[Senate Hearing 108-204]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 108-204
 
       REAUTHORIZATION OF THE INDIAN HEALTH CARE IMPROVEMENT ACT
=======================================================================

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                                   ON

                                 S. 556

 TO AMEND THE INDIAN HEALTH CARE IMPROVEMENT ACT TO REVISE AND EXTEND 
                                THAT ACT

                               __________

                             JULY 23, 2003
                             WASHINGTON, DC









                       U.S. GOVERNMENT PRINTING OFFICE
88-704                     WASHINGTON : 2003
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                      COMMITTEE ON INDIAN AFFAIRS

              BEN NIGHTHORSE CAMPBELL, Colorado, Chairman

                DANIEL K. INOUYE, Hawaii, Vice Chairman

JOHN McCAIN, Arizona,                KENT CONRAD, North Dakota
PETE V. DOMENICI, New Mexico         HARRY REID, Nevada
CRAIG THOMAS, Wyoming                DANIEL K. AKAKA, Hawaii
ORRIN G. HATCH, Utah                 BYRON L. DORGAN, North Dakota
JAMES M. INHOFE, Oklahoma            TIM JOHNSON, South Dakota
GORDON SMITH, Oregon                 MARIA CANTWELL, Washington
LISA MURKOWSKI, Alaska

         Paul Moorehead, Majority Staff Director/Chief Counsel
        Patricia M. Zell, Minority Staff Director/Chief Counsel

                                  (ii)












                            C O N T E N T S

                              ----------                              
                                                                   Page
S. 556, text of..................................................     2
Statements:
    Benjamin, Melanie, chief executive, Mille Lacs Band Assembly, 
      Onamia, MN.................................................   345
    Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, 
      chairman, Committee on Indian Affairs......................     1
    Dixon, Mim, Dixon & Associates, Boulder, CO..................   356
    Johnson, Hon. Tim, U.S. Senator from South Dakota............   348
    Moose, Samuel, commissioner, Health and Human Services, Mille 
      Lacs Band Assembly, Onamia, MN.............................   345
    Munson, Myra M., esquire, Sonosky, Chambers, Sachse, Miller, 
      LLP, Juneau, AK............................................   352
    Rolin, Buford L., vice chairman, Poarch Band of Creek 
      Indians, Atmore, AL........................................   349

                                Appendix

Prepared statements:
    Benjamin, Melanie............................................   363
    Dixon, Mim...................................................   372
    Munson, Myra M. (with attachment)............................   377
    Rolin, Buford L. (with attachment)...........................   366



















       REAUTHORIZATION OF THE INDIAN HEALTH CARE IMPROVEMENT ACT

                              ----------                              


                        WEDNESDAY, JULY 23, 2003


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to recess, at 10 a.m. in room 
485, Russell Senate Building, Hon. Ben Nighthorse Campbell 
(chairman of the committee) presiding.
    Present: Senators Campbell, Johnson, and Murkowski.

 STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM 
        COLORADO, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    The Chairman. The Committee on Indian Affairs will be in 
session.
    Welcome to the third hearing in a series held by the 
Committee on S. 556, a bill to Reauthorize the Indian Health 
Care Improvement Act. Today we will hear from tribal leaders 
and tribal health care experts on issues related to Indian 
access to health care and services. The committee will receive 
testimony on how Indian access is affected by Medicare, 
Medicaid, and other Federal health care programs, and what 
improvements are needed to increase Indian access.
    [Text of S. 556 follows:]
      
      

  
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The Chairman. In the interest of time, we are going to go 
ahead and start with our panel which includes Melanie Benjamin, 
chief executive, Mille Lacs Band Assembly, Onamia, MN; Buford 
L. Rolin, vice chairman, Poarch Band of Cree Indians, Atmore, 
AL; Myra M. Munson, Esq., Sonosky, Chambers, Sachse, Miller & 
Munson, LLP, Juneau, AK; and Mim Dixon, Dixon & Associates, 
Boulder, CO.
    I read all your written testimony this morning. It will all 
be included in the record. If you would like to abbreviate or 
diverge from that written testimony, feel free to do so.
    We will start with Ms. Benjamin.

STATEMENT OF MELANIE BENJAMIN, CHIEF EXECUTIVE, MILLE LACS BAND 
ASSEMBLY, ONAMIA, MN, ACCOMPANIED BY SAMUEL MOOSE, COMMISSIONER 
                  OF HEALTH AND HUMAN SERVICES

    Ms. Benjamin. Good morning, Chairman Campbell, Vice 
Chairman Inouye, and distinguished members of the Senate 
Committee on Indian Affairs. I am Melanie Benjamin. I am the 
chief executive of the Mille Lacs Band of Ojibwe. Accompanying 
me today is Samuel Moose, who is the commissioner of Health and 
Human Services. I also brought summer youth as well. This will 
be their first opportunity to participate in this hearing.
    The Chairman. Are those the young people back here?
    Ms. Benjamin. Yes.
    The Chairman. We are glad to have them here.
    Ms. Benjamin. The Mille Lacs Band is a federally-recognized 
tribe of 3,570 members located in East Central Minnesota. As an 
elected tribal leader, I have an interest in the general 
direction of Federal Indian policy. I am greatly concerned with 
the dismal state of health across Indian country, and in 
particular, on the Mille Lacs Reservation.
    My comments to the Senate Committee on Indian Affairs are 
provided from this perspective. At the outset, I wish to 
respectfully point out that I am not an expert on health care 
issues, nor on Medicaid or Medicare. There are individuals on 
this panel who are experts and possess the technical knowledge 
to more adequately address these subjects.
    Today I will briefly discuss three topics as they relate to 
Medicaid and Medicare under Title IV of the Indian Health Care 
Improvement Act, sovereignty, the Federal trust responsibility, 
and Indian Health disparities. The access to health services 
under title IV provisions have a direct connection to the 
health disparities in Indian country and must be addressed by 
Congress.
    When the Indian Health Care Improvement Act was first 
enacted in 1976, Congress recognized its trust responsibility 
toward the tribes to provide adequate health care. Throughout 
the subsequent amendments and reauthorizations of the act, one 
of the major underlying policies has been to provide tribes 
access to other Federal health care sources, like Medicaid and 
Medicare programs that do not face funding limits like our 
Indian Health Service programs do.
    The intent was and is to improve our health status through 
that access. Since then Medicaid and Medicare reimbursement to 
tribes, including the Mille Lacs Band, have become a 
significant source of revenue for our health care programs and 
operations.
    Over the last 15 years, the Mille Lacs Band has actively 
participated in the formulation of tribal self-governance 
policy. We were one of the first 10 self-governance tribes. We 
participated in the original demonstration project and the 
writing of the permanent acts for BIA and Indian Health Service 
self-governance. We have also been on the rulemaking committees 
for the implementation of self-governance laws.
    Currently, the Mille Lacs Band is an active member of the 
Tribal Self-Governance Advisory Committee that advises Federal 
agencies on Indian policy matters affecting the self-governance 
tribes. The Mille Lacs Band has supported and advocated for 
self-governance laws because our philosophy is that we should 
be free to govern ourselves and develop our own policies in the 
administration of our tribal programs. We should not be 
entangled by Federal or State bureaucracy. To us, developing 
our own policies is an important exercise of sovereignty.
    There are three principles that the Mille Lacs Band of 
Ojibwe considers when analyzing Federal programs. First, we 
assert that our primary relationship is with the Federal 
Government. Second, we retain all sovereignty not expressly 
taken away. Therefore, we should have the ability to control 
funds reserved for us under Federal law. Third, we should have 
equal access to the same funding avenues as States. This third 
principle raises the fundamental flaw of the Medicaid and 
Medicare programs and the treatment of tribes.
    It is my understanding that the design of the Medicaid and 
Medicare programs is a Federal-State collaboration. The problem 
is that tribes do not fit into the picture at all. This design 
flaw makes it very difficult to meet criteria for receiving 
reimbursements.
    An example is that counties receive an administrative match 
from the State for their administrative costs, while tribes 
cannot. According to the Mille Lacs Band of Ojibwe's Commission 
of Health and Human Services, our inability to recover the 
administrative match demonstrates that tribes do not have equal 
access to Medicaid and Medicare reimbursements.
    The reason is that States determine how their block grants 
will be distributed under their own guidelines. As a result, 
the Mille Lacs Band and many other tribes lose out on potential 
and critical avenues of funding we desperately need. Others on 
this panel have addressed this and other legal barriers more 
specifically, but from a tribal leader perspective, it is clear 
that States and managed care systems have predominance over 
tribes under Medicaid and Medicare.
    Clearly, the establishment of Medicaid and Medicare 
entitlement programs happened at a time in history when the 
Congress did not focus on tribal sovereignty. However, today 
tribes are treated as governments in Federal legislation and 
tribal sovereignty is recognized. Indian people are provided 
direct access to Federal programs and funding.
    The Mille Lacs Band of Ojibwe receives direct funding for 
our Self-Governance Indian Health Service annual funding 
agreement. But when it comes to Medicaid and Medicare programs, 
it is a different situation. The process of devolution, where 
Federal funds in the form of block grants are provided to the 
States who then distribute those funds under their guidelines, 
has created a framework that leaves the tribes unable to access 
needed funds.
    It is time to change the Medicaid and Medicare provisions 
under title IV of the Indian Health Care Improvement Act to 
reflect the new enlightened view of tribal sovereignty and 
provide tribes more access to health care services as the act 
was originally intended. Through our treaties, Federal 
statutes, executive orders, and court decisions, a Federal 
trust responsibility has been established and recognized over 
the course of dealings with tribes.
    The Mille Lacs Band of Ojibwe signed several treaties with 
the United States and the provision of proper health care 
became an expectation of the Band and an obligation of the 
Federal Government. In addition, the Snyder Act of 1921, the 
Transfer Fact of 1954, the Self-Determination Act of 1975, the 
Indian Health Care Improvement of Act of 1976, as well as the 
enactment of the Indian Health Service Self-Governance Act, all 
evidence the trust obligations that flow to the tribes from the 
Federal Government for the provision of health care.
    In spite of the clear legal duty created by these Federal 
statutes, the Federal obligation to provide adequate health 
care to tribes has never been properly funded. Historically, 
this insufficient funding has interfered with our ability to 
provide comprehensive health care to Mille Lacs Band members. 
According to IHS estimates, the Mille Lacs Band, and all other 
tribes in our region, are funded at approximately 30 percent of 
need. This means more than two-thirds of our need is not being 
met and explains why the status of Indian health on the Mille 
Lacs Band Reservation, and many other reservations, is so poor.
    I am told that the Federal Government spends nearly twice 
as much for a prisoner's health care than it does for Indians. 
This fact is an example of why our health status is at the 
bottom of every disease category. It seems ironic that Indian 
health care, through the Indian Health Service, is not an 
entitlement for Indian people when tribes essentially pre-paid 
for our health care by ceding millions of acres of land to the 
Federal Government.
    It seems more ironic that the tribes have problems 
accessing the Federal entitlement programs like Medicaid and 
Medicare which were designed for all State citizens. This 
funding disparity becomes a matter of fairness and equity 
because Indian people are also citizens of the States in which 
we reside. It is only logical that we should have the same 
access to the same services as do other non-Indian citizens.
    Given that we have been historically under-funded for our 
health care needs, and tribes likely will not receive funding 
for the level of need in the next appropriations cycle, the 
Federal trust responsibility needs to be taken seriously and 
changes made to allow tribes full participation in the existing 
entitlement programs of Medicaid and Medicare. It is fair and 
it is right.
    Finally, I am not going to cite the long and tragic list of 
statistics that tell the story of health disparities throughout 
Indian country. Instead, I will talk about my own Reservation. 
Diabetes is a serious problem in the Mille Lacs community. I do 
not know of one family without diabetes among one of their 
family members. For many our Band members, it is not a matter 
of if they get the disease, but when. Band members are losing 
their vision. They are losing their limbs. Many are so close to 
needing kidney dialysis treatments.
    More alarming is the chronic health conditions occurring in 
our children and our youth. They are our future. I have serious 
concerns for their long-term health and longevity. I do not 
have answers but I do know that adequate and comprehensive 
health care is absolutely critical to preserving our tribal 
communities. We are fighting to protect our members' lives on 
our reservations and in our communities.
    If Congress makes the necessary changes to Title IV of the 
Indian Health Care Improvement Act, and provides more access to 
Federal health care services and funds, it will at least give 
us another weapon in the war against health disparities.
    Thank you for this opportunity to testify. I would also ask 
that my written statement be made part of the record of this 
hearing.
    The Chairman. Without objection, so ordered.
    [Prepared statement of Ms. Benjamin appears in appendix.]
    The Chairman. Thank you, Ms. Benjamin.
    Senator Johnson, I do not know how tight your schedule is. 
Do you have a statement?

