[Senate Report 112-228]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 509
112th Congress                                                   Report
 2d Session                                                     112-228




               September 20, 2012.--Ordered to be printed


           Mr. Akaka, from the Committee on Indian Affairs, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 2389]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 2389) to deem the submission of certain claims to an 
Indian Health Service contracting officer as timely, having 
considered the same, reports favorably without amendment and 
recommends that the bill do pass.


    The purpose of S. 2389 is to deem claims submitted to an 
Indian Health Service contracting officer pursuant to the 
Indian Self-Determination and Education Assistance Act (25 
U.S.C. 450 et seq.) on or before October 31, 2005, involving a 
claim that accrued after October 1, 1995, and on or before 
September 30, 1999, to have been timely submitted.


    S. 2389 deems timely approximately two dozen contract 
claims that were presented to the Indian Health Service in 2005 
over alleged contract underpayments which occurred in fiscal 
years 1996-1999. These claims were not filed earlier because 
tribal contactors reasonably believed that class action 
litigation filed in 2001 would protect their interests by 
tolling the applicable statute of limitations.
    The Indian Self Determination and Education Assistance Act 
provides a process whereby Indian tribes or tribal 
organizations can assume operation of Federal Indian programs 
administered by the Department of the Interior and the Indian 
Health Service within the Department of Health and Human 
Services. Tribal contractors administer these programs through 
contracts or compacts. In addition, this Act also authorizes 
the payment of contract support costs to these tribal 
contractors. These contract support costs are reasonable costs 
for activities which must be carried on by a contractor to 
ensure compliance with the terms of the contract and prudent 
management. 25 U.S.C. 450j-1(a)(2).
    However, contending that these costs were not fully funded, 
Indian tribes filed suit against the Indian Health Service 
seeking full support costs. See Cherokee Nation of Okla. v. 
Leavitt, 543 U.S. 631 and Pueblo of Zuni v. U.S., 243 F.R.D. 
436 (D.N.M. 2007). These suits, filed March 5, 1999 and 
September 10, 2001, respectively, also sought class 
certification comprised of Indian tribes and tribal 
organizations operating Indian programs through these contracts 
and not fully paid the contract support costs.\1\
    \1\In Cherokee Nation, the plaintiff sought class certification for 
tribal contractors with claims arising from 1988 to ``the present''. In 
Zuni, the plaintiff sought class certification for tribal contractors 
with claims arising from 1993 to ``the present.''
    In the Cherokee Nation case, the District Court denied 
class certification on February 9, 2001 and subsequently ruled 
on the merits of the case, which the Cherokee Nation appealed. 
The court stayed the action in the Zuni case pending the 
outcome of the appeal in the Cherokee Nation case. After the 
Supreme Court issued its ruling in the Cherokee Nation case, 
the Zuni District Court lifted the stay and denied class 
certification in 2007 for failing to comply with the mandatory 
administrative exhaustion scheme under the Contract Disputes 
Act which governs these types of disputes for tribal contracts 
and compacts.
    Several tribal contractors filed individual claims with the 
agency contracting officer, which were all denied as untimely. 
On appeal of the denials, tribal contractors argued that the 
statute of limitations, for filing these claims was tolled 
until class certification was denied. The Civilian Board of 
Contract Appeals held that the statute of limitations for 
filing these claims was not subject to tolling.\2\ On appeal, 
the Federal Circuit Court of Appeals held that the statute of 
limitation for these claims was not tolled under the general 
class action tolling doctrine, but it was subject to equitable 
tolling. The court remanded to the ``for a determination as to 
whether, under the circumstances of these cases, the limitation 
period should be tolled.''\3\
    \2\Arctic Slope Native Ass'n v. Sebelius, 585 F.3d 784, 790 (Fed. 
Cir. 2009).
    \3\Id. at 800.
    However, this ruling does not settle whether any claims 
were timely nor does it settle the validity of any claim. 
Rather, each claim will need to be reviewed through the 
administrative process under the equitable tolling doctrine 
before any determination of the validity of any claim may be 

                          NEED FOR LEGISLATION

    Generally, for class action lawsuits, the statute of 
limitations for individual class members to pursue their own 
claims is suspended while a class action case is pending in the 
courts. In 2009 the U.S. Court of Appeals for the Federal 
Circuit ruled that this normal rule does not apply in 
government contract litigation.\4\ Over the past 8 years, the 
entire litigation for these claims has focused on whether they 
were timely filed, not whether the government is actually 
responsible for having underpaid the contracts. This bill would 
contribute to judicial efficiency, but would not predetermine 
the outcome or validity of the litigation nor invite more 
    \4\Arctic Slope Native Ass'n v. Sebelius, 583 F.3d 785 (Fed. Cir. 

                          LEGISLATIVE HISTORY

    On April 26, 2012, Senator Begich, for himself, Senator 
Crapo, Senator Murkowski, and Senator Tester, introduced S. 
2389, which was referred to the Committee on Indian Affairs.

                      SECTION-BY-SECTION ANALYSIS

Section 1. Timely submission of certain claims

    This section deems the submission of certain claims to an 
Indian Health Service contracting officer as timely.


