I 
114TH CONGRESS 
2D SESSION 
H. R. 5406 
To amend the Indian Health Care Improvement Act to improve access to 
tribal health care by providing for systemic Indian Health Service work-
force and funding allocation reforms, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 8, 2016 
Mrs. NOEM (for herself, Mr. ASHFORD, Mr. SMITH of Nebraska, Mr. FORTEN-
BERRY, Mr. CRAMER, and Ms. MCCOLLUM) introduced the following bill; 
which was referred to the Committee on Natural Resources, and in addi-
tion to the Committees on Energy and Commerce and Ways and Means, 
for a period to be subsequently determined by the Speaker, in each case 
for consideration of such provisions as fall within the jurisdiction of the 
committee concerned 
A BILL 
To amend the Indian Health Care Improvement Act to im-
prove access to tribal health care by providing for sys-
temic Indian Health Service workforce and funding allo-
cation reforms, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Helping Ensure Accountability, Leadership, and Trust in 
Tribal Healthcare Act’’ or the ‘‘HEALTTH Act’’. 
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(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Findings. 
TITLE I—EXPANDING AUTHORITIES AND IMPROVING ACCESS TO 
CARE 
Sec. 101. Service hospital long-term contract pilot program. 
Sec. 102. Expanded hiring authority for the Indian Health Service. 
Sec. 103. Removal or demotion of employees. 
Sec. 104. Improving timeliness of care. 
TITLE II—INDIAN HEALTH SERVICE RECRUITMENT AND 
WORKFORCE 
Sec. 201. Exclusion from gross income for payments made under Indian Health 
Service Loan Repayment Program. 
Sec. 202. Clarifying that certain degrees qualify individuals for eligibility in the 
Indian Health Service Loan Repayment Program. 
Sec. 203. Cultural competency programs. 
Sec. 204. Relocation reimbursement. 
Sec. 205. Authority to waive Indian preference laws. 
Sec. 206. Streamlining medical volunteer credentialing process. 
TITLE III—PURCHASED/REFERRED CARE PROGRAM REFORMS 
Sec. 301. Codification of limitation on charges for health care professional serv-
ices and non-hospital-based care source. 
Sec. 302. Allocation of Purchased/Referred Care program funds. 
Sec. 303. Purchased/Referred Care program backlog. 
Sec. 304. Report on financial stability of Service hospitals and facilities. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) The United States Government has a treaty 
obligation to provide health care to American Indi-
ans and Alaska Natives. 
(2) The Indian Health Service is the Federal 
agency that is entrusted to carry out this obligation. 
(3) Access to high quality health care is critical 
for strong and vibrant tribal communities in the 
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Great Plains Area and throughout the United 
States. 
(4) In 2010, the Senate Committee on Indian 
Affairs published a report titled ‘‘In Critical Condi-
tion: The Urgent Need to Reform the Indian Health 
Service’s Aberdeen Area’’, which detailed defi-
ciencies, abuses, and malfeasance within the Aber-
deen Area of the Indian Health Service, now called 
the Great Plains Area. 
(5) In 2015 and 2016, the Centers for Medi-
care & Medicaid Services conducted surveys of In-
dian Health Service hospitals in the Great Plains 
Area and found serious structural deficiencies that 
put patients’ health and safety in immediate jeop-
ardy. 
(6) The Indian Health Service’s failures in the 
Great Plains Area have resulted in a severe reduc-
tion in access to emergency care, needlessly long 
wait times, patient suffering, low quality of life, and 
several tragic deaths. 
(7) The Indian Health Service is in need of 
comprehensive reform that will hold its management 
and employees accountable, foster strong and capa-
ble agency leadership, and restore tribal members’ 
trust in the care it delivers. 
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TITLE I—EXPANDING AUTHORI-
TIES 
AND 
IMPROVING 
AC-
CESS TO CARE 
SEC. 101. SERVICE HOSPITAL LONG-TERM CONTRACT 
PILOT PROGRAM. 
Title VIII of the Indian Health Care Improvement 
Act (25 U.S.C. 1671) is amended by adding at the end 
the following new section: 
‘‘SEC. 833. SERVICE HOSPITAL LONG-TERM CONTRACT 
PILOT PROGRAM. 
‘‘(a) IN GENERAL.—The Secretary, acting through 
the Service, shall implement a 7-year pilot program to test 
the viability and advisability of entering into long-term 
contracts for the operation of eligible Service hospitals 
with governance structures that include tribal input. 
‘‘(b) ELEMENTS.—Under such pilot program, subject 
to subsection (e), the following shall apply: 
‘‘(1) The Secretary shall select three eligible 
Service hospitals in rural areas to participate in the 
pilot program. 
‘‘(2) For each such participating hospital, the 
Secretary shall enter into a long-term contract. 
‘‘(3) At each such participating hospital, the 
Secretary, in consultation with the primary Indian 
tribes served by the hospital, shall install a gov-
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erning board described in subsection (d), which shall 
be responsible for overseeing the local operation of 
the hospital. 
‘‘(c) ELIGIBLE SERVICE HOSPITAL.—For purposes 
of this section, the term ‘eligible Service hospital’ means 
a Service hospital that furnishes services in a rural area 
to direct services tribes and with respect to which the Sec-
retary has obtained the permission of the primary Indian 
tribes served by the hospital for the hospital to participate 
under the pilot program under this section. 
‘‘(d) GOVERNANCE BOARD DESCRIBED.—For pur-
poses of subsection (b), a governance board described in 
this subsection, with respect to a Service hospital partici-
pating in the pilot program, is a board that satisfies the 
following criteria: 
‘‘(1) COMPOSITION.— 
‘‘(A) IN GENERAL.—The governance board 
is composed, in accordance with the best prac-
tices specified under paragraph (3), of the fol-
lowing individuals: 
‘‘(i) Representatives of the Service, 
who shall be selected by the Secretary. 
‘‘(ii) Representatives of the Service 
hospital. 