 STATEMENT OF HON. TIM JOHNSON, U.S. SENATOR FROM SOUTH DAKOTA

    Senator Johnson. Mr. Chairman, I just commend you for 
holding this very timely hearing. There are few areas where we 
have a greater crisis than in health care as we go about the 
debate on Medicare and Medicaid within the context of 
prescription drug coverage. I think that we have made some real 
progress on the Senate side, but it is essential that we 
continue to be closely consultative with the tribes. I think 
you have an excellent panel here.
    I am going to have to excuse myself for some conflicting 
obligations that I have, but I will be examining the testimony 
closely and look forward to working with you and other members 
of the committee to see what we can do. The overall level of 
funding, of course, is the first problem. The IHS is funded at 
roughly half of what they ought to be funded.
    But even beyond that, I think it is proper that we focus on 
the role of Medicare-Medicaid third-party payment mechanisms 
and what we do to better utilize those resources to live up to 
our obligations in Indian country.
    I thank you very much.
    The Chairman. For the panel's information, members will be 
coming and going. Some will not be here. It does not mean they 
are not interested in the issue. Every one of us is over-
scheduled with two or three things to do at the same time. It 
comes with the territory here. Please understand why some 
members are not here.
    Let us go ahead with Buford Rolin. Thank you for being 
here.

  STATEMENT OF BUFORD L. ROLIN, VICE CHAIRMAN, POARCH BAND OF 
                   CREEK INDIANS, ATMORE, AL

    Mr. Rolin. Thank you, Senator Campbell.
    Chairman Campbell, Vice Chairman Inouye, and distinguished 
members of the Senate Committee on Indian Affairs, I am Buford 
Rolin, Vice Chairman of the Poarch Band of Creek Indians from 
Atmore, AL. I serve as an elected member of the National Indian 
Health Board representing the Nashville area. It is indeed an 
honor for me to come before you this morning to offer this 
testimony on the reauthorization of the Indian Health Care 
Improvement Act.
    As you know, the Indian Health Service's National Indian 
Health Board serves all federally-recognized tribes throughout 
the Nation. We have a membership of 12 members that are elected 
to the Board by their respective areas. Our goal is to advocate 
for Indian people, not only in the budgetary area, but health 
issues throughout.
    I would like to commend the testimony of chief executive 
officer Melanie Benjamin and her concerns. She has expressed 
them well. I know the other panelists will have equal concerns 
that they will talk about.
    Given the two previous hearings of the committee that was 
held during the 108th Congress, I am going to be brief this 
morning. I realize that the members are quite aware, as you 
have just stated, about the needs of the health care of the 
Indian people, the reauthorization, and how important it is in 
the Indian Health Care Improvement Act. We realize the 
political realities that are facing Congress, and we appreciate 
the fact that you are holding these hearings this.
    Let me talk a little bit about the process of what has 
taken place over the years since 1999 with the first bill that 
we introduced to reauthorize the Indian Health Care Improvement 
Act. In 1999, the National Steering Committee was formed by the 
Indian Health Service. It represented tribal leaders throughout 
the Nation as well as members from the organizations and urban 
areas.
    Over the last several years, the NSC has worked closely 
with Indian country, the Administration and Congress, and the 
Indian Health Service to develop amendments to the Indian 
Health Care Improvement Act. Let me begin first by talking 
about the Centers for Medicaid and Medicare services.
    At the request of the CMS, we have established a tribal 
technical work group that has been representative of Indian 
people throughout this Nation. The TTAG was formed in 2001 and 
consists of tribal leaders, area Indian health boards, and 
designated national tribal organizations.
    The activities of the TTAG are coordinated through the 
Intergovernmental and tribal Affairs Office within CMS. The 
TTAG has forwarded several recommendations to Congress and CMS 
regarding recommended changes to the reimbursement 
methodologies in place for the Indian Health Service, tribal 
health programs, and urban Indian problems.
    The TTAG is very adamant about its position that any 
reforms in Medicare, medicaid, or CHIP programs must allow for 
tribal allocation or other direct funding mechanisms that 
authorize Indian health program access to CMS.
    The TTAG has also worked very closely the NSC to develop 
the changes in Title IV of the Indian Health Care Improvement 
Act, as reflected in H.R. 2440, which include the most recent 
NSC recommendation.
    As the committee is well aware, the Indian Health Service 
lags far behind other segments of the population and has failed 
to keep pace with inflation as far as health care is concerned. 
Current Indian Health Service funding is so inadequate that 
less than 60 percent of the health care needs of American 
Indians and Alaska Native people are being met.
    In order to address additional health care resources, Title 
IV of the Indian Health Care Improvement Act is critical to 
address the Medicare-Medicaid and other third party 
reimbursements, as Chief Executive Officer Benjamin has stated 
this morning.
    It is one of the most important provisions of the Indian 
Health Care Improvement Act. It makes IHS hospitals eligible 
for Medicare reimbursements and facilities eligible for 
Medicaid reimbursement. Title IV also makes it possible for 
Medicare and Medicaid eligible American Indians and Alaska 
natives to use these benefits.
    Since the passage of the Indian Health Care Improvement Act 
in 1976, Medicare and Medicaid payments have become sources of 
income for tribal programs, so much so that in fiscal year 
2002, $460 million was collected for these services. This 
amount enhances the resources available already to hospitals 
and clinics' budgets by 30 percent. We are indeed appreciative 
of that.
    But in order to further improve the ability of Indian 
country as far as health providers to access third party 
resources, the NSC has developed several changes to title IV 
that was indicated in S. 212 and continues through S. 556. I 
would like to note that S. 556 introduced to Congress is 
identical to S. 212. Therefore, many of the concerns raised in 
regards to S. 212 remain.
    In response to those concerns, however, the National 
Steering Committee has revised the recommendations for 
reauthorization. The changes are reflected in H.R. 2440. By the 
way, that bill was introduced June 11, 2003.
    I think it is quite helpful to point out that the Senate 
Committee on Indian Affairs and the House Resources Committee's 
hearing on the Indian Health Care Improvement Act last week 
indicates the cooperation and the spirit of the two houses to 
support this reauthorization. H.R. 2440 reflects several 
changes made to the original tribal proposal as introduced in 
1999. Those changes listed have come about and we will see that 
in H.R. 2440.
    There are four areas that I would like to quickly talk 
about that we have been removed from the previous legislation. 
One is the Qualified Indian Health Program. This provision has 
been removed. We have requested that a provider type with 
Indian health programs appear, such as Medicaid, so that we can 
more fully exercise our statutory rights in that aspect.
    Secretary Thompson expressed his concern for that in S. 
212. His concern was that over a 10-year period it would cost 
in excess of $3 billion. However, in place of the QIHP 
proposal, tribes are requesting that the Secretary prepare a 
program or a report that would, in fact, examine whether these 
payments under the current methodologies are sufficient to 
continue to be applicable as a most favorable provider under 
the Social Security Act. The current all-inclusive rate 
certainly is appreciated, and we would hope that in this 
process none of that would be discontinued.
    Another concern that the Secretary had, of course, was the 
extension of the 100 percent Federal Medical Assistance 
Percentage. Tribal leaders agreed to delete this provision as 
well. The Centers for Medicare and Medicaid Services requested 
that be done. The States are very supportive of the 100 percent 
FMAP expansion. Secretary Thompson's concern was the cost of $2 
billion over a 10-year period.
    A third area of his concern was the waiver of the Medicare 
late enrollment penalty as far as Part B of Medicare is 
concerned and the barriers that it may create as far as giving 
Indians the opportunity to enroll late as opposed to other 
enrollees within the Medicare programs. Tribal leaders 
reluctantly agreed to remove that factor as well.
    Finally, an area of concern that we had, and the Secretary 
objected to, was the fact that tribal leaders had asked for, 
and called for, regulations in a negotiated rulemaking process. 
Our concerns here were relative to the complexity of the Social 
Security Act and to having to negotiate a rulemaking process. 
In response to this concern again, tribal leaders eliminated 
the Social Security Act changes from the bill's negotiated 
rulemaking provision.
    We believe the changes to the original tribal proposal 
submitted in 1999 significantly reduces the bill's Federal 
budget impact. S. 212, or its identical bill, S. 556, as it was 
scored in 2001, has a Federal budget impact of $6.9 billion. 
With the deletion of QIHP and the FMAP, the score reflects a 
70-percent decrease.
    We request, and ask this committee, to submit a request to 
the Congressional Budget Office to either score S. 556, without 
the above-mentioned provisions, provide a fiscal budget impact 
on H.R. 2440.
    It has been my pleasure to brief this committee on the 
concerns that the National Indian Health Board has relative to 
the Indian Health Care Improvement Act. As I have been 
involved, along with other tribal leaders, including Chief 
Executive Officer Benjamin and the other panelists here this 
morning, we will continue to stay involved to make sure that 
this Act hopefully will be passed this year.
    Further, we request that any concerns regarding this 
legislation are raised in a timely manner so that passage of 
the bill will occur during this session and there are no delays 
that would jeopardize the passage of this bill.
    I thank you for your time. I would also ask that my written 
statement be made part of the record of this hearing.
    The Chairman. Without objection, so ordered.
    [Prepared statement of Buford Rolin appears in appendix.]
    The Chairman. Thank you, Mr. Rolin.
    Ms. Munson.

