American Community Survey data. The estimated percent of AI/AN reporting health insurance increased more in states that expanded Medicaid compared to those that did not. (See fig. 10.) Appendix II: GAO Contact and Staff Acknowledgments GAO Contact Staff Acknowledgments In addition to the contact named above, Kristi Peterson, Assistant Director; Patricia Roy, Analyst-in-Charge; Michelle Duren; and Lisa Rogers made key contributions to this report. Also contributing were Todd Anderson, Krister Friday, Ethiene Salgado-Rodriguez, and Emily Wilson Schwark. Related GAO Products Tribal Consultation: Additional Federal Actions Needed for Infrastructure Projects. GAO-19-22. Washington, D.C.: March 20, 2019. Indian Health Service: Spending Levels and Characteristics of IHS and Three Other Federal Health Care Programs. GAO-19-74R. Washington, D.C.: December 10, 2018. Indian Health Service: Considerations Related to Providing Advance Appropriation Authority. GAO-18-652. Washington, D.C.: September 13, 2018. Indian Health Service: Agency Faces Ongoing Challenges Filling Provider Vacancies. GAO-18-580. Washington, D.C.: August 15, 2018. High-Risk Series: Progress on Many High-Risk Areas, While Substantial Efforts Needed on Others. GAO-17-317. Washington, D.C.: February 15, 2017. Indian Health Service: Actions Needed to Improve Oversight of Quality of Care. GAO-17-181. Washington, D.C.: January 9, 2017. Indian Health Service: Actions Needed to Improve Oversight of Patient Wait Times. GAO-16-333. Washington, D.C.: March 29, 2016. Indian Health Service: Opportunities May Exist to Improve the Contract Health Services Program. GAO-14-57. Washington, D.C.: December 11, 2013. Indian Health Service: Most American Indians and Alaska Natives Potentially Eligible for Expanded Health Coverage, but Action Needed to Increase Enrollment. GAO-13-553. Washington, D.C.: September 5, 2013. Indian Health Service: Increased Oversight Needed to Ensure Accuracy of Data Used for Estimating Contract Health Service Need. GAO-11-767. Washington, D.C.: September 23, 2011. Indian Health Service: Updated Policies and Procedures and Increased Oversight Needed for Billings and Collections from Private Insurers. GAO-10-42R. Washington, D.C.: October 22, 2009. Indian Health Service: Health Care Services Are Not Always Available to Native Americans. GAO-05-789. Washington, D.C.: August 31, 2005.
target: IHS provides care to American Indians and Alaska Natives through a system of health care facilities. The Patient Protection and Affordable Care Act (PPACA) provided states with the option to expand their Medicaid programs, and created new coverage options beginning in 2014, including for American Indians and Alaska Natives. GAO was asked to review how PPACA has affected health care coverage and services for American Indians and Alaska Natives. In this report, GAO describes (1) trends in health insurance coverage and third-party collections at federally operated and tribally operated facilities from fiscal years 2013 through 2018, and (2) the effects of any changes in coverage and collections on these facilities. To address these objectives, GAO analyzed IHS data on coverage, third-party collections, and PRC. GAO interviewed IHS officials from headquarters and all 12 area offices, as well as from 17 facilities selected to include a mix of federally operated and tribally operated hospitals and health centers in states that both had and had not expanded their Medicaid programs as of September 2018. GAO interviewed officials from 11 federally operated IHS facilities and 6 tribally operated facilities. GAO provided a draft of this report to the Secretary of Health and Human Services for comment. The Department did not have any comments on the draft report. GAO's analysis of Indian Health Service (IHS) data shows that from fiscal years 2013 through 2018, the percent of patients at federally operated IHS hospitals and health centers that reported having health insurance coverage increased an average of 14 percentage points. While all federally operated IHS facilities reported coverage increases, the magnitude of these changes differed by facility, with those located in states that expanded access to Medicaid experiencing the largest increases. Federally operated IHS facilities' third-party collections—that is, payments for enrollees' medical care from public programs such as Medicaid and Medicare, or from private insurers—totaled $1.07 billion in fiscal year 2018, increasing 51 percent from fiscal year 2013. Although exact figures were not available, tribally operated facilities, which include hospitals and health centers not run by IHS, also experienced increases in coverage and collections over this period, according to officials from selected facilities and national tribal organizations. Increases in health insurance coverage and third-party collections helped federally operated and tribally operated facilities continue their operations and expand the services offered, according to officials from 17 selected facilities. These officials told GAO that their facilities have been increasingly relying on third-party collections to pay for ongoing operations including staff payroll and facility maintenance. Officials at most facilities with increases in third-party collections also stated that they expanded their onsite services, including increasing the volume or scope of services offered by, for example, adding new providers or purchasing medical equipment. Increased coverage and collections also allowed for an expansion in the complexity of services provided offsite through the Purchased/Referred Care (PRC) program, which enables patients to obtain needed care from private providers if the patients meet certain requirements and funding is available. According to IHS and facility officials, increases in coverage have allowed some patients to access care offsite using their coverage, and an expansion of onsite services has reduced the need for some patients to access PRC. Officials GAO interviewed from federally operated and tribally operated facilities stated that facilities' expansion of onsite and offsite services has led to enhancements in patients' access to care in some instances.