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106th Congress                                            Rept. 106-818
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================



 
   ALASKA NATIVE AND AMERICAN INDIAN DIRECT REIMBURSEMENT ACT OF 1999

                                _______
                                

 September 6, 2000.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 406]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Resources, to whom was referred the bill (S. 
406) to amend the Indian Health Care Improvement Act to make 
permanent the demonstration program that allows for direct 
billing of medicare, medicaid, and other third party payors, 
and to expand the eligibility under such program to other 
tribes and tribal organizations, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                          Purpose of the Bill

    The purpose of S. 406 is to amend the Indian Health Care 
Improvement Act to make permanent the demonstration program 
that allows for direct billing of medicare, medicaid, and other 
third party payors, and to expand the eligibility under such 
programs to other tribes and tribal organizations.

                  Background and Need for Legislation

    The purpose of S. 406 is to make permanent a direct billing 
demonstration program authorized by the Indian Health Care 
Improvement Act Amendments of 1988, Public Law 100-713. The 
bill makes the program permanent for the four demonstration 
programs and expands the eligibility to other tribes and tribal 
organizations which operate Indian Health Service (IHS) 
hospitals and clinics. It provides that all funds received 
through the program be used specifically to maintain 
accreditation or, if that has been secured, to address the lack 
of health resources available to that tribe. The bill 
recognizes the success of the demonstration program, and that 
the program enhances and reinforces the ideas contained in the 
Indian Self-Determination and Assistance Act (Public Law 93-
638, 25 U.S.C. 450 et seq.) to strengthen the government-to-
government relationship between tribes and the federal 
government.

                               Background

    In exchange for the cession of millions of acres of land to 
which Indian tribes held aboriginal title, the United States 
entered into treaties with Indian nations. Many of the treaties 
provided that health care services would be guaranteed to the 
citizens of Indian country in perpetuity. The federal 
obligation for the provision of health care services in Indian 
country also arises out of the special trust relationship 
between the United States and Indian tribes, as reflected in 
Article I, Section 8, Clause 3 of the U.S. Constitution, which 
has been given form and substance by numerous treaties, laws, 
Supreme Court decisions, and Executive Orders.
    In 1976, the Indian Health Care Improvement Act (IHCIA, 
Public Law 94-437, 25 U.S.C. 1601 et seq.) became law. IHCIA 
was the first comprehensive statute specifically addressing the 
provision of health care in Indian country and the federal 
administration of health care of Native Americans. In 1988, 
amendments to IHCIA provided for the creation of a medicare and 
medicaid direct billing demonstration program which is made 
permanent by this legislation.

                     The IHS and Billing Practices

    Prior to 1988, tribes who operated IHS hospitals and 
clinics submitted their requests for reimbursement for medicare 
and medicaid outlays or expenditures to the IHS. The submission 
of that request began a complex, arduous process which did not 
always result in payment.
    Once a patient was seen by the IHS facility, a claim was 
generated and sent to the IHS Area Office. The Area Office, in 
turn, made a claim to the Fiscal Intermediary, the agent 
responsible for processing medicare and medicaid claims 
(oftentimes a state). Once the Fiscal Intermediary paid the IHS 
Area Office, the funds were deposited in the federal reserve 
and sent to the Department of the Treasury, where payment was 
apportioned back to the IHS headquarters. The Area Office would 
then request funds from IHS headquarters, and once the amount 
an Area Office would receive was determined, the Area Office 
would modify the tribe's contract to reflect the actual amount 
received from IHS headquarters and which was to be paid to the 
tribe. When the payment was finally received by the tribe 
operating the IHS facility, it was always difficult, if not 
impossible, for the tribe to determine which of the submitted 
claims had been paid and which had been denied, as there was no 
list provided which identified claim numbers to the tribe. 
Often, according to tribal officials, if a payment register was 
received, it would not be for months or years after the 
original claim was made and no attempt could be made to 
resubmit the claim. Officials reported periods as long as two 
years between submission of a claim and reimbursement or denial 
of the claim.
    Tribal officials also claimed that for a period of time the 
problems with a claim resulted from incorrect submissions made 
by the IHS, whose computer system had malfunctioned. A medicare 
audit later uncovered the errors, and tribes were made to repay 
the overpayment claimed by the IHS system, along with 
penalties, even though they had no control over the submission 
to the Fiscal Intermediary, nor any way of determining that 
they had in fact received an overpayment.\1\
---------------------------------------------------------------------------
    \1\ See Department of Health and Human Services, Report to Congress 
on the tribal Demonstration Program on Direct Billing for Medicare, 
Medicaid and Other Third Party Payors, Appendix D, December 15, 1998.
---------------------------------------------------------------------------

                  History of the Demonstration Program

    In 1988, the Indian Health Care Improvement Act was amended 
to authorize a limited demonstration program for direct billing 
by tribes. In the course of gathering information regarding the 
IHCIA, several tribal leaders submitted comments regarding 
their desire to streamline the process for billing medicare and 
medicaid reimbursements. Specifically, Indian tribes and tribal 
organizations who contracted the operation and administration 
of IHS facilities stated that:

        should they be allowed to retain all of the funds they 
        collect from Medicaid and Medicare reimbursements and 
        third party insurers, they could better control their 
        own cost accounting systems and accounts receivable, 
        and that they could thereby maximize and increase the 
        amounts collected from such sources. Tribes and tribal 
        organizations believe that the policy of self-
        determination dictates this step toward a degree of 
        financial autonomy that will better equip them to one 
        day assume the full range of responsibilities that are 
        associated with the provision of health care. Evidence 
        submitted by tribal contractors in Alaska would 
        indicate that because of certain legal impediments that 
        exist to the collection of third party resources by the 
        Indian Health Service, tribal contractors can in fact 
        collect amounts from third party sources far in excess 
        of the amounts that Indian Health Service is able to 
        collect.