   STATEMENT OF MYRA M. MUNSON, ESQUIRE, SONOSKY, CHAMBERS, 
            SACHSE, MILLER & MUNSON, LLP, JUNEAU, AK

    Ms. Munson. Thank you, Mr. Chairman.
    The last time I had the privilege of testifying before this 
committee was in the late 1980's when I was still commissioner 
of Health and Social Services for the State of Alaska. Since 
joining the law firm I am a member of now, I have had the 
opportunity to work with tribal leaders and tribal health 
providers on every major health reform initiative that has been 
discussed in the Congress, and since 1998 when the work began 
on the reauthorization of the Indian Health Care Improvement 
Act.
    It is fundamental that the United States owes a duty to 
Indians to provide them with health care. Everything flows from 
that. It is equally fundamental in the decisionmaking that that 
health care, in order to be delivered in a responsible way, 
must be culturally competent.
    That requires not merely that individual Indians have 
access to health care, which most do not, at least in any way 
comparable to that of other citizens of the United States and 
the States, but it is important that the health care they have 
access to is that operated by their own tribes or the Indian 
Health Service, carried out to the extent possible to Indian 
people, and managed by Indian people.
    Indian people and Indian tribes expected that the duty of 
the United States would be satisfied by providing them with 
direct appropriations to the Indian Health Service and 
eventually down to the tribes through the Self-Determination 
Act. Congress has not been able to effect the appropriations 
necessary to meet any level of health care for Indian people 
comparable to that, provided even to Federal employees, let 
alone to other Americans.
    Instead, in 1976 when the Health Care Improvement Act was 
first authorized, Congress, realizing it could not meet the 
needs exclusively through direct appropriations, chose to 
authorize the Indian Health Service and tribes eventually as 
they took over the programs to bill for certain services 
provided to Medicare or Medicaid eligible Indians, to bill 
those programs and recover those revenues.
    That made a fundamental shift and one which has been very 
difficult for tribes and for their members to absorb. It 
essentially made many Indians into welfare recipients when they 
had never been before. It made them apply for benefits through 
the Medicaid program in order to have access to the very care 
they had been promised and for which they had ceded their 
lands.
    However, time passes and Indian people and Indian tribal 
leaders are pragmatic. Indian Health Services had to be 
pragmatic about this. The resistance to participating in those 
programs has had to be overcome simply to make enough money 
available to try to begin to provide for the needs for health 
care.
    Tribes and the Indian Health Service have worked to become 
competent billers of the Medicare and Medicaid programs and to 
be able to participate without losing the integrity of the very 
special programs that they offer.
    The Indian health system is truly the only system of health 
care that exists in the United States. For all the promise of 
managed care, somehow it would bring a preventative focus to 
care; it would be a birth-to-death kind of model. In fact, it 
is as profit-driven as all other health care in the United 
States and tends to focus on illness and not on health, on 
response and not on prevention.
    The Indian health system is fundamentally different than 
that in that it is truly a birth-to-death program. The people 
who are running health programs, and many of the programs that 
I work with, were born in the hospitals that they now operate 
and that they now run. Their children were born in those 
hospitals. They expect their great-grandchildren to be born and 
cared for in a program that they operate. That is not an 
expectation that those of us who rely on the private sector 
health care system care enjoy. But to make that real, of 
course, there must be adequate financing.
    The Medicare and Medicaid programs are complex and not the 
things that are typically are dealt with by this committee or 
the Resources Committee in the House. They are relatively 
foreign. You may have experienced this yourself, or you may 
have talked with someone who has had to assist an elder parent 
in applying for Medicare or making sense of their benefits, or 
assisted someone in applying for Medicaid in order that they 
could be in a nursing home or get other care that they need--
these are difficult programs to participate in.
    In my written testimony, I have described very briefly the 
basics of those programs. I think for those of you who are, in 
fact, familiar with Indian people, and the way in which they 
live, when you read about those programs, you will see the way 
in which they diverge.
    However, the Medicare and Medicaid programs are rife with 
special exceptions. There is a tendency to believe that it is 
all one program and it exists in exactly the same way for 
everyone. Fundamentally not true. There are exceptions built in 
throughout Medicare and Medicaid to assure that special 
populations will get some level of care to guarantee their 
access, and that certain kinds of providers will continue to 
exist even as the rates get cranked down in those programs to 
manage the cost increases.
    So there are federally-qualified health centers, rural 
health centers, and critical access hospitals, children's 
hospitals, and cancer treatment centers. The list goes on and 
on of various kinds of specific providers, each one of which, 
if you meet all the finely-tuned rules, you get a special level 
of compensation under the program different than applies to 
others.
    Fundamentally, as we worked on trying to revise the 
Medicare-Medicaid provisions and access by the Indian Health 
Service and tribes, we kept that in mind. We recognized that 
the duty to provide health care to Indians is fundamental. The 
existence of the Indian Health Service and of tribal health 
programs is fundamental. Medicaid and Medicare should recognize 
those special provider types.
    As Mr. Rolin said, the Steering Committee agreed, 
reluctantly, to drop the qualified Indian Health Program as a 
new and special provider type in order to try to move this bill 
forward. Instead, what we have done is try to tailor very 
narrow provisions to other parts of Medicaid where there are 
special compensation or reimbursement rules or Medicare to 
permit the kinds of activities that are so essential on 
reservations and in Indian communities in which health care is 
being provided.
    For instance, there is a provision that allows visiting 
nurse services to be reimbursed, provided they are provided 
through a rural health center in a setting which is a shortage 
area for home and community-based care services. There are lots 
of rules attached to that. We ask that the same kind of 
visiting nurse services be reimbursed when they are provided in 
any Indian Health Service program without having to go through 
becoming a rural health center and proving you are in a 
shortage area. We know there are those shortages.
    I have provided for the committee comments on H.R. 2440 
provisions. Those reflect the best drafting. I can say with 
some great humility, I wrote much of what is in S. 556 
regarding the Social Security Act provisions and the title IV 
provisions. They were written conceptually.
    I could spend my lifetime and never penetrate to the depths 
of the Social Security Act and get an amendment quite right. We 
were blessed with the assistance of Representative Young to 
have an opportunity to work with House Legislative Counsel who 
assisted us in turning our concepts into real Social Security 
Act amendments. We encourage you to look at those and less at 
the S. 556 provisions.
    There is a side-by-side analysis that has been provided to 
committee members so that you can track from S. 556 to the 
House bill and understand what is left and how it has been 
redone. There is also a section-by-section analysis which is 
attached to my testimony.
    I want to mention basically six principles that drive the 
kinds of amendments. They are first to improve access to 
Medicare and Medicaid enrollment. It is not, as I mentioned 
earlier, a natural thought for an Indian elder to seek to apply 
for Medicare. Many Indian elders are not eligible for Medicare. 
They are not eligible for Social Security because they did not 
work in jobs that participate in Social Security during their 
work years.
    But for those who are, it is not natural for them to 
consider enrolling in part B and using up $700 a year of their 
limited income to pay part B premiums. Applying for Medicaid is 
certainly not something they think about even though they may 
be living in poverty--because they are used to caring for 
themselves. They expect the Indian health programs to provide 
the health care they need.
    Those programs are not accessible because people resist 
applying and because in many States services and access by 
Indian people to the programs operated by the State is not 
readily available. Some of that is a matter of direct policy by 
States, of where they locate their services, and some of it is 
because of the sheer remoteness of where Indian people live in 
relationship to State services. Finding ways to involve tribes 
meaningfully in those activities is an important feature of the 
act so that the rights of Indian people to participate in those 
programs can be protected.
    In addition, reducing co-payments, co-insurance, and 
deductible obligations without reducing the reimbursement to 
the tribal or Indian Health Services program also helps to 
overcome the barrier to access to those programs.
    Second, and I have mentioned this before, Indian health 
programs should enjoy the same kind of special consideration in 
the Social Security Act provisions that other kinds of health 
care programs, like federally-qualified health centers, or 
rural health centers, enjoy. You should not be taken in when 
somebody says, ``Oh, they are trying to create an exception.'' 
There are a thousand exceptions.
    The Social Security Act provisions on Medicare and Medicaid 
are basically about two general rules. Everything else is an 
exception to those rules. We are simply looking for some of the 
same kinds of things. Nothing we have asked for is 
fundamentally different than is available for some other kind 
of provider.
    Third, we are looking to minimize administrative barriers. 
Mr. Rolin spoke to the fact that currently most of the Indian 
health programs are reimbursed on an encounter per-day rate. We 
look to maintain that rate while a study of reimbursement is 
carried out to ensure that any changes in those reimbursement 
methodologies are carried out in a way that will minimize 
administrative burdens and will control the costs of trying to 
build new billing systems, and to respond to the administrative 
requirements of those programs.
    Fourth, we want to encourage cooperation with the States. 
Medicaid is a partnership with States that cannot be 
effectively carried out by tribes without a good relationship 
with the States. We look for additional consultation on their 
part, and in some other provisions to find ways to improve the 
relationships.
    Among those is to reduce the role of the States in 
licensing tribal facilities and tribal providers so long as 
they meet the quality standards imposed by the Social Security 
Act. It basically would put the tribal providers in the same 
position that the Federal Indian Health Service providers are, 
vis-a-vis State regulation. We look to try to achieve that more 
uniformly.
    Finally, we want to improve communication by the formation 
of a technical assistance group in which people like myself and 
Mim Dixon, along with health care providers from tribal 
programs and others can work on behalf of tribal leaders, and 
in direct interaction with CMS, to work through issues as they 
arise so that when the Department of Health and Human Services 
is making policy changes, they do so fully aware of the 
consequences of them. What happens now all too often is that 
they make the change and it is only months down the road that 
the impact of that change becomes apparent and we all scramble 
to find a way to fix it.
    I join with the others in encouraging that this committee 
keep this bill intact, that it endorse these provisions, and 
that it work closely with other committees of the Senate and 
the House who have jurisdiction over certain of these 
provisions relating to the Social Security Act to ensure that 
they will give those requests the serious attention that they 
are due. It is easy to lose small changes. In an environment in 
which you are trying to make changes as massive as adopting 
Medicare prescription drugs, the very tiny nature of what we 
are asking for should not stop serious consideration of them.
    Thank you very much. I would also ask that my written 
statement be made part of the record of this hearing.
    The Chairman. Without objection, so ordered.
    [Prepared statement of Ms. Munson appears in appendix.]
    The Chairman. Thank you, Ms. Munson.
    By the way, do not worry about not getting things right. We 
work year-around here and if you could read our mail, we never 
get things right. We just have to keep trying. That is why you 
never get rid of us, I guess.
    Before I go on, I did not know what Senator Murkowski's 
schedule is, particularly since Ms. Munson is from Juneau.
    Do you have any opening statement or comments before we go 
on? I do not know if you have to leave.
    Senator Murkowski. Thank you, Mr. Chairman.
    I will be leaving in about 15 minutes, but I did want to 
hear the testimony of Ms. Munson and welcome her as a 
constituent. I also want to welcome a former constituent, Ms. 
Dixon. I am looking forward to her testimony. I understand she 
is from Fairbanks, as I am. We share a lot there.
    I just wanted to listen to the comments this morning and 
thank you, Mr. Chairman, for continuing on this very important 
issue of the reauthorization of Indian health.
    The Chairman. Thank you.
    Ms. Dixon, please proceed.

