Federal Tort Claims Act: Coverage and Claims for Tribal
Self-Determination Contracts at the Indian Health Service
(31-JUL-01, GAO-01-1001T).
The Indian Self-Determination and Education Assistance Act of
1975 encourages tribes to participate in and manage programs that
for years had been administered on their behalf by the Department
of Health and Human Services (HHS) and the Department of the
Interior. The act authorizes tribes to take over the
administration of such programs through contractual arrangements
with the agencies that previously ran them: HHS' Indian Health
Service and Interior's Bureau of Indian Affairs. For the Indian
Health Service, the programs include mental health, dental care,
hospitals and clinics. For the Bureau of Indian Affairs, the
programs that can be contracted by tribes include law
enforcement, education, and social services. Under the first 15
years of the Self-Determination Act, tribal contractors generally
assumed liability for accidents or torts (civil wrongdoings)
caused by their employees. However, in 1990, the federal
government permanently assumed this liability when Congress
extended the Federal Tort Claims Act (FTCA) coverage to tribal
contractors under the Self-Determination Act. Originally enacted
in 1946, FTCA established a process by which individuals injured
by federal employees could seek compensation from the federal
government. As a result of extending this coverage to tribal
contractors, individuals injured by tribal employees may, under
certain circumstances, seek compensation from the federal
government. This testimony discusses the (1) process for
implementing FTCA coverage for tribal self-determination
contracts and (2) FTCA claims history for tribal
self-determination contracts at the Indian Health Service for
fiscal years 1997 through 1999. GAO found that federal
regulations implementing FTCA prescribe the process that federal
agencies must follow in resolving claims arising from the
negligent or wrongful acts of federal employees. With the
extension of FTCA coverage to tribal contractors, tribal
employees or volunteers under the self-determination contract are
considered federal employees for the purpose of FTCA coverage.
According to FTCA regulations, claims are subject first to an
administrative review and determination by the federal agency
whose actions gave rise to the claim. At the administrative
level, HHS handles these claims for the Indian Health Service. If
a claim is not resolved administratively, a lawsuit may be filed
in federal court, where the Department of Justice would defend
it. Administrative and legal settlements may be paid from agency
funds, the U.S. Treasury, or the tribes' private liability
insurance if duplicative coverage exists. Data on FTCA claims
involving tribal contractors are not readily available because
HHS is not required to track these claims separately from FTCA
claims involving federal employees. However, in response to GAO's
request for claims data, the department identified 114 claims,
filed from fiscal years 1997 through 1999, that arose from
programs contracted from the Indian Health Service. Total damages
claimed were $487 million. Patient care activities and vehicle
accidents of a few tribes gave rise to most of the claims.
Although about half of the claims remain open, 58 (involving $230
million in claimed damages) have been brought to closure at a
cost of less than $700,000. Of the claims brought to closure, 40
resulted in settlement payments and 18 were denied. This
testimony updates a July, 2000 report (RCED-00-169).
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-01-1001T
ACCNO: A01493
TITLE: Federal Tort Claims Act: Coverage and Claims for Tribal
Self-Determination Contracts at the Indian Health Service
DATE: 07/31/2001
SUBJECT: Federal aid programs
Locally administered programs
Native Americans
Torts
Litigation
Government liability (legal)
Native American businesses
Federal employees
Claims settlement
Contractors
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Testimony. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-01-1001T
FEDERAL TORT CLAIMS ACT
Coverage and Claims for Tribal SelfDetermination
Contracts at the Indian Health Service Statement of Barry T. Hill, Director,
Natural Resources and Environment
United States General Accounting Office
GAO Testimony Before the Committee on Indian Affairs,
U. S. Senate
For Release on Delivery Expected at 10: 00 a. m., Tuesday, July 31, 2001
GAO- 01- 1001T
1 Mr. Chairman and Members of the Committee:
The Indian Self- Determination and Education Assistance Act was passed in
1975 to encourage tribes to participate in and manage programs that for
years had been administered on their behalf by the Department of Health and
Human Services and the Department of the Interior. The act authorizes tribes
to take over the administration of such programs through contractual
arrangements with the agencies that previously administered them: Health and
Human Services? Indian Health Service and Interior?s Bureau of Indian
Affairs. 1 For the Indian Health Service, the programs include mental
health, dental care, hospitals, and clinics, and for the Bureau of Indian
Affairs, the programs that can be contracted by tribes include law
enforcement, education, and social services.
