[Congressional Record Volume 151, Number 154 (Friday, November 18, 2005)]
[Senate]
[Pages S13381-S13386]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN (for himself, Mr. Baucus, Mr. Dorgan, Mrs. 
        Murray, Ms. Cantwell, and Mr. Johnson):
  S. 2074. A bill to amend title XIX of the Social Security Act to 
provide for fair treatment of services furnished to Indians under the 
medicaid program, and for other purposes; to the Committee on Finance.
  Mr. BINGAMAN. Mr. President, I am pleased to be introducing the 
Indian Medicaid Health Act of 2005 with Senators Baucus, Dorgan, 
Murray, Cantwell and Johnson.
  This legislation addresses a number of technical but critically 
important provisions within the Medicaid Program that devote special 
attention to Native Americans, the Indian Health Service, IHS, tribal 
health organizations, and urban Indian health organizations. These 
provisions would:
  No. 1, codify protections that American Indians and Alaska Natives 
have obtained over the years in the Medicaid program, such as the 
requirement that states consult with tribes and tribal health 
organizations prior to seeking a federal Medicaid waiver;
  No. 2, clarify that American Indians and Alaska Natives are not 
subject to additional cost sharing or benefit limitations within 
Medicaid that will result in nothing more than a cost-shift from the 
Medicaid program to IHS or tribal health providers;
  No. 3, codify critically important provisions that provide 
protections against states or the federal government taking Indian 
property or tribal lands in exchange for medical services delivered 
through Medicaid; and,
  No. 4, eliminate certain inequities such as the lack of 100 percent 
federal matching payments within Medicaid for care delivered to Native 
Americans at urban Indian health clinics.
  American Indians and Alaska Natives continue to suffer enormous 
disparities in the health and medical care they receive. It should not 
come as a surprise to anyone at the Federal level that health care 
funding for American Indians and Alaska Natives, AI/AN, is well below 
what it should be and, consequently, Native Americans received rationed 
health care services that deny them access to the quality and medically 
necessary health care services.
  However, year after year, budget and appropriations amendments are 
offered to more fully fund health care for Native Americans but both 
the administration and Congress routinely fail to provide adequate 
funding. The result is a continued and growing divide between the 
health of American Indians and Alaska Natives compared to that of the 
general population.
  The U.S. Commission on Civil Rights, USCCR, held meetings in 
Albuquerque, NM, and visited the Gallup Indian Medical Center in 2003 
as part of a factfinding mission to review the current disparities in 
the health status and outcomes of Native Americans. What they found 
served as a basis for the release of their report in September 2004 
entitled Broken Promises: Evaluating the Native American Health Care 
System. The opening line in that report reads, ``Today, in Indian 
Country, health-related problems and the lack of adequate health care 
are the enemy.''
  This is in large part due to the fact that the IHS operates on just 
57 percent of the budget it needs and had more than $3 billion in unmet 
needs in 2003. USCCR cites estimates by the Department of Health and 
Human Services, HHS, that per capita health spending for all Americans 
at $4,065, while IHS spent about $1,914 per person and average spending 
on Navajo patients is just $1,187.

[[Page S13382]]

  The USCCR adds, ``In fact, the federal government spends nearly twice 
as much money for a federal prisoner's health care than it does for an 
American Indian or Alaska Native.''
  Consequently and not surprisingly, this disparity in funding 
translates into severe health disparities for Native Americans. For 
example, life expectancy is 6 years less than the rest of the U.S. 
citizens. Tuberculosis rates are four times the national average. 
Complications due to diabetes are almost three times the national 
average and death rates exceed the Healthy People 2010 targets by 233 
percent. Infant mortality rates are 1.7 times higher than the rate for 
white infants.
  In recognition of these facts, the National Indian Health Board has 
said, ``The travesty in looking at the deplorable health of American 
Indians and Alaska Natives is recognizing that the poor health 
indicators could be improved if funding was available to provide even a 
basic level of care.''
  The U.S. Commission on Civil Rights adds, ``In this light, this 
report should be considered a clarion call to those who inexplicably 
fail to acknowledge the present state of Native American health care 
and to those who lack a commitment necessary to address the 
overwhelming need for clear and decisive action. Such a call is 
certainly appropriate for our political leadership and the message is 
clear--it is finally time to honor our nation's commitment to 
protecting the health of Native Americans.''
  Such an agenda is actually a fairly simple one. It would include:
  No. 1, full funding for the Indian Health Service and tribal health 
organizations, which should include conversion of IHS into an 
entitlement program;
  No. 2, increased numbers and funding of urban Indian health 
organizations;
  No. 3, reauthorization of the Indian Health Care Improvement Act;
  No. 4, coverage of as many American Indians and Alaska Natives who 
qualify for federal health programs, such as Medicare and Medicaid, as 
possible to ensure they are enrolled and receiving benefits in order to 
augment funding to IHS facilities; and,
  No. 5, targeted efforts to address health disparities in Indian 
Country, such as diabetes.
  For this reason, I strongly support the annual budget and 
appropriations efforts, which have been led by Senator Daschle in the 
past and Senator Dorgan this year, to increase funding for the Indian 
Health Service. Unfortunately, those efforts continue to be voted down 
in the Congress.
  I also strongly support reauthorization of the Indian Health Care 
Improvement Act, IHCIA, which is led by Senators McCain and Dorgan. 
This effort has been ongoing for 6 years and it is long past time for 
the Congress to take up and pass IHCIA. Unfortunately, due to 
continued opposition to certain provisions by the administration, the 
legislation continues to be bottled up in the Congress and has not even 
been reintroduced in the House of Representatives.