    STATEMENT OF MIM DIXON, DIXON & ASSOCIATES, BOULDER, CO

    Ms. Dixon. Thank you, Chairman Campbell and Senator 
Murkowski, tribal leaders, and honored guests today.
    There has been a lot of talk recently about modernizing 
Medicare and, in a way, the proposed Title IV of the Indian 
Health Care Improvement Act, and the proposed amendments to 
Medicaid, Medicare, and the Social Security Act, could be 
considering modernizing Indian health care. As we know, this is 
not an appropriations bill and it will not provide the funding 
to bring programs and facilities up to standards.
    So when I talk about modernizing Indian health care, I am 
not talking about the delivery of services. Rather I am talking 
about modernizing the legal and regulatory framework that 
allows the Indian health programs to bill Medicaid, SCHIP, 
Medicare, and private insurance, and to be paid for the covered 
services that are provided to mutual beneficiaries.
    Title IV and the Social Security Act amendments are needed 
to respond to changes that have occurred in health care 
delivery in our country in the past decade. Just a few years 
ago there was no Medicaid managed care. There was no SCHIP. 
There was no Medicare Part C or D or E. In most States, tribes 
have not been included in the planning for these changes in 
Medicaid, or to the development of SCHIP programs.
    It is difficult for Indian health care to interface with 
the Medicaid, SCHIP and Medicare of today. Indian health 
programs are unique in many ways that make it impossible for 
many Indian health facilities and programs to meet the usual 
requirements to become providers under managed care programs.
    Yet the Indian Health Service beneficiaries who are 
enrolled in managed care programs under their Medicaid and 
SCHIP programs will go off-plan to seek care at their Indian 
health care facility. It is essential that they have that 
unrestricted choice and that the Indian health facility can 
bill and be paid for the services it provides.
    Provisions in the Indian Health Care Improvement Act also 
allow tribes to take advantage of some of the opportunities 
provided by managed care. For example, they could use funds 
from the Indian Health Serve as to purchase managed care plans 
or other insurance programs for their beneficiaries. The 
measures would also require States to allow Indian health 
providers to service case managers for American Indian and 
Alaska Native Medicaid beneficiaries.
    Despite the increasing reliance of Indian health programs 
on third-party collections, many American Indians who are 
eligible for Medicaid and SCHIP are not enrolled in those 
programs. To remedy this situation, this bill authorizes 
funding for tribes for outreach services. The bills would also 
eliminate financial barriers to enrollment in Medicaid and 
SCHIP, such as premiums, deductibles, and co-pays.
    Many of the issues relating to Indian health care financing 
are extremely complicated. Tribes have recognized that there is 
a need for a national Tribal Technical Advisory Group to work 
closely with CMS to resolve problems as they arise. To operate 
effectively, this TTAG must be authorized in law. The TTAG will 
be essential for helping to implement the provisions in Title 
IV of the Indian Health Care Improvement Act, and for all the 
proposed changes in Medicare under the proposed prescription 
drug legislation and proposed Medicaid reform.
    In closing, it is important to remember the purpose of this 
legislation. At the heart of the provisions in title IV is 
enhancing access to care for American Indians and Alaska 
Natives, protecting their rights to choose their health care 
providers, and assuring that Indian health care facilities get 
paid when they provide services under Medicaid, SCHIP, and 
Medicare to those beneficiaries.
    I have submitted written testimony which provides greater 
detail on these points. Thank you. I would also ask that my 
written statement be made part of the record of this hearing.
    The Chairman. Without objection, so ordered.
    [Prepared statement of Ms. Dixon appears in appendix.]
    The Chairman. Thank you, Ms. Dixon.
    Let me ask a couple of questions. Let me start with Ms. 
Benjamin. Thank you for being here.
    I have been a big supporter, as you know, for years of 
self-governance. It seems to me that the tribes, if they have 
the capability, should be offered that opportunity. In most 
cases they do a better job than the Federal Government could 
have done.
    But with that in mind, I guess there are some things that 
probably ought to remain with the Agency. Let me just ask you a 
couple of things on that. With that thought in mind, what is 
your view on Secretarial oversight for the tribal direct 
billing program?
    Ms. Benjamin. That's a hard question.
    The Chairman. Yes; I know. That is why I asked you. 
[Laughter.]
    Do you think tribes could do that better than can be done 
through the Agency?
    Ms. Benjamin. We know what our need is for our membership. 
I think we can address the health disparity issues better than 
an outside entity doing that. So I would support that tribes 
would have that authority to do that.
    The Chairman. Your testimony also includes a concern that 
tribes are usually not consulted in the design of the State 
Medicaid programs. It is not unusual, unfortunately. We hear 
that very often here in the committee that there is a lack of 
good in-depth consulting with the tribes before decisions are 
made.
    How do we encourage tribal State collaboration in the 
design of health insurance programs so that they are inclusive 
of Indian people's needs?
    Ms. Benjamin. I guess I can look at our example. Currently 
what we have for our membership is called a ``Circle of 
Health.'' We provide some health care opportunities for all of 
our members, regardless of where they live in the United 
States. There is a process that they have to go through, of 
course. Our goal is to make sure that people that may not live 
on the reservation, that live in different States, and do not 
have access, that we are providing a service to them as well.
    The Chairman. Do you do that through the mail? Do you offer 
advice, say, of 500 miles away and cannot get home to the 
clinic?
    Ms. Benjamin. We send them applications where they would be 
able to get some insurance in their State. We help pay the 
premiums for that, to get that done. We want to make sure that 
our membership is not forgotten, if they live elsewhere beside 
the reservation.
    The Chairman. That is a great idea. Has that been pretty 
successful?
    Ms. Benjamin. It is successful. We still have a lot of 
folks that still have not utilized that program. We are 
continuously trying to educate them and the opportunities 
through our mailings or newsletters. We also make sure that 
they know what services are available.
    Also, what we are doing with the State of Minnesota is that 
we try to partner in any way we can. Currently we have some 
discussions with the TANF program to provide services for 
Indian people in the Minneapolis-St. Paul area. We also feel 
that we can show more compassion to Indian people, to our own 
tribal members or whoever, to get them to become more self-
sufficient because of our cultural backgrounds. We can relate 
to some of those issues, we feel, in a better way than the 
State or county agencies that are out there.
    Those are two examples of what we are trying to do. We want 
to provide a system that we can hopefully improve lives for 
membership of our own tribe and other Indian people, even 
though they do not live directly on the reservation.
    The Chairman. You mentioned that your tribe has difficulty 
collecting third-party reimbursements, and the little you do 
collect often goes to meeting health care needs of your tribal 
members. What are the most serious impediments to preventing 
the tribe from collecting third-party reimbursements?
    Ms. Benjamin. I would like to refer that question to Samuel 
Moose, the Commissioner of Health and Human Services because he 
administers that. Can you assist me, Sam?
    Mr. Moose. We are always negotiating with the State and 
through our State liaison some opportunities within the various 
programs. Some of the difficulties that we run into is that the 
State delegates some of that authority to the local county 
agencies where they were negotiating those rates and 
opportunities. We have had difficulties in the past.
    The Chairman. Do they just refuse to negotiate? Do they 
drag their feet?
    Mr. Moose. Yes; they drag their feet. Some of them come to 
the table. We really do not make any progress with the issues. 
There is always a history. There is always something that comes 
up that somehow creates barrier.
    The Chairman. It is called jumping through hoops.
    Mr. Moose. Yes.
    The Chairman. It is not uncommon, I guess.
    Vice Chairman Rolin, you have put a number of years of 
dedication to improving the health of Indian people. I want to 
commend you for that. You have been in here a number of times 
testifying on their behalf. I thank you for that.
    On the Federal medical assistance percentage, I understand 
that the National Steering Committee decided to remove the 100 
