Supreme Court Ruling Means Cost Recovery for Tribal Healthcare Programs Under Self-Determination

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By REDW

August 02, 2024

In a big win for Tribal Nations, the Supreme Court ruled in June in favor of the San Carlos Apache and Northern Arapaho Tribes that they can recoup certain contract support costs (CSC) related to the administration of healthcare programs under self-determination contracts and compacts. The court’s decision affirms Tribal sovereignty by underscoring the government’s obligation to fully fund these contracts, including paying contract support costs.

The decision in Becerra, Secretary of Health and Human Services, et al. v. San Carlos Apache Tribe determined that covering these costs is “necessary to prevent a funding gap,” effectively placing Tribal Nations that pursue self-determination under PL 93-638 on an equal footing with the Indian Health Service (IHS). 

“For 30 years, Tribal Nations have sought to recoup certain contract support costs related to the administration of health care programs under self-determination contracts. On June 6, 2024, the Supreme Court agreed,” said Wesley Ryan Benally, CPA, Principal and National Tribal Practice Leader for advisory and CPA firm REDW. REDW has advised and advocated for Native American Tribes for more than 40 years on complex business, accounting, and regulatory issues. From 2014 to 2016, REDW provided financial advisory services in Ramah Navajo Chapter, et al. v. Jewell, a settlement that brought closure to 25 years of legal disputes on contract support costs. 

“CSC can include human resources functions, procurement and financial management activities, audit costs, insurance coverage and so on,” said Lloyd Miller of the law firm Sanosky Chambers, Sachse, Miller and Monkman, who helped argue the case on behalf of the San Carlos Apache and spoke with REDW’s National Tribal Practice on a recent podcast episode. “Tribal Nations previously had to use program funds to cover these overhead expenses, leaving them with fewer program dollars. When compared to the IHS, Tribes thus had fewer program dollars than if the contract had never occurred, because on average, about 25 percent of the contract [cost] is required to fund those [administrative] costs.”

Another piece of positive news for Tribes is the July 9 approval of the Interior, Environment, and Related Agencies FY 2025 appropriations bill by the House Appropriations Committee, which includes a 23 percent increase in funding for the HIS for CSC, or an increase of $985 million, subject to final approval by the full House and the Senate Appropriations Committee. 

What Tribes Need to Know to Have a Successful Claim for CSC

• Those with 638 contracts/compacts can be reimbursed by the IHS for certain contract support costs related to healthcare.
• Reimbursement includes costs incurred in collecting and spending income from third-party payors like Medicare, Medicaid, and private insurers.
• Timely filing of claims is critical; self-determination agreements have a six-year statute of limitations on claims for additional compensation.
• Contact your accounting and legal advisors to ensure proper documentation for the claim.

REDW’s team of trusted experts have more than 70 years of combined experience substantiating and vigorously defending financial information with triers of fact and federal regulators. Currently, REDW serves more than 200 Tribes and 500 Tribal entities, and approximately 33 percent of its National Tribal Practice team are enrolled Tribal members. Included in REDW’s services that support Tribal Nations are review of program accounts, calculating direct and indirect CSC, and collaborating with counsel during claim submission/negotiations with the IHS.

To learn more and schedule a 30-minute educational complimentary consultation with a member of our National Tribal Practice, visit https://www.redw.com/tribes/tribal-contract-support-costs-claims-assistance/.