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‘‘(iii) Representatives of each primary 
Indian tribe served by the hospital, who 
shall be selected by the respective Indian 
tribe. 
‘‘(iv) Experts in health care adminis-
tration and delivery, who shall— 
‘‘(I) be selected by the Secretary 
and respective Indian tribe; and 
‘‘(II) to the extent possible, lo-
cated in the State in which the hos-
pital is located or otherwise familiar 
with such State. 
‘‘(B) VOTING RIGHTS.—In determining the 
composition of the board with respect to voting 
rights on the board— 
‘‘(i) the number of voting members 
representing the Service shall be equal to 
the number of voting members rep-
resenting the Indian tribes involved; and 
‘‘(ii) the number of voting members 
representing the hospital may not be great-
er than the number of voting members rep-
resenting the Service or the Indian tribes 
involved. 
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‘‘(2) DUTIES.—The governance board shall per-
form duties in accordance with the best practices 
specified under paragraph (3) and shall include de-
veloping financial and quality metrics and standards 
for salaries, recruitment, retention, training, and 
dismissal of employees of such hospital. 
‘‘(3) BEST
PRACTICES.—The Secretary shall 
specify best practices for the governance board de-
scribed in this subsection, including best practices 
relating to the number of members of such board, 
the authorities of the board, and the duties of the 
board. 
‘‘(e) TREATMENT OF ELIGIBLE SERVICE HOSPITALS 
CURRENTLY UNDER CONTRACT.—In the case of an eligi-
ble Service hospital that is under a current contract with 
the Secretary as of the initiation of the selection process 
period for the pilot program, in order for such hospital 
to participate in the pilot program the Secretary, with the 
agreement of the hospital, may— 
‘‘(1) notwithstanding any other provision of 
law, modify or terminate such contract and in order 
for such hospital to enter into a long-term contract 
under the pilot program; or 
‘‘(2) enter into a long-term contract under the 
pilot program (and begin the pilot program) begin-
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ning on the date after the last date of such current 
contract. 
‘‘(f) LONG-TERM CONTRACT DEFINED.—For pur-
poses of this section, the term ‘long-term contract’ means 
a contract for a period of at least 5 years. 
‘‘(g) CLARIFICATION.—Nothing in this section shall 
be construed to inhibit a tribe’s authority to enter into 
a compact or contract under the Indian Self-Determina-
tion and Education Assistance Act. 
‘‘(h) REPORTS.—For each year of the pilot program, 
the Secretary shall submit a report to Congress on the 
results of the program demonstrated during the respective 
year. Each such report shall include the following: 
‘‘(1) Information related to the financial health 
of each eligible hospital participating in the pilot 
program. 
‘‘(2) Information on the affect the pilot pro-
gram has on access to care. 
‘‘(3) Information on patient satisfaction with 
services provided at such hospitals. 
‘‘(4) The number of readmissions at such hos-
pitals. 
‘‘(5) The number of hospital-acquired condi-
tions at such hospitals. 
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‘‘(6) Recommendations on the viability and ad-
visability of the long-term contracts and hospital 
governance structure under such pilot program. 
‘‘(7) Any other information the Secretary con-
siders necessary for a proper analysis of the pilot 
program.’’. 
SEC. 102. EXPANDED HIRING AUTHORITY FOR THE INDIAN 
HEALTH SERVICE. 
Section 601(d) of the Indian Health Care Improve-
ment Act (25 U.S.C. 1661(d)) is amended— 
(1) in paragraph (1)(A), by inserting ‘‘and sub-
ject to paragraph (4)’’ after ‘‘paragraph (2)’’; and 
(2) by adding at the end the following: 
‘‘(4) EMPLOYMENT AUTHORITY.— 
‘‘(A) IN
GENERAL.—The Secretary may, 
with respect to any employee described in sub-
paragraph (B), provide that one or more provi-
sions of chapter 74 of title 38, United States 
Code (other than subchapter V of such chapter 
or of regulations promulgated under such chap-
ter other than under such subchapter), shall 
apply— 
‘‘(i) in lieu of any provision of title 5 
of the United States Code (other than as 
applied pursuant to section 834); or 
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‘‘(ii) notwithstanding any lack of spe-
cific authority for a matter with respect to 
which title 5 of the United States Code re-
lates. 
‘‘(B) APPLICABILITY TO EMPLOYEES.—Au-
thority under this paragraph may be exercised 
with respect to any employee in the Service 
holding a position— 
‘‘(i) to which chapter 51 of title 5 of 
the United States Code applies, excluding 
any senior executive service position; and 
‘‘(ii) which involves health care re-
sponsibilities. 
‘‘(C) DEFINITION.—For purposes of this 
paragraph, ‘health care’ means direct patient- 
care services or services incident to direct pa-
tient-care services.’’. 
SEC. 103. REMOVAL OR DEMOTION OF EMPLOYEES. 
(a) IN GENERAL.—Title VIII of the Indian Health 
Care Improvement Act (25 U.S.C. 1671 et seq.), as 
amended by section 101, is further amended by adding 
at the end the following new section: 
‘‘SEC. 834. REMOVAL OR DEMOTION OF EMPLOYEES. 
‘‘(a) IN GENERAL.—The Secretary may remove or 
demote an individual who is an employee of the Service 
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if the Secretary determines the performance or misconduct 
of the individual warrants such removal or demotion. If 
the Secretary so removes or demotes such an individual, 
the Secretary may— 
‘‘(1) remove the individual from the Service; or 
‘‘(2) demote the individual by means of— 
‘‘(A) a reduction in grade for which the in-
dividual is qualified and that the Secretary de-
termines is appropriate; or 
‘‘(B) a reduction in annual rate of pay 
that the Secretary determines is appropriate. 
In the case of an individual who is removed under 
paragraph (1) or demoted under paragraph (2), the 
Secretary may require such individual take unpaid 
administrative leave for not longer than 10 consecu-
tive work days. 
‘‘(b) PAY OF CERTAIN DEMOTED INDIVIDUALS.—(1) 
Notwithstanding any other provision of law, any individual 
subject to a demotion under subsection (a)(2)(A) shall, be-
ginning on the date of such demotion, receive the annual 
rate of pay applicable to such grade. 
