[Federal Register Volume 88, Number 136 (Tuesday, July 18, 2023)]
[Proposed Rules]
[Pages 45867-45872]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-14849]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Indian Health Service

42 CFR Part 136

RIN 0917-AA10


Catastrophic Health Emergency Fund

AGENCY: Indian Health Service, HHS.

ACTION: Proposed rule.

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SUMMARY: The Indian Health Service (IHS or Service) administers the 
Catastrophic Health Emergency Fund (CHEF) pursuant to section 202 of 
the Indian Health Care Improvement Act (IHCIA). The purpose of the CHEF 
is to meet the extraordinary medical costs associated with the 
treatment of victims of disasters or catastrophic illnesses who are 
within the responsibility of the Service. This notice proposes 
regulations governing the administration of the CHEF.

DATES: Send comments on or before September 18, 2023.

ADDRESSES: You may submit comments by the following method:
    Electronically: Go to the Federal eRulemaking Portal: https://www.regulations.gov. In the Search box, enter the Regulation Identifier 
Number (RIN) (presented above in the document headings). For best 
results, do not copy and paste the number; instead, type the RIN into 
the Search box using hyphens. Then, click on the Search button. On the 
resulting page, in the panel on the left side of the screen, under the 
Document Type heading, check the Proposed Rule box to locate this 
document. You may submit a comment by clicking on ``Comment.''
    Instructions: Comments sent by any other method, to any other 
address or individual, or received after the end of the comment period, 
may not be considered by the IHS. All comments received are a part of 
the public record and will generally be posted for public viewing on 
www.regulations.gov without change. All submissions are voluntary, and 
such voluntary submission of personal identifying information (e.g., 
name, address, etc.), confidential business information, or otherwise 
sensitive information constitutes permission for IHS to make the 
information publicly accessible. The IHS will accept anonymous comments 
(enter ``N/A'' in the required fields if you wish to remain anonymous).

FOR FURTHER INFORMATION CONTACT: For technical questions concerning 
this rule contact: Carl Mitchell, Director, Division of Regulatory and 
Policy Coordination (DRPC), Office of Management Services (OMS), Indian 
Health Service, 301-443-6384, [email protected]; or CAPT John Rael, 
Director, Office of Resource Access and Partnerships (ORAP), Indian 
Health Service, 301-443-0969, [email protected].

SUPPLEMENTARY INFORMATION: The CHEF was established by section 202 of 
the IHCIA, Public Law 94-437 (25 U.S.C. 1621a). The Patient Protection 
and Affordable Care Act, Public Law 111-148 as amended by the Health 
Care and Education Reconciliation Act of 2010, Public Law 111-152 
(collectively, the Affordable Care Act or ``the ACA''), reauthorized 
the IHCIA and amended the CHEF, directing the Secretary to promulgate 
regulations governing the administration of the CHEF.

I. Background

    The purpose of the CHEF is to meet the extraordinary medical costs 
associated with the treatment of victims of disasters or catastrophic 
illnesses who are within the responsibility of the Service. The IHS 
administers the CHEF to reimburse certain IHS and Tribal purchased/
referred care (PRC) costs that exceed the cost threshold. Although the 
CHEF was first established in 1988, a similar fund was authorized by 
Public Law 99-591, a Joint Resolution continuing appropriations for 
fiscal year (FY) 1987. The IHS developed operating guidelines for the 
management of the CHEF in August of 1987, which were approved by the 
Office of Management and Budget (OMB). Those guidelines were developed 
with input from Tribal Organizations and the IHS personnel who work 
with the daily processing and management of Contract Health Services 
(CHS), now known as the Purchased/Referred Care (PRC) Program. Congress 
passed the Indian Health Care Improvement Reauthorization and Extension 
Act of 2009, S. 1790, 111th Cong. (2010) (IHCIREA), as section 10221(a) 
of the Patient Protection and Affordable Care Act, Public Law 111-148. 
Through IHCIREA, Congress permanently reauthorized and amended the 
IHCIA, Public Law 94-437. Section 202 of the IHCIA (25 U.S.C. 1621a) 
establishes the CHEF and directs the IHS to promulgate regulations for 
its administration. The operating guidelines and twenty-eight (28) 
years of experience (FYs 1987-2015) contributed to the design of the 
proposed rule published January 26, 2016, (81 FR 4239). Following 
additional consultation and additional years of experience, the IHS is 
issuing this new notice of proposed rulemaking (NPRM). This NPRM 
supersedes and replaces the proposed rule published January 26, 2016, 
(81 FR 4239); as such, the 2016 NPRM is hereby rescinded.