  As a member of the Senate Finance Committee, one area that I have 
been able to focus on in recent years is to improve coverage for Native 
Americans in both Medicare and Medicaid. I was able to pass 
legislation, the Native American Breast and Cervical Cancer Treatment 
Technical Amendment Act of 2001 or Public Law 107-121, to correct 
problems whereby Native American women had previously been wrongly 
denied coverage under Medicaid's breast and cervical cancer treatment 
option. After a year of work, we were able to pass legislation to 
correct that outrageous and discriminatory error.
  I was also able to pass two provisions in 2003 from my bill, the 
Medicare Indian Health Fairness Act of 2003, that expanded 
reimbursement to IHS and tribal health providers for all Medicare Part 
B services and limited the amount that providers outside the IHS system 
can charge for services delivered to Native Americans through the 
contract health services, CHS, program. As with anything related to 
Native Americans in this Administration, the Department of Health and 
Human Services, HHS, continues to fail to publish regulations necessary 
to implement the latter provision, even though the law required 
publishing of those regulations in December 2004.
  Although most involved in Indian health feel frustrated and argue 
that we are taking one step forward and two steps back with respect to 
Indian health care policy, it is in the area of Medicare, Medicaid and 
the State Children's Health Insurance Program, SCHIP, policy that we 
have been making some progress. The legislation I am introducing today, 
the Medicaid Indian Health Care Act of 2005, seeks to protect the gains 
that have been made and to take another few steps forward.
  For one, while IHS funding continues to fall further and further 
behind what is needed, the one bright spot is that collections from 
third party payers has increased over time with Medicaid playing a 
fundamental role in that growth.
  IHS was first authorized to seek Medicaid payment for services 
delivered in Indian health facilities, whether operated by the IHS 
directly or by tribes as part of the Indian Health Care Improvement Act 
of 1976 or Public Law 94-437.
  As Indian health experts Mim Dixon and Kris Locke said, ``This 
entitlement funding was expected to provide critical resources to 
improve the quality of health care for AI/AN and to reduce the health 
status disparities. To support this outcome, there is an additional 
provision in the IHCIA that Medicaid and Medicare revenues shall not 
offset Congressional appropriations for the IHS, so that the total 
amount of funding for Indian health care would increase and not merely 
be shifted from one funding stream to another.''
  With regard to that requirement, however, the U.S. Commission on 
Civil Rights adds, ``. . . Congress included language to articulate the 
express intent that increased collections not be used to justify lower 
appropriations levels. Congress has failed to abide by this clear 
mandate. Only enhanced collection efforts have made up for shortfalls 
created by inflation and population growth, and prevented a continuous 
decline from 1991 until today.''
  Growth in Medicaid collections has been used to partially offset the 
dramatic decline in IHS purchasing power over the years, despite the 
Federal provision stating that such revenues should not reduce overall 
IHS spending.
  The U.S. Commission on Civil Rights noted that `` . . . collections 
from third parties increased 453 percent from 1991 to 2003.'' Without 
that increase, the fate of IHS and health care services for Native 
Americans would even be more severe.
  According to the Government Accountability Office, GAO, in its August 
2005 report entitled ``Indian Health Service: Health Care Services Are 
Not Always Available to Native Americans'', ``In fiscal year 2004, IHS-
funded facilities obtained approximately $628 million in 
reimbursements, with 92 percent collected from Medicare and Medicaid 
and 8 percent from private insurance.''
  Medicaid collections, alone, have by 2004 ``grown to $446 million, 
which is 71 percent of the total third party collections reported by 
IHS In FY 2004, . . . Medicaid collections provided about 16.8 percent 
of the IHS budget for clinical services,'' according to Dixon and 
Locke.
  Consequently, the administration's own congressional justification 
document for its IHS budget proposes just a 2.1-percent increase, or 
$62.9 million, in additional IHS funding in fiscal year 2006 while 
noting that the IHS will increase their Medicare and Medicaid 
collections by another $8.4 million in fiscal year 2006. The Northwest 
Portland Area Indian Health Board estimates it will take $371 million 
to maintain current services for IHS and tribally operated health 
programs. Therefore, the administration's ridiculously low proposed 
increase for IHS combined with their estimated increase in Medicare and 
Medicaid collections will still fall $300 million short of providing 
current services.
  Whether intentional or not, as direct IHS funding continues to fail 
to cover inflation or population growth year after year, Medicaid 
collections are now a growing and critical component to providing basic 
health care services by IHS and tribal health organizations. Yet, while 
Medicaid has become critically important to the health of American 
Indians and Alaska Natives, Native Americans constitute a small share 
of overall Medicaid costs. As the Northwest Portland Area Indian Health 
Board has found, Medicaid accounts for almost 20 percent of the IHS