Under the first 15 years of the Self- Determination Act, tribal contractors
generally assumed liability for accidents or torts (civil wrongdoings)
caused by their employees. However, in 1990, the federal government
permanently assumed this liability when the Congress extended Federal Tort
Claims Act (FTCA) coverage to tribal contractors under the Self-
Determination Act. Originally enacted in 1946, FTCA established a process by
which individuals injured by federal employees could seek compensation from
the federal government. As a result of extending this coverage to tribal
contractors, individuals injured by tribal employees may, under certain
circumstances, seek compensation from the federal government. For example,
if a patient receives negligent care at a tribal health facility,
administered under a self- determination contract, the injured party may be
able to seek compensation from the federal government for their personal
injuries.
1 Throughout this statement, the term ?tribes? will refer both to tribes and
tribal organizations eligible to contract programs under the Indian Self-
Determination and Education Assistance Act. Also, the term ?contracts? will
refer to contracts, grants, self- governance agreements, cooperative
agreements, or annual funding agreements entered into pursuant to the Indian
Self- Determination and Education Assistance Act, as amended.
2 To gain a better understanding of how this coverage works, you asked us to
review and
report on various aspects of it. We provided this Committee with our report
on July 5, 2000. 2 We testified before this Committee last year on the
combined FTCA claims history for tribal self- determination contracts at the
Indian Health Service and the Bureau of Indian Affairs and FTCA legal issues
that are unique to tribal contractors. 3 Our testimony today will focus
solely on the Indian Health Service. Specifically, our testimony will (1)
describe the process for implementing FTCA coverage for tribal self-
determination contracts and (2) present the FTCA claims history for tribal
self- determination contracts at the Indian Health Service for fiscal years
1997 through 1999. The status of the FTCA claims presented in this testimony
has been updated since our July 2000 report and is current as of July 15,
2001.
In summary:
Federal regulations implementing FTCA prescribe the process that federal
agencies must follow in resolving claims arising from the negligent or
wrongful acts of federal employees. With the extension of FTCA coverage to
tribal contractors, tribal employees or volunteers under a self-
determination contract are considered federal employees for the purpose of
FTCA coverage. According to FTCA regulations, claims are subject first to an
administrative review and determination by the federal agency whose actions
gave rise to the claim. At the administrative level, the Department of
Health and Human Services handles these claims for the Indian Health
Service. If a claim is not resolved administratively, a lawsuit may be filed
in federal court, where the Department of Justice would defend it.
Administrative and legal settlements may be paid from agency funds, the U.
S. Treasury, or tribes? private liability insurance if duplicative coverage
exists.
2 Federal Tort Claims Act: Issues Affecting Coverage for Tribal Self-
Determination Contracts (GAO/ RCED00- 169, July 5, 2000). 3 Federal Tort
Claims Act: Claims History and Issues Affecting Coverage for Tribal Self-
Determination Contracts (GAO/ T- RCED- 00- 234, July 12, 2000).
3
Data on FTCA claims involving tribal contractors are not readily available
because the Department of Health and Human Services is not required to track
these claims separately from FTCA claims involving federal employees.
However, in response to our request for claims data, the department
identified 114 claims, filed from fiscal years 1997 through 1999, that arose
from programs contracted from the Indian Health Service. Total damages
claimed were $487 million. Patient care activities and vehicle accidents of
a few tribes gave rise to most of the claims. Although about half of the
claims remain open, 58 (involving $230 million in claimed damages) have been
brought to closure at a cost of less than $700,000. Of the claims brought to
closure, 40 resulted in settlement payments and 18 were denied.
Background
The Federal Tort Claims Act was enacted in 1946 and provides a limited
waiver of the federal government?s sovereign immunity. It specifies the
instances in which individuals injured by the wrongful or negligent acts or
omissions of federal employees can seek restitution and receive compensation
from the federal government through an administrative process and,
ultimately, through the federal courts. The Department of Justice handles
lawsuits arising from FTCA claims.
The Indian Self- Determination and Education Assistance Act of 1975 allowed
Indian tribes to contract for administration of certain federal Indian
programs. As originally enacted, tribal contractors assumed liability for
torts caused by tribal employees performing official duties. The act
authorized the Secretaries of Health and Human Services and the Interior to
require that tribal contractors obtain private liability insurance. People
injured by the actions of tribal contractors could file claims against
tribal employees or their tribes.