Senate Report 100-508, 100th Cong., 2nd Sess. 1988, 1988 
U.S.C.C.A.N. 6183.
    In 1996, Congress, based on evidence presented to it 
regarding the success of the IHCIA demonstration program, 
extended the program for two more years to allow time for the 
Department of Health and Human Services to make its report to 
Congress. The program was extended again in 1998, based upon a 
favorable report made to Congress by the Department.

                     demonstration program results

    Four facilities were chosen to participate in the 
demonstration program: the Southeast Alaska Regional Health 
Consortium (SEARHC), Sitka, Alaska; the Bristol Bay Area Health 
Corporation, Dillingham, Alaska; the Choctaw Nation of 
Oklahoma, Durant, Oklahoma; and the Mississippi Band of Choctaw 
Indians, Philadelphia, Mississippi.
    Under the terms of the demonstration program, the 
participants were authorized to make claims directly to the 
Fiscal Intermediary for reimbursement. To become a participant, 
the tribe's facility had to meet IHS requirements for operation 
of its own programs and the facility needed to be accredited by 
the Joint Commission on Accreditation of Healthcare 
Organizations.
    All funds reimbursed were required to be used for specific 
purposes. The first priority for the funds received was to make 
improvements within the facility which would allow it to 
maintain compliance with the conditions and requirements 
applicable generally to all facilities under medicare and 
medicaid programs (to continue to be accredited). If funds 
remained after compliance was maintained, the excess was to be 
used only to improve the health resources available to the 
Indian tribe. All funds were to be expended in accordance with 
IHS regulations applicable to funds provided by the IHS under a 
contract entered into under the Indian Self-Determination Act 
(25 U.S.C. 450 et seq.).
    The Medicare and Medicaid Direct Billing Demonstration 
Program was, by all accounts, a success. The Department of 
Health and Human Services, in a report delivered to Congress in 
December of 1998, stated that the ``demonstration project has 
been a success as it has simplified, streamlined, and increased 
collections.''
    The Department reported that the direct billing process had 
positive effects for the four participating tribes. First, 
medicare and medicaid collections increased dramatically at all 
four facilities. The increase in collections for both medicaid 
and medicare combined ranged from 152% at the SEARHC facility 
to 364% at the Bristol Bay facility. Second, the increased 
collections were used by all four tribes to address compliance 
issues at their facilities. During the term of the 
demonstration project, all four facilities reported increases 
in their status and ratings with the accrediting body and three 
of the projects reported significant increases in their 
standing. SEARHC reported receiving the highest score possible. 
The SEARHC facility also received the highest ranking possible 
for the years 1996 and 1997. Third, three of the four 
participants also reported that they expended excess funds to 
improve the health resources available to the tribe. Most of 
these funds were used to improve facilities, to acquire 
additional medical equipment, and to hire additional staff. The 
Mississippi Band of Choctaw Indians reported that additional 
funds were used to open three new clinics, geared toward 
tuberculosis, diabetes and Women's Wellness. The Choctaw Nation 
of Oklahoma reported program expansions at three locations, the 
opening of a diabetes treatment center and the use of an 
improved information system. The remaining participants 
reported that the increased collections were used to hire new 
staff and implement projects that both improved their 
accreditation rating and improved the health resources offered 
by the tribe. Finally, all projects reported a large decrease 
in the amount of time between billing and collection. Each 
tribe reported saving at least two months time, and one tribe 
reported saving up to eight months time between billing and 
collection. This was largely due to increased, direct contact 
with the Fiscal Intermediary. The participants reported that 
the direct contact with the Fiscal Intermediary allowed them to 
``improve billings and collection practices, improve management 
of accounts receivable, reduce the time between billing and 
collection, and improve management planning on use of 
collections.'' \2\
---------------------------------------------------------------------------
    \2\ See Department of Health and Human Services, Report to Congress 
on the Tribal Demonstration Program on Direct Billing for Medicare, 
Medicaid and Other Third Party Payors, page 9, December 15, 1998.
---------------------------------------------------------------------------
    The Department of Health and Human Services recommended 
that the demonstration program be made permanent and that the 
program be open to an expanded number of participants. S. 406 
creates a more efficient and effective means for the medicare 
and medicaid reimbursement to tribes. But more importantly, it 
is a recognition of the government to government relationship 
that exists between the federal government and Indian tribes, 
and furthers the policy of tribal self-determination by 
allowing tribes to best determine the allocation and use of 
funds received.