[[Page S13383]]

budget but less than 0.5 percent of Medicaid expenditures go to Indian 
health.
  Consequently, the legislation I am introducing today with Senators 
Baucus, Dorgan, Murray, Cantwell, and Johnson entitled the ``Medicaid 
Indian Health Act of 2005'' is primarily an attempt to prevent the 
Federal Government and States from inflicting harm on the health and 
well-being of American Indians and Alaska Natives, but it also seeks to 
take a few steps forward as well.
  What is at stake? First, from the ``do no harm'' prescriptive, both 
the National Governors' Association, NGA, and the House of 
Representatives budget reconciliation legislation contemplate major 
changes to the Medicaid program to achieve $10 billion or more in 
proposed budget cuts to Medicaid and Medicare. Unfortunately, it is 
clear that neither the NGA nor the House of Representatives considered 
the tremendous impact that the cuts they are proposing will have on the 
health and well-being of Native Americans across this Nation.

  For example, both the NGA and the House budget reconciliation package 
provide for States being able to impose additional premiums, 
copayments, and other forms of cost-sharing on low-income Medicaid 
beneficiaries, including Native Americans. Such changes can have 
enormous consequences for AI/ANs as well as the Indian Health Service, 
tribal, and urban Indian, I/T/U providers from whom many Native 
Americans receive health services.
  As Andy Schneider of Medicaid Policy, LLC, stated at a meeting in 
August of this year on Medicaid and Indian health care, ``Regrettably, 
the NGA recommendations [which have been adopted as part of the House 
budget reconciliation package] could well make matters even worse for 
AI/ANs and the I/T/U providers that serve them. The NGA proposal to 
increase beneficiary cost-sharing could impose additional financial 
burdens on IHS and tribal health budgets. The NGA proposal for more 
benefits package `flexibility' could result in significant 
reimbursement losses to I/T/U providers.''
  How would this occur? With respect to additional cost sharing, 
evidence shows that additional cost sharing either results in reduced 
use of medical services, which could result in further a decline in the 
health status of AI/ANs, or that the I/T/U providers will pick up the 
added cost sharing burden. As Schneider points out, ``These costs 
include not only the amounts of the copayments and deductibles but also 
the administrative expense of processing them and tracking the 
cumulative out-of-pocket payments, particularly if the services subject 
to cost-sharing are delivered by a non-I/T/U provider.''
  Even if you subscribe to the ideology that Medicaid beneficiaries 
should pay more for their health care, as Dixon and Locke point out, 
``The intended outcome of enrollee cost sharing is not achieved in the 
Indian health system and actually acts to further deplete funding.''
  Put simply, added copayments in Medicaid would result in the 
unintended effect of shifting Medicaid costs directly upon the already 
horribly underfunded IHS system. In other words, the imposition of 
consumer cost-sharing provisions by Medicaid on Native American 
populations would effectively reduce the level and quality of health 
care services in Indian communities.
  With respect to benefit flexibility as proposed by NGA and adopted in 
the House budget reconciliation package, according to Schneider, ``The 
effect of reducing Medicaid coverage will be to reduce Medicaid 
revenues to the I/T/U providers that furnish covered services to this 
population. Services for which the I/T/U could previously collect 
Medicaid revenues will no longer be reimburseable because the patient 
is no longer eligible for Medicaid.''
  To address these concerns, the Northwest Portland Area Indian Health 
Board has recommended, ``The Medicaid program could be a more effective 
means of financial Indian health programs if it would exempt American 
Indians and Alaska Natives from cost sharing including co-pays, 
premiums and any form of cost sharing. It makes little sense to Indian 
people to sign up for a health program that charges them for health 
care services that their tribe gave up lands and others considerations 
to secure for all generations. The practical effect is that they will 
not sign up for Medicaid and the IHS funded programs will end up paying 
all the costs of their health care. If this becomes the case, CMS will 
save the federal government millions of dollars, but renege on rights 
guaranteed by law and treaties.''
  In order to address these important points, one need look no further 
than the State Children's Health Insurance Program, SCHIP, rules and 
regulations. As Schneider adds, ``Federal regulations prohibit states 
from imposing premiums, deductibles, coinsurance, or copayments or AI/
AN children enrolled in their SCHIP programs. There is no comparable 
regulatory protection for AI/AN children or adults enrolled in 
Medicaid.''
  Consequently, to prevent harm to the health and well-being of Native 
Americans, section 3 of the Medicaid Indian Health Act of 2005 would 
explicitly prohibit imposing such things as premiums or other forms of 
cost sharing on Native Americans within Medicaid, just as SCHIP already 
does. Section 4 adds a prohibition on the recovery of the estates of 
AI/AN Medicaid beneficiaries or tribal property by States through the 
Medicaid Program. Furthermore, section 8 of the legislation allows 
States to include special provisions exempting Native Americans from 
additional cost sharing or from benefit reductions in recognition of 
the special circumstances of Native Americans in the Medicaid Program.
  In light of the failure of the NGA to consider the special 
circumstances of American Indians and Alaska Natives with respect to 
Medicaid policy, section 5 of the legislation recognizes the Federal 
trust responsibility and requires the Secretary, prior to the approval 
of any State Medicaid waivers, to assure that there has been 
consultation with tribes whose members or tribal health programs could 
be adversely affected by the waiver. Otherwise, the current waiver 
process can result in the approval of waivers that may include 
reductions in Medicaid eligibility, benefits and/or reimbursement or 
increases in cost sharing that can have a negative impact on Native 
Americans or tribal health programs.
  In short, sections 3, 4, 5, and 8 seek to adopt a policy of ``do no 
harm'' by preventing changes in Medicaid policy from having negative 
consequences for Native Americans. Meanwhile, sections 2, 6, and 7 in 
the bill seek to make some additional progress on behalf of Native 
Americans through the Medicaid Program.
  Foremost among those provisions in section 2, which provides for 100 
percent Federal Medicaid matching funds for services delivered to AI/AN 
Medicaid beneficiaries at urban Indian health programs. Although the 
Medicaid statute currently provides for 100 percent Federal Medicaid 
matching funds for Medicaid services delivered to AI/ANs through IHS 
facilities and a subsequent Memorandum of Agreement, MOA, in 1996 
clarified those payments also apply to services provided through 
tribally owned facilities, the 100 Percent Federal Medical Assistance 
Percentage, FMAP, does not apply to urban Indian clinics.
  In short, if an AI/AN Medicaid beneficiary received services from an 
IHS or tribal facility, the Federal Government is paying 100 percent of 
the cost, but if the same individual received the same services from an 
urban Indian health program funded by the IHS, the Federal Government 
shifts part of the costs of that care to the State in proportion to the 
State's share of the FMAP. There is no justification for this cost 
shift. Just as IHS and tribal facilities are part of the I/T/U delivery 
system for Native Americans, so are urban Indian health programs and, 
as part of the ``Federal trust responsibility,'' States should not be 
required to subsidize any element of this system.

