1 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Tribal Authority to Collect and Use Third-Party Revenues Geoff Strommer, Partner Hobbs, Straus, Dean, & Walker, LLP January 2015

2 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Background On November 24, 2014, HHS Office of Inspector General Alert: –Cautioned Tribes and Tribal Organizations (T/TO) to ensure that ISDEAA funds and M/M and CHIP reimbursements are properly allocated and spent Question: What are the limits on how third- party reimbursements, for services provided to individuals with alternative health coverage, may be used?

3 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Overview Types of third-party reimbursements Tribal authority to collect Limits on funds in IHS “special fund” How to use M/M and CHIP reimbursements when directly billed Collections for services to non-beneficiaries Open questions and other possible limitations

4 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Third-Party Revenues Medicare – federal program for individuals age 65+; younger based on certain disabilities Medicaid – state-run federal program for low- income individuals and families Children’s Health Insurance Program (CHIP) – state-run federal program offering free/low-cost care to eligible children, and sometimes families and pregnant women

5 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Third-Party Revenues Private health insurance – (e.g., Blue Cross) Tortfeasors – collections from liable third- parties, such as a person who caused an accident resulting in injury/medical care Catastrophic Health Emergency Fund (CHEF) – IHS funds for high-cost PRC Veterans Administration – reimbursements VA makes to Tribes for services to veterans

6 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Tribes and Third-Party Funds Tribes authorized by law to seek reimbursement for services from M/M, CHIP, other third-party payers – as health care providers responsible for health under ISDEAA Use of third-party reimbursements may depend on provider type, facility type, relevant program and other factors

7 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA History of Third-Party Funds Before IHCIA in 1976, IHS facilities could not bill for and collect M/M Congress amended the Social Security Act via Title IV of the IHCIA in 1976 to authorize billing M/M

8 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA History of Third-Party Funds Cont’d Applied to “facilities of the IHS,” whether operated by IHS or T/TO Largely required collections to be placed into a “special fund” Had to use the special fund for improvements necessary to achieve compliance with M/M participation/accreditation standards Requirement now in Section 401(c) of IHCIA

9 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA IHCIA Reauthorization: Direct Billing Section 401(c)(2) now exempts tribal health programs from the “special fund” limitation if they elect to directly bill Section 401(d) now specifically authorizes T/TO to directly bill M/M, CHIP and any other third-party payer

10 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Use of M/M & CHIP Funds: Section 401(d)(2)(A) M/M and CHIP funds collected under the direct billing authority must be used for: –Achieving or maintaining compliance with the requirements applicable to M/M and CHIP programs; or –Health care services; or –Improvements in health facilities or health programs; or –Any “health-related purpose;” or –To otherwise achieve the objectives of Section 3 of the IHCIA (e.g., ensure highest possible health status)

11 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Services to Non-Beneficiaries The same use provisions in Section 401(d)(2)(A) apply to all third-party collections for services provided to non- beneficiaries under Section 813 of the IHCIA –M/M and CHIP –All other third-party reimbursements Statute: “shall be used for the purposes listed in section 401(d)(2).”

12 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Other Third-Party Reimbursements Question whether Section 401(d)(2)(A) also applies to other third-party reimbursements collected for services to eligible beneficiaries –e.g., services not covered by Section 813 –e.g., private insurance collections Hinges on interpretation of Section 207 of the IHCIA regarding “crediting reimbursements”

13 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA ISDEAA Provisions May not be necessary to solve the open legal question/interpret Section 207 ISDEAA requires T/TO “program income” to be spent: –Title I: “[T]o further the general purpose of the contract” –Title V: “[A]s supplemental funding to that negotiated in the funding agreement”

14 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA ISDEAA Provisions, Cont’d Applicable to all “program income” –Any third-party reimbursement received or recovered by Title I and Title V Tribes –M/M, CHIP, private insurance, etc. Generally understood to mean that funds are to be used to supplement the funds Tribes receive to carry out health care-related programs

15 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Special Issues Construction of New Facilities Contract Limitations CHEF Funds Reimbursements from the VA State Law

16 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA New Facility Construction Can third-party funds that are subject to 401(d)(2)(A) be used for new facility construction? A limitation on IHS in appropriations law, prohibiting use of M/M and CHIP collections for new facilities—does not appear in provision applicable to T/TO Broad language in 401 should be read to include new facilities

17 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA CHEF Funds Designed to reimburse T/TO’s PRC programs for catastrophic expenses No statements in IHCIA about how CHEF must be spent IHS Administrative Guidelines for CHEF: –Funds made available for expenditures on patients –Solely for meeting extraordinary medical costs –Amounts unused on approved case must be returned to IHS CHEF Account

18 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Veterans Administration Section 2901(b) of ACA: T/TO are payers of last resort VA must pay for services provided by T/TO to veterans per Section 405(c) of IHCIA Individual reimbursement agreements between T/TO and the VA may provide limitations on use of reimbursements (e.g., refer to Section 401(d) of IHCIA) or may say nothing

19 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Other Possible Limitations ISDEAA Contracts: Individual T/TO may have agreed to language in their ISDEAA agreements on use of third-party revenues State Law: T/TO should consider whether they have agreed to comply with, or are otherwise subject to, any state law limitations on use of third-party collections

20 HOBBS STRAUS DEAN & WALKER, LLP WASHINGTON, DC | PORTLAND, OR | OKLAHOMA CITY, OK | SACRAMENTO, CA Questions or Comments? Geoff Strommer: