Supreme Court Agrees to Hear Tribal Health Care Reimbursement Disputes

Native American tribes in Arizona and Wyoming argue that federal law shortchanges them.
Supreme Court Agrees to Hear Tribal Health Care Reimbursement Disputes
“The Guardian” or “Authority of Law" statue by James Earle Frasier in front of the U.S. Supreme Court in Washington on Sept. 28, 2020. (Al Drago/Getty Images)
Matthew Vadum

The Supreme Court agreed on Nov. 20 to take a look at whether Indian tribes should be allowed to sue the federal government over reimbursements related to administrative expenses generated by insurers.

The federal Indian Self-Determination and Education Assistance Act (ISDA) empowers Native American tribes to administer their own health care programs. Tribes receive funding from the Indian Health Service (IHS), an agency within the U.S. Department of Health and Human Services (HHS).

The statute requires IHS to reimburse tribes for some administrative expenses, which are called contract support costs.

Contract support costs are defined as “any overhead expense incurred by the tribal contractor in connection with the operation of the Federal program, function, service, or activity pursuant to the contract.”

The cases are Becerra v. San Carlos Apache Tribe (court file 23-250) and Becerra v. Northern Arapaho Tribe (court file 23-253). HHS Secretary Xavier Becerra is the petitioner in both cases.

The San Carlos Apache Indian Tribe is based in Arizona. The Northern Arapaho Tribe is based in Wyoming.

The Supreme Court did not explain why it granted the petitions for certiorari, or review, in the two cases. None of the justices dissented. At least four of the nine justices must vote to grant a petition for it to advance to the oral argument stage.

Congress enacted ISDA in 1975 to promote “effective and meaningful participation by the Indian people in the planning, conduct, and administration” of federal programs and services for Indians, according to court documents.

ISDA allows eligible tribes to take over responsibility for operating federal programs administered by HHS or the U.S. Department of the Interior for the benefit of tribal members.

Tribes may take on that responsibility by entering into a “self-determination contract” with the relevant federal agency, in which case the tribe assumes responsibility for the programs and services spelled out in the contract. Certain tribes are allowed to enter into “self-governance compacts” that function like self-determination contracts but generally provide those tribes with greater operational flexibility.

The IHS and the tribes entered into these contracts under which they receive federal funding to operate the program.

ISDA states that the tribe is to receive the amount of appropriated funds that the government “would have otherwise provided for the operation of the programs or portions thereof for the period covered by the contract.” The law also requires the government to provide specified additional funds.

Contract support costs are added to the funding. They consist of reasonable costs for activities that the tribe must carry out but which the government doesn’t normally provide.

Tribes collect revenue from third-party payors including Medicare and private insurers. ISDA states that such “program income” is to “be used by the tribal organization to further the general purposes of the contract.” In other words, tribes get to keep the insurance payments as long as they spend the funds on health care.

Tribes usually meet this requirement by using program income to provide additional services under the contracted program, just as IHS does when operating its programs.

The tribes say the IHS should pay contract support costs for the increased overhead expenses that tribes incur “in connection with services funded by the exact same program income from third parties that IHS uses when operating the same program.”

The case centers on whether the tribes are allowed to keep only enough of the funds for activities that IHS covers.

In 2021, a panel of the U.S. Court of Appeals for the District of Columbia Circuit held in a case involving Washington state’s Swinomish Indian Tribal Community that tribes are only allowed to receive contract support costs that cover IHS-funded activities, according to a SCOTUSblog summary.

But a panel of the U.S. Court of Appeals for the 9th Circuit found in 2022 that the San Carlos Apache Indian Tribe was entitled to payments covered by insurance. The circuit court found the federal law was ambiguous, which under Indian law, means the legal provisions must be interpreted in favor of the tribe.

In 2023, a panel of the U.S. Court of Appeals for the 10th Circuit arrived at the same conclusion in three decisions involving the Northern Arapahoe Tribe.

The government had asked the Supreme Court to take both petitions but had argued that the San Carlos Apache Tribe was a better vehicle for resolving the legal issues at hand. The Northern Arapaho Tribe had argued that its case was the better case to flesh out the relevant legal issues.

The Epoch Times reached out for comment to attorneys for the tribes, Lloyd Benton Miller of Sonosky, Chambers, Sachse, Endreson and Perry in Washington, Carter Phillips of Sidley Austin in Washington, and Adam Unikowsky of Jenner and Block in Washington, but had not received a response from any of them as of press time.

The Epoch Times also asked the U.S. Department of Justice, which is representing Mr. Becerra, for comment but had not received a reply at the time of publication.

The court has not yet scheduled oral arguments in the two cases. The court consolidated the cases and will hear them together.