  Section 6 of the legislation would simply ensure that I/T/U providers 
that do not have the status of federally qualified health centers, 
FQHCs, receive the same level of reimbursement from Medicaid managed 
care organizations, MCOs, as they would if they were a FQHC. If 
Medicaid MCOs are continued to be allowed to pay I/T/U providers less 
for the same services that they pay other network providers, the I/T/U 
providers will, effectively, be subsidizing the MCO or other network 
providers, which is not an appropriate use of limited federal IHS 
resources.

[[Page S13384]]

  And finally, section 7 of the Medicaid Indian Health Act of 2005 
ensures that IHS spending on behalf of a Native American does not 
disqualify them for Medicaid coverage under the ``medically needy 
option.'' Current policy prohibits such care from counting toward the 
``spend down'' requirements for qualifying as ``medically needy'' in 
Medicaid. Receiving services at an IHS facility should certainly not 
disqualify anybody from Medicaid coverage and, once again, IHS should 
not be subsidizing the Medicaid program.
  In total, the provisions in the Medicaid Indian Health Act of 2005 
might at first glance appear to be a hodge podge set of provisions 
related to both Medicaid and Indian health. However, they are not. They 
reflect a concerted effort on behalf of Native American people to 
protect the gains that have already been made within the Medicaid 
Program for American Indians and Alaska Natives and the need to make 
additional strides to improve the delivery of health services 
throughout to Native people, including those in urban areas, through 
Medicaid.
  Furthermore, this is just the first in a series of bills addressing 
Indian issues within the Medicaid and Medicare Programs. The next two 
will focus, respectively, on improving the Medicare Program and fixing 
problems with respect to the Medicare prescription drug program for 
Native Americans and Indian health providers.
  As part of the Indian Health Care Improvement Act of 1976 report, the 
Congress said, ``The most basic human right must be the right to enjoy 
decent health. Certainly, any effort to fulfill Federal 
responsibilities to the Indian people must begin with the provision of 
health services. In fact, health services must be the cornerstone upon 
which rest all the other Federal programs for the benefit of Indians. 
Without a proper health status, the Indian people will be unable to 
fully avail themselves of the many economic, educational, and social 
programs already directed to them or which this Congress and future 
Congresses will provide them.''
  The Federal Government has a ``Federal trust responsibility'' to 
Indian people that it is simple not fulfilling. This administration and 
this Congress can and simply must do better. Part of that multipronged 
agenda should include passage of the Medicaid Indian Health Act of 
2005.
  This could occur in a variety of ways. First, the provision from this 
bill could be incorporated in any budget reconciliation conference 
report package. Consequently, during Finance Committee consideration of 
the Senate's version of the budget reconciliation package on October 
25, 2005, I offered an amendment that included a number of the 
provisions from this bill. Opponents of the amendment, which failed on 
a 9-to-11 party-line vote with Democrats in favor and Republicans 
opposing it, argued at the time that the budget reconciliation package 
was not the right vehicle but that we should look to the 
reauthorization bill for the Indian Health Care Improvement Act to 
attach these provisions instead.
  Two days later, on October 27, 2005, the Committee on Indian Affairs 
took up and passed S. 1057, the Indian Health Care Improvement Act 
Amendments of 2005, but did not include any of the Medicaid provisions 
I have been discussing as part of this bill. They were told that 
inclusion of Medicaid provisions within IHCIA was objected to by both 
the administration and the Senate Finance Committee. However, in light 
of the Senate Finance Committee's failure to take up the amendment 
earlier this month, another possible vehicle should be the 
reauthorization bill for the Indian Health Care Improvement Act when it 
comes to the Senate floor.
  And finally, if we fail to get these provisions included in either of 
those legislative vehicles, we will push to get the Medicaid Indian 
Health Act of 2005 passed as a free standing piece of legislation. 
Medicaid has become such a crucial and necessary piece in maintaining 
and improving the health and well-being of American Indians and Alaska 
Natives that it is unacceptable that the various Senate committees 
point to each other as being in charge while not taking the necessary 
responsibility to get this important protections for Native Americans 
passed into law.
  The Federal Government and the States also point figures at each 
other as to who is in charge. As Jim Crouch, executive director of the 
California Rural Indian Health Board, has said, ``The joint operation 
of the Medicaid program by federal and state authorities often ignores 
the governmental status of Tribes and the unique needs of Tribal 
citizens. It is always appropriate for the federal government to 
establish special provisions that are in the best interest of Tribes 
and American Indians due to the governmental status of federally 
recognized tribes.''
  Mr. President, it is well past time to enact legislative initiatives 
such as the Medicaid Indian Health Act of 2005 and reauthorization of 
IHCIA. Years of broken promises to Indian Country must come to an end. 
Passage of the provisions in both the Medicaid Indian Health Act of 
2005 and IHCIA reauthorization are just two of the pieces that the 
Federal Government must take in order to fulfill the Federal trust 
responsibility and make real progress at providing the full array of 
medically necessary health services that have been long promised to 
American Indians.
  I ask unanimous consent that the text of the bill and a fact sheet 
describing the various provisions in the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2074

