[Congressional Record Volume 150, Number 139 (Wednesday, December 8, 2004)]
[Senate]
[Pages S12052-S12055]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         ADDITIONAL STATEMENTS

                                 ______
                                 

FINAL THOUGHTS ON THE INDIAN HEALTH CARE IMPROVEMENT ACT AMENDMENTS OF 
                                  2003

 Mr. CAMPBELL. Mr. President, I am pleased to provide for 
inclusion in the Congressional Record, the final cost estimate for S. 
556, the Indian Health Care Improvement Act Amendments of 2003 prepared 
by the Congressional Budget Office.
  This estimate had not been completed in time to be filed with the 
Senate Report No. 108-411 on S. 556 that was filed on November 17, 
2004.
  S. 556 would reauthorize the Indian Health Care Improvement Act which 
sets forth the statutory framework for the Indian health system and was 
first enacted in 1976. The act was reauthorized in 1992. The goal of 
the 1976 act, as amended, is to raise the health status of Indians to 
achieve parity with that of other Americans.
  American Indians and Alaska Natives rank at or near the bottom of 
nearly every health indicator when compared to the general U.S. 
population. Health studies indicate disproportionately higher mortality 
rates of alcoholism, between 670-770%; tuberculosis, 650%; diabetes, 
between 318-420% accidental injuries, 280%; suicide, 190%; and 
homicide, 210%, than other populations.
  With the basic goals of the Act unrealized, the need for 
reauthorization grows greater. S. 556 would have provided an additional 
set of improvements to the Indian health care system--most notably, for 
facility construction, access to care through Medicaid cost-sharing 
waivers, and long-term planning through the establishment of a 
bipartisan commission to study the Indian health care system.
  The reauthorization bill has been a work in progress since the 106th 
Congress when I introduced a bill to reauthorize the act. I have 
introduced a bill to reauthorize the act in every subsequent Congress. 
Over the course of the past three Congresses, the Committee has held 
eight hearings on the reauthorization with four hearings held in the 
108th Congress alone.
  I was particularly pleased to have Secretary Thompson testify before 
the Committee on July 21, 2004, regarding the administration's views on 
the proposed legislation. At this hearing, the Secretary expressed 
enthusiastic support of the proposed legislation and his desire to see 
it enacted this year.
  This show of support was particularly important because we had been 
anticipating the administration's view for several months and were fast 
coming to the end of the 108th Congress.
  At the hearing, Secretary Thompson committed his staff to immediately 
begin meeting with the bill committee staff to work on the bill. Much 
effort to advance this legislation had already been put forth by 
committee staff, tribal leaders and the Indian health community. With 
department staff working alongside committee staff, we anticipated 
swift passage of the bill.
  However, swift passage did not happen and I am disappointed that the 
reauthorization did not get enacted this year. The committee staff 
worked diligently along with the administration and Indian tribal 
leaders until the very end of this Congress to finalize the bill for 
passage.
  I believe that, in addition to the changes made prior to July, 2004, 
the committee was quite responsive to the department's concerns and 
suggestions in revising the bill.
  In particular, the provisions for Medicare and health professional 
shortage areas were not included in the reported bill. The committee 
modified the establishment of creative funding programs such as the 
revolving loan funds and opted for studies for this type of funding 
mechanism instead--at the request of the administration.
  There was substantial discussions at the eleventh hour regarding 
provisions governing urban Indians and non-eligible individuals. I 
believe the Federal responsibility to provide health care applies to 
individual Indians living in the urban centers, especially when it is 
remembered that Indians reside in urban areas primarily as a result of 
the Federal policy of relocation during the first half of the 20th 
Century.
  In addition, in the course of negotiations, we were made aware of 
concerns dealing with the Veteran's Administration drug supply 
schedules and services to non-eligible individuals. A limited scope of 
services to certain non-eligibles has been a part of the Indian Health 
Care Improvement Act for years. Nevertheless, the Department and some 
tribes have different views of the scope of services.
  In any event, the matter is being addressed in the courts. Any 
resolution we could offer would be better served by reviewing the 
decision of the courts and then thoroughly examining the matter instead 
of fixing what has not been determined by the courts to be a problem.