By the late 1980s, the Congress recognized that some tribes were using
program funds to purchase private liability insurance, which reduced the
funds available to provide direct program services. Thus, the Congress
amended the act in 1988 and required that
4 beginning in 1990 the Secretaries of Health and Human Services and the
Interior obtain
or provide liability insurance or equivalent coverage for the tribes. Also
in the late 1980s, the Congress began to enact statutes extending FTCA
coverage to tribal selfdetermination contracts. In 1990, this coverage was
extended permanently, thus giving injured parties the right to file tort
claims against and recover monetary damages from the federal government for
injuries or losses resulting from the negligent actions of tribal employees.
Federal Indian programs that tribes can contract under the Self-
Determination Act fall under the jurisdiction of the departments of Health
and Human Services and the Interior. Within these departments, the primary
agencies responsible for administering Indian programs are the Indian Health
Service and the Bureau of Indian Affairs, which have a combined annual
appropriation exceeding $4 billion. Indian tribes administer about onehalf
of these programs, or about $2 billion annually. As of March 2000, there
were 556 federally recognized tribes. Agency officials estimate that nearly
all of the federally recognized tribes administer at least one contract from
the Indian Health Service or Bureau of Indian Affairs, either directly or as
a member of a tribal consortium.
The Indian Health Service and the Bureau of Indian Affairs programs
administered by a tribe under the Self- Determination Act may represent only
a portion of that tribe?s total activities. The other programs tribes
operate outside of the Self- Determination Act may include other federal
programs, such as federal housing assistance for Native Americans under the
Department of Housing and Urban Development, early childhood educational and
care programs under the departments of Education and of Health and Human
Services, and tribal enterprises, such as gaming operations and smokeshops
or convenience stores. These programs have generally not been extended FTCA
coverage. The tribes themselves are liable for any injuries or damages
caused by these programs, and they may choose to protect themselves against
this liability by purchasing private liability insurance.
5
FTCA Regulations Prescribe Administrative and Judicial Review of Claims
The federal regulations implementing FTCA prescribe the process that federal
agencies must follow in resolving claims arising from the negligent or
wrongful acts of federal employees. With the extension of FTCA coverage to
tribal contractors, tribal employees or volunteers under a self-
determination contract are considered federal employees for the purpose of
FTCA coverage. According to FTCA regulations, claims are subject first to
administrative review and determination by the federal agency whose actions
gave rise to the claim. Claims must include evidence and information about
the actions giving rise to the injury and the injury sustained, and must be
presented in writing to the responsible agency within 2 years. The claim
must also request a specific amount of compensation. Once a claim has been
filed, the agency has 6 months in which to review the claim before the
claimant may file suit in federal court. The administrative review can
result in a claim?s being denied, settled, or undecided.
Claims arising from Indian Health Service programs are filed with the
Department of Health and Human Services? Claims Branch in Rockville,
Maryland. The Claims Branch reviews all claims for completeness and requests
additional documentation as necessary. For nonmedical claims of $10,000 or
less, the Claims Branch can issue the initial administrative determination;
those claims over $10,000 are forwarded to the Office of General Counsel for
a determination. A more rigorous review process exists for medical claims.
Each medical claim must undergo three reviews: (1) a site review at the
facility where the incident occurred; (2) an independent medical review from
an off- site provider( s) in the pertinent field; and (3) a review by the
Public Health Service?s Quality Review Panel. The recommendations of the
Quality Review Panel on the medical merits of the claim are then returned to
the Claims Branch. The Claims Branch can issue the initial administrative
determination for medical claims of $10,000 or less, while claims over this
amount are forwarded to the Office of General Counsel.
6 The claimant must go through the administrative claims process before
filing suit in
federal court. The Department of Health and Human Services can approve
settlements of less than $25,000. The Department of Justice must approve
larger settlements. Settlements of $2,500 or less are paid directly from
agency funds, and larger settlements are paid from the Judgment Fund in the
U. S. Treasury. 4 Ultimately, if the claimant is dissatisfied with the
administrative determination, the claimant may file suit in federal court.
The Department of Justice handles lawsuits arising from FTCA claims. FTCA
claims involving tribal contractors may be turned over, or ?tendered,? to
private insurers when tribes have private liability insurance policies that
provide coverage for the same incidents covered under FTCA.