II. Provisions of This Proposed Regulation

    This regulation proposes to (1) establish definitions governing the 
CHEF, including definitions of disasters and catastrophic illnesses; 
(2) establish that a Service Unit shall not be eligible for 
reimbursement for the cost of treatment from the CHEF until its cost of 
treating any victim of such catastrophic illness or disaster has 
reached a certain threshold cost; (3) establish a procedure for 
reimbursement

[[Page 45868]]

of the portion of the costs for authorized services that exceed such 
threshold costs; (4) establish a procedure for payment from the CHEF 
for cases in which the exigencies of the medical circumstances warrant 
treatment prior to the authorization of such treatment; and, (5) 
establish a procedure that will ensure no payment will be made from the 
CHEF to a Service Unit to the extent the provider of services is 
eligible to receive payment for the treatment from any other Federal, 
state, local, or private source of reimbursement for which the patient 
is eligible.
    No part of the CHEF, or its administration, shall be subject to 
contract or grant under any law, including the Indian Self-
Determination and Education Assistance Act (ISDEAA), Public Law 93-638 
(25 U.S.C. 5301 et seq.) and may not be allocated, apportioned, or 
delegated to a Service Unit, Area Office, or any other IHS 
organizational unit. Accordingly, the IHS Division of Contract Care 
within ORAP, IHS, shall remain responsible for administration of the 
CHEF.
    The proposed regulation also incorporates provisions on 
severability. Congress has specifically directed the promulgation of 
these rules for the administration of the CHEF, which is administered 
by the Secretary, Department of Health and Human Services (HHS) (``the 
Secretary'') acting through the Headquarters of the Indian Health 
Service (IHS) (``the Service''). The sole purpose of the CHEF is 
meeting extraordinary medical costs associated with treatment of 
victims of disasters or catastrophic illnesses who are within the 
responsibility of the Service. In the event that any portion of the 
proposed regulation is declared invalid, the Secretary, acting through 
the IHS, will continue to be responsible for the administration of the 
CHEF. The IHS anticipates that the remainder of the regulation could 
function sensibly and continue to govern the administration of the 
CHEF. For these reasons, if any portion of the proposed regulation is 
declared invalid, the IHS intends that the remaining provisions be 
severable.

A. Definitions

    The IHS proposes establishing the following definitions for 
governing the CHEF, including definitions of disasters and catastrophic 
illnesses:
    1. Alternate Resources--health care resources other than those of 
the IHS. Such resources include health care providers and institutions 
and health care programs for the payment of health services including 
but not limited to programs under titles XVIII or XIX of the Social 
Security Act (i.e., Medicare, Medicaid), state or local health care 
programs, and private insurance.
    2. Catastrophic Health Emergency Fund (CHEF)--the fund established 
by Congress to reimburse extraordinary medical expenses incurred for 
catastrophic illnesses and disasters paid by a PRC program of the IHS, 
whether such program is carried out by the IHS or an Indian Tribe or 
Tribal Organization under the ISDEAA.
    3. Catastrophic Illness--a medical condition that is costly by 
virtue of the intensity and/or duration of its treatment. Examples of 
conditions that frequently require multiple hospital stays and 
extensive treatment are cancer, burns, premature births, cardiac 
disease, end-stage renal disease, strokes, trauma-related cases such as 
automobile accidents and gunshot wounds, and certain mental disorders. 
The CHEF is intended to insulate the IHS and Tribal PRC operations from 
financial disruption caused by the intensity of expenses incurred as a 
result of high cost illnesses and/or disasters.
    4. Disasters--situations that pose a significant level of threat to 
life or health or cause loss of life or health stemming from events 
such as tornadoes, earthquakes, floods, catastrophic accidents, 
epidemics, fires, and explosions. The CHEF is intended to insulate the 
IHS and Tribal PRC operations from financial disruption caused by the 
intensity of expenses incurred as a result of high cost illnesses and/
or disasters.
    5. Episode of Care--the period of consecutive days for a discrete 
health condition during which reasonable and necessary medical services 
related to the condition occur.
    6. Purchased/Referred Care (PRC)--any health service that is--
    (a) delivered based on a referral by, or at the expense of, an 
Indian health program; and
    (b) provided by a public or private medical provider or hospital 
that is not a provider or hospital of the IHS health program.
    7. Service Unit--an administrative entity of the Service or a 
Tribal health program through which services are provided, directly or 
by contract, to eligible Indians within a defined geographic area.
    8. Threshold Cost--the annual designated amount above which 
incurred medical costs will be considered for the CHEF reimbursement 
after a review of the authorized expenses and diagnosis.