percent FMAP expansion provision in S. 556 in response to the 
Administration's concern that it would be too costly; is that 
correct?
    Mr. Rolin. That is correct.
    The Chairman. What cost estimates were included in that 
decision?
    Mr. Rolin. Myra might be able to answer that. She has 
handled that technical portion.
    The Chairman. We call that passing the buck around here, 
Myra. Go ahead. [Laughter.]
    Mr. Rolin. That has been her area of expertise.
    Ms. Munson. If Congress would pass the buck, we would have 
no problems here. [Laughter.]
    The Chairman. Bucks, plural.
    Ms. Munson. Many, many bucks. The truth is we really do not 
know. What we do know is that they came up with an estimate of 
$2.48 billion for the 100 percent FMAP. We believe that that is 
a substantial over-estimate of increased costs since we believe 
that States that currently claiming 100 percent FMAP for a wide 
variety of activities that they believe, and I think correctly, 
are already authorized as ``through the facility.''
    A significant amount of the FMAP issue arises out of the 
difference of interpretation of that phrase, ``through the 
facility,'' with tribal health programs and the States 
interpreting it to mean not only the things provided in the 
building, but things which may be referred out that have to be 
purchased from other providers. They should also be entitled to 
that 100 percent FMAP. We think that CBO has over-estimated the 
number, but we do not have the benefit of having any details so 
we cannot tell you exactly in what ways.
    The Chairman. I see.
    Mr. Rolin. Senator, if I might add, you noted in my 
testimony also the States support that. They believe this would 
be a direct support as far as funding for tribes. They have 
been most supportive in that aspect.
    The Chairman. We often hear that States deny health care to 
Indian people by saying it is a Federal responsibility. Is the 
NSC aware of cases where States have refused public health 
insurance coverage for eligible Indian people because of that 
concept?
    Mr. Rolin. I do not know of any. Ms. Dixon, are you 
familiar with any? I am not aware of any. I know my State has 
not.
    The Chairman. Ms. Dixon.
    Ms. Dixon. I think it is a matter of degree. It is not as 
black and white as that. I think that there is a higher level 
of cooperation with the State looking for ways to enhance and 
support the Indian health system when there is 100 percent FMAP 
and they are not trying to conserve State funds and they 
realize that the Federal are there.
    For those services where there is not 100 percent FMAP, 
Medicaid directors tend to take the most conservative approach 
in terms of allowing tribes to carry out their mission with 
Medicaid funding.
    The Chairman. Okay.
    Ms. Munson.
    Ms. Munson. If I could, Mr. Chairman, I think the denial 
plays out in one other way. I think any Indian person who gets 
their application in and manages to fill it out completely will 
be granted their eligibility if they satisfy all the 
conditions. The trick is: Will they ever get the application? 
Will they understand it? Will they get it completed? Will they 
meet the deadlines for personal interviews or whatever other 
hoops they may have to jump through to get it considered? Will, 
in fact, it be returned to them because there is something 
missing? Will they have had difficulty getting access?
    We believe, and there is pretty good demonstrated evidence 
of this, that even in States that cooperate, Indian people are 
substantially under-represented in the Medicaid rolls compared 
to the level of poverty in Indian country. We think there are 
many barriers; most of them subtle.
    The Chairman. Including educational problems. Sometimes 
Indian people do not have the educational opportunities and 
when they have to fill out some of these complicated Federal or 
State forms, they are already at a disadvantage.
    Ms. Munson. Absolutely.
    The Chairman. Ms. Dixon, we are dealing with managed care. 
You hear it all the time here in Congress, as you probably 
know. It seems to be the new rage. It seems to be the way we 
are going. But we do get some feedback that one size does not 
fit all, particularly in the difference between rural America 
and urban America. But I think also that might apply to the 
problems that many Indian people face, and that is cultural 
differences.
    What are your recommendations to try to improve the health 
care system from a culturally-sensitive aspect for Indian 
people?
    Ms. Dixon. That is a really good question. First, let me 
say that in essence the Indian health system is a culturally-
sensitive managed care system. The issue is not so much the 
cultural sensitivity within the Indian health system, it is 
forcing Indian people to enroll in managed care plans that are 
operated by the State under Medicaid. And now with the 
revisions to Medicare that we are talking about, that is a 
potential there as well. It has not been so much Medicare up to 
now, as Medicaid.
    Then forcing them to enroll in a Medicaid managed care plan 
for which the Indian Health System is not a provider. Then they 
are into a health care system that is off the reservation, or 
outside their communities, where people have little knowledge 
of the culture, where there are not people who speak the 
language, where people do not understand the living conditions. 
Often times facilities are very hard to access because they are 
far away. They are defaulted to a facility that might require a 
great deal of transportation to get there. They do not have the 
vehicles and the transportation.
    What we have recommended--and what tribes have been 
recommending ever since the National Indian Health Board did 
its study of the nine State Medicaid programs that have gone 
into managed care, that had a significant Indian population in 
those States--is that Indian people be exempted from mandatory 
enrollment, that States keep a carve-out for Indian health that 
is paid for on a ``fee-for-service.'' We call it ``fee- for-
service,'' but it really is not. It is called the ``encounter 
rate'' or the ``all-inclusive rate.'' Sometimes it is the ``OMB 
rate'' or the ``IHS rate.'' It is not exactly ``fee-for-
service,'' but it is not the capitated managed care payment.
    Also, Indian people should be allowed to go to their local 
Indian facility, if that is what they choose. If they choose to 
use another facility under Medicaid, they should be allowed to 
do that as well. But they should not be penalized, and the 
Indian health facility should not be penalized if a Medicaid 
recipient chooses to use their local tribal or Indian health 
care facility.
    The Chairman. I agree.
    Ms. Benjamin.
    Ms. Benjamin. I wanted to comment on the cultural sensitive 
way of how some of our people deal with the providers. Many of 
our elders' first language would be Ojibwe. There is that 
communication barrier sometimes with the providers.
    What we provide is traditional healers. They then have a 
comfort level dealing with someone that can speak and 
understand their language. Our issue with the traditional 
healers is that they are not recognized. We are not included in 
the billing process when we use traditional healing for our 
membership.
    The Chairman. I think some other tribes have had quite a 
bit success with that, too. I think the Navajos do that, not 
only with working with the State for health care but such as 
surgery, for instance. I understand that they have spiritual 
leaders that understand the traditional healing ways of the 
Navajos who work with the doctors. I think that is a terrific 
idea.
    I have often wondered if it creates a liability issue or 
what is sometimes called the unintended consequences of doing 
something. I wonder if there is something in there that comes 
around to haunt you later on why you try to do that. But it 
seems to me it is the only way to go, particularly for 
traditional people. That comfort level goes up considerably if 
they know there is a spiritual attachment to healing.
    Mr. Rolin.
    Mr. Rolin. Senator, I have just one more comment regarding 
the FMAP. I noticed in the most recent Senate prescription bill 
that Native Hawaiian providers were included. However, our 
providers were left out. Certainly that is a concern we have as 
well. We wanted to share that with you.
    The Chairman. Thank you for bringing that to my attention. 
I did not know that. I will make sure that we look into that 
and find out why.
    Mr. Rolin. Thank you.
    The Chairman. I have no further questions that I will ask 
today. I will put some in writing to you. We have many members 
who are not here today. They will be submitting questions in 
writing, too. We would appreciate your getting those back to 
us.
    Without objection, so ordered.
    We will keep the hearing open for 2 weeks for any 
additional testimony or letters from anyone in the audience or 
from our panelists.
    I thank you for appearing today.
    This committee is adjourned.
    [Whereupon, at 11:17 a.m., the committee was adjourned, to 
reconvene at the call of the Chair.]
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                            A P P E N D I X