  Likewise, I am concerned with what may be a desire to rollback the 
gains tribes have made in implementing the Indian Health Care 
Improvement Act and the Indian Self-Determination and Education 
Assistance Act.
  The underlying policies and plain language of the both statutes 
should not be ignored and the commitment to self-governance needs to be 
respected when enacting any Indian legislation.

[[Page S12053]]

  I certainly appreciated President Bush's Memorandum to Department 
Heads on ``The Government-to-Government Relationship with Tribal 
Governments'' dated September 30, 2004, in which he reiterated his 
support for the government-to-government relationship and tribal 
sovereignty. President Bush continued the long-standing policy of self-
governance begun in 1970 by President Nixon.
  The committee has continually upheld those principles and fought for 
expansions in self-governance, even over the objections of previous 
Administrations. I believe that retreating from those principles in 
enacting any Indian statutes would be inconsistent with the President's 
commitment as well as the will of Congress.
  What I am particularly disappointed in having to set aside this year 
is the State Children's Health Insurance Program, SCHIP, improvements 
that we had worked on for several months. In mid-May, 2004, we were 
informed that the department lacked information regarding how many 
Indian children qualified for the program and how many Indian children 
were actually being served, despite clear statutory language mandating 
services to Indian children. Yet again, we find the most needy must 
continue to suffer until there is a serious effort to address these 
disparities.
  There were many other Senators and committees which provided 
substantial assistance in seeking passage of this bill. Without the 
commitment and support of Majority Leader Bill Frist, we certainly 
could not have gotten as far as we did.
  Senator Frist was constructively engaged very early on this bill and 
continued his support throughout the negotiations with the 
Administration.
  Senator Stevens was also very supportive and committed to passage of 
this bill. His staff worked diligently also with the committee staff 
until the very end of the session.
  Likewise, Senator Grassley also committed his staff in assisting the 
committee staff in developing significant improvements in the Medicaid 
provisions.
  I cannot forget the work of Senator Hatch on this matter as well. 
Senator Hatch was instrumental in developing the Indian provisions in 
the SCHIP statute and assisted in seeking resolutions for many of the 
problems we found in SCHIP implementation.
  I am leaving the Senate knowing that there are many issues left 
unresolved but I have every confidence that the Committee under the 
leadership of Senator McCain will continue to protect tribal 
sovereignty and uphold principles of tribal self-governance.
  I do look forward to seeing a vigorous discussion on the 
reauthorization next year and believe that coordinated efforts ensure 
its passage.
  I ask that the CBO cost estimate be printed in the Record.
     S. 556--Indian Health Care Improvement Act Amendments of 2004
       Summary: S. 556 would authorize the appropriation of such 
     sums as necessary through 2015 for the Indian Health Care 
     Improvement Act, the primary authorizing legislation for the 
     Indian Health Service (IHS). The bill also contains specific 
     authorizations for loans and loan guarantees for urban Indian 
     organizations and a commission on Indian health care. In 
     addition, the bill also would affect direct spending, 
     primarily through provisions that would make it easier for 
     IHS to enter into capital leases and make changes to the 
     Medicaid program.
       CBO estimates that implementing S. 556 would cost $2.4 
     billion in 2005 and $31.8 billion over the 2005-2014 period, 
     assuming appropriation of the necessary amounts. We also 
     estimate that enacting the bill would increase direct 
     spending by $8 million in 2005, by $69 million over the 2005-
     2009 period, and by $238 million over the 2005-2014 period.
       S. 556 would preempt state licensing laws in certain cases, 
     and this preemption would be an intergovernmental mandate as 
     defined in the Unfunded Mandates Reform Act (UMRA); however, 
     CBO estimates that the costs of that mandate would be small 
     and would not approach the threshold established in UMRA ($60 
     million in 2004, adjusted annually for inflation). Other 
     provisions of the bill would establish new or expand existing 
     programs for Indian health care. It also would place new 
     requirements on Medicaid and the State Children's Health 
     Insurance Program (SCHIP) that would result in additional 
     spending of about $35 million over the 2005-2009 period. This 
     bill contains no private-sector mandates as defined in UMRA.
       Estimated cost to the Federal Government: The estimated 
     budgetary impact of S. 556 is shown in Table 1. The costs of 
     this legislation fall within budget function 550 (health).