                            Committee Action

    S. 406 was introduced on February 10, 1999, by Senator 
Frank Murkowski (R-AK). The bill was passed by the Senate on 
September 15, 1999, with amendments by unanimous consent. The 
bill was referred primarily to the Committee on Resources, and 
additionally to the Committee on Commerce and the Committee on 
Ways and Means. On April 5, 2000, the Committee met to consider 
the bill. No amendments were offered and the bill was then 
ordered favorably reported by voice vote to the House of 
Representatives.

                      Section by Section Analysis


                         section 1. short title

    This section provides the short title of bill, the Alaska 
Native and American Indian Direct Reimbursement Act of 1999.

                          section 2. findings

    This section describes the history and of benefits of the 
direct billing program.

section 3. direct billing of medicare, medicaid, and other third party 
                                 payors

    Subsection (a) amends Section 405 of IHCIA (25 U.S.C. 1645) 
to provide for the permanent authorization and establishment of 
the direct billing program. Specifically, the amendments to 
Section 405 of IHCIA are as follows:
    Subsection (a)(1) authorizes tribes to directly bill for 
payment to be made under the medicare program (Title XVIII of 
the Social Security Act (42 U.S.C. 1395 et seq.)), state plans 
for medical assistance approved under Title XIX of the Social 
Security Act, and third party payors.
    Subsection (a)(2) provides for direct billing from the 
medicaid program (section 1905(b) of the Social Security Act, 
42 U.S.C. 1396(b)).
    Subsection (b)(1) specifies that the funds reimbursed will 
first be used by the hospital or clinic for the purpose of 
making any improvements in the hospital or clinic that may be 
necessary to achieve or maintain compliance with the conditions 
and requirements applicable to facilities of such type under 
the medicare or medicaid programs.
    Subsection (b)(2) states that all tribal hospitals and 
clinics participating in the program shall be subject to all 
auditing requirements applicable to programs administered 
directly by the IHS.
    Subsection (b)(3) provides for Secretarial (of the 
Department of Health and Human Services) oversight of the 
program by requiring the submission of annual reports by 
participants of the program.
    Subsection (b)(4) ensures that no payments will be made out 
of the special funds described in Section 1880(c) of the Social 
Security Act (42 U.S.C. 1395qq(c)) or section 402(a) of IHCIA.
    Subsection (c)(1) establishes the eligibility requirements 
for participation in the program.
    Subsection (c)(2) sets forth the required contents of the 
tribal application for participation in the program; the 
timeline for approval of the submitted applications; allows for 
the continued, uninterrupted participation of the demonstration 
program participants; and states the duration of the approved 
application.
    Subsection (d)(1) gives the authority to the Secretary of 
the Department of Health and Human Services for the 
implementation of any administrative changes that may be 
necessary to facilitate direct billing and reimbursement.
    Subsection (d)(2) sets out the reporting requirements for 
accounting information that a participant will have to submit 
to the Secretary, and provides for periodic changes in the 
required information.
    Subsection (e) allows for a participant to withdraw from 
the program in the same manner that a tribe retrocedes a 
contracted program to the Secretary of Health and Human 
Services under authority of the Indian Self-Determination Act 
(25 U.S.C. 450 et seq.)
    The remaining subsections provide for conforming amendments 
and an effective date of October 1, 2000.

            Committee Oversight Findings and Recommendations

    Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of 
rule XIII of the Rules of the House of Representatives, the 
Committee on Resources' oversight findings and recommendations 
are reflected in the body of this report.

                   Constitutional Authority Statement

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact this bill.

                    Compliance With House Rule XIII

    1. Cost of Legislation. Clause 3(d)(2) of rule XIII of the 
Rules of the House of Representatives requires an estimate and 
a comparison by the Committee of the costs which would be 
incurred in carrying out this bill. However, clause 3(d)(3)(B) 
of that rule provides that this requirement does not apply when 
the Committee has included in its report a timely submitted 
cost estimate of the bill prepared by the Director of the 
Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974.
    2. Congressional Budget Act. As required by clause 3(c)(2) 
of rule XIII of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, this 
bill does not contain any new budget authority, credit 
authority, or an increase or decrease in revenue or tax 
expenditures. According to the Congressional Budget Office, 
enactment of S. 406 would increase federal outlays by $8-9 
million in each of fiscal years 2001 through 2005.
    3. Government Reform Oversight Findings. Under clause 
3(c)(4) of rule XIII of the Rules of the House of 
Representatives, the Committee has received no report of 
oversight findings and recommendations from the Committee on 
Government Reform on this bill.
    4. Congressional Budget Office Cost Estimate. Under clause 
3(c)(3) of rule XIII of the Rules of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for this bill from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                       Washington, DC, May 1, 2000.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 406, the Alaska 
Native and American Indian Direct Reimbursement Act of 1999.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts for federal 
costs and intergovernmental mandates are Eric Rollins and Leo 
Lex, respectively.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 406--Alaska Native and American Indian Direct Reimbursement Act of 
        1999