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              Additional Material Submitted for the Record

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  Prepared Statement of Melanie Benjamin, Chief Executive, Mille Lacs 
                             Band of Ojibwe

    Chairman Campbell, Vice Chairman Inouye and distinguished members 
of the Senate Committee on Indian Affairs, my name is Melanie Benjamin 
and I am the chief executive of the Mille Lacs Band of Ojibwe. The 
Mille Lacs Band is a federally recognized tribe of 3,570 members 
located in East Central Minnesota. We operate three clinics in three 
Mille Lacs Band districts on our reservation and serve a user 
population of several thousand.
    Three topics will be discussed as they relate to Medicaid and 
Medicare under Title IV of the Indian Health Care Improvement Act: 
Sovereignty, the Federal trust responsibility and the health 
disparities that exist between Indians and the rest of the American 
population. The access to health services under title IV have a direct 
connection to the health disparities in Indian country and must be 
addressed by the Congress. Following the general discussion of the 
three topics under Medicaid and Medicare will be the Mille Lacs Band 
recommendation of the establishment of a Tribal Leaders Group and 
Tribal Technical Advisory Group specific to the Centers for Medicare 
and Medicaid Services and their work with the Indian Health Service 
[IHS]. The statement concludes with one final issue of concern to the 
Mille Lacs Band: the Department of Health and Human Services' ``One'' 
HHS Initiative.
    When the Indian Health Care Improvement Act was first enacted in 
1976, Congress recognized its trust responsibility toward the tribes to 
provide adequate health care. Throughout the subsequent amendments and 
reauthorizations of the Act, one of the major underlying policies has 
been to provide tribes access to other Federal health care sources like 
Medicare and Medicaid programs. These programs have unlimited funding, 
as opposed to Indian Health Service programs that have funding limits 
each year. The intent was and is to improve our health status through 
that access. Since then Medicare and Medicaid reimbursements to tribes, 
including the Mille Lacs Band, have become a significant source of 
revenue for our health care programs and operations.
    Over the last 15 years, the Mille Lacs Band of Ojibwe has actively 
participated in the formulation of Tribal Self-Governance policy. We 
take pride in being one of the first ten Self-Governance tribes. We 
participated in the original demonstration project and the 1 writing of 
the permanent Acts for BIA and IHS Self-Governance. The Mille Lacs Band 
has also been on the rulemaking committees for the implementation of 
Self-Governance laws. Presently, the Mille Lacs Band of Ojibwe is an 
active member with the Tribal Self-Governance Advisory Committee that 
advises Federal agencies on Indian policy matters affecting the Self-
Governance tribes.
    The Mille Lacs Band has supported and advocated for Self-Governance 
laws because our philosophy is that we should be free to govern 
ourselves and develop our own policies in the administration of our 
tribal programs. To us, this is an important exercise of sovereignty. 
In that exercise of sovereignty, we should not be entangled by a 
Federal or State bureaucracy.
    There are three principles that the Mille Lacs Band of Ojibwe 
considers when analyzing Federal programs. First, we assert that our 
primary relationship is with the Federal Government. This tribal-
Federal relationship has been established through treaties with the 
United States, Executive orders, Federal statutes and numerous court 
decisions recognizing the same. Second, we retain all sovereignty not 
expressly taken away, and therefore we should have the ability to 
control funds reserved for us under Federal law. Third, we should have 
equal access to the same funding avenues as States. This third 
principle raises the fundamental flaw of the Medicaid and Medicare 
programs.
    It is the Band's understanding that the design of the Medicaid and 
Medicare programs is a Federal--State collaboration. The problem is 
that tribes do not fit into the picture at all and this design flaw 
makes it very difficult to meet the criteria for receiving 
reimbursements. An example is that counties receive an administrative 
match from the state for their administrative costs while tribes 
cannot. According to the Mille Lacs Band of Ojibwe Commissioner of 
Health and Human Services, our inability to recover the administrative 
match demonstrates that tribes do not have equal access to Medicaid and 
Medicare reimbursements. The reason is that States determine how their 
block grants will be distributed under their own guidelines. As a 
result, the Mille Lacs Band and many other tribes lose out on potential 
and critical avenues of funding we desperately need because Federal 
funding through the Indian health service. Others on this panel have 
addressed this and other legal barriers more specifically, but from a 
tribal leader perspective it is clear that states and managed care 
systems have predominance over tribes under Medicaid and Medicare.
    Clearly, the establishment of the Medicaid and Medicare entitlement 
programs happened at a time in history when the Congress did not focus 
on tribal sovereignty. Presently tribes are treated as governments in 
Federal legislation and tribal sovereignty is recognized. Indian people 
are provided direct access to Federal programs and funding. The Mille 
Lacs Band of Ojibwe receives direct funding through our Self-Governance 
Indian Health Service and Bureau of Indian Affairs Annual Funding 
Agreements. But when it comes to Medicaid and Medicare programs, it is 
a different situation. It is time to change the Medicaid and Medicare 
provisions under Title IV of the Indian Health Care Improvement Act to 
reflect the new enlightened view of tribal sovereignty and provide 
tribes more access to health care services as the Act was originally 
intended.
    Through our treaties, Federal statutes, Executive orders and court 
decisions, a Federal trust responsibility has been established and 
recognized over the course of dealings with tribes. The Mille Lacs Band 
of Ojibwe signed several treaties with the United States, and the 
provision of proper health care became an expectation of the Band and 
an obligation of the Federal Government. In addition, the Snyder Act of 
1921, the Transfer Act of 1954, the Self-Determination Act of 1975, the 
Indian Health Care Improvement Act of 1976, as well as the enactment of 
the IHS Self-Governance Act, all evidence the trust obligations that 
flow to the tribes from the Federal Government for the provision of 
health care.
    In spite of the clear legal duty created by these Federal statutes, 
the Federal obligation to provide adequate health care to tribes has 
never been properly funded. Historically, this insufficient funding has 
interfered with our ability to provide comprehensive health care to 
Mille Lacs Band members. According to IRS estimates, the Mille Lacs 
Band and all other tribes in the Bemidji are funded at approximately 30 
percent of need. This means more than two-thirds of our need is not 
being met and explains why the status of Indian health on the Mille 
Lacs Band Reservation and almost all other tribal reservations is so 
poor. We are told that the Federal Government spends nearly twice as 
much for a prisoner's health care than it does for Indians. This fact 
is an example of why our health status is at the bottom of every 
disease category.
    It seems ironic that Indian health care through the IHS is not an 
entitlement for Indian people when tribes essentially pre-paid for our 
health care by ceding millions of acres of land to the Federal 
Government. It seems even more ironic that tribes have problems 
accessing the Federal entitlement programs like Medicaid and Medicare 
which were designed for all state citizens. This funding disparity 
becomes a matter of fairness and equity because Indian people are also 
citizens of the States in which we reside. It is only logical that we 
should have the same access to the same services as do other non-Indian 
citizens.
    Given that we have been historically under funded for our health 
care needs and that tribes likely will not receive funding for the 
level of need in the next appropriations cycle, the Federal trust 
responsibility needs to be taken seriously and changes made to allow 
tribes full participation in the existing entitlement programs of 
Medicaid and Medicare. It is fair and it is right.
    It has been more than 25 years ago since the Indian Health Care 
Improvement Act was enacted. The primary purpose of the legislation was 
to improve the health status of Indians to a level comparable with the 
general U.S. population. While strides have certainly been made in the 
delivery of Indian health care in that time, there continue to be 
health disparities in Indian country that are recited time and time 
again. The numbers change slightly, but one constant is that Indians 
rank highest in nearly every category of disease incidence than the 
general American population. It is plain and simple that Indian health 
status is not improving and something must be done.
    On the Mille Lacs Band Reservation, diabetes is a very serious 
problem. There is not one family without diabetes among one of their 
family members. For many of our Band members, it is not a matter of if 
they get the disease, but when. Band members are losing their vision 
due to glaucoma complications, they are losing their limbs because of 
circulatory problems and many are close to requiring kidney dialysis 
treatments. This chronic disease affects our members' quality of life 
and it affects the lives of their family members.
    More alarming is that diabetes and other long-term chronic health 
conditions are now occurring in our children and our youth. We have 
serious concerns for their long-term health and longevity. Our children 
and youth are our future and we must aggressively confront these health 
problems to preserve our tribal communities. There are no answers but 
it is clear that adequate and comprehensive Indian health care is a 
critical part of the solution.
    The ability to provide comprehensive health care on our 
reservations is paramount because frequently our members will use only 
our tribal health facilities. The Mille Lacs Band is located in a rural 
area and other health care facilities are long distances. Our three 
clinics attempt to provide the health care our members need, but 
resources are quickly used and we make every effort to access outside 
funding through Medicaid and Medicare reimbursements within the 
limitations of existing law. More often than not, our efforts cannot 
meet our needs. We are fighting to protect the lives and health of our 
members on our reservations and in our communities. If Congress makes 
the necessary changes to Title IV of the Indian Health Care Improvement 
Act and provides more access to Federal health care services and funds, 
it will at least give us another weapon in this war on health 
disparities.
    Under Executive Order Number 113175, the Tribal Consultation 
Policy, the Indian Health Service frequently solicits tribal input on 
health care matters that affect Indian country. The same cannot be said 
for other agencies within the Federal Department of Health and Human 
Services. Two examples that demonstrate the lack of tribal consultation 
are the proposed Medicaid and Medicare Reform that will affect tribal 
health care programs throughout Indian country.
    The Department of Health and Human Services and the Mille Lacs Band 
of Ojibwe, along with the other federally recognized tribes throughout 
the United States, share the common goal of providing accessible and 
culturally-appropriate health care that we believe is best achieved by 
working together at the earliest stages of policy development and 
certainly prior to implementation. The Mille Lacs Band of Ojibwe 
endorses and supports the Secretarial appointment of a Tribal Leaders 
Group [TLG] that would provide policy guidance throughout the 
Department of Health and Human Services. The Mille Lacs Band also 
endorses and supports the Tribal Technical Advisory Group [TTAG] that 
would provide technical expertise on complicated Indian policy matters 
and issues specifically to the Centers for Medicare and Medicaid 
Services.
    The Tribal Leaders Group has been sanctioned by the National Indian 
Health Board, the National Congress of American Indians and the Tribal 
Self-Governance Advisory Committee, and would be comprised of tribal 
leadership from each of the Indian Health Service areas. These three 
organizations are recognized by the Federal Government and the agencies 
that handle Indian affairs, but on many occasions Indian policy is 
overlooked by lawmakers and policymakers during the process of policy 
development. The Tribal Leaders Group would provide important policy 
recommendations to the Department of Health and Human Services on 
proposed initiatives that affect health care delivery throughout Indian 
Country, which in turn furthers the government-to-government 
relationship that fulfills the objectives of the tribal consultation 
policy.
    On a more specific level, the Tribal Technical Advisory Group 
[TTAG] would provide the technical expertise and knowledge to the 
Centers for Medicare and Medicaid Services that is required when 
dealing with complex issues like Medicaid and Medicare Reform. The TTAG 
is also sanctioned by the National Indian Health Board, the National 
Congress of American Indians and the Tribal Self-Governance Advisory 
Committee. The Centers for Medicare and Medicaid Services has drafted a 
charter for the TTAG that provides representation from the three 
national Indian organizations identified above; however, the Mille Lacs 
Band and the TTAG believe that the Group should also require the 
participation of at least three technical advisers that are familiar 
with health care financing and administration and how proposed changes 
will affect Indian country.
    Through the Secretarial appointment of the Tribal Leaders Group and 
the Tribal Technical Advisory Group, tribal involvement from the 
earliest stages of policy development will ensure that Indian issues 
will be adequately addressed. Involvement and consultation also 
furthers the government-to-government relationship that the Mille Lacs 
Band of Ojibwe believes is part of the Federal trust responsibility to 
tribes.
    The Mille Lacs Band of Ojibwe has a number of concerns with the 
Secretary of the Department of Health and Human Services' One HHS 
Initiative. First, the Initiative has not involved tribal consultation 
and that lack of consultation undermines the government-to-government 
relationship that tribes enjoy with the Federal Government. One of the 
underlying policies of Executive Order Number 13175 was and is to 
involve tribes at the policymaking level and work with decisionmakers 
to enhance the government-to-government relationship. The Mille Lacs 
Band of Ojibwe and other tribes want to be involved and consulted on 
health and human service policy matters that affect Indian country 
because we know best what our tribal communities need and can provide 
that knowledge to HHS officials.
    Second, tribes' unique status as sovereign governments who are 
federally-recognized political entities is overlooked by the One HHS 
initiative. As a federally-recognized tribe, the Mille Lacs Band of 
Ojibwe is a sovereign government that has a government-to-government 
relationship with the Federal Government and its agencies. Our Self-
Governance compacts are an expression of that relationship. As 
political entities recognized by the Federal Government, the Mille Lacs 
Band and other tribes cannot be treated as simply another racial 
minority group. The U.S. Constitution, our Treaties, Presidential 
Executive orders, and Federal statutes and court decisions all affirm 
our political status as sovereign governments that are distinctly 
separate from all other racial and minority groups. By engaging in 
tribal consultation, Federal agencies will support tribes' government-
to-government relationship expressed in the above mentioned 
instruments.
    Third, implementation of the One HHS Initiative is a departmental 
reorganization that fails to recognize the Indian Health Services' 
unique responsibility to Indian tribes. The restructuring of the HHS 
does not acknowledge the unique relationship between the Indian Health 
Service and the federally-recognized tribes. By incorporating Indian 
health care into public health and minority health programs, the Indian 
Health Service may lose its ability to provide direct medical services 
to tribes and eventually may see the loss of programs designed 
specifically for tribes. Inherent in the restructuring is an alteration 
of the Federal trust responsibility. Indian Health Service exists to 
fulfill the Federal trust responsibility of providing health care to 
tribes across the United States and attempting to improve the health 
status in Indian country. Removing that trust responsibility runs 
counter to the very purpose of the Indian Health Care Improvement Act.
    The Mille Lacs Band of Ojibwe recognizes that improvements have 
been made in the delivery of health and human services since the 
enactment of the Indian Health Care Improvement Act in 1976. However, 
we still have significant health disparities in our communities that 
have not seen improvement. This tells us there must be greater efforts 
to address Indian health disparities. Those efforts must involve tribal 
consultation and coordinated discussions for any result to be obtained. 
It is not too late to engage tribes and begin working together to move 
forward and improve Indian health disparities.
    Miigwech.
                                 ______
                                 