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Medicaid Indian Health Act 
     of 2005''.

     SEC. 2. APPLICATION OF 100 PERCENT FMAP FOR SERVICES 
                   FURNISHED TO AN INDIAN BY AN URBAN INDIAN 
                   HEALTH PROGRAM.

       (a) In General.--The third sentence of section 1905(b) of 
     the Social Security Act (42 U.S.C. 1396d(b)), is amended by 
     inserting before the period at the end the following: ``, or 
     through an urban Indian health program receiving funds under 
     title V of the Indian Health Care Improvement Act''.
       (b) Conforming Amendment.--Section 1911(c) of such Act (42 
     U.S.C. 1396j(c)), is amended by inserting ``, or through an 
     urban Indian health program receiving funds under title V of 
     the Indian Health Care Improvement Act'' after 
     ``facilities''.

     SEC. 3. PROHIBITION ON IMPOSITION OF PREMIUMS, DEDUCTIBLES, 
                   COPAYMENTS, AND OTHER COST-SHARING ON INDIANS.

       Section 1916 of the Social Security Act (42 U.S.C. 1396o) 
     is amended--
       (1) in subsection (a)(3), by inserting ``(other than such 
     individuals who are Indians (as defined in section 4 of the 
     Indian Health Care Improvement Act)'' after ``other such 
     individuals'';
       (2) in subsection (b), in the matter preceding paragraph 
     (1), by inserting ``or who are Indians (as defined in section 
     4 of the Indian Health Care Improvement Act)'' after 
     ``section 1902(a)(10)''; and
       (3) in subsection (c)(1), by inserting ``(other than such 
     an individual who is an Indian (as defined in section 4 of 
     the Indian Health Care Improvement Act))'' after ``section 
     1902(l)(1)''.

     SEC. 4. PROHIBITION ON RECOVERY AGAINST ESTATES OF INDIANS.

       Section 1917(b)(1) of the Social Security Act (42 U.S.C. 
     1396p(b)(1)) is amended, in the matter preceding subparagraph 
     (A), by inserting `` who is not an Indian (as defined in 
     section 4 of the Indian Health Care Improvement Act)'' after 
     ``an individual'' the second place it appears.

     SEC. 5. REQUIREMENT FOR CONSULTATION WITH INDIAN TRIBES PRIOR 
                   TO APPROVAL OF SECTION 1115 WAIVERS.

       Section 1115 of the Social Security Act (42 U.S.C. 1315) is 
     amended by adding at the end the following:
       ``(g) In the case of an application for a waiver of 
     compliance with the requirements of section 1902 (or a 
     renewal or extension of such a waiver) that is likely to 
     affect members of an Indian tribe (as defined in section 4 of 
     the Indian Health Care Improvement Act) or a tribal health 
     program (whether operated by an Indian tribe or a tribal 
     organization (as so defined) serving such members, the 
     Secretary shall, prior to granting such a waiver under 
     subsection (a) or renewing or extending such a waiver under 
     subsection (e), consult with each such Indian tribe.''.

     SEC. 6. REQUIREMENT FOR FAIR PAYMENT BY MEDICAID MANAGED CARE 
                   ENTITIES TO INDIAN HEALTH PROGRAM PROVIDERS.