B. Threshold Cost

    The IHCIA section 202 provides that a Service Unit shall not be 
eligible for reimbursement from the CHEF until its cost of treating any 
victim of a catastrophic illness or event has reached a certain 
threshold cost. The Secretary is directed to establish the initial CHEF 
threshold at--
    (1) the FY 2000 level of $19,000; and
    (2) for any subsequent year, the threshold will not be less than 
the threshold cost of the previous year increased by the percentage 
increase in the medical care expenditure category of the Consumer Price 
Index (CPI) for all urban consumers (United States city average) for 
the 12-month period ending with December of the previous year.
    The IHS intends to set the initial threshold governed by this rule 
at $19,000 for FY 2023. In reaching this determination, the IHS adopted 
the recommendation of the IHS Director's Workgroup on Improving PRC 
(Workgroup). The Workgroup, composed of Tribal leaders and Tribal and 
Federal representatives, voted 18-2 to recommend $19,000 as the initial 
threshold. For this recommendation, the Workgroup considered several 
factors, including (1) Tribal concerns regarding the lower threshold 
and the potential to exhaust the CHEF earlier in the fiscal year 
leaving PRC programs without the ability to recover costs for treating 
victims of catastrophic illnesses or disasters; and, (2) Tribal 
concerns about setting the threshold at the FY 2000 level and then 
applying the CPI-U Medical for each year since FY 2000, which would 
have resulted in a $30,000 plus threshold requirement by FY 2013. At 
this higher level, PRC programs with limited budgets would be unable to 
access the CHEF to seek recovery for extraordinary medical costs. 
Accordingly, the IHS intends to set the initial threshold at $19,000 
for FY 2023, with increases in subsequent years based on the annual 
CPI-U Medical factor. The IHS will publish the revised threshold costs 
yearly in the Federal Register.

C. Compliance With PRC Regulations

    The IHS proposes to follow PRC regulations 42 Code of Federal 
Regulations (CFR) part 136 for payment from the CHEF. For example, 
payment or reimbursement from the CHEF may be made for the costs of 
treating persons eligible for PRC in accordance with 42 CFR 136.23 and 
authorized for PRC in accordance with 42 CFR 136.24. In cases where the 
exigencies of the medical circumstances warrant treatment prior to the 
authorization of such treatment by the Service Unit, authorization must 
be obtained in accordance with 42 CFR 136.24(c). For example, claims 
for reimbursement of services provided that

[[Page 45869]]

do not meet the 72 hour emergency notification requirements found at 42 
CFR 136.24(c) will be denied. The applicable Area PRC program shall 
review the CHEF requests for CHEF reimbursement to ensure consistency 
with PRC regulations. The IHS seeks comment on whether payments by PRC 
programs to patients, or other individuals/entities that are not PRC 
providers, should be included as eligible for CHEF reimbursement under 
these regulations and if so, under what circumstances.

D. Alternate Resources

    In accordance with section 202(d)(5) of the IHCIA [25 U.S.C. 1621a 
(d)(5)], alternate resources must be exhausted before reimbursement is 
made from the CHEF. No reimbursement shall be made from the CHEF to any 
Service Unit to the extent that the provider of treatment is eligible 
to receive payment for the treatment from any other Federal, state, 
local, or private source of reimbursement for which the patient is 
eligible. Medical expenses incurred for catastrophic illnesses and 
events will not be considered eligible for reimbursement if they are 
payable by alternate resources, as determined by the IHS. The IHS is 
the payor of last resort and, if the provider of services is eligible 
to receive payment from other resources, the medical expenses are only 
payable by PRC and reimbursable by the CHEF to the extent the IHS would 
not consider the other resources to be ``alternate resources'' under 
the applicable regulations and the IHS policy. Expenses paid by 
alternate resources are not eligible for payment by PRC or 
reimbursement by the CHEF. However, if the patient is found to have 
been eligible for alternate resources at the time of service, the 
Service Unit shall promptly return all funds reimbursed from the CHEF 
to the Headquarters CHEF account.