                                                     TABLE 1.--ESTIMATED BUDGETARY EFFECTS OF S. 556
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                               2005       2006       2007       2008       2009       2010       2011       2012       2013       2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                      CHANGES IN SPENDING SUBJECT TO APPROPRIATION
 
Estimated Authorizations Level............      2,977      3,026      3,093      3,165      3,243      3,321      3,401      3,484      3,569      3,657
Estimated Outlays.........................      2,353      2,843      2,995      3,131      3,212      3,289      3,368      3,450      3,535      3,621
 
                                                               CHANGES IN DIRECT SPENDING
 
Estimated Budget Authority................          7         42         90         44         46         96         49         51        104         54
Estimated Outlays.........................          8         12         13         15         21         24         28         36         38         43
--------------------------------------------------------------------------------------------------------------------------------------------------------

       Basis of estimate: For the purpose of this estimate, CBO 
     assumes that S. 556 would be enacted near the start of 
     calendar year 2005 and that the authorized amounts will be 
     appropriated for each fiscal year.
     Spending Subject to Appropriation
       The estimated effects of S. 556 on spending subject to 
     appropriation are shown in Table 2. IHS programs were 
     authorized for 2004 by the Department of the Interior and 
     Related Agencies Appropriations Act, 2004 (Public Law 108-
     108).
       Existing Indian Health Service activities. S. 556 would 
     authorize the appropriation of such sums as necessary for the 
     Indian Health Service through 2015. The agency's 
     responsibilities under the bill would be broadly similar to 
     those in current law. CBO's estimate of the authorized level 
     for IHS programs is the appropriated amount for 2004 adjusted 
     for inflation in later years. The estimated outlays reflect 
     CBO's current assumptions about spending patterns for IHS 
     activities. (The pending omnibus appropriation act, H.R. 
     4818, would provide $2.985 billion in funding for IHS 
     activities in fiscal year 2005).

                                             TABLE 2.--ESTIMATED EFFECTS OF S. 556 ON DISCRETIONARY SPENDING
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         By fiscal year, in millions of dollars--
                                ------------------------------------------------------------------------------------------------------------------------
                                    2004       2005       2006       2007       2008       2009       2010       2011       2012       2013       2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
Spending Under Current Law \1\
    Budget Authority...........      2,921          0          0          0          0          0          0          0          0          0          0
    Estimated Outlays..........      2,909        605        159         71          5          0          0          0          0          0          0
Proposed Changes:
    Existing Indian Health
     Service Activities:
        Estimated Authorization          0      2,973      3,025      3,092      3,165      3,243      3,321      3,401      3,484      3,569      3,657
         Level.................
        Estimated Outlays......          0      2,352      2,841      2,994      3,131      3,212      3,289      3,368      3,450      3,535      3,621
    Loan Guarantees for Urban
     Indian Organizations:
        Estimated Authorization          0          *          1          1          0          0          0          0          0          0          0
         Level.................
        Estimated Outlays......          0          *          *          *          *          *          *          0          0          0          0
    Commission on Indian Health
     Care Entitlement:
        Authorization Level....          0          4          0          0          0          0          0          0          0          0          0
        Estimated Outlays......          0          1          2          1          0          0          0          0          0          0          0
    Total Changes in Spending
     Subject to Appropriation:
        Estimated Authorization          0      2,977      3,026      3,093      3,165      3,243      3,321      3,401      3,484      3,569      3,657
         Level.................
        Estimated Outlays......          0      2,353      2,843      2,995      3,131      3,212      3,289      3,368      3,450      3,535      3,621
Spending Under S. 556:
    Estimated Authorization          2,921      2,977      3,026      3,093      3,165      3,243      3,321      3,401      3,484      3,569      3,657
     Level \1\.................

[[Page S12054]]

 
    Estimated Outlays..........      2,909      2,958      3,002      3,066      3,136      3,212      3,289      3,368      3,450      3,535      3,621
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The 2004 level is the amount appropriated for that year. The pending omnibus appropriation act (H.R. 4818) would provide $2.985 billion in funding
  for IHS activities in fiscal year 2005.
 
Note: *=Less than $500,000.