‘‘(2) An individual so demoted may not be placed on 
administrative leave or any other category of paid leave 
during the period during which an appeal (if any) under 
this section is ongoing, and may only receive pay if the 
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individual reports for duty. If an individual so demoted 
does not report for duty, such individual shall not receive 
pay or other benefits pursuant to subsection (e)(5). 
‘‘(c) NOTICE TO SECRETARY.—Not later than 30 
days after removing or demoting an individual under sub-
section (a), the Service shall submit to the Secretary no-
tice in writing of such removal or demotion and the reason 
for such removal or demotion. 
‘‘(d) PROCEDURE.—(1) The procedures under section 
7513(b) of title 5 and chapter 43 of such title shall not 
apply to a removal or demotion under this section. 
‘‘(2)(A) Subject to subparagraph (B) and subsection 
(e), any removal or demotion under subsection (a) may 
be appealed to the Merit Systems Protection Board under 
section 7701 of title 5. 
‘‘(B) An appeal under subparagraph (A) of a removal 
or demotion may only be made if such appeal is made not 
later than seven days after the date of such removal or 
demotion. 
‘‘(e) EXPEDITED
REVIEW
BY
ADMINISTRATIVE 
JUDGE.—(1) Upon receipt of an appeal under subsection 
(d)(2)(A), the Merit Systems Protection Board shall refer 
such appeal to an administrative judge pursuant to section 
7701(b)(1) of title 5. The administrative judge shall expe-
dite any such appeal under such section and, in any such 
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case, shall issue a decision not later than 45 days after 
the date of the appeal. 
‘‘(2) Notwithstanding any other provision of law, in-
cluding section 7703 of title 5, the decision of an adminis-
trative judge under paragraph (1) shall be final and shall 
not be subject to any further appeal. 
‘‘(3) In any case in which the administrative judge 
cannot issue a decision in accordance with the 45-day re-
quirement under paragraph (1), the removal or demotion 
is final. In such a case, the Merit Systems Protection 
Board shall, within 14 days after the date that such re-
moval or demotion is final, submit to Congress a report 
that explains the reasons why a decision was not issued 
in accordance with such requirement. 
‘‘(4) The Merit Systems Protection Board or admin-
istrative judge may not stay any removal or demotion 
under this section. 
‘‘(5) During the period beginning on the date on 
which an individual appeals a removal from the Service 
under subsection (d) and ending on the date that the ad-
ministrative judge issues a final decision on such appeal, 
such individual may not receive any pay, awards, bonuses, 
incentives, allowances, differentials, student loan repay-
ments, special payments, or benefits. 
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‘‘(6) To the maximum extent practicable, the Sec-
retary shall provide to the Merit Systems Protection 
Board, and to any administrative judge to whom an appeal 
under this section is referred, such information and assist-
ance as may be necessary to ensure an appeal under this 
subsection is expedited. 
‘‘(f) TERMINATION OF INVESTIGATIONS BY OFFICE 
OF SPECIAL COUNSEL.—Notwithstanding any other provi-
sion of law, the Special Counsel (established by section 
1211 of title 5) may terminate an investigation of a pro-
hibited personnel practice alleged by an employee or 
former employee of the Department after the Special 
Counsel provides to the employee or former employee a 
written statement of the reasons for the termination of 
the investigation. Such statement may not be admissible 
as evidence in any judicial or administrative proceeding 
without the consent of such employee or former employee. 
‘‘(g) RELATION TO TITLE 5.—The authority provided 
by this section is in addition to the authority provided by 
subchapter V of chapter 75 of title 5 and chapter 43 of 
such title. 
‘‘(h) DEFINITIONS.—In this section: 
‘‘(1) The term ‘individual’ means an individual 
occupying a position at the Service but does not in-
clude— 
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‘‘(A) an individual, as that term is defined 
in section 713(g)(1); or 
‘‘(B) a political appointee. 
‘‘(2) The term ‘grade’ has the meaning given 
such term in section 7511(a) of title 5. 
‘‘(3) The term ‘misconduct’ includes neglect of 
duty, malfeasance, or failure to accept a directed re-
assignment or to accompany a position in a transfer 
of function. 
‘‘(4) The term ‘political appointee’ means an in-
dividual who is— 
‘‘(A) employed in a position described 
under sections 5312 through 5316 of title 5 
(relating to the Executive Schedule); 
‘‘(B) a limited term appointee, limited 
emergency appointee, or noncareer appointee in 
the Senior Executive Service, as defined under 
paragraphs (5), (6), and (7), respectively, of 
section 3132(a) of title 5; or 
‘‘(C) employed in a position of a confiden-
tial or policy-determining character under 
schedule C of subpart C of part 213 of title 5 
of the Code of Federal Regulations.’’. 
(b) CONFORMING.—Section 4303(f) of title 5, United 
States Code, is amended— 
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(1) by striking ‘‘or’’ at the end of paragraph 
(2); 
(2) by striking the period at the end of para-
graph (3) and inserting ‘‘, or’’; and 
(3) by adding at the end the following: 
‘‘(4) any removal or demotion under section 
834 of the Indian Health Care Improvement Act.’’. 
SEC. 104. IMPROVING TIMELINESS OF CARE. 
Title III of the Indian Health Care Improvement Act 
(25 U.S.C. 1631 et seq.) is amended by adding at the end 
the following new section: 
‘‘SEC. 314. STANDARDS TO IMPROVE TIMELINESS OF CARE. 
‘‘(a) IN GENERAL.—The Secretary, acting through 
the Service, shall— 
‘‘(1) establish, by regulation, standards to 
measure the timeliness of the provision of health 
care services in Service facilities; and 
‘‘(2) make such standards available to all Serv-
ice areas and Service facilities. 
‘‘(b) DATA COLLECTION.—The Secretary, acting 
through the Service, shall develop a process for Service 
facilities to submit to the Secretary data with respect to 
the standards established under subsection (a).’’. 