E. Reimbursement Procedure

    A patient must be eligible for PRC services and the Service Unit 
must adhere to regulations (42 CFR 136.23(a) through (f)) governing the 
PRC program to be reimbursed for catastrophic cases from the CHEF. Once 
the catastrophic case meets the threshold requirement and the Service 
Unit has authorized PRC resources exceeding the threshold requirement, 
the Service Unit may qualify for reimbursement from the CHEF. 
Reimbursable costs are those costs that exceed the threshold 
requirement after payment has been made by all alternate resources such 
as Federal, state, local, private insurance, and other resources. 
Reimbursement of PRC expenditures incurred by the Service Unit and 
approved by the PRC program at Headquarters will be processed through 
the respective IHS Area Office. Reimbursement from the CHEF shall be 
subject to availability of funds.

F. Recovery of the CHEF Reimbursement Funds

    In the event a PRC program has been reimbursed from the CHEF for an 
episode of care and that same episode of care becomes eligible for and 
is paid by any Federal, state, local, or private source (including 
third party insurance), the PRC program shall return all the CHEF funds 
received for that episode of care to the CHEF at the IHS Headquarters. 
These recovered CHEF funds will be used to reimburse other approved 
CHEF requests.

III. Collection of Information Requirements

    Prior to implementing the rule, the IHS may be required to develop 
new information collection forms that would require approval from the 
Office of Management and Budget in accordance with the Paperwork 
Reduction Act of 1995, 44 United States Code 3507(d).

IV. Response to Comments

    Because of the large number of public comments normally received on 
Federal Register documents, we are not able to acknowledge or respond 
to them individually. We will consider all comments received by the 
date and time specified in the DATES section of the preamble of this 
proposed rule, and, when we proceed with a final rule, we will respond 
to the comments in the preamble to that rule.

V. Regulatory Impact Analysis

    We have examined the impacts of this rule as required by Executive 
Order (E.O.) 12866 on Regulatory Planning and Review (September 30, 
1993); section 603 of the Regulatory Flexibility Act (RFA), Public Law 
96-354 [5 U.S.C. 601-612], as amended by subtitle D of the Small 
Business Regulatory Fairness Act of 1996, Public Law 104-121; the 
Unfunded Mandates Reform Act (UMRA) of 1995, Public Law 104-4; E.O. 
13132 on Federalism (August 4, 1999); and E.O. 13175 Consultation and 
Coordination with Indian Tribal Governments.

A. Executive Order 12866

    Executive Order 12866, as amended by Executive Order 14094, directs 
agencies to assess all costs and benefits of available regulatory 
alternatives and, if regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety effects, distributive impacts, 
and equity). Section 3(f) of Executive Order 12866, as amended, defines 
a ``significant regulatory action'' as one that is likely to result in 
a rule that may: (1) have an annual effect on the economy of $200 
million or more in any one year (adjusted every three years by the 
Administrator of OIRA for changes in gross domestic product), or 
adversely affect in a material way a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or State, local, territorial, or tribal governments or 
communities (2) create a serious inconsistency or otherwise interfering 
with an action taken or planned by another agency; (3) materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
raise legal or policy issues for which centralized review would 
meaningfully further the President's priorities or the principles set 
forth in Executive Order 12866. While the Office of Information and 
Regulatory Affairs has determined that this is a significant regulatory 
action as defined by Executive Order 12866, they have also determined 
that it does not confer significant costs and does not warrant a 
regulatory impact analysis.