       Loan Guarantees for Urban Indian Organizations. Section 509 
     of the bill would establish a loan guarantee program for 
     urban Indian organizations. Under this new program, the 
     federal government would provide loans or loan guarantees, 
     with a term of up to 25 years, for construction or renovation 
     by urban Indian organizations. The bill would not require any 
     guarantee fees to be charged to the organizations and would 
     not limit the percent of the loan that would be insured by 
     the federal government. CBO therefore assumes that IHS would 
     insure up to 100 percent of the loan value and that borrowers 
     would not be charged any guarantee fees.
       The new loan program would be considered a discretionary 
     federal credit program and would require appropriation to 
     establish a limit on the total value of outstanding loans and 
     loan guarantees and to provide a credit subsidy for the cost 
     of such loans and loan guarantees. Based on discussions with 
     officials from the National Council of Urban Indian Health, 
     CBO estimates that the total value of loans and loan 
     guarantees would be $30 million. Using the Small Business 
     Administration's 7(a) general business loan program as a 
     guide, CBO assumes that, like small businesses, the default 
     rate for loans made to urban Indian organizations would be 
     about 10 percent and that recoveries on such loans would be 
     about 50 percent. Using those assumptions, CBO estimates that 
     the subsidy rate for the new loan program would be 5 percent, 
     and that establishing the loan program would cost about $2 
     million over the next five years, assuming appropriation of 
     the necessary amounts.
       Commission on Indian Health Care Entitlement. Section 815 
     would authorize the appropriation of $4 million for a 
     commission that would study establishing a legal entitlement 
     for Indians to receive health care services. The members of 
     the commission would have to be appointed within five months 
     of the bill's enactment and would be required to submit a 
     final report to the Congress no later than 18 months after 
     that. Assuming the appropriation of the authorized amount, 
     CBO estimates that implementing this provision would cost $1 
     million in 2005, $2 million in 2006, and $1 million in 2007.
       New Hospital for Fort Berthold Indian Reservation. S. 556 
     contains a provision that would authorize the appropriation 
     of $20 million for the construction of a new hospital on the 
     Fort Berthold Indian Reservation in North Dakota. CBO 
     estimates that this provision would have no effect on 
     spending because it is also contained in a separate piece of 
     legislation (S. 1146, the Three Affiliated Tribes Health 
     Facility Compensation Act) that the Congress recently 
     cleared.
     Direct Spending
       S. 556 contains several provisions, primarily related to 
     leasing by IHS and the Medicaid program, that would affect 
     direct spending. The bill's estimated effects on direct 
     spending are shown in Table 3. Overall, CBO estimates that 
     enacting the bill would inrease direct spending by $8 million 
     in 2005 and $238 million over the 2005-2014 period.
       The effects of each provision are discussed in more detail 
     below. IHS-funded health programs are commonly divided into 
     three groups: those operated directly by the Indian Health 
     Service, those operated by tribes and tribal organizations 
     under self-governance agreements, and those operated by urban 
     Indian organizations. For this estimate, they are referred to 
     collectively as Indian health programs.

                                                TABLE 3.--ESTIMATED EFFECTS OF S. 556 ON DIRECT SPENDING
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                              By fiscal year, in millions of dollars--
                                           -------------------------------------------------------------------------------------------------------------
                                               2005       2006       2007       2008       2009       2010       2011       2012       2013       2014
--------------------------------------------------------------------------------------------------------------------------------------------------------
Spending on Health Facilities:
    Estimated Budget Authority............          0         31         78         32         32         82         33         34         86         35
    Estimated Outlays.....................          0          0          0          2          7          9         12         18         20         23
Consultation with Indian Health Programs:
    Estimated Budget Authority............          *          *          1          1          1          1          1          1          1          1
    Estimated Outlays.....................          *          *          1          1          1          1          1          1          1          1
Exempt Indians from Cost Sharing:
    Medicaid:
        Estimated Budget Authority........          3          5          5          5          6          6          7          8          8          9
        Estimated Outlays.................          3          5          5          5          6          6          7          8          8          9
    SCHIP:
        Estimated Budget Authority........          0          0          0          0          0          0          0          0          0          0
        Estimated Outlays.................          1          1          1          1          *          *          *          *          *          *
Exempt Indians from Premiums:
    Medicaid:
        Estimated Budget Authority........          2          3          3          3          3          3          3          3          3          3
        Estimated Outlays.................          2          3          3          3          3          3          3          3          3          3
    SCHIP:
        Estimated Budget Authority........          0          0          0          0          0          0          0          0          0          0
        Estimated Outlays.................          *          *          *          *          *          *          *          *          *          *
Medicaid Interaction with SCHIP:
    Estimated Budget Authority............          *          *          *          *          1          1          1          1          1          1
    Estimated Outlays.....................          *          *          *          *          1          1          1          1          1          1
Medicaid Managed Care Provisions:
    Estimated Budget Authority............          1          2          3          3          3          4          4          4          5          5
    Estimated Outlays.....................          1          2          3          3          3          4          4          4          5          5
Scholarship and Loan Repayment Recovery
 Fund:
    Estimated Budget Authority............          *          *          *          *          *          *          *          *          *          *
    Estimated Outlays.....................          *          *          *          *          *          *          *          *          *          *
Total Changes in Direct Spending:
    Estimated Budget Authority............          7         42         90         44         46         96         49         51        104         54
    Estimated Outlays.....................          8         12         13         15         21         24         28         36         38        43
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes: Components may not sum to totals because of rounding. SCHIP is the State Children's Health Insurance Program. * = Costs or savings of less than
  $500,000.