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TITLE II—INDIAN HEALTH SERV-
ICE 
RECRUITMENT 
AND 
WORKFORCE 
SEC. 201. EXCLUSION FROM GROSS INCOME FOR PAY-
MENTS MADE UNDER INDIAN HEALTH SERV-
ICE LOAN REPAYMENT PROGRAM. 
(a) IN GENERAL.—Section 108(f)(4) of the Internal 
Revenue Code of 1986 is amended by inserting ‘‘under 
section 108 of the Indian Health Care Improvement Act,’’ 
after ‘‘338I of such Act,’’. 
(b) CLERICAL AMENDMENT.—The heading for sec-
tion 108(f)(4) of such Code is amended by striking ‘‘AND 
CERTAIN’’ and inserting ‘‘, INDIAN HEALTH SERVICE LOAN 
REPAYMENT PROGRAM, AND CERTAIN’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts received after the date 
of the enactment of this Act. 
SEC. 202. CLARIFYING THAT CERTAIN DEGREES QUALIFY 
INDIVIDUALS FOR ELIGIBILITY IN THE IN-
DIAN HEALTH SERVICE LOAN REPAYMENT 
PROGRAM. 
Section 108 of the Indian Health Care Improvement 
Act (25 U.S.C. 1616a) is amended— 
(1) in subsection (b)(1)(B)— 
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(A) in clause (i), by inserting ‘‘(including 
a degree business administration with an em-
phasis in health care management, as defined 
by the Secretary, or a degree in health adminis-
tration, hospital administration, or public 
health)’’ before the semicolon; and 
(B) in clause (ii), by inserting ‘‘or a license 
or certification to practice in the field of health 
administration, hospital administration, busi-
ness administration, or public health, as appli-
cable, in a State’’ before the semicolon; 
(2) in subsection (f)(1)(B)(iii), by striking ‘‘2 
years or such longer period as the individual may 
agree to serve in the full-time clinical practice of 
such individual’s profession’’ and inserting ‘‘2 years 
or such longer period as the individual may agree to 
serve in the full-time practice of such individual’s 
profession (or 4 years or such longer period as the 
individual may agree to serve in the half-time prac-
tice of such individual’s profession)’’; and 
(3) in subsection (g)(2)(A), in the first sen-
tence— 
(A) by inserting ‘‘, in the case of an indi-
vidual agreeing to serve in the full-time practice 
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of such individual’s profession,’’ before ‘‘up to 
$35,000’’; and 
(B) by inserting ‘‘(or, in the case of an in-
dividual agreeing to serve in the half-time prac-
tice of such individual’s profession, up to 
$17,500)’’ before ‘‘on behalf of’’. 
SEC. 203. CULTURAL COMPETENCY PROGRAMS. 
Title I of the Indian Health Care Improvement Act 
(25 U.S.C. 1611 et seq.) is amended by adding at the end 
the following new section: 
‘‘SEC. 125. CULTURAL COMPETENCY PROGRAMS. 
‘‘(a) IN GENERAL.—The Secretary, acting through 
the Service, shall, not later than one year after the date 
of the enactment of this section and for each Service area, 
develop and implement training programs for cultural 
competency for employees of the Service, locum tenens 
medical providers, and other contracted employees who 
work at Service hospitals or other Service facilities and 
whose employment requires regular direct patient access. 
‘‘(b) REQUIRED PARTICIPATION.—Notwithstanding 
any other provision of law, beginning with years beginning 
after (and for contracts entered into on or after) the date 
of implementation of the training programs under sub-
section (a), annual participation in such a program shall 
be a condition of employment (or of providing services in 
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the capacity as a locum tenen medical provider or of the 
terms of the contracted employment, as applicable), and 
continued employment (or provision of such services in 
such capacity or contracted employment, as applicable), 
for each employee of the Service, locum tenens medical 
provider, and contracted employee described in such sub-
section. For purposes of the previous sentence, an indi-
vidual shall not be considered as participating in such a 
program, with respect to a year, unless such individual 
satisfies such requirements, including testing, included in 
such program for such year, as specified by the Secretary. 
‘‘(c) CONSULTATION.—In developing a training pro-
gram under subsection (a) for a Service area, the Sec-
retary shall consult with representatives of each Indian 
tribe served in such area.’’. 
SEC. 204. RELOCATION REIMBURSEMENT. 
Title I of the Indian Health Care Improvement Act 
(25 U.S.C. 1611 et seq.), as amended by section 203, is 
further amended by adding at the end the following new 
section: 
‘‘SEC. 126. RELOCATION REIMBURSEMENT. 
‘‘(a) IN GENERAL.—In the case of an employee of 
the Service who relocates to serve in a different capacity 
or position as an employee of the Service, the Secretary 
shall, subject to subsection (b), offer such employee reim-
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bursement for reasonable costs associated with such relo-
cation, as determined by the Secretary, incurred by such 
employee if— 
‘‘(1) such relocation is to fill a position that— 
‘‘(A) is at a Service facility that is located 
in a rural area or medically underserved area; 
and 
‘‘(B) had not been filled by a full-time non- 
contractor for a period of at least 6 months; or 
‘‘(2) such relocation is to fill a position that is 
for hospital management or administration, as deter-
mined by the Secretary. 
‘‘(b) AMOUNT FOR RELOCATION.— 
‘‘(1) IN GENERAL.—The amount of reimburse-
ment to an employee under subsection (a) shall be 
in an amount that is at least 50 percent, but not 
more than 75 percent, of the specified pay amount 
(as described in paragraph (2)) of the employee. 
‘‘(2) SPECIFIED PAY AMOUNT.—For purposes 
of paragraph (1), the specified pay amount, with re-
spect to an employee, is the annual rate of basic pay 
of the employee in effect at the beginning of the 
service period of such employee multiplied by the 
number of years (including fractions of a year) in 
the service period, not to exceed 4 years. 