B. Regulatory Flexibility Act (RFA)

    RFA requires analysis of regulatory options that minimize any 
significant economic impact of a rule on small entities, unless it is 
certified that the proposed rule is not expected to have a significant 
economic impact on small entities. This rule is not expected to have a 
significant economic impact on small entities, because the rule only 
governs reimbursements of certain expenditures made by Service Units 
under Purchased/Referred Care (PRC) authorities. Many PRC programs are 
operated by the Federal Government, through the Indian Health Service 
(IHS). The remaining PRC programs are operated by Tribes and tribal 
organizations under Indian Self-Determination and Education Assistance 
Act (ISDEAA) agreements with the IHS. Presently, there are 62 federally 
operated PRC programs and 188 tribally operated PRC programs. Some of 
the entities operating PRC programs may be small entities, but the rule 
does not directly impact a substantial number of small entities and the 
rule is not expected to reduce their revenues or raise their costs.

[[Page 45870]]

C. Unfunded Mandates Reform Act (UMRA)

    Section 202 of UMRA (Pub. L. 104-4) requires an assessment of 
anticipated costs and benefits before proposing any rule that may 
result in expenditure by state, local, and Tribal Governments, in 
aggregate, or by the private sector of $100 million or more (adjusted 
annually for inflation) in any one year. The current threshold after 
adjustment for inflation is $165 million, using the most current (2021) 
Implicit Price Deflator for the Gross Domestic Product. We have 
determined that this rule is consistent with the principles set forth 
in the executive orders and in these statutes and find that this rule 
will not have an effect on the economy that exceeds the UMRA threshold 
in any one year. The IHS FY 2022 annual appropriation for the CHEF was 
$53 million. This final rule is not anticipated to have an effect on 
state, local, or Tribal Governments in the aggregate, or by the private 
sector of $165 million or more. This rule does not impose any new costs 
on small entities, and it will not result in a significant economic 
impact on a substantial number of small entities. Thus, no further 
analysis is required.

D. Federalism

    E.O. 13132 establishes certain requirements that an agency must 
meet when it promulgates a proposed rule (and subsequent final rule) 
that imposes substantial direct requirement costs on State and local 
Governments, preempts state law, or otherwise has federalism 
implications. We have reviewed this proposed rule under the threshold 
criteria of E.O. 13132 and have determined that this proposed rule 
would not have substantial direct effect on the states, on the 
relationship between the Federal Government and the states, or on the 
distribution of power and governmental responsibilities among the 
various levels of the Government(s). As this rule has no Federal 
implications, a federalism summary impact statement is not required.

E. E.O. 13175 Consultation and Coordination With Indian Tribal 
Governments

    This rule has Tribal implications under E.O. 13175, Consultation 
and Coordination with Indian Tribal Governments, because it would have 
a substantial direct and positive effect on one or more Indian Tribes.
    The first proposed CHEF rule, published in January 2016 (81 FR 
4239), was developed with input from Tribes and the IHS personnel who 
work with the daily processing and management of PRC resources. 
Specifically, the IHS Director's Workgroup on Improving PRC met and 
discussed the CHEF guidelines on October 12-13, 2010, and June 1-2, 
2011, in Denver, Colorado, and on January 11-12, 2012, in Albuquerque, 
New Mexico. In addition, the IHS issued ``Dear Tribal Leader'' letters 
related to the development of these regulations on February 9, 2011, 
and May 6, 2013.
    The IHS has sought additional Tribal input throughout the 
development of this new proposed rule. Specifically, Tribal 
consultation sessions were held in the fall of 2016. At meetings of the 
Workgroup in 2015 and 2018, the Workgroup recommended establishing a 
$19,000 CHEF threshold. Moreover, in November 2020, the Workgroup 
recommended that the IHS promulgate new regulations based on Workgroup 
input. Based on the recommendation of the Workgroup, the threshold 
amount of $19,000 is proposed to be established for the current fiscal 
year. This proposed rule serves as additional Tribal consultation with 
affected Tribes by giving interested Tribes the opportunity to comment 
on the regulation before it is finalized. The IHS intends to consult as 
fully as possible with Tribes prior to the publication of a final rule.

List of Subjects in 42 CFR Part 136

    Alaska Natives, Purchased/Referred Care (formerly Contract Health 
Services), Health, Health facilities, Indians.

    For the reasons set out in the preamble, the IHS proposes to amend 
42 CFR chapter I as set forth below:

PART 136--INDIAN HEALTH

0
1. The authority citation for part 136 is revised to read as follows:

    Authority: 42 U.S.C. 2001 and 2003; 25 U.S.C. 13; and 25 U.S.C. 
1621a.