    Summary: S. 406 would extend indefinitely an Indian Health 
Service (IHS) demonstration project that allows four tribally 
operated IHS facilities to bill the Medicare and Medicaid 
programs directly, rather than submitting their claims through 
the IHS. The act also would allow all other tribally operated 
IHS facilities to bill Medicare and Medicaid directly. CBO 
estimates that S. 406 would raise federal outlays by $8 million 
to $9 million in each of fiscal years 2001 through 2005. 
(Federal Medicare outlays would be higher by about $2 million a 
year, and federal Medicaid outlays would be higher by about $6 
million a year.) Because the act would affect direct spending, 
pay-as-you-go procedures would apply.
    S. 406 contains no private-sector or intergovernmental 
mandates as defined in the Unfunded Mandates Reform Act (UMRA). 
Participation in the direct billing program would improve the 
cash-flow of health facilities operated by tribal governments 
and increase their total Medicaid funding.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of S. 406 is shown in the following table. The 
costs of this legislation fall within budget functions 550 
(health) and 570 (Medicare).

----------------------------------------------------------------------------------------------------------------
                                                                      Outlays, by fiscal year, in millions of
                                                                                     dollars--
                                                                 -----------------------------------------------
                                                                   2000    2001    2002    2003    2004    2005
----------------------------------------------------------------------------------------------------------------
                                           CHANGES IN DIRECT SPENDING

Medicare........................................................       0       3       2       2       2       2
Medicaid........................................................       0       6       6       5       5       6
                                                                 -----------------------------------------------
      Total.....................................................       0       9       8       8       8       8
----------------------------------------------------------------------------------------------------------------
Note. Components may not sum to totals because of rounding.

    Basis of Estimate: Under current law, four tribally 
operated Indian Health Service demonstration sites are 
authorized to bill the Medicare and Medicaid programs directly 
rather than submitting their claims through the IHS. The 
demonstration authority expires on September 30, 2000. S. 406 
would allow all tribally operated IHS facilities to bill 
Medicare and Medicaid directly.
    According to IHS, seven hospitals are tribally operated and 
would likely choose to bill Medicare and Medicaid directly. In 
1999, Medicare and Medicaid collections totaled $56 million in 
these facilities. In addition, more than 150 health stations, 
health centers, and clinics would be eligible to bill directly 
under the legislation. CBO assumes that all of the hospitals 
would choose to bill directly over the next several years but 
that only a few of the largest of the other facilities would 
develop the infrastructure necessary to adopt direct billing. 
CBO further assumes that a few additional hospitals would 
become tribally operated and begin to bill directly.
    Based on information from the IHS on the experiences in the 
demonstration sites, CBO expects that direct billing would 
increase Medicare and Medicaid payments for two reasons. First, 
the demonstration sites report a reduction in the amount of 
time between filing reimbursement claims and receiving payment. 
CBO therefore assumes that in the first year a facility 
participated in direct billing, it would receive one to two 
extra months worth of Medicare and Medicaid payments. The 
legislation would also accelerate federal spending for the four 
existing demonstration sites because under current law they are 
required to return to billing Medicare and Medicaid through IHS 
and will therefore experience a one- to two-month slow-down in 
Medicare and Medicaid collections. Of the $41 million in 
estimated Medicare and Medicaid costs over the 2001-2005 
period, $10 million is attributable to the one-time 
acceleration of payments.
    Second, demonstration sites also reported increased 
Medicare and Medicaid payments under direct billing because of 
improved claims processing. The sites reported that they were 
better able to track their claims and correct errors under 
direct billing than when they filed their claims through the 
IHS. Medicare and Medicaid payments have grown dramatically in 
both demonstration sites and nondemonstration IHS facilities in 
the 11 years since the demonstration was authorized. Much of 
the growth stems from higher Medicare and Medicaid 
reimbursement rates for IHS facilities, efforts by IHS to 
improve its Medicare and Medicaid collections, and general 
growth in medical costs and enrollment, rather than from direct 
billing. Nonetheless, based on the experience in the 
demonstration sites, CBO estimates that the improved claims 
processing procedures that would result from direct billing 
would increase Medicare and Medicaid payments by about 10 
percent for the facilities that choose to undertake it.
    In addition, direct billing may slightly reduce IHS 
administrative costs, which are subject to annual 
appropriation.
    Pay-As-You-Go Considerations: The Balanced Budget and 
Emergency Deficit Control act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. The net 
changes in outlays that are subject to pay-as-you-go procedures 
are shown in the following table. (S. 406 would not affect 
receipts.) For the purposes of enforcing pay-as-you-go 
procedures, only the effects in the current year, the budget 
year, and the succeeding four years are counted.

----------------------------------------------------------------------------------------------------------------
                                                       By fiscal year, in millions of dollars--
                                    ----------------------------------------------------------------------------
                                      2000   2001   2002   2003   2004   2005   2006   2007   2008   2009   2010
----------------------------------------------------------------------------------------------------------------
Changes in outlays.................      0      9      8      8      8      8      9      9     10     10     11
Changes in receipts................                                 Not applicable
----------------------------------------------------------------------------------------------------------------