Over One Hundred Claims Have Been Filed; Most Involve Patient Care and
Vehicle Accidents
Data on FTCA claims involving tribal contractors are not readily available
because the Department of Health and Human Services is not required to track
these claims separately from FTCA claims involving federal employees.
However, in response to our request for claims data, the department
identified 114 claims filed from fiscal years 1997 through 1999 for programs
contracted by tribes from the Indian Health Service. Total damages claimed
were $487 million. Patient care claims accounted for about 45 percent of all
claims involving tribal contractors (51 out of 114 claims) filed during this
period. Claims involving vehicle accidents constituted about 35 percent of
the total, and personal injuries, about 17 percent (see fig. 1).
4 The Judgment Fund is a permanent indefinite appropriation available to pay
certain settlements and judgments against the federal government.
7
Figure 1: Claims Arising from Tribally Contracted Programs From the Indian
Health Service by Type of Claim, Fiscal Years 1997- 99
3%
Property damage/ loss
17%*
Personal injury
35% Vehicle accident
45%
Patient care
These claims involved tribally contracted programs for 40 contractors. The
Indian Health Service contractor with the most claims- the Navajo Nation-
had 14 claims, about 12 percent of the total. Seven contractors were
involved with five or more claims during the 3- year period (see fig. 2).
8
Figure 2: The Seven Indian Health Service Contractors Involved With the Most
Claims, Fiscal Years 1997- 99 Number of claims
0 2
4 6
8 10
12 14
16 Navajo
Nation Yukon
Kuskokwim Health Corporation
Gila River Indian Community
Bristol Bay Area Health Corporation
Central Valley Indian Health,
Inc. Maniilaq
Association Southeast
Alaska Regional
Health Corporation
One of the reasons why so few of the 556 tribes had claims involving their
selfdetermination programs is because FTCA coverage is still not well- known
or understood by attorneys, tribes, or potential claimants, according to the
agency officials that process these claims. Also, to the extent that tribes
continue to carry duplicative private liability insurance, claimants may be
referred to private insurers rather than to the federal government for
compensation.
The damages claimed ranged from a low of $75 to a high of $100 million, with
a median claim amount of $1 million. The $75 claim involved damages to a car
that was parked adjacent to a tribally contracted facility. A tribal
contract employee was treating a wooden fence with water sealant when some
of the overspray damaged the finish on the claimant?s car. The $75 claim to
remove the spray and to wax the car was paid in full. The $100 million claim
involved an alleged misdiagnosis that resulted in delayed treatment for
breast cancer. This claim was denied because the evidence failed to
establish that the claimant?s condition was due to an act or omission of the
tribal physician.
9 As of July 15, 2001, for the 114 FTCA claims filed from fiscal years 1997
through 1999
involving tribal self- determination contracts 40 resulted in settlement
payments, 18 were ultimately denied and the final outcome of 56 claims is
still pending either administratively or in litigation. The status of the
claims filed changes frequently as new administrative determinations are
made, lawsuits are filed, or settlement agreements are reached. The figures
presented in this testimony have been updated since our July 2000 report.
Overall, for the 40 claims that resulted in settlement payments 31 were
settled administratively and 9 through litigation. Including the 18 claims
that have been denied, a total of 58 claims have been brought to closure, or
about 51 percent of the 114 claims. These 58 claims have been closed at a
cost of about $680,000 out of the $230 million claimed in these cases.
According to agency officials, the small, simple claims for minor incidents,
such as a ?fender bender,? are generally resolved quickly, while the large,
complex claims may take longer to resolve. Although $680,000 has been paid
to date to resolve claims involving tribal contractors filed from fiscal
years 1997 through 1999, this figure will likely increase as the remaining
claims are resolved. For example, since our July 2000 report the total
settlement amount has increased by about $90,000. In aggregate, the
percentage of tribal claims approved and the amount awarded are comparable
with the resolution of other FTCA claims at the Department of Health and
Human Services.
- - - Mr. Chairman, this concludes my statement. We would be pleased to
respond to any questions that you or other Members of the Committee may have
at this time.
Contacts and Acknowledgments
For information about this testimony, please contact Chet Janik or Jeff
Malcolm at (202) 512- 3841.
(360120)
*** End of document. ***