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‘‘(c) CLARIFICATION.—Nothing in this section shall 
be construed as limiting the authority of the Secretary, 
as in existence before the enactment of this section, to 
offer reimbursement for travel or relocation.’’. 
SEC. 205. AUTHORITY TO WAIVE INDIAN PREFERENCE 
LAWS. 
Title VI of the Indian Health Care Improvement Act 
(25 U.S.C. 1611 et seq.) is amended by adding at the end 
the following new section: 
‘‘SEC. 605. AUTHORITY TO WAIVE INDIAN PREFERENCE 
LAWS. 
‘‘To enhance recruitment and retention of employees 
of the Service, the Secretary may waive the requirements 
of the Indian preference laws (as defined in section 2(e) 
of Public Law 96–135 (25 U.S.C. 472a(e))) with respect 
to a personnel action with respect to a Service unit with 
the written request or resolution of an Indian tribe located 
within the applicable Service unit— 
‘‘(1) if such personnel action is with respect to 
a facility that has a personnel vacancy rate of at 
least 20 percent; or 
‘‘(2) in the case such personnel action is with 
respect to a former employee of the Service or 
former tribal employee who was removed from such 
former employment or demoted for misconduct that 
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occurred during the five years prior to the date of 
such personnel action.’’. 
SEC. 
206. 
STREAMLINING 
MEDICAL 
VOLUNTEER 
CREDENTIALING PROCESS. 
Title I of the Indian Health Care Improvement Act 
(25 U.S.C. 1611 et seq.), as amended by sections 203 and 
204, is further amended by adding at the end the following 
new section: 
‘‘SEC. 
128. 
STREAMLINING 
MEDICAL 
VOLUNTEER 
CREDENTIALING PROCESS. 
‘‘(a) IN GENERAL.—The Secretary, acting through 
the Service, shall, in accordance with subsection (b), im-
plement a Service-wide centralized credentialing system to 
credential licensed health professionals who seek to volun-
teer at a Service facility. 
‘‘(b) REQUIREMENTS.—The credentialing system im-
plemented under subsection (a) shall be in accordance with 
the following: 
‘‘(1) Credentialing of licensed health profes-
sionals who seek to volunteer at a Service facility 
shall occur at the Service level. 
‘‘(2) Credentialing procedures under such sys-
tem shall be uniform throughout the Service. 
‘‘(3) Under such system, in the case that such 
a licensed health professional has successfully com-
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pleted the credentialing procedures under such sys-
tem, such professional shall be authorized to treat 
patients at any Service facility or other facility with-
in a Service area. 
‘‘(c) REGULATIONS.—The Secretary may promulgate 
regulations to implement this section. 
‘‘(d) CONSULTATION.—The Secretary may consult 
with public and private associations of medical providers 
in the development of the credentialing system under this 
section. 
‘‘(e) APPLICATION.—The credentialing system under 
this section shall apply with respect to licensed health pro-
fessionals seeking to volunteer with respect to— 
‘‘(1) providing direct health care services at a 
Service facility; and 
‘‘(2) providing services at facilities operated or 
contracted by a tribe, tribal organization, or urban 
Indian organization under the Indian Self-Deter-
mination and Education Assistance Act. 
‘‘(f) CLARIFICATION.—Nothing in this section shall 
be construed to inhibit a tribe’s authority to enter into 
a compact or contract under the Indian Self-Determina-
tion and Education Assistance Act.’’. 
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TITLE 
III—PURCHASED/RE-
FERRED CARE PROGRAM RE-
FORMS 
SEC. 301. CODIFICATION OF LIMITATION ON CHARGES FOR 
HEALTH 
CARE 
PROFESSIONAL 
SERVICES 
AND NON-HOSPITAL-BASED CARE SOURCE. 
(a) APPLICABILITY.—The requirements of this sec-
tion shall apply to— 
(1) health programs operated by the Indian 
Health Service; 
(2) health programs operated by an urban In-
dian organization through a contract or grant under 
title V of the Indian Health Care Improvement Act, 
Public Law 94–437, as amended; and 
(3) health programs operated by an Indian 
tribe or tribal organization pursuant to a contract or 
compact with the Indian Health Service under the 
Indian Self-Determination and Education Assistance 
Act (25 U.S.C. 450 et seq.), provided that the In-
dian tribe or tribal organization has agreed in such 
contract or compact to be bound by this section pur-
suant to section 108 of the Indian Self-Determina-
tion and Education Assistance Act (25 U.S.C. 450l) 
and section 517(e) of such Act (25 U.S.C. 458aaa– 
16(e)), as applicable. 
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(b) DEFINITIONS.—For purposes of this section, the 
following definitions apply: 
(1) The term ‘‘notification of a claim’’ means, 
the submission of a claim, with respect to services 
for an individual, that meets the requirements of 
section 136.24 of title 42, Code of Federal Regula-
tions, in accordance with the following: 
(A) Such claim is submitted within the ap-
plicable period specified under such section 
136.24, or if applicable, section 406 of the In-
dian Health Care Improvement Act (25 U.S.C. 
1646), and includes information necessary to 
determine the relative medical need for the 
services and the individual’s eligibility. 
(B) The information submitted with the 
claim is sufficient to— 
(i) identify the individual as eligible 
for Indian Health Service services (such as 
name, address, home or referring service 
unit, tribal affiliation); 
(ii) identify the medical care provided 
(such as the date of service and description 
of services); and 
(iii) verify prior authorization by the 
Indian Health Service for services provided 
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(such as the IHS purchase order number 
or medical referral form) or exemption 
from prior authorization (such as copies of 
pertinent clinical information for emer-
gency care that was not prior-authorized). 
(C) To be considered sufficient notification 
of a claim, a claim submitted by a provider or 
supplier for payment shall be in a format that 
complies with the format required for submis-
sion of claims under title XVIII of the Social 
Security Act (42 U.S.C. 1395 et seq.) or recog-
nized under section 1175 of such Act (42 
U.S.C. 1320d–4). 