    Estimated impact on State, local, and tribal governments: 
S. 406 contains no intergovernmental mandates as defined in 
UMRA. by allowing all tribally operated IHS facilities to 
directly bill the Department of Health and Human Services for 
Medicare and Medicaid services, the act would shorten the 
period of time for receiving reimbursements and improve 
processing procedures. CBO estimates that those facilities 
would receive a total of between $5 million and $7 million 
annually in additional Medicaid reimbursements. Since the 
federal medical assistance percentage is 100 percent for tribal 
health facilities, S. 406 would increase total funding and 
improve the cash-flow position of facilities that chose to 
participate in the direct billing program.
    Estimated impact on the private sector: S. 406 contains no 
private-sector mandates as defined in UMRA.
    Previous CBO estimate: On August 27, 1999, CBO estimated 
that S. 406, as ordered reported by the Senate Committee on 
Indian Affairs on August 4, 1999, would increase direct 
spending by $37 million over the 2000-2004 period. The language 
in the Senate version of S. 406 is substantively the same as 
that in the version that was ordered reported by the House 
Committee on Resources. CBO has updated its earlier estimate to 
include more recent data on Medicare and Medicaid collections 
by IHS facilities (which were lower than expected) and to show 
the legislation's effects in 2005.
    Estimate prepared by: Federal costs: Eric Rollins; impact 
on State, local, and tribal governments: Leo Lex; impact on the 
private sector: Stuart Hagen.
    Estimate approved by: Peter H. Fontaine, Deputy Assistant 
Director for Budget Analysis.

                    Compliance With Public Law 104-4

    This bill contains no unfunded mandates.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