       Spending on Health Facilities. IHS already has the 
     authority to enter into leases, contracts, or other 
     agreements with tribes or tribal organizations that have 
     title to, a leasehold interest in, or a beneficial interest 
     in facilities that would be used by IHS to deliver health 
     care services. Section 308 of the bill would require that all 
     such arrangements be treated as operating leases for the 
     purposes of the Balanced Budget and Emergency Deficit Control 
     Act.
       Under the bill, CBO anticipates that IHS would enter into 
     arrangements that should be treated as capital leases because 
     those arrangements would effectively allow IHS to acquire new 
     buildings. Consistent with government rules for accounting 
     for obligations, the full cost of those leases should be 
     recorded in the budget as new budget authority at the time 
     the lease agreements are signed. That budget authority--
     estimated to be about $440 million over the 2005-2014 
     period--is determined by calculating the discounted present 
     value of the anticipated lease payments. Spending of that 
     budget authority would occur over the term of the various 
     leases (that is, outlays would significantly lag behind the 
     budget authority).
       For this estimate, CBO assumed that IHS would begin signing 
     new capital leases starting in 2006. Based on information 
     from IHS, we anticipate that those leases would be used for a 
     variety of construction projects, including inpatient 
     hospitals, outpatient hospitals, and staff quarters. We 
     assume that IHS would not begin to make lease payments until 
     2008; payments in that year would total $2 million and then 
     rise gradually to $23 million by 2014. Both the level of 
     spending that might occur under the bill and the types of 
     projects that might be financed are uncertain, and IHS 
     spending may be more or less than the amounts CBO has 
     estimated.
       Consultation with Indian Health Programs. Section 409 would 
     encourage state Medicaid programs to consult regularly with 
     Indian health programs on outstanding Medicaid issues by 
     allowing states to receive federal matching funds for the 
     cost of those consultations. Those costs would be treated as 
     an administrative expense under Medicaid

[[Page S12055]]