(2) The term ‘‘provider’’ means a provider of 
services not governed by or subject to subpart D of 
part 136 of title 42, Code of Federal Regulations, 
and may include a skilled nursing facility, com-
prehensive outpatient rehabilitation facility, home 
health agency, or hospice program. 
(3) The term ‘‘referral’’ means an authorization 
for medical care by the appropriate ordering official 
in accordance with subpart C of part 136 of title 42, 
Code of Federal Regulations. 
(4) The term ‘‘repricing agent’’ means an entity 
that offers the Indian Health Service or a tribe, trib-
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al organization, or urban Indian organization dis-
counted rates from public and private providers that 
are not the Indian Health Service or a tribe, tribal 
organization, or urban Indian organization as a re-
sult of existing contracts that the public or private 
provider other than the Indian Health Service or a 
tribe, tribal organization, or urban Indian organiza-
tion may have within the commercial health care in-
dustry. 
(5) The term ‘‘supplier’’ means a physician or 
other practitioner, a facility, or other entity (other 
than a provider) not already governed by or subject 
to subpart D of part 136 of title 42, Code of Fed-
eral Regulations, that furnishes items or services 
under this section. 
(c) PAYMENT FOR PROVIDER AND SUPPLIER SERV-
ICES PURCHASED BY INDIAN HEALTH PROGRAMS.— 
(1) IN GENERAL.—Payment to providers and 
suppliers for any level of care authorized under sub-
part C of part 136 of title 42, Code of Federal Reg-
ulations, by a Purchased/Referred Care program of 
the Indian Health Service, authorized by a tribe or 
tribal organization carrying out such a program of 
the Indian Health Service under the Indian Self-De-
termination and Education Assistance Act (25 
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U.S.C. 450 et seq.), authorized for purchase under 
section 136.31 of such title 42, Code of Federal 
Regulations, by an urban Indian organization (as 
that term is defined in 25 U.S.C. 1603(h)) (here-
after collectively referred to as the ‘‘I/T/U’’), shall, 
subject to subsection (e), be determined based on 
one of the methods described in the following sub-
paragraphs, as applicable: 
(A) MFC RATE METHOD.— 
(i) IN
GENERAL.—The method de-
scribed in this subparagraph is that, sub-
ject to clause (ii), in the case a specific 
amount for an item or service has been ne-
gotiated with a specific provider or supplier 
or its agent by the I/T/U, the I/T/U shall 
pay that amount for such item or service. 
(ii) LIMITATION.—The amount ap-
plied under clause (i) for an item or service 
shall be an amount that is at least the 
amount of the provider’s or supplier’s most 
favored customer rate, as defined by the 
Secretary of Health and Human Services, 
for an item or service, as evidenced by 
commercial price lists or paid invoices and 
other related pricing and discount data to 
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ensure that the I/T/U is receiving a fair 
and reasonable price. The limitation under 
the previous sentence shall not apply with 
respect to an item or service if— 
(I) the amount offered to the I/ 
T/U under the negotiation under 
clause (i) is fair and reasonable, as 
determined by the I/T/U, even though 
comparable discounts were not nego-
tiated; and 
(II) the amount is otherwise in 
the best interest of the I/T/U, as de-
termined by the I/T/U. 
(B) MEDICARE RATES.—The method de-
scribed in this subparagraph is that, in the case 
that an amount for an item or service has not 
been negotiated in accordance with subpara-
graph (A), the I/T/U will pay the lowest of the 
following amounts for the item or service: 
(i) The amount that is the applicable 
payment amount under the Medicare pro-
gram under title XVIII of the Social Secu-
rity Act for such item or service, including 
payment according to a fee schedule, a 
prospective payment system or based on 
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reasonable cost for the period in which the 
service was provided, or in the event of a 
Medicare waiver, the payment amount will 
be calculated in accordance with such waiv-
er. For purposes of this paragraph, the 
amount described in this clause shall be re-
ferred to as the ‘‘Medicare rate’’. 
(ii) An amount negotiated by a repric-
ing agent if the provider or supplier is par-
ticipating within the repricing agent’s net-
work and the I/T/U has a pricing arrange-
ment or contract with that repricing agent. 
(iii) An amount not to exceed the pro-
vider or supplier’s most favored customer 
rate described in subparagraph (A)(ii) for 
such item or service, as evidenced by com-
mercial price lists or paid invoices and 
other related pricing and discount data to 
ensure that the I/T/U is receiving a fair 
and reasonable price, but only to the ex-
tent such evidence is reasonably accessible 
and available to the I/T/U. 
(C) OTHER.—The method described in this 
subparagraph is that, in the case that a Medi-
care rate does not exist for an item or service, 
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and no other method described in a previous 
subparagraph is accessible or available, the 
amount shall be deemed to be 65 percent of au-
thorized charges for such item or service. 
(2) COORDINATION OF BENEFITS AND LIMITA-
TION ON RECOVERY.—If an I/T/U has authorized 
payment for items and services provided to an indi-
vidual who is eligible for benefits under title XVIII 
of the Social Security Act, title XIX of such Act, or 
another third-party payer, the following shall apply: 
(A) The I/T/U shall be the payer of last 
resort under section 2901(b) of the Patient 
Protection and Affordable Care Act (25 U.S.C. 
1623(b)). 
(B) If there are any third-party payers, the 
I/T/U shall pay the amount for which the pa-
tient is being held responsible after the provider 
or supplier of services has coordinated benefits 
and all other alternate resources have been con-
sidered and paid, including applicable copay-
ments, deductibles, and coinsurance that are 
owed by the patient. 
(C) The maximum payment by the I/T/U 
shall be only the portion of the payment 
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amount determined under this section not cov-
ered by any other payer. 
(D) The I/T/U payment may not exceed 
the rate calculated in accordance with para-
graph (1) of this section (plus applicable cost 
sharing). 
(E) In the case payment is made under 
such title XIX for an item or service such pay-
ment shall be considered payment in full and 
there shall be no additional payment made by 
the I/T/U for such item or service. 