         SECTION 405 OF THE INDIAN HEALTH CARE IMPROVEMENT ACT


  DEMONSTRATION PROGRAM FOR DIRECT BILLING OF MEDICARE, MEDICAID, AND 
                        OTHER THIRD PARTY PAYORS

  Sec. 405. [(a) The Secretary shall establish a demonstration 
program under which Indian tribes, tribal organizations, and 
Alaska Native health organizations, which are contracting the 
entire operation of an entire hospital or clinic of the Service 
under the authority of the Indian Self-Determination Act, shall 
directly bill for, and receive payment for, health care 
services provided by such hospital or clinic for which payment 
is made under title XVIII of the Social Security Act 
(medicare), under a State plan for medical assistance approved 
under title XIX of the Social Security Act (medicaid), or from 
any other third-party payor. The last sentence of section 
1905(b) of the Social Security Act shall apply for purposes of 
the demonstration program.
  [(b)(1) Each hospital or clinic participating in the 
demonstration program described in subsection (a) shall be 
reimbursed directly under the medicare and medicaid programs 
for services furnished, without regard to the provisions of 
section 1880(c) of the Social Security Act and sections 
sections 402(a) and 813(b)(2)(A) of this Act, but all funds so 
reimbursed shall first be used by the hospital or clinic for 
the purpose of making any improvements in the hospital or 
clinic that may be necessary to achieve or maintain compliance 
with the conditions and requirements applicable generally to 
facilities of such type under the medicare or medicaid program. 
Any funds so reimbursed which are in excess of the amount 
necessary to achieve or maintain such conditions or 
requirements shall be used--
          [(A) solely for improving the health resources 
        deficiency level of the Indian tribe, and
          [(B) in accordance with the regulations of the 
        Service applicable to funds provided by the Service 
        under any contract entered into under the Indian Self-
        Determination Act.
  [(2) The amounts paid to the hospitals and clinics 
participating in the demonstration program described in 
subsection (a) shall be subject to all auditing requirements 
applicable to programs administered directly by the Service and 
to facilities participating in the medicare and medicaid 
programs.
  [(3) The Secretary shall monitor the performance of hospitals 
and clinics participating in the demonstration program 
described in subsection (a), and shall require such hospitals 
and clinics to submit reports on the program to the Secretary 
on a quarterly basis (or more frequently if the Secretary deems 
it to be necessary).
  [(4) Notwithstanding section 1880(c) of the Social Security 
Act or section 402(a) of this Act, no payment may be made out 
of the special fund described in section 1880(c) of the Social 
Security Act, or section 402(a) of this Act, for the benefit of 
any hospital or clinic participating in the demonstration 
program described in subsection (a) during the period of such 
participation.
  [(c)(1) In order to be considered for participation in the 
demonstration program described in subsection (a), a hospital 
or clinic must submit an application to the Secretary which 
establishes to the satisfaction of the Secretary that--
          [(A) the Indian tribe, tribal organization, or Alaska 
        Native health organization contracts the entire 
        operation of the Service facility;
          [(B) the facility is eligible to participate in the 
        medicare and medicaid programs under sections 1880 and 
        1911 of the Social Security Act;
          [(C) the facility meets any requirements which apply 
        to programs operated directly by the Service; and
          [(D) the facility is accredited by the Joint 
        Commission on Accreditation of Hospitals, or has 
        submitted a plan, which has been approved by the 
        Secretary, for achieving such accreditation prior to 
        October 1, 1990.
  [(2) From among the qualified applicants, the Secretary 
shall, prior to October 1, 1989, select no more than 4 
facilities to participate in the demonstration program 
described in subsection (a). The demonstration program 
described in subsection (a) shall begin by no later than 
October 1, 1991, and end on September 30, 1996.
  [(d)(1) Upon the enactment of the Indian Health Care 
Amendments of 1988, the Secretary, acting through the Service, 
shall commence an examination of--
          [(A) any administrative changes which may be 
        necessary to allow direct billing and reimbursement 
        under the demonstration program described in subsection 
        (a), including any agreements with States which may be 
        necessary to provide for such direct billing under the 
        medicaid program; and
          [(B) any changes which may be necessary to enable 
        participants in such demonstration program to provide 
        to the Service medical records information on patients 
        served under such demonstration program which is 
        consistent with the medical records information system 
        of the Service.
  [(2) Prior to the commencement of the demonstration program 
described in subsection (a), the Secretary shall implement all 
changes required as a result of the examinations conducted 
under paragraph (1).
  [(3) Prior to October 1, 1990, the Secretary shall determine 
any accounting information which a participant in the 
demonstration program described in subsection (a) would be 
required to report.
  [(f) The Secretary shall provide for the retrocession of any 
contract entered into between a participant in the 
demonstration program described in subsection (a) and the 
Service under the authority of the Indian Self-Determination 
Act. All cost accounting and billing authority shall be 
retroceded to the Secretary upon the Secretary's acceptance of 
a retroceded contract.]
  (a) Establishment of Direct Billing Program.--
          (1) In general.--The Secretary shall establish a 
        program under which Indian tribes, tribal 
        organizations, and Alaska Native health organizations 
        that contract or compact for the operation of a 
        hospital or clinic of the Service under the Indian 
        Self-Determination and Education Assistance Act may 
        elect to directly bill for, and receive payment for, 
        health care services provided by such hospital or 
        clinic for which payment is made under title XVIII of 
        the Social Security Act (42 U.S.C. 1395 et seq.) (in 
        this section referred to as the ``medicare program''), 
        under a State plan for medical assistance approved 
        under title XIX of the Social Security Act (42 U.S.C. 
        1396 et seq.) (in this section referred to as the 
        ``medicaid program''), or from any other third party 
        payor.
          (2) Application of 100 percent fmap.--The third 
        sentence of section 1905(b) of the Social Security Act 
        (42 U.S.C. 1396d(b)) shall apply for purposes of 
        reimbursement under the medicaid program for health 
        care services directly billed under the program 
        established under this section.
  (b) Direct Reimbursement.--
          (1) Use of funds.--Each hospital or clinic 
        participating in the program described in subsection 
        (a) of this section shall be reimbursed directly under 
        the medicare and medicaid programs for services 
        furnished, without regard to the provisions of section 
        1880(c) of the Social Security Act (42 U.S.C. 
        1395qq(c)) and sections 402(a) and 813(b)(2)(A), but 
        all funds so reimbursed shall first be used by the 
        hospital or clinic for the purpose of making any 
        improvements in the hospital or clinic that may be 
        necessary to achieve or maintain compliance with the 
        conditions and requirements applicable generally to 
        facilities of such type under the medicare or medicaid 
        programs. Any funds so reimbursed which are in excess 
        of the amount necessary to achieve or maintain such 
        conditions shall be used--
                  (A) solely for improving the health resources 
                deficiency level of the Indian tribe; and
                  (B) in accordance with the regulations of the 
                Service applicable to funds provided by the 
                Service under any contract entered into under 
                the Indian Self-Determination Act (25 U.S.C. 
                450f et seq.).
          (2) Audits.--The amounts paid to the hospitals and 
        clinics participating in the program established under 
        this section shall be subject to all auditing 
        requirements applicable to programs administered 
        directly by the Service and to facilities participating 
        in the medicare and medicaid programs.
          (3) Secretarial oversight.--The Secretary shall 
        monitor the performance of hospitals and clinics 
        participating in the program established under this 
        section, and shall require such hospitals and clinics 
        to submit reports on the program to the Secretary on an 
        annual basis.
          (4) No payments from special funds.--Notwithstanding 
        section 1880(c) of the Social Security Act (42 U.S.C. 
        1395qq(c)) or section 402(a), no payment may be made 
        out of the special funds described in such sections for 
        the benefit of any hospital or clinic during the period 
        that the hospital or clinic participates in the program 
        established under this section.
  (c) Requirements for Participation.--
          (1) Application.--Except as provided in paragraph 
        (2)(B), in order to be eligible for participation in 
        the program established under this section, an Indian 
        tribe, tribal organization, or Alaska Native health 
        organization shall submit an application to the 
        Secretary that establishes to the satisfaction of the 
        Secretary that--
                  (A) the Indian tribe, tribal organization, or 
                Alaska Native health organization contracts or 
                compacts for the operation of a facility of the 
                Service;
                  (B) the facility is eligible to participate 
                in the medicare or medicaid programs under 
                section 1880 or 1911 of the Social Security Act 
                (42 U.S.C. 1395qq; 1396j);
                  (C) the facility meets the requirements that 
                apply to programs operated directly by the 
                Service; and
                  (D) the facility--
                          (i) is accredited by an accrediting 
                        body as eligible for reimbursement 
                        under the medicare or medicaid 
                        programs; or
                          (ii) has submitted a plan, which has 
                        been approved by the Secretary, for 
                        achieving such accreditation.
          (2) Approval.--
                  (A) In general.--The Secretary shall review 
                and approve a qualified application not later 
                than 90 days after the date the application is 
                submitted to the Secretary unless the Secretary 
                determines that any of the criteria set forth 
                in paragraph (1) are not met.
                  (B) Grandfather of demonstration program 
                participants.--Any participant in the 
                demonstration program authorized under this 
                section as in effect on the day before the date 
                of enactment of the Alaska Native and American 
                Indian Direct Reimbursement Act of 1999 shall 
                be deemed approved for participation in the 
                program established under this section and 
                shall not be required to submit an application 
                in order to participate in the program.
                  (C) Duration.--An approval by the Secretary 
                of a qualified application under subparagraph 
                (A), or a deemed approval of a demonstration 
                program under subparagraph (B), shall continue 
                in effect as long as the approved applicant or 
                the deemed approved demonstration program meets 
                the requirements of this section.
  (d) Examination and Implementation of Changes.--
          (1) In general.--The Secretary, acting through the 
        Service, and with the assistance of the Administrator 
        of the Health Care Financing Administration, shall 
        examine on an ongoing basis and implement--
                  (A) any administrative changes that may be 
                necessary to facilitate direct billing and 
                reimbursement under the program established 
                under this section, including any agreements 
                with States that may be necessary to provide 
                for direct billing under the medicaid program; 
                and
                  (B) any changes that may be necessary to 
                enable participants in the program established 
                under this section to provide to the Service 
                medical records information on patients served 
                under the program that is consistent with the 
                medical records information system of the 
                Service.
          (2) Accounting information.--The accounting 
        information that a participant in the program 
        established under this section shall be required to 
        report shall be the same as the information required to 
        be reported by participants in the demonstration 
        program authorized under this section as in effect on 
        the day before the date of enactment of the Alaska 
        Native and American Indian Direct Reimbursement Act of 
        1999. The Secretary may from time to time, after 
        consultation with the program participants, change the 
        accounting information submission requirements.
  (e) Withdrawal From Program.--A participant in the program 
established under this section may withdraw from participation 
in the same manner and under the same conditions that a tribe 
or tribal organization may retrocede a contracted program to 
the Secretary under authority of the Indian Self-Determination 
Act (25 U.S.C. 450 et seq.). All cost accounting and billing 
authority under the program established under this section 
shall be returned to the Secretary upon the Secretary's 
acceptance of the withdrawal of participation in this program.
                              ----------                              