0
2. Add new subpart L consisting of Sec. Sec.  136.501-136.510 to read 
as follows:

Subpart L--Indian Catastrophic Health Emergency Fund

Sec.
136.501 Definitions.
136.502 Purpose of the regulations.
136.503 Threshold cost.
136.504 Reimbursement procedure.
136.505 Reimbursable services.
136.506 Alternate resources.
136.507 Program integrity.
136.508 Recovery of reimbursement funds.
136.509 Reconsideration and appeals.
136.510 Severability.


Sec.  136.501  Definitions.

    Alternate Resources means health care resources other than those of 
the Indian Health Service. Such resources include health care providers 
and institutions and health care programs for the payment of health 
services including but not limited to programs under titles XVIII or 
XIX of the Social Security Act (i.e., Medicare, Medicaid), state or 
local health care programs, and private insurance.
    Catastrophic Health Emergency Fund (CHEF) means the fund 
established by Congress to reimburse extraordinary medical expenses 
incurred for catastrophic illnesses and disasters paid by a PRC program 
of the IHS, whether such program is carried out by the IHS or an Indian 
Tribe or Tribal Organization under the ISDEAA.
    Catastrophic Illness refers to a medical condition that is costly 
by virtue of the intensity and/or duration of its treatment. Examples 
of conditions that frequently require multiple hospital stays and 
extensive treatment are cancer, burns, premature births, cardiac 
disease, end-stage renal disease, strokes, trauma-related cases such as 
automobile accidents, and gunshot wounds, and some mental disorders. 
The CHEF is intended to insulate the IHS and Tribal PRC operations from 
financial disruption caused by the intensity of expenses incurred as a 
result of high cost illnesses and/or disasters.
    Disaster means a situation that poses a significant level of threat 
to life or health or causes loss of life or health stemming from events 
such as tornadoes, earthquakes, floods, catastrophic accidents, 
epidemics, fires, and explosions. The CHEF is intended to insulate the 
IHS and Tribal PRC operations from financial disruption caused by the 
intensity of expenses incurred as a result of high cost illnesses and/
or disasters.
    Episode of Care means the period of consecutive days for a discrete 
health condition during which reasonable and necessary medical services 
related to the condition occur.
    Purchased/Referred Care means any health service that is--
    (1) delivered based on a referral by, or at the expense of, an 
Indian health program; and
    (2) provided by a public or private medical provider or hospital 
which is not a provider or hospital of the Indian health program.
    Service Unit means an administrative entity of the Service or a 
Tribal Health Program through which services are provided, directly or 
by contract, to eligible Indians within a defined geographic area.

[[Page 45871]]

    Threshold Cost means the annual designated amount above which 
incurred medical costs will be considered for the CHEF reimbursement 
after a review of the authorized expenses and diagnosis.


Sec.  136.502  Purpose of the regulations.

    The Indian Catastrophic Health Emergency Fund (hereafter referred 
to as ``CHEF'') is authorized by section 202 of the Indian Health Care 
Improvement Act (IHCIA) [25 U.S.C. 1621a]. The CHEF is administered by 
the Secretary, Department of Health and Human Services (HHS) (``the 
Secretary'') acting through the Headquarters of the Indian Health 
Service (IHS) (``the Service''), solely for the purpose of meeting 
extraordinary medical costs associated with treatment of victims of 
disasters or catastrophic illnesses who are within the responsibility 
of the Service.
    These regulations:
    (a) establish definitions of terms governing the CHEF, including 
definitions of disasters and catastrophic illnesses for which the cost 
of treatment provided under contract would qualify for payment from the 
CHEF;
    (b) establish a threshold level for reimbursement for the cost of 
treatment;
    (c) establish procedures for reimbursement of the portion of the 
costs incurred by Service Units that exceeds such threshold costs, 
including procedures for when the exigencies of the medical 
circumstances warrant treatment prior to the authorization of such 
treatment by the Service; and
    (d) establish procedures for reimbursements pending the outcome or 
payment by alternate resources.


Sec.  136.503  Threshold cost.