(3) AUTHORIZED SERVICES.—Payment shall be 
made only for those items and services authorized by 
an I/T/U consistent with this section or section 
503(a) of the Indian Health Care Improvement Act 
(25 U.S.C. 1653(a)). 
(4) NO ADDITIONAL CHARGES.— 
(A) If an amount has not been negotiated 
under paragraph (1)(A) for an item or service, 
the provider or supplier shall be deemed to have 
accepted the applicable payment amount under 
paragraph (1)(B) for such item or service as 
payment in full if— 
(i) the item or service was provided 
based on a referral; 
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(ii) the provider or supplier submits a 
notification of a claim for payment to the 
I/T/U; or 
(iii) the provider or supplier accepts 
payment for the provision of such item or 
service from the I/T/U. 
(B) A payment made and accepted in ac-
cordance with this section shall constitute pay-
ment in full and the provider or its agent, or 
supplier or its agent, may not impose any addi-
tional charge— 
(i) on the individual for I/T/U author-
ized items and services; or 
(ii) for information requested by the I/ 
T/U or its agent or fiscal intermediary for 
the purposes of payment determinations or 
quality assurance. 
(5) NOTIFICATION
OF
CLAIM.—The Indian 
Health Service shall not adjudicate a notification of 
a claim that does not contain the information de-
scribed in subsection (b)(1) with an approval or de-
nial, except that the Service may request further in-
formation from the individual, or as applicable, the 
provider or supplier, necessary to make a decision. 
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A notification of a claim meeting the requirements 
specified herein does not guarantee payment. 
(6) RATE
AUTHORIZED.—No service shall be 
authorized and no payment shall be issued under 
this section in excess of the rate authorized by this 
section. 
(d) AUTHORIZATION BY AN URBAN INDIAN ORGANI-
ZATION.—An urban Indian organization may authorize for 
purchase items and services for an eligible urban Indian 
as those terms are defined in section 4 of the Indian 
Health Care Improvement Act (25 U.S.C. 1603) according 
to section 503 of such Act (25 U.S.C. 1653) and applica-
ble regulations. Services and items furnished by physicians 
and other health care professionals and non-hospital-based 
entities shall be subject to the payment methodology set 
forth in this section. 
(e) EXCEPTION.—In the case of a payment described 
in subsection (c) that is with respect to a rare specialty 
service, as specified by the Secretary of Health and 
Human Services, or a service furnished in highly rural and 
medically underserved areas, as specified by the Secretary, 
the Indian Health Service or tribe or tribal organization 
involved may negotiate an amount for such payment for 
such service that is greater than the payment amount that 
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would be recognized under title XVIII of the Social Secu-
rity for such service. 
(f) REPORT.—Not later than two years after the date 
of the enactment of this Act, the Secretary of Health and 
Human Services, acting through the Director of the In-
dian Health Service, shall submit to Congress a report on 
the impact of this section on access to care under the Pur-
chased/Referred Care program, including recommenda-
tions for such legislative actions as the Secretary deter-
mines appropriate. 
SEC. 302. ALLOCATION OF PURCHASED/REFERRED CARE 
PROGRAM FUNDS. 
(a) IN GENERAL.—Title II of the Indian Health Care 
Improvement Act is amended by inserting after section 
226 (25 U.S.C. 1621y) the following new section: 
‘‘SEC. 227. PURCHASED/REFERRED CARE PROGRAM DIS-
BURSEMENT FORMULA. 
‘‘(a) IN GENERAL.—The Secretary shall, with respect 
to the Purchased/Referred Care program (formerly re-
ferred to as the ‘contract health services program’) funded 
by the Indian Health Service and operated by the Indian 
Health Service, an Indian tribe, or tribal organization, re-
view the distribution of funds pursuant to the program 
and initiate procedures under subchapter III of chapter 
5 of title 5, United States Code, to negotiate or promul-
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gate regulations to develop and implement a revised dis-
tribution formula in accordance with the subsequent sub-
sections of this section. 
‘‘(b) CONSIDERATIONS.—In developing the revised 
distribution formula under subsection (a), the Secretary 
shall consider— 
‘‘(1) the extent to which services are available 
at a Service hospital or facility of the Service rather 
than the mere existence of such a hospital or facility; 
‘‘(2) population growth and the potential for 
population growth; 
‘‘(3) the socioeconomic makeup of the popu-
lation of each contract health service delivery area; 
‘‘(4) the geographic makeup of each contract 
health service delivery area; 
‘‘(5) the size of the hospital or facility; 
‘‘(6) the relative regional cost of purchasing 
services; 
‘‘(7) actual counts of Purchased/Referred Care 
users; and 
‘‘(8) accreditation problems at the Service hos-
pital or facility of the Service. 
‘‘(c) IMPLEMENTATION DEADLINE.—The revised dis-
tribution formula under subsection (a) shall be imple-
mented not later than the date that is 3 years after the 
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first October 1 following the date of the enactment of this 
Act. 
‘‘(d) TRANSITION.— 
‘‘(1) IN GENERAL.—Notwithstanding any other 
provision of law, for the period beginning on the 
first October 1 following the date of the enactment 
of this section and ending the day before the imple-
mentation date of the revised distribution formula 
under subsection (a), the Secretary shall provide for 
the distribution of funds, with respect to direct 
health care services provided by a Service facility, 
pursuant to the Purchased/Referred Care program 
(and with respect to services provided by any other 
facility under such program, at the option of such 
facility) be consistent with the following: 
‘‘(A) During any portion of such period for 
which a Service area has been designated as a 
high IHS level area under paragraph (2)(B), 
such area shall not receive any funds pursuant 
to such program in addition to the base allot-
ment determined under the distribution formula 
under the program for 2016 with respect to 
such area. 
‘‘(B) In the case that during such period 
the amount of funds made available to the 
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Service for such distribution under such pro-
gram is in excess of the total amounts of base 
allotments for distribution under such program 
for 2016, the Secretary shall distribute such ex-
cess amount, in accordance with a methodology 
specified by the Secretary, to Service areas 
which for an applicable portion of such period 
of excess funding have been designated as a low 
IHS level area under paragraph (2)(A). 