SOCIAL SECURITY ACT

           *       *       *       *       *       *       *



TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

           *       *       *       *       *       *       *



Part D--Miscellaneous Provisions

           *       *       *       *       *       *       *



                    indian health service facilities

  Sec. 1880. (a)  * * *

           *       *       *       *       *       *       *

  (e) For provisions relating to the authority of certain 
Indian tribes, tribal organizations, and Alaska Native health 
organizations to elect to directly bill for, and receive 
payment for, health care services provided by a hospital or 
clinic of such tribes or organizations and for which payment 
may be made under this title, see section 405 of the Indian 
Health Care Improvement Act (25 U.S.C. 1645).

           *       *       *       *       *       *       *


TITLE XIX--GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS

           *       *       *       *       *       *       *


                    INDIAN HEALTH SERVICE FACILITIES

  Sec. 1911. (a)  * * *

           *       *       *       *       *       *       *

  (d) For provisions relating to the authority of certain 
Indian tribes, tribal organizations, and Alaska Native health 
organizations to elect to directly bill for, and receive 
payment for, health care services provided by a hospital or 
clinic of such tribes or organizations and for which payment 
may be made under this title, see section 405 of the Indian 
Health Care Improvement Act (25 U.S.C. 1645).

           *       *       *       *       *       *       *

                            A P P E N D I X

                              ----------                              

                          House of Representatives,
                                    Committee on Resources,
                                     Washington, DC, June 13, 2000.
Hon. Tom Bliley,
Chairman, Committee on Commerce,
Rayburn HOB, Washington, DC.
    Dear Mr. Chairman: On April 5, 2000, the Committee on 
Resources ordered reported without amendment S. 406, the Alaska 
Native and American Indian Direct Reimbursement Act of 1999. 
The Senate passed the bill by unanimous consent on September 
15, 1999. The purpose of the bill is to make permanent a very 
successful demonstration program under the Indian Health Care 
Improvement Act Amendments (Public Law 100-713) that allows 
tribes to directly bill for Medicare and Medicaid 
reimbursements. S. 406 was primarily referred to the Committee 
on Resources and additionally to the Committee on Commerce and 
the Committee on Ways and Means.
    Because of the limited numbers of days remaining in the 
106th Congress, I seek your help in allowing S. 406 to be 
scheduled for consideration by the House of Representatives 
without further action by the Committee on Commerce. I would 
propose to pass the Senate bill without amendment and forward 
it to the President for signature.
    Of course, by allowing this to occur, the Committee on 
Commerce does not waive its jurisdiction over S. 406 or any 
other similar matter, and this action should not be seen as 
precedent for any other Senate bills which affect the Committee 
on Commerce's jurisdiction. I can place this letter and your 
response in the Committee on Resources' bill report or to 
insert our exchange of letters in the Congressional Record 
during consideration of the bill on the Floor to document this 
agreement.
    I appreciate your continued cooperation and that of your 
staff in moving this important Native American bill, as well as 
several others this session of Congress.
            Sincerely,
                                               Don Young, Chairman.
                              ----------                              