     and divided equally between the federal government and the 
     states. CBO anticipates that a small number of states would 
     take advantage of this provision, increasing federal Medicaid 
     spending by about $200,000 in 2005 and by $7 million over the 
     2005-2014 period.
       Exempt Indians from Cost Sharing. Section 412 would 
     prohibit Medicaid and SCHIP from charging cost sharing to 
     Indians for services provided directly or upon referral by 
     Indian health programs. The provision also would require that 
     payments by Medicaid and SCHIP for services provided directly 
     by those programs could not be reduced by the amount of cost 
     sharing that Indians otherwise would pay.
       Medicaid. CBO anticipates that this provision's budgetary 
     effect would stem primarily from eliminating cost sharing for 
     referral services. Current law already prohibits Indian 
     health programs from charging cost sharing to Indians who use 
     their services. In addition, Medicaid pays almost all 
     facilities operated by IHS and tribes based on an all-
     inclusive rate that is not reduced to account for any cost 
     sharing that Indians would otherwise have to pay.
       Using Medicaid administrative data, CBO estimates that 
     about 225,000 Indians are Medicaid recipients who also use 
     IHS, and that federal Medicaid spending on affected services 
     would be about $400 per person annually in 2005. The amount 
     of affected spending would be relatively low because Medicaid 
     already prohibits cost sharing in many instances, such as 
     long-term care services, emergency services, and all services 
     for children and pregnant women. For the affected spending, 
     CBO assumes that cost sharing paid by individuals equals 2 
     percent of total spending--Medicaid law limits cost sharing 
     to nominal amounts--and that eliminating cost sharing would 
     increase total spending by about 5 percent as individuals 
     consume more services. Overall, CBO estimates that the 
     provision would increase federal Medicaid spending by $3 
     million in 2005 and by $62 million over the 2005-2014 period.
       State Children's Health Insurance Program. SCHIP 
     regulations already prohibit states from charging cost 
     sharing to Indian children enrolled in the program. As a 
     result, the provision's impact on SCHIP spending reflects 
     higher payments to Indian health programs and the use of 
     additional referral services by adult enrollees that some 
     states cover in waiver programs. CBO estimates that the 
     additional spending would total $1 million in 2005 and $5 
     million over the 2005-2014 period. The provision's effects 
     would be limited in later years because total funding for the 
     program is capped.
       Exempt Indians from Premiums. Section 412 also would exempt 
     Indians from paying any premiums under Medicaid or SCHIP. 
     Based on information from the Government Accountability 
     Office on the limited extent to which states charge premiums 
     in those programs and Medicaid administrative data, CBO 
     estimated that this provision would affect about 5,000 
     Medicaid recipients, and that the loss of premium payments 
     from those individuals would raise federal Medicaid spending 
     by $2 million in 2005 and by $29 million over the next 10 
     years.
       CBO also estimates that this provision would affect federal 
     SCHIP spending by less than $500,000 annually. As noted 
     above, Indian children do not pay premiums under SCHIP, so 
     the provision would affect only adult recipients.
       Medicaid Interaction with SCHIP. The changes in SCHIP 
     spending outlined above also would lead to slightly higher 
     Medicaid spending. Total funding for SCHIP is limited by 
     statute, and CBO anticipates that many states will experience 
     funding shortfalls over the 10-year projection period. CBO 
     also assumes that states will partly offset those funding 
     shortfalls by expanding Medicaid eligibility, which would 
     allow states to continue to receive federal matching funds, 
     albeit at a less-favorable matching rate. Since S. 556 
     would increase spending in SCHIP, it also would increase 
     the extent to which states use Medicaid funds to offset 
     funding shortfalls in SCHIP. CBO estimates that this 
     interaction would raise federal Medicaid spending by less 
     than $500,000 in 2005 and by about $5 million over the 
     2005-2014 period.
       Medicaid Managed Care Provisions. Section 413 contains 
     three provisions that would affect Medicaid spending on 
     services provided in managed care settings.
       Pay Indian Health Programs at Preferred Provider Rates. 
     States that rely on managed care organizations (MCOs) to 
     provide care to Medicaid beneficiaries and have an IHS 
     presence commonly require MCOs to include Indian health 
     programs in their networks or otherwise allow access to 
     services provided by those programs. In other instances, 
     states pay Indian health programs directly for services 
     provided to Indians enrolled in managed care. Although Indian 
     health programs are generally eligible for Medicaid 
     reimbursement from MCOs, they may not be paid at the same 
     rates as preferred providers. S. 556 would require that 
     managed care organizations pay Indian health programs at 
     least the rate paid to preferred providers. As an 
     alternative, state Medicaid programs could pay the increased 
     amounts directly to Indian health programs.
       Under current law, about 200,000 Indians on Medicaid 
     receive health care services through MCOs. Based on Medicaid 
     administrative data, CBO estimates that about a third of 
     Indians in Medicaid managed care also use Indian Health 
     providers, mainly for primary care services. Assuming that a 
     third of those enrollees use non-preferred providers, CBO 
     estimates that providers serving about 23,000 Indians would 
     receive rate increases by 2009. Based on administrative 
     spending data for Indians in managed care and assuming that 
     rates under the bill would be 20 percent higher than under 
     current law, CBO estimates that the bill would increase 
     payments to providers of about $150 per year in 2009, some of 
     which would be paid through managed care plans and the 
     balance directly by the states. Assuming the regular Medicaid 
     match rate for plan spending and a 100 percent match rate for 
     direct payments to facilities operated by IHS and tribes, CBO 
     estimates that the bill would increase federal Medicaid 
     payments by less than $1 million in 2005 and by about $16 
     million over the 2005-2014 period.
       Submission of Claims. The bill also would prohibit MCOs 
     from requiring enrollees to submit claims as a condition of 
     payment to contracting Indian health programs. CBO 
     anticipates that Indian health programs would be able to bill 
     more, raising federal Medicaid spending by less than $1 
     million in 2005 and by $5 million over the 2005-2014 period.
       Require States to Contract with Indian Health Programs. 
     Finally, S. 556 would require states to enter into agreements 
     with MCOs that are run by an Indian health program. CBO 
     anticipates that the provision would increase the number of 
     Indians who receive care from MCOs. Because payments to those 
     MCOs would be reimbursed at a 100 percent federal matching 
     rate (instead of the regular matching rate), CBO estimates 
     that this provision would increase federal Medicaid spending 
     by less than $1 million in 2005 and by $13 million over the 
     2005-2014 period.
       Scholarship and Loan Repayment Recovery Fund. Section 111 
     would allow the Secretary of Health and Human Services to 
     spend amounts collected for breach of contract from 
     recipients of certain IHS scholarships. Under current law, 
     those funds are deposited in the Treasury and not spent. 
     Because the Secretary's ability to spend those funds would 
     not be subject to appropriation, the provision would increase 
     direct spending. Based on historical information from IHS, 
     CBO estimated that the provision would increase spending by 
     about $150,000 in 2005 and by $3 million over the 2005-2014 
     period.