  Prepared Statement of Buford Rolin, Vice Chairman, Poarch Creek of 
                                Indians

    Chairman Campbell, Vice Chairman Inouye, and distinguished members 
of the Senate Indian Affairs Committee, I am Buford Rolin, member at 
large of the National Indian Health Board. I am an elected official of 
the Poarch Creek Band of Indians, serving as vice chairman. On behalf 
of the National Indian Health Board, it is an honor and pleasure to 
offer my testimony this morning on the Reauthorization of the Indian 
Health Care Improvement Act.
    The NIHB serves nearly all federally recognized American Indian and 
Alaska Native (AI/AN) tribal governments in advocating for the 
improvement of health care delivery to American Indians and Alaska 
Natives. We strive to advance the level of health care and the adequacy 
of funding for health services that are operated by the Indian Health 
Service, programs operated directly by Tribal Governments, and other 
programs. Our Board Members represent each of the 12 areas of IHS and 
are elected at-large by the respective Tribal Governmental Officials 
within their regional area.
    I would first like to commend the witnesses that testified before 
me this morning, Mim Dixon and Myra Munson, for their tireless work and 
expertise on American Indian and Alaska Native issues related to 
Medicare, Medicaid and the Children's Health Insurance Program. I am 
also much honored to testify this morning alongside Chief Executive 
Melanie Benjamin of the Mille Lacs Band of Ojibwe.
    Given the two previous hearings the committee has held on the 
Indian Health Care Improvement Act during the 108th Congress, I'm going 
to be brief this morning. I realize the members are quite aware of the 
need and purpose of the reauthorization; therefore I would like to 
focus on the efforts of tribal leaders to craft legislation that 
addresses previous concerns raised by the Administration and responds 
to the current political realities facing Congress.
    The National Steering Committee [NSC] was formed by the Indian 
Health Service in 1999 to develop and submit recommendations for 
changes to the Indian Health Care Improvement Act. The NSC is comprised 
of elected tribal representatives throughout Indian country, and also 
includes urban health program representation. The NSC is currently 
cochaired by Julia Davis-Wheeler, NIHB Chair, and Rachel Joseph of the 
Lone Pine Paiute Shoshone Tribe.
    Over the last several years, the NSC has worked closely with Indian 
country, the Administration, Congress, and the Indian Health Service to 
develop amendments to the Indian Health Care Improvement Act. Indian 
country has proceeded through this process in a spirit of cooperation 
and negotiation and the language has gone through several changes.
    At the request of Tribal leaders, the Centers for Medicare and 
Medicaid Services [CMS] established the Tribal Technical Advisory Group 
(TTAG) to advise CMS on Medicare, Medicaid, and Children's Health 
Insurance (CHIP) policy issues related to American Indians and Alaska 
Natives. The TTAG was formed in 2001 and consists of Tribal leaders, 
Area Indian Health Boards, and designated national Tribal 
organizations, including the National Indian Health Board. The 
activities of the TTAG are coordinated primarily through the 
Intergovernmental and Tribal Affairs Office within CMS.
    The TTAG has forwarded several recommendations to Congress and CMS 
regarding recommended changes to the reimbursement methodologies in 
place for the Indian Health Service, Tribal health programs, and Urban 
Indian programs. The TTAG is adamant in its position that any reform or 
changes in the Medicare, Medicaid, or CHIP programs must allow for 
Tribal allocation or other direct funding mechanisms that authorize 
Indian health programs access to Centers for Medicare & Medicaid 
Services (CMS) program funding.
    The TTAG has worked closely with the National Steering Committee to 
develop the changes to Title IV of the Indian Health Care Improvement 
Act that are reflected in H.R. 2440, which are the most recent NSC 
recommendations.
    As the committee is well aware, funding for the Indian Health 
Service lags far behind other segments of the population and has failed 
to keep pace with population increases and inflation. Current Indian 
Health Service funding is so inadequate that less than 60 percent of 
the health care needs of American Indians and Alaska Natives are being 
met. In order to address the need for additional health care resources, 
Title IV of the Indian Health Care Improvement Act addresses access to 
Medicare, Medicaid and other third party reimbursements. It is one of 
the most important provisions of the Indian Health Care Improvement Act 
as it makes IHS hospitals eligible for Medicare reimbursements, and 
also makes IHS facilities eligible for Medicaid reimbursements. Title 
IV makes it possible for Medicare and Medicaid eligible American 
Indians and Alaska Natives to utilize these benefits.
    Since the passage of the Health Care Improvement Act in 1976, 
Medicare and Medicaid payments have become vital sources of revenue for 
basic tribal hospital and clinic operations. In fiscal year 2002 alone, 
IHS and tribally operated hospitals and clinics collected $460 million 
for services provided to Indian people enrolled in these programs. This 
amount enhances the resources available for the IHS hospitals and 
health clinics budget by nearly 30 percent.
    In order to further improve the ability of Indian Country health 
providers to access third party resources, the NSC developed several 
changes to Title IV that were included in S. 212 introduced during the 
107th Congress. When asked to respond to the language contained in S. 
212, several concerns were raised by Health and Human Services 
Secretary Tommy G. Thompson regarding the proposed changes to title IV. 
The concerns were primarily related to costs. I would like to note that 
S. 556 introduced during this Congress is identical to S. 212 and 
therefore many of the concerns raised in regards to S. 212 remain.
    In response to those concerns, the National Steering Committee 
revised their recommendations for the reauthorization and those changes 
are reflected in H.R. 2440, which was introduced on June 11, 2003. I 
think it was,quite helpful to hold the joint Senate Committee on Indian 
Affairs and House Resources Committee hearing on the IHCIA last week as 
it illustrates the efforts of both houses to pass a bill this session. 
Although the bill was introduced in the House, it was developed with 
input and involvement from both Senate and House members and staff.
    H.R. 2440 reflects several changes made to the original tribal 
proposal prepared in 1999 by the National Steering Committee (NSC). The 
legislation includes revisions to the 1999 proposal in response to the 
Secretary Thompson's concerns. Some of the major changes of the revised 
Tribal recommendations made ii?- H.R. 2440 that respond to the 
Administration's concerns about S. 212.
    Qualified Indian Health Program [QIHP]. This provision has been 
removed. The NSC designed QIHP as a new provider type through which 
Indian health programs and urban Indian health programs could more 
fully exercise their statutory authority to receive payments under 
Medicare, Medicaid and SCHIP. Secretary Thompson expressed concern that 
QIHP was complex and would be administratively burdensome. Tribal 
leaders acknowledged that the CBO score of this provision--in excess of 
$3 billion over 10 years--could be a barrier to Congressional 
acceptance of QIHP and therefore removed it.
    In place of the QIHP proposal, Tribal leaders seek a comprehensive 
study by the Department of Health and Human Services [DHHS] of 
reimbursement methodologies of Medicare and Medicaid for the Indian 
Health Service [IHS], Tribal health programs, and health programs of 
urban Indian organizations. The new provision found in H.R. 2440 
directs the Secretary to perform such a study and report the findings 
to Congress. The Secretary is to examine whether payment amounts under 
current methodologies are sufficient to assure access to care and 
whether these methodologies should be revised consistent with those 
applicable to the ``most favored'' providers under the Social Security 
Act. The current ``all-inclusive'' rate system through which IHS and 
tribal hospitals and some clinics now receive Medicare and Medicaid 
reimbursements would remain in place until the Secretary's 
recommendations are reported to Congress and Congress decides whether 
to make any changes.
    Extension of 100 percent Federal Medical Assistance Percentage 
[FMAP]. Tribal leaders also agreed to delete a provision that would 
have extended the 100 percent FMAP to services provided to Medicaid 
eligible Indians referred by IHS or tribal programs to outside 
providers, such as referrals made through the contract health services 
program. Under current interpretation of the Centers for Medicare and 
Medicaid Services [CMS], the 100 percent FMAP is made available to 
States only for reimbursements for services provided directly in an IHS 
or tribal facility, even though the only reason the patient required 
care outside the IHS or tribal facility was that the facility could not 
directly provide the service and had to rely on an outside provider.
    While State governments are very supportive of the 100 percent FMAP 
expansion, DHHS objected that its cost was too high--more than $2 
billion over 10 years--and that its financial benefits would flow only 
to the States, not to Indian health programs and their Indian 
beneficiaries. While the NSC disagrees with the Department's 
interpretation of the statute and their conclusions about the effect of 
the proposed amendment, we agreed to delete the provision from the 
IHCIA.
    Waiver of Medicare Late Enrollment Penalty. The 1999 tribal 
proposal--and S. 212 and S. 556--sought to waive the premium penalty 
for any Medicare-eligible Indian who did not timely enroll in Medicare 
Part B because of a number of barriers. The DHHS strongly objected to 
this provision as it would treat Indians differently than other 
Medicare-eligible persons who do not timely enroll. The DHHS asserts 
that the penalty is needed to encourage eligible persons to enroll and 
begin paying Part B premiums when they first become eligible, rather 
than waiting until they become ill and need to use their Medicare 
coverage. Tribal leaders also agreed, reluctantly, to delete this 
provision.
    Regulations. Secretary Thompson objected to the tribal leaders' 
call for all regulations--including Social Security Act regulations 
affecting Indian health providers--to be prepared through Negotiated 
Rulemaking with tribal representatives. He asserted that the large 
number and complexity of Social Security Act regulations makes 
negotiated rulemaking unfeasible. In response to this concern, tribal 
leaders eliminated Social Security Act changes from the bill's 
negotiated rulemaking provision.
    We believe the changes to the original tribal proposal submitted in 
1999 significantly reduce the bill's Federal budget impact. S. 212 
[identical to S. 556] was scored in 2001 as having a Federal budget 
impact of $6.9 billion over 10 years. Deletion of the QIHP and the 100 
percent FMAP provisions together reduce the bill's score by about 70 
percent. We ask that the committee submit a request to the 
Congressional Budget Office to either score S. 556 without the above 
mentioned provisions, or provide a fiscal budget impact on H.R. 2440.
    Conclusion. On behalf of the National Indian Health Board, I would 
like to thank the committee for its consideration of my testimony and 
for your diligence in making the health of American Indian and Alaska 
Native people a high priority of the 108th Congress. I have been 
involved with the National Steering Committee since its inception in 
1999 and have seen the hard work and compromises that the tribal 
leaders have made. Tribal leaders have come to the table to work out 
the more contentious provisions and we urge the committee to act 
swiftly on this important piece of legislation. Further, we request 
that any concerns regarding this legislation are raised in a timely 
manner so that passage of this bill during this session is not 
jeopardized.
                                 ______
                                 