    In an open business meeting on June 28, 2012, the Committee 
on Indian Affairs, by voice vote, adopted S. 2389 and ordered 
the bill reported to the Senate, with the recommendation that 
the Senate do pass S. 2389 as reported.


    The following cost estimate, as provided by the 
Congressional Budget Office, dated August 6, 2012, was prepared 
for S. 2389:

S. 2389--A bill to deem the submission of certain claims to an Indian 
        Health Service contracting officer as timely

    Summary: S. 2389 would amend federal law regarding certain 
health care claims submitted to the Indian Health Service 
(IHS). Specifically, the bill would deem certain claims 
submitted to an IHS contracting officer on or before October 
31, 2005, involving a claim that accrued between October 1, 
1995, and September 30, 1999, to have been submitted within the 
period specified by the statute of limitations.
    CBO estimates that enacting S. 2389 would increase direct 
spending from the Judgment Fund of the U.S. Treasury by $12 
million over the 2013-2022 period. Because the legislation 
would affect direct spending, pay-as-you-go procedures apply. 
Enacting S. 2389 would not affect revenues.
    CBO also estimates that implementing S. 2389 would have an 
insignificant effect on spending subject to appropriation.
    S. 2389 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 2389 is shown in the following table. 
The costs of this legislation fall within budget function 800 
(general government).

                                                                                       By fiscal year, in millions of dollars--
                                                               2013   2014   2015   2016   2017   2018   2019   2020   2021   2022  2013-2017  2013-2022
                                                               CHANGES IN DIRECT SPENDING

Estimated Budget Authority..................................      0      0      0      0      2      2      2      2      2      2         2         12
Estimated Outlays...........................................      0      0      0      0      2      2      2      2      2      2         2         12

    Basis of estimate: The Indian Health Service (IHS) operates 
a network of health care clinics and hospitals in tribal areas. 
Because there are situations in which IHS patients require 
additional health care services that are not available at local 
IHS service sites, the agency contracts with private health 
care practitioners and facilities to supplement the care 
available to those patients. Certain private contract health 
care providers have contended that the reimbursement they 
received from IHS in the mid-to-late 1990s was insufficient to 
cover the full cost of providing care to IHS patients under the 
Indian Self-Determination and Education Assistance Act, and 
they resubmitted some of those claims from the 1990s in 2005. 
However, IHS determined that the providers had submitted those 
claims after the time allowed for claims submission had 
expired, removing them from consideration.
    S. 2389 would allow the claims specified above to be 
resubmitted for payment by the government because these claims 
now would be considered ``submitted timely.'' According to 
legal representatives involved in the matter, the total value 
of the claims affected by this bill is about $25 million.
    The outcome of the claims against the government that would 
result from enacting S. 2389 is uncertain, both with respect to 
the amount of any damages that might be awarded to the health 
care providers and the timing of any resolution. Assuming 
enactment around the end of fiscal year 2012, CBO believes 
there is some probability that litigation brought based on 
these claims would result in a settlement payable within the 
2013-2022 period from the Treasury's Judgment Fund (a 
permanent, indefinite appropriation for claims and judgments 
against the United States). In a recent Supreme Court decision 
(in the case Salazar v. Ramah Navajo Chapter, 132 S. Ct. 2181 
(2012)), the Court removed one of the government's defenses 
against such claims.
    Taking into account the uncertainty of the outcome, CBO 
assumes that about half of the resubmitted claims would be paid 
under S. 2389. Therefore, CBO estimates that enacting this bill 
would increase direct spending by $12 million over the 2013-
2022 period. Those payments would be made from the Judgment 
Fund. Given the extended length of time required to settle 
similar litigation, CBO expects that outlays would probably not 
begin until 2017 or later.
    Pay-as-you-go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget-reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table.

                                                                                    By fiscal year, in millions of dollars--
                                                        2012   2013   2014   2015   2016   2017   2018   2019   2020   2021   2022  2012-2017  2012-2022
                                                               NET INCREASE IN THE DEFICIT

Statutory Pay-As-You-Go Impact.......................      0      0      0      0      0      2      2      2      2      2      2         2         12

    Intergovernmental and private-sector impact: S. 2389 
contains no intergovernmental or private-sector mandates as 
defined in UMRA.
    Estimate prepared by: Federal Costs: Robert Stewart; Impact 
on State, Local, and Tribal Governments: Lisa Ramirez-Branum; 
Impact on the Private Sector: Marin Randall.
    Estimate approved by: Holly Harvey, Deputy Assistant 
Director for Budget Analysis.


    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires that each report accompanying a bill evaluate 
the regulatory and paperwork impact that would be incurred in 
carrying out the bill. The Committee believes that the 
regulatory impact of S. 2389 will be minimal.

                        EXECUTIVE COMMUNICATIONS

    The Committee has received no communications from the 
Executive Branch regarding S. 2389.

                        CHANGES IN EXISTING LAW

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee finds that the 
enactment of S. 2389 will not effect any changes in existing