                          House of Representatives,
                                     Committee on Commerce,
                                     Washington, DC, June 13, 2000.
Hon. Don Young,
Chairman, Committee on Resources, Longworth House Office Building, 
        Washington, DC.
    Dear Don: I am writing with regard to S. 406, the Alaska 
Native and American Indian Direct Reimbursement Act of 1999. As 
you know, Rule X of the Rules of the House of Representatives 
grants the Committee on Commerce jurisdiction over public 
health and quarantine. Accordingly, legislation addressing the 
interaction of the Indian Health Service with the Medicare and 
Medicaid programs fall within the Committee's jurisdiction.
    Section 3 of S. 406, as ordered reported by the Committee 
on Resources, makes permanent a demonstration project 
permitting Indian Health Service (IHS) facilities to bill the 
Medicare and Medicaid programs directly, rather than requiring 
all such billing to be routed through IHS.
    Because of the importance of this legislation, I recognize 
your desire to bring it before the House in an expeditious 
manner, and I will not exercise the Committee's right to 
exercise its referral. By agreeing to waive its consideration 
of the bill, however, the Committee on Commerce does not waive 
its jurisdiction over S. 406. In addition, the Commerce 
Committee reserves its authority to seek conferees on any 
provisions of the bill that are within its jurisdiction during 
any House-Senate conference that may be convened on this 
legislation, should it be amended. I ask for your commitment to 
support any request by the Commerce Committee for conferees on 
S. 406 or similar legislation.
    I request that you include this letter and your response in 
your committee report on the bill and as part of the Record 
during consideration of the legislation on the House floor.
    Thank you for your attention to these matters.
            Sincerely,
                                              Tom Bliley, Chairman.
                              ----------                                


                          House of Representatives,
                                    Committee on Resources,
                                     Washington, DC, July 28, 2000.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
Longworth HOB, Washington, DC.
    Dear Mr. Chairman: On April 5, 2000, the Committee on 
Resources ordered reported without amendment S. 406, the Alaska 
native and American Indian Direct Reimbursement Act of 1999. 
The Senate passed the bill by unanimous consent on September 
15, 1999. The purpose of the bill is to make permanent a very 
successful demonstration program under the Indian Health Care 
Improvement Act Amendments that allows tribes to directly bill 
for Medicare and Medicaid reimbursements. S. 406 was primarily 
referred to the Committee on Resources and additionally to the 
Committees on Commerce and Ways and Means.
    Because of the limited numbers of days remaining in the 
106th Congress, I seek your help in allowing S. 406 to be 
scheduled for consideration by the House of Representatives 
without further action by the Committee on Ways and Means. As 
you outlined in your letter, I propose to pass the Senate bill 
without amendment under suspension of the bills and forward it 
to the President for signature. Chairman Bill Bliley of the 
Committee on Commerce has agreed to this procedure.
    Of course, by allowing this to occur, the Committee on Ways 
and Means does not waive its jurisdiction over S. 406 or any 
other similar matter, and this action should not be seen as 
precedent for any other Senate bills which affect your 
Committee's jurisdiction. I can place this letter and your 
response in the Committee on Resources' bill report to document 
this agreement.
    I appreciate your continued cooperation and that of your 
staff in moving this important Native American bill.
            Sincerely,
                                               Don Young, Chairman.
                              ----------                              

                          House of Representatives,
                               Committee on Ways and Means,
                                     Washington, DC, July 28, 2000.
Hon. Don Young,
Chairman, Committee on Resources, Longworth House Office Building, 
        Washington, DC.
    Dear Mr. Chairman: I am writing in regard to S. 406, the 
Alaska Native and American Indian Direct Reimbursement Act of 
1999, as ordered reported by the Committee on Resources.
    The bill would make permanent a demonstration project 
permitting Indian Health Service (IHS) facilities to bill the 
Medicare program directly, rather than requiring all billing to 
be routed through the IHS. As you know, legislation addressing 
the interaction of the Indian Health Service with the Medicare 
program would fall within the jurisdiction of the Committee on 
Ways and Means.
    Normally, the committee would meet to consider such 
legislation. However, in order to expedite consideration of S. 
406, I will not object to this legislation, and, for this 
reason, it will not be necessary for the committee on Ways and 
means to meet to consider the bill.
    However, this is being done with the understanding that you 
will bring the bill to the floor under suspension of the rules 
for final action prior to transmission of the bill to the 
President, and that you have agreed to accept no additional 
changes on these or any other matters of concern to this 
Committee during further consideration of this legislation. 
This action is also being done with the understanding that it 
will not prejudice the jurisdictional prerogatives of the 
Committee on Ways and Means on these provisions or any other 
similar legislation and will not be considered as precedent for 
consideration of matters of jurisdictional interest to my 
Committee in the future.
    Finally, I would ask that you include a copy of our 
exchange of letters on this matter in your Committee Report on 
the legislation. Thank you for your assistance and cooperation 
in this matter. With warm personal regards,
            Sincerely,
                                             Bill Archer, Chairman.