Buford Rolin, Member at Large, National Indian Health Board, Responses 
                              to Questions

    On behalf of the National Indian Health Board [NIHB], a non-profit 
organization established in 1972 to serve nearly 558 federally 
recognized tribal governments in advocating for the improvement of 
health care delivery for American Indians and Alaska Natives, I am 
pleased to respond to your letter dated August 1, 2003 regarding my 
recent testimony on S. 556, the Indian Health Care Improvement Act 
Reauthorization.
    No. 1. Federal Medical Assistance Program [FMAP]. There appears to 
be a concern that a 100-percent FMAP provision is too costly.
    Question A--What is the purpose of the 100 percent FMAP and what 
are the cost estimates used to determine the provision was too costly?
    Response. The discussion of the 100 percent FMAP provision, section 
212 of S. 556, has become quite complicated. The National Steering 
Committee [NSC] endorses passage of a provision of law that will 
clarify the intent of Congress and require full implementation of what 
we, and many states, believe is existing law. We are hopeful that the 
100 percent FMAP provision will compel the Centers for Medicare and 
Medicaid Services [CMS] to do what we think it should already do.
    After the Congressional Budget Office [CBO] issued its score on the 
provision in S. 212, the predecessor to S. 556, and the Administration 
expressed its objection to the provision, the NSC reluctantly 
determined that the provision was likely to hinder efforts to 
reauthorize the Indian Health Care Improvement Act and therefore agreed 
to its removal from the bill in favor of free-standing legislation. 
Current law states: ``the Federal medical assistance percentage shall 
be 100 per centum with respect to amounts expended as medical 
assistance for services which are received through an Indian Health 
Service facility whether operated by the Indian Health Service or by an 
Indian tribe or tribal organization (as defined in section 1602 of 
Title 25).''
    42 U.S.C. Sec.  1396 (d) (b) (emphasis added.). The NSC believes 
that ``through'' encompasses all services provided directly by the 
Indian Health Service [IHS] and tribes and tribal organizations 
operating health programs under the Indian Self-Determination and 
Education Assistance Act [ISDEAA], as well as non-facility based 
services--such as home and community-based services--and services that 
the Indian health program would have paid for from its contract health 
service program, but for the patient being Medicaid eligible. CMS has 
generally interpreted ``through'' to mean ``in,'' applying the 100 
percent FMAP only for services provided in an IHS or tribal facility.
    Authorization of 100 percent reimbursement for States for services 
provided through the IHS reflects Congressional understanding that the 
obligation to provide health care to American Indians and Alaska 
Natives is a Federal obligation deriving from the Constitution, 
treaties and laws and paid for by tribes with hundreds of millions of 
acres of land. Pragmatically, it serves to encourage States to 
recognize the importance of IHS and tribal providers to ensuring that 
Indians have access to culturally appropriate and sensitive health 
care. Please see the response to question B for a more thorough 
discussion of this latter point.
    Unfortunately, the NSC is not privy to the CBO scoring methodology 
or to information that may have been provided to CBO by CMS. We do 
believe it is highly probable that the score is inflated substantially. 
Many States have interpreted the current law to permit them to claim 
exactly what is described in Sec.  212 of S. 556. Accordingly, they 
have been claiming, and until recently, often been being reimbursed, at 
that level. Thus, the expenditures are not new, but part of the current 
budget.
    Second, we believe it possible that the score includes an estimate 
of the cost of all services to Indians by non-IHS providers whether 
there was a referral from the IHS or tribal health program or not. This 
would significantly inflate the score. The intent of the NSC is only 
that services provided based on such a referral be included. By 
limiting it in this way, the continuity of care for Indian patients and 
the integrity of the Indian health system are retained.
    The score was so high that it also makes us wonder if CBO was 
relying on census numbers for estimating the number of Indians instead 
of the number of active users in the Indian health system. What is 
clear to us is that American Indians and Alaska Natives are not 
receiving the benefit of services in amounts anywhere equivalent to the 
CBO estimates and that the Indian health system continues to be 
dramatically underfunded to carry out its mission. Both should be 
remedied.
    Question B--If FMAP is not enacted, is there a chance that some 
States may not extend services to Indians unless the 100-percent FMAP 
applies?
    Response. The relationship between States and tribes varies 
dramatically from State to State, administration to administration, 
issue to issue. It ranges from enmity, to distrust, to indifference 
with occasional shining lights of cooperation. The hostilities arise 
typically from historical and present conflicts over control of 
resources--land, minerals, water, tax base, to name a few. The 
indifference arises from a view that since there is a direct Federal/
tribal government-to-government relationship, the State has no role. 
This is reinforced by the human tendency to set priorities based on the 
``out-of-sight out-of-mind'' principle under which rural and remote 
communities suffer, including Indian communities. Increased 
reimbursement for Medicaid expenditures won't cure all of this, but it 
would be a substantial help.
    After the execution of the 1996 Memorandum of Agreement between the 
Health Care Financing Administration [HCFA] [now CMS] and IHS, many 
States demonstrated a significantly higher willingness to work with IHS 
and tribes to include them in their Medicaid programs as providers and 
as programs able to assist Medicaid-eligible Indians to exercise their 
right to participate in the Medicaid program. This did not happen 
overnight and it continues to require diligence and outreach by IHS and 
tribes, but gradually it did happen.
    We hesitate to say that states will roll back their cooperation if 
the narrower interpretations by CMS of their right of recovery is not 
overcome, but in a time when all states are experiencing financial 
pressures, particularly centered on their Medicaid programs, it is a 
high risk. It is a risk we do not believe we should have to take.
    No. 2. 1996 MOA between IHS and DHHS: The 1996 Memorandum of 
Agreement between IHS and DHHS established a 100-percent FMAP which 
applies to certain services provided by IHS and Tribal ``638'' programs 
at their facilities.
    Question--Does the MOA apply to tribes who provide programs that 
are not contracted such as long-term care and, if not, should it?
    Response. In our view the MOA did not change anything substantive 
about the coverage. It makes tribal health facilities, health 
facilities of the IHS, as if there were a lease between IHS and the 
tribe, in order to avoid the wasteful exercise of IHS actually having 
to enter into such leases. Whether the MCA extends to long-term care, 
is really a question about whether the IHS and tribes should offer 
long-term care health services, and whether tribes have the right to do 
so, even if not directly funded by IHS to do so. We believe the answer 
to all these questions is ``yes.'' Tragically, long-term care wasn't a 
priority of the IHS because Indians did not live long enough to require 
it. Tragically, long-term care couldn't be a priority because IHS was 
so short-funded it could not meet acute care demand, let alone expand 
to long-term care. Tragically, Indians who were reluctant to leave 
their families and communities to receive long-term care simply had to 
forego that option because there were few, if any, nursing homes on or 
near reservations and predominantly Indian communities.
    Thankfully, life expectancy is increasing and long-term care 
doesn't only have to mean nursing home care, although it is still an 
important component. Indian tribes and tribal organizations are 
exercising their right to assume responsibility for carrying out 
programs of the IHS under both Title I (self-determination) and Title V 
(self-governance) of the ISDEAA and achieving efficiencies and program 
improvements only imagined by the IHS under which they can exercise 
authority to set priorities locally and redesign their programs 
accordingly. Some tribes have even developed the capability of 
contributing tribal resources to the mix of funding for health services 
and this has meant expansion of services, including long-term care. 
When this occurs, the MOA absolutely should cover tribal long-term 
care. In our view, the better question would be why it shouldn't cover 
long-term care.
    Most health care expenditures come at the end of life--some of that 
expense is due to long-term care. Why should Federal financial 
participation in delivering health services to American Indians and 
Alaska Natives end just at the point the expense becomes greatest?
    No. 3. States Denying Care to Indians. Federal health care to 
Indians arises from the special relationship with and obligations of 
the United States. But, as U.S. citizens, Indians also have equal 
access to other public health programs available to all other U.S. 
citizens.
    Question--Is the National Steering Committee aware of cases where 
States have refused public health insurance coverage for eligible 
Indians because of the belief that health care is a ``Federal 
responsibility''?
    Response. The National Steering Committee is not aware of a 
consistent pattern of such refusals however, tribal leaders are aware 
of individual cases where this has occurred at the application level. 
Despite the well established Federal responsibility to provide health 
services to American Indians and Alaska Natives, tribal members are 
often discriminated against and are denied the opportunity to even 
apply for other public health programs based on the ``Indians receive 
free health care,'' misconception. The result is that tribal members 
often avoid utilizing such resources in order to avoid such 
discrimination and do not utilize those resources that are available to 
them.
    Another barrier that exists for tribal members in accessing 
services outside of the HIS, Tribal, and Urban (I/T/U) system is the 
eligibility application process. The application process is quite 
lengthy and arduous, which discourages participation. Tribal leaders 
are aware of these problems and are taking steps to address them, such 
as working with States to increase participation.



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