    A Service Unit shall not be eligible for reimbursement from the 
CHEF until its cost of treating any victim of a catastrophic illness or 
disaster for an episode of care has reached a certain threshold cost.
    (a) The threshold cost shall be established at the level of 
$19,000.
    (b) The threshold cost in subsequent years shall be calculated from 
the threshold cost of the previous year, increased by the percentage 
increase in the medical care expenditure category of the Consumer Price 
Index for all urban consumers (United States city average) for the 12-
month period ending with December of the previous year. The revised 
threshold costs shall be published yearly in the Federal Register.


Sec.  136.504  Reimbursement procedure.

    Service Units whose scope of work and funding include the purchase 
of medical services from private or public vendors under PRC are 
eligible to participate. The CHEF payments shall be based only on valid 
PRC expenditures, including expenditures for exigent medical 
circumstances without prior PRC authorization. Reimbursement from the 
CHEF will not be made if applicable PRC requirements are not followed.
    (a) Claim Submission: Requests for reimbursement from the CHEF must 
be submitted to the appropriate IHS Area Office. Area PRC programs will 
review requests for reimbursement to ensure compliance with PRC 
requirements, including but not limited to: patient eligibility, 
medical necessity, notification requirements for emergent and non-
emergent care, medical priorities, allowable expenditures, and 
eligibility for alternate resources. Following this review, Area PRC 
programs may provide Service Units an opportunity to submit missing 
information or to resubmit documents that are indecipherable. Area PRC 
programs will then forward all requests to the Division of Contract 
Care, along with any recommendations or observations from the Area PRC 
program regarding compliance with PRC or other CHEF requirements. The 
Division of Contract Care will adjudicate the claim based upon an 
independent review of the claim documentation, but it may consider any 
recommendations or observations from the Area PRC program.
    (b) Content of Claims: All claims submitted for reimbursement may 
be submitted electronically utilizing the secure IHS system(s) 
established for this purpose or may be submitted in paper form but must 
include:
    (1) A fully completed Catastrophic Health Emergency Fund 
Reimbursement Request Form.
    (2) A statement of the provider's charges on a form that complies 
with the format required for the submission of claims under title XVIII 
of the Social Security Act. For example, charges may be printed on 
forms such as the Centers for Medicare & Medicaid Services (CMS) 1500, 
UB-04 (formerly CMS-1450), American Dental Association (ADA) dental 
claim form, or National Council for Prescription Drug Program (NCPDP) 
universal claim forms. The forms submitted for review must include 
specific appropriate diagnostic and procedure codes.
    (3) An explanation of benefits or statement of payment identifying 
how much was paid to the provider by the Service Unit for the 
Catastrophic Illness or Disaster. Payments to the patient or any other 
entity are ineligible for the CHEF reimbursement.
    (4) The Division of Contract Care may request additional medical 
documentation describing the medical treatment or service provided, 
including but not limited to discharge summaries and/or medical 
progress notes. Cases may be submitted for 50% reimbursement of 
eligible expenses pending discharge summaries. Medical documentation 
must be received to close the CHEF case.
    (c) Limitation of Funds and Reimbursement Procedure: Because of the 
limitations of funds, full reimbursement cannot be guaranteed on all 
requests and will be based on the availability of funds at the time the 
IHS processes the claim. To the extent funds are available, the CHEF 
funds may not be used to cover the cost of services or treatment for 
which the funds were not approved. Unused funds, including but not 
limited to, funds unused due to overestimates, alternate resources, and 
cancellations must be returned to the CHEF.


Sec.  136.505  Reimbursable services.

    The costs of catastrophic illnesses and disasters for distinct 
episodes of care are eligible for reimbursement from the CHEF in 
accordance with the medical priorities of the Service. Only services 
that are related to a distinct episode of care will be eligible for 
reimbursement.
    (a) Some of the services that may qualify for reimbursement from 
the fund are:
    (1) Emergency treatment.
    (2) Emergent and acute inpatient hospitalization.
    (3) Ambulance services; air and ground (including patient escort 
travel costs).
    (4) Attending and consultant physician.
    (5) Functionally required reconstructive surgery.
    (6) Prostheses and other related items.
    (7) Reasonable rehabilitative therapy exclusive of custodial care 
not to exceed 30 days after discharge.
    (8) Skilled nursing care when the patient is discharged from the 
acute process to a skilled nursing facility.
    (b) [Reserved]


Sec.  136.506  Alternate resources.