‘‘(2) AREA
DESIGNATIONS.—For purposes of 
paragraph (1), the Secretary shall, with respect to 
each contract health service delivery area— 
‘‘(A) review the services provided in the 
area to determine the IHS medical priority level 
pursuant to section 136.23(e) of title 42, Code 
of Federal Regulations, of such services; and 
‘‘(B) in the case majority, as specified by 
the Secretary, of the services so provided in the 
area were determined to have— 
‘‘(i) such a priority level of a I or II, 
designate such area as a low IHS level 
area; and 
‘‘(ii) any other priority level, designate 
such area as a high IHS level area. 
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‘‘(e) APPLICATION OF REDUCTION CLAUSE.—In the 
case of a facility that, as of the date of the enactment 
of this section, is under contract with the Secretary with 
respect to the Purchased/Referred Care program and such 
contract applies to a period to which subsection (d) or the 
revised distribution formula under subsection (a) applies, 
if application of subsection (d) or the revised distribution 
formula results in the distribution of an amount of funds 
to such facility during such period that is less than the 
amount of funds that would be provided during such pe-
riod to such facility under such contract with respect to 
the Purchased/Referred Care program before application 
of such subsection (d) or such revised distribution for-
mula, respectively, the Secretary may under section 
106(b) of the Indian Self-Determination and Education 
Assistance Act (25 U.S.C. 450j–1(b)) reduce such amount 
accordingly to be consistent with such subsection (d) or 
revised distribution formula, respectively. 
‘‘(f) CLARIFICATION.—Nothing in this section shall 
be construed to supersede a Tribe’s self-governance con-
tract under the Indian Self-Determination and Education 
Assistance Act. 
‘‘(g) UPDATE.—The Secretary shall periodically, but 
not more frequently than once every 3 years and not less 
frequently than once every five years, review and, as nec-
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essary, update the formula implemented under subsection 
(a). 
‘‘(h) CONSULTATION.—In developing the formula 
under subsection (a) and reviewing and making updates 
to such formula under subsection (f), the Secretary shall 
consult with Indian tribes, including such tribes consulted 
for purposes of carrying out section 226. 
‘‘(i) REPORTS.—Not later than one year after the 
date of the enactment of this section, and annually there-
after, the Secretary shall submit to Congress a report on 
the implementation of this section. Each such report shall 
include information, with respect to the period for such 
report, on— 
‘‘(1) the distribution of funds for such period 
pursuant to the Purchased/Referred Care program 
among the contract health service delivery area, 
tribes, tribal organizations, and urban Indian orga-
nizations; 
‘‘(2) whether during such period any contract 
health service delivery area, tribe, tribal organiza-
tion, or urban Indian organization had a shortfall in 
such funding and, if so, the amount of such short-
fall; and 
‘‘(3) recommendations for such legislative ac-
tion as the Secretary deems appropriate.’’. 
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(b) CONFORMING AMENDMENTS.—Section 226 of the 
Indian Health Care Improvement Act (25 U.S.C. 1621y) 
is amended— 
(1) in subsection (a)— 
(A) by striking ‘‘As soon as practicable 
after the date of enactment of the Indian 
Health Care Improvement Reauthorization and 
Extension Act of 2009’’ and inserting ‘‘Not 
later than 2 years after the date of the enact-
ment of section 227’’; 
(B) by striking ‘‘the study’’ and inserting 
‘‘a study’’; and 
(C) by striking ‘‘as requested by Congress 
in March 2009, or pursuant to section 830’’ 
and inserting ‘‘, including as amended pursuant 
to section 227’’; 
(2) in subsection (b)— 
(A) in the matter preceding paragraph (1), 
by inserting ‘‘, and submit, not later than one 
year after the date of the enactment of section 
227 and annually thereafter, to Congress a re-
port on’’ after ‘‘pursuant to the program’’; 
(B) in paragraph (3), by striking at the 
end ‘‘and’’; 
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(C) by redesignating paragraph (4) as 
paragraph (5); 
(D) by inserting after paragraph (3) the 
following new paragraph: 
‘‘(4) to determine whether during the period of 
the report any contract health service delivery area, 
tribe, tribal organization, or urban Indian organiza-
tion had a shortfall in such funding and, if so, the 
amount of such shortfall; and 
‘‘(5) recommendations for such legislative ac-
tion as the Secretary deems appropriate.’’; and 
(E) in paragraph (5), as redesignated by 
subparagraph (C), by inserting ‘‘, including rec-
ommendations for such legislative actions as the 
Secretary determines appropriate’’ before the 
period at the end; and 
(3) by striking subsection (c). 
SEC. 303. PURCHASED/REFERRED CARE PROGRAM BACK-
LOG. 
Title II of the Indian Health Care Improvement Act 
(25 U.S.C. 1621), as amended by section 302, is further 
amended by adding at the end the following new section: 
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‘‘SEC. 228. PURCHASED/REFERRED CARE PROGRAM BACK-
LOG. 
‘‘Not later than one year after the date of the enact-
ment of this section, the Secretary shall develop and im-
plement a system to prioritize any backlog of unpaid bal-
ances under the Purchased/Referred Care program for 
each Service area. In developing such system, the Sec-
retary shall consider— 
‘‘(1) the monetary amount of each such unpaid 
balance; and 
‘‘(2) how long such balance has remained un-
paid.’’. 
SEC. 304. REPORT ON FINANCIAL STABILITY OF SERVICE 
HOSPITALS AND FACILITIES. 
Not later than one year after the date of the enact-
ment of this Act, the Comptroller General of the United 
States shall submit to Congress a report on issues related 
to the financial stability of hospitals and facilities of the 
Indian Health Service that have experienced sanction or 
threat of sanction by the Centers for Medicare & Medicaid 
Services. Such report shall focus on the effects of any reve-
nues lost as a result of the sanction or threat of sanction 
and shall include recommendations for legislative action. 
Æ 
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