       Section 1903(m)(2)(A)(ii) of the Social Security Act (42 
     U.S.C. 1396b(m)(2)(A)(ii)) is amended to read as follows:
       ``(ii) such contract provides, in the case of entity that 
     has entered into a contract for the provision of services 
     with a facility or program of the Indian Health Service, 
     whether operated by the Service or an Indian tribe or tribal 
     organization (as defined in

[[Page S13385]]

     section 4 of the Indian Health Care Improvement Act) or an 
     urban Indian health program receiving funds under title V of 
     the Indian Health Care Improvement Act , that is not a 
     Federally-qualified health center or a rural health clinic, 
     that the entity shall provide payment that is not less than 
     the highest level and amount of payment that the entity would 
     make for the services if the services were furnished by a 
     provider that is not a facility or program of the Indian 
     Health Service;''.

     SEC. 7. TREATMENT OF MEDICAL EXPENSES PAID BY OR ON BEHALF OF 
                   AN INDIAN BY AN INDIAN HEALTH PROGRAM AS COSTS 
                   INCURRED FOR MEDICAL CARE FOR PURPOSES OF 
                   DETERMINING MEDICALLY NEEDY ELIGIBILITY.

       Section 1902(a)(17)(D) of the Social Security Act (42 
     U.S.C. 1396a(a)(17)(D)) is amended by inserting ``or by the 
     Indian Health Service or an Indian tribe or tribal 
     organization (as defined in section 4 of the Indian Health 
     Care Improvement Act)'' after ``political subdivision 
     thereof''.

     SEC. 8. STATE OPTION TO EXEMPT INDIANS FROM REDUCTIONS IN 
                   ELIGIBILITY OR BENEFITS.

       Section 1902 of the Social Security Act (42 U.S.C. 1396a)) 
     is amended by inserting after subsection (j) the following:
       ``(k) The Secretary shall not disapprove a State plan 
     amendment, or deny a State request for a waiver under section 
     1115 (or a renewal or extension of such a waiver), on the 
     grounds that the amendment or waiver would exempt Indians (as 
     defined in section 4 of the Indian Health Care Improvement 
     Act) eligible for medical assistance from--
       ``(1) any restriction on eligibility for medical assistance 
     under this title that would otherwise apply under the 
     amendment or waiver;
       ``(2) any imposition of premiums, deductibles, copayments, 
     or other cost-sharing that would otherwise apply under the 
     amendment or waiver; or
       ``(3) any reduction in covered services or supplies that 
     would otherwise apply under the amendment or waiver.''.

     SEC. 9. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), this 
     Act and the amendments made by this Act apply to items or 
     services furnished on or after January 1, 2006.
       (b) Extension of Effective Date for State Law Amendment.--
     In the case of a State plan under title XIX of the Social 
     Security Act which the Secretary of Health and Human Services 
     determines requires State legislation in order for the plan 
     to meet the additional requirements imposed by the amendments 
     made by a provision of this Act, the State plan shall not be 
     regarded as failing to comply with the requirements of this 
     Act solely on the basis of its failure to meet these 
     additional requirements before the first day of the first 
     calendar quarter beginning after the close of the first 
     regular session of the State legislature that begins after 
     the date of enactment of this Act. For purposes of the 
     previous sentence, in the case of a State that has a 2-year 
     legislative session, each year of the session shall be 
     considered to be a separate regular session of the State 
     legislature.
                                  ____


           Fact Sheet--``Medicaid Indian Health Act of 2005''

       Senators Bingaman, Baucus, Dorgan, Murray, Cantwell, and 
     Johnson are introducing legislation entitled the ``Medicaid 
     Indian Health Act of 2005'' that would make technical but 
     important changes to the Medicaid program to address the 
     unique issues confronting Native Americans and Indian Health 
     Service (IHS) providers within that program.
       The provisions within this legislation are as follows:


  Sec. 2. 100% FMAP for Services to AI/AN Medicaid Patients of Urban 
                         Indian Health Programs

     Current Law
       The cost of covered services to AI/AN Medicaid 
     beneficiaries is matched by the federal government at a 100% 
     rate if the services are received through an IHS facility, 
     whether operated by the IHS or a tribe or tribal 
     organization. However, the federal government matches the 
     cost of covered services furnished to AI/AN Medicaid 
     beneficiaries by urban Indian health programs funded by the 
     IHS only at a state's regular federal matching rate, which 
     varies from 50% to 77%. Thus, states must pay a share of the 
     cost of Medicaid services furnished to AI/AN beneficiaries by 
     urban Indian health programs.
     Proposed Change
       Extend the 100% federal matching rate to services received 
     through an urban Indian health program receiving funds under 
     Title V of the Indian Health Care Improvement Act.
     Justification
       Under current policy, if an AI/AN Medicaid beneficiary 
     receives covered services from an IHS or tribal hospital or 
     clinic, the federal government pays 100% of the cost, but if 
     the same individual receives covered services from an urban 
     Indian health program funded by the IHS, the federal 
     government shifts part of the costs to the state in 
     proportion to the state's share of Medicaid spending 
     generally. There is no principled justification for this cost 
     shift. Just as IHS and tribal facilities receive IHS funds, 
     so do urban Indian health programs. The urban Indian health 
     programs are part of the same ``I/T/U'' delivery system as 
     are IHS and tribal facilities. States should not be required 
     to subsidize any element of this system.