        ESTIMATED IMPACT ON STATE, LOCAL, AND TRIBAL GOVERNMENTS

     Intergovernmental Mandates
       S. 556 would preempt state licensing laws in cases where a 
     health care professional is licensed in one state but is 
     performing services in another state under a funding 
     agreement in a tribal health program. This preemption would 
     be an intergovernmental mandate as defined in UMRA; however, 
     CBO estimates that the loss of any licensing fees resulting 
     from the mandate would be small and would not approach the 
     threshold established in UMRA ($60 million in 2004, adjusted 
     annually for inflation).
     Other Impacts
       S. 556 would reauthorize and expand grant and assistance 
     programs available to Indian tribes, tribal organizations, 
     and urban Indian organizations for a range of health care 
     programs, including prevention, treatment, and ongoing care. 
     The bill also would allow IHS and tribal entities to share 
     facilities, and it would authorize joint ventures between IHS 
     and Indian tribes or tribal organizations for the 
     construction and operation of health facilities. The bill 
     would authorize funding for a variety of health services 
     including hospice care, long-term care, public health 
     services, traditional Indian health care, and home and 
     community-based services.
       The bill would prohibit states from charging cost sharing 
     or premiums in the Medicaid or SCRIP programs to Indians who 
     receive services or benefits through an Indian health 
     program. The bill also would require states that operate 
     managed care systems within their Medicaid programs to enter 
     into agreements with Indian health programs that operate 
     managed care systems. CBO estimates that these requirements 
     would result in additional spending by states of about $35 
     million over the 2005-2009 period. Some tribal entities, 
     particularly those operating managed care systems, may 
     realize some savings as a result of these provisions.
       Estimated impact on the private sector. This bill contains 
     no private-sector mandates as defined in UMRA.
       Previous CBO estimate. On November 30, 2004, CBO 
     transmitted a cost estimate for H.R. 2440, the Indian Health 
     Care Improvement Act Amendments of 2004, as reported by the 
     House Committee on Resources on November 19, 2004. The 
     language in the two bills is almost identical, and CBO 
     estimates that their budgetary effects would be the same.
       Estimate Prepared by: Federal Costs: Eric Rollins; Impact 
     on State, Local, and Tribal Governments: Leo Lex; Impact on 
     the Private Sector: Stuart Hagen.
       Estimate approved by: Peter H. Fontaine; Deputy Assistant 
     Director for Budget Analysis.

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