    (a) Expenses paid by alternate resources are not eligible for 
payment by PRC or reimbursement by the CHEF. No payment shall be made 
from the CHEF to any Service Unit to the extent that the provider of 
services is eligible to receive payment for the treatment from any 
other Federal, state, local, or private source of reimbursement for 
which the

[[Page 45872]]

patient is eligible. A patient shall be considered eligible for such 
resources and no payment shall be made from the CHEF if:
    (1) The patient is eligible for alternate resources, or
    (2) The patient would be eligible for alternate resources if he or 
she were to apply for them, or
    (3) The patient would be eligible for alternate resources under 
Federal, state, or local law or regulation but for the patient's 
eligibility for PRC, or other health services, from the Indian Health 
Service or Indian Health Service funded programs.
    (b) The determination of whether a resource constitutes an 
alternate resource for the purpose of the CHEF reimbursement shall be 
made by the Headquarters of the Indian Health Service, irrespective of 
whether the resource was determined to be an alternate resource at the 
time of PRC payment.


Sec.  136.507  Program integrity.

    All the CHEF records and documents will be subject to review by the 
respective Area and by Headquarters. Internal audits and administrative 
reviews may be conducted as necessary to ensure compliance with PRC 
regulations and the CHEF policies.


Sec.  136.508  Recovery of reimbursement funds.

    In the event a Service Unit has been reimbursed from the CHEF for 
an episode of care and that same episode of care becomes eligible for 
and is paid by any Federal, state, local, or private source (including 
third party insurance) the Service Unit shall return all the CHEF funds 
received for that episode of care to the CHEF at the IHS Headquarters. 
These recovered CHEF funds will be used to reimburse other valid CHEF 
requests.


Sec.  136.509  Reconsideration and appeals.

    (a) Any Service Unit to whom payment from the CHEF is denied will 
be notified of the denial in writing together with a statement of the 
reason for the denial within 130 business days from receipt.
    (b) If a decision on the CHEF case is not made by the CHEF Program 
Manager within 180 calendar days from receipt, the Service Unit that 
submitted the claim may choose to appeal it as a deemed denial.
    (c) In order to seek review of a denial decision or deemed denial, 
the Service Unit must follow the procedures set forth in paragraphs 
(c)(1) and (c)(2) of this section.
    (1) Within 40 business days from the receipt of the denial provided 
in paragraph (a) of this section, the Service Unit may submit a request 
in writing for reconsideration of the original denial to the Division 
of Contract Care. The request for reconsideration must include, as 
applicable, corrections to the original claim submission necessary to 
overcome the denial; or a statement and supporting documentation 
establishing that the original denial was in error. If no additional 
information is submitted the original denial will stand. The Service 
Unit may also request a telephone conference with the Division of 
Contract Care, to further explain the materials submitted, which shall 
be scheduled within 40 business days from receipt of the request for 
review. A decision by the Division of Contract Care shall be made 
within 130 business days of the request for review. The Division of 
Contract Care Director, or designee, shall review the application de 
novo with no deference to the original decision maker or to the 
applicant.
    (2) If the original decision is affirmed on reconsideration, the 
Service Unit will be notified in writing and advised that an appeal may 
be taken to the Director, Indian Health Service, within 40 business 
days of receipt of the denial. The appeal shall be in writing and shall 
set forth the grounds supporting the appeal. The Service Unit may also 
request a telephone conference through the Division of Contract Care, 
which shall be scheduled with the Director or a representative 
designated by the Director, to further explain the grounds supporting 
the appeal. A decision by the Director shall be made within 180 
calendar days of the request for reconsideration. The decision of the 
Director, Indian Health Service or designee, shall constitute the final 
administrative action.


Sec.  136.510  Severability.

    If any provision of this subpart is held to be invalid or 
unenforceable by its terms, as applied to any person or circumstance, 
or stayed pending further agency action, the provision shall be 
construed to continue to give the maximum effect to the provision 
permitted by law, including as applied to those not similarly situated 
or to dissimilar circumstances. However, if such holding is that the 
provision of this subpart is invalid and unenforceable in all 
circumstances, the provision shall be severable from the remainder of 
this subpart and shall not affect the remainder thereof.

    Dated: July 10, 2023.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2023-14849 Filed 7-17-23; 8:45 am]
BILLING CODE 4165-16-P