 Sec. 3. Prohibiting Imposition of Medicaid Premiums on AI/AN Medicaid 
                             Beneficiaries

     Current Law
       State Medicaid programs are allowed to impose premiums only 
     on certain categories of Medicaid beneficiaries--principally 
     those who qualify as ``medically needy'' by incurring 
     high medical expenses that, when applied against their 
     income, enable them to ``spend down'' into eligibility. 
     Any premiums imposed on this group must be income-related, 
     as specified in federal regulations. In contrast, State 
     SCHIP programs are prohibited by regulation from imposing 
     premiums on AI/AN beneficiaries.
     Proposed Change
       Prohibit states from imposing any premiums, enrollment 
     fees, or similar charges in any amount on AI/AN 
     beneficiaries, regardless of the basis of eligibility for 
     Medicaid.
     Justification
       The Federal government, through the IHS, has the 
     responsibility for providing health care free of charge to 
     AI/ANs eligible for its services. Thus, if a state imposes a 
     premium requirement as a condition of Medicaid enrollment, in 
     the case of an AI/AN the premium must be paid by the IHS or 
     the contracting tribe from the limited federal funds 
     allocated to it. The effect is to reduce the appropriated 
     funds available to the IHS or tribal facility for serving 
     patients who are eligible for IHS services but are not 
     eligible for Medicaid. In this respect, Medicaid policy 
     should be conformed to SCHIP policy.


  Sec. 3. Prohibiting Imposition of Medicaid Copayments or Other Cost-
                Sharing on AI/AN Medicaid Beneficiaries

     Current Law
       States Medicaid programs may impose deductibles, 
     copayments, or co-insurance requirements on certain services 
     with respect to certain populations. Any cost-sharing imposed 
     must be ``nominal'' in amount, as defined in federal 
     regulations. States are prohibited from imposing any cost-
     sharing, nominal or otherwise, on certain services (e.g., 
     emergency services and family planning services and supplies) 
     and certain populations (e.g., children under 18). In 
     contrast, State SCHIP programs are prohibited by regulation 
     from imposing deductibles, copayments, or co-insurance 
     requirements on AI/AN beneficiaries.
     Proposed Change
       Prohibit states from imposing deductibles, copayments, or 
     co-insurance requirements in any amount on AI/AN Medicaid 
     beneficiaries.
     Justification
       The Federal government, through the IHS, has the 
     responsibility for providing health care free of charge to 
     AI/ANs eligible for its services. Thus, if a state imposes 
     deductibles, copayments, or co-insurance requirements, in the 
     case of an AI/AN beneficiary cost-sharing amount must be paid 
     by the IHS or the contracting tribe from the limited federal 
     funds allocated to it. The effect is to reduce the 
     appropriated funds available to the IHS or tribal facility 
     for serving patients who are eligible for IHS services but 
     are not eligible for Medicaid. In this respect, Medicaid 
     policy should be conformed to SCHIP policy.


  Sec. 4. Prohibiting Recovery Against the Estates of AI/AN Medicaid 
                             Beneficiaries

     Current Law
       States are required to recover from the estates of deceased 
     Medicaid beneficiaries the costs of long-term care services 
     (nursing facility services, home and community-based 
     services, and related hospital services and prescription 
     drugs) paid for by Medicaid when the individual was age 55 or 
     over. The state may not recover against an individual's 
     estate until the death of any surviving spouse and so long as 
     there is not a child under 21 or an adult child who is blind 
     or disabled. Under federal administrative guidance, certain 
     AI/AN property is exempt from estate recovery.
     Proposed Change
       Exempt the property/estates of deceased AI/AN beneficiaries 
     from recovery for costs correctly paid by Medicaid.
     Justification
       The Federal government, through the IHS, has the 
     responsibility for providing health care to AI/ANs eligible 
     for its services. Because the IHS, due to funding 
     limitations, generally does not have the capacity to furnish 
     long-term care services, low-income AI/ANs who are eligible 
     for IHS services must turn to Medicaid for coverage for this 
     care. To recover Medicaid costs correctly paid from the 
     estates of these individuals violates the Federal 
     government's responsibility to them. Tribal lands and 
     property should not be threatened by federal or state 
     governments.


Sec. 5. Requiring Tribal Consultation Prior to Approval of Section 1115 
                                Waivers

     Current Law
       Under section 1115 of the Social Security Act, the 
     Secretary of HHS has the authority to waive certain 
     requirements of federal Medicaid law to enable states to 
     conduct demonstrations that, in his judgment, ``is likely to 
     assist in promoting the objectives of'' the Medicaid program. 
     Section 1115 contains no requirement that the Secretary 
     consult with Indian tribes prior to approval of Medicaid 
     demonstration waivers that may adversely affect their members 
     or their tribal health programs. The January 2005 HHS

[[Page S13386]]

     tribal consultation policy does not specify that consultation 
     is required in these specific circumstances, although the 
     previous July 2001 guidance had.
     Proposed Change
       Require the Secretary, prior to approval of any new section 
     1115 waiver or renewal of any existing section 1115 waiver to 
     consult with tribes whose members or tribal health programs 
     could be affected by the waiver.
     Justification
       Section 1115 waivers are commonly negotiated by the 
     Secretary (acting through CMS) and the Governor of the state 
     seeking the waiver (through his Medicaid or Budget director). 
     Affected Indian tribes have no formal role in these 
     negotiations, even when those negotiations result in 
     reductions in Medicaid eligibility, benefits, and/or 
     reimbursement or increases in premiums and cost-sharing that 
     have an adverse impact on tribal members or tribal health 
     programs.


    sec. 6. require fair payment by medicaid mcos to i/t/u providers

     Current Law
       Managed care organizations (MCOs) contracting with Medicaid 
     on a risk basis are required to pay health care providers, 
     whether in- or out-of-network, on a timely basis for covered 
     services furnished to Medicaid beneficiaries. Although there 
     are generally no minimum payment requirements, in the case of 
     federally qualified health centers (FQHCs) and rural health 
     clinics (RHCs), MCOs are required to pay the same amount for 
     a covered service as they would if the provider were not an 
     FQHC or RHC. In addition, the State Medicaid agency is 
     required to pay the difference, if any, between: (1) the 
     MCO's payment to the FQHC or RHC; and, (2) the prospective 
     payment amount to which the FQHC or RHC is entitled under 
     Medicaid law. There is no similar protection for I/T/U 
     providers that are not FQHCs or RHCs.
     Proposed Change
       Require that MCOs to pay I/T/U providers that are not FQHCs 
     or RHCs the same amount that the MCO would pay for the same 
     service to a non-I/T/U provider.
     Justification
       Current law protects I/T/U providers that are FQHCs or 
     Rural Health Clinics against underpayment by Medicaid MCOs. 
     This provision extends some of these protections to other I/
     T/U providers. If Medicaid MCOs are allowed to pay I/T/U 
     providers less for the same services than they pay other 
     network providers, the I/T/U providers will, in effect, be 
     subsidizing the MCO or other network providers. This is not 
     an appropriate use of limited federal IHS resources.


    Sec. 7. Treatment of IHS or Tribal Payments as Incurred Medical 
                                Expenses

     Current Law
       States have the option of extending Medicaid coverage to 
     individuals who are ``medically needy''--that is, individuals 
     who ``spend-down'' by incurring high medical expenses that, 
     when subtracted from their incomes, reduce their incomes to 
     below the state eligibility threshold. If the IHS or a Tribe 
     pays the health care costs of an AI/AN, that individual is 
     not considered to have ``incurred'' the cost for purposes of 
     meeting the ``spend-down'' requirements for qualifying as 
     ``medically needy.''
     Proposal
       Allow medical expenses paid by the IHS or a Tribe or tribal 
     organization on behalf of an AI/AN to count as costs 
     ``incurred'' for medical care for purposes of establishing 
     eligibility for Medicaid in states with ``medically needy'' 
     programs.
     Justification
       Current policy has the effect of disqualifying AI/ANs from 
     Medicaid eligibility as ``medically needy'' individuals. 
     This, in turn, results in IHS, Tribes, and tribal 
     organizations paying for services that Medicaid would 
     otherwise cover once these individuals established 
     ``medically needy'' eligibility. Subsidizing Medicaid is not 
     an appropriate use of limited IHS and Tribal resources.


    sec. 8. option for states to exempt indians from reductions in 
                        eligibility or benefits

     Current Law
       CMS policy has been to acknowledge the federal government's 
     unique responsibilities under the trust obligation and to 
     take into account special circumstances of American Indians 
     and Alaska Natives in Medicaid and SCHIP programs. As such, 
     states have historically been allowed to include special 
     provisions with respect to Tribes and Indian people in their 
     Medicaid and SCHIP programs. However, in 2004, CMS informed 
     Oregon and Washington that it would not approve waiver 
     amendments containing special provisions for Indian 
     participation in the Medicaid program.
     Proposed Change
       Secretary shall not disapprove a state Plan amendment, or 
     deny a state request for a waiver under section 1115, on the 
     grounds that the amendment or waiver would exempt eligible 
     Indians (as defined in section 4 of the Indian Health Care 
     Improvement Act) from:
       (1) any restriction on eligibility for medical assistance 
     under this Title that would otherwise apply under the 
     amendment or waiver;
       (2) any imposition of premiums, deductibles, copayments or 
     other cost-sharing that would otherwise apply under the 
     amendment or waiver; or
       (3) any reduction in covered services or supplies that 
     would otherwise apply under the amendment or waiver.''
     Justification
       The federal government should continue to acknowledge the 
     federal government's unique responsibilities under the trust 
     obligation and to take into account and allow states to take 
     into account the special circumstances of American Indians 
     and Alaska Natives in Medicaid and SCHIP programs.
                                 ______