Tribal self-governance at center of dispute over federal health care costs

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Petitions of the week

The Petitions of the Week column highlights a selection of cert petitions recently filed in the Supreme Court. A list of all petitions we’re watching is available here.

The Indian Health Service is an agency within the Department of Health and Human Services that administers health care programs for Native American tribes. In an effort to promote tribal self-governance, Congress allows tribes to contract with the agency to oversee these programs themselves. This week, we highlight petitions that ask the court to consider, among other things, precisely what funds the Indian Health Service must pay to tribes that manage their own health care.

Established in 1871, the San Carlos Apache Indian Reservation spans 2,800 square miles in southeastern Arizona and is home to nearly 11,000 people. The San Carlos Apache entered into a contract with the Indian Health Service in 2011 to assume responsibility to run health care programs – including emergency medical and alcohol and substance abuse programs – on their own.

Under federal law, the tribe’s contract with the Indian Health Service meant that it received federal funding for the programs that it operated – the amount that the agency would have otherwise spent on the programs if it had administered them itself. But because tribes lack the extensive bureaucracy and many of the cost-saving legal advantages of federal agencies, making it more expensive for them to administer their own health care, federal law requires the Indian Health Service to provide tribes with a second pool of funds – known as contract support costs – to cover the costs of complying with their contract with the agency.

Congress also provided tribes that contract with the Indian Health Service with a third possible source of funding. Federal law permits tribes to negotiate their contracts with the agency to give the tribe responsibility for billing its members’ insurance – whether from private insurers, Medicare, Medicaid, workers’ compensation, or some other source – for services provided. Under the federal statute governing these contracts, tribes can then keep third-party insurance revenue so long as they spend it on health care.

In 2019, the San Carlos Apache went to court seeking higher contract support costs from the agency for the years from 2011 to 2013. The tribe argued that it was entitled to funds for the costs associated with both its base pool of federal health care funds under the contract and also its third-party insurance revenue. A federal district court in Arizona dismissed the tribe’s claim, agreeing with the federal government that costs associated with activities funded by revenue from third parties are not the kind of contract support costs eligible for payment by the Indian Health Service.

On appeal, the U.S. Court of Appeals for the 9th Circuit reversed the district court’s decision and reinstated the tribe’s suit. To comply with both its Indian Health Service contract and the federal statute, the court of appeals explained, the tribe has to spend revenue from third parties on health care programs. Accordingly, the court reasoned that the statute could be read to entitle the tribe to contract support costs for all of the costs it incurred in complying with the contract, including the cost of spending third-party revenue. Because the federal law is ambiguous on this question, the court of appeals concluded, principles of statutory construction require it to be construed in favor of the tribe.

In Becerra v. San Carlos Apache Tribe, both the government and the tribe ask the justices to grant review of the 9th Circuit’s decision. Although the parties disagree on whether the 9th Circuit got it right, they agree that its ruling conflicts with a decision reached by the U.S. Court of Appeals for the D.C. Circuit on the same issue, and that a uniform answer to the question of contract support costs matters deeply to both federal and tribal interests.

The government also asks the justices to grant review in a dispute with the Northern Arapho Tribe, whose reservation is located in Wyoming, in which the U.S. Court of Appeals for the 10th Circuit reached a similar conclusion to that of the 9th Circuit. Like the San Carlos Apache, the Northern Arapho agree that review is warranted.

A list of this week’s featured petitions is below:

E.M.D. Sales, Inc. v. Carrera
23-217
Issue: Whether the burden of proof that employers must satisfy to demonstrate the applicability of a Fair Labor Standards Act exemption is a mere preponderance of the evidence or clear and convincing evidence.

Moore v. United States
23-219
Issue: Whether, for purposes of 18 U.S.C. § 2251(e), a state offense relates to the “sexual exploitation of children” only when it relates to child pornography or when it relates to any criminal sexual activity involving children.

Becerra v. San Carlos Apache Tribe
23-250
Issue: Whether the Indian Health Service must pay “contract support costs” not only to support IHS-funded activities, but also to support the tribe’s expenditure of income collected from third parties.

Becerra v. Northern Arapaho Tribe
23-253
Issue: Whether the Indian Health Service must pay “contract support costs” not only to support IHS-funded activities, but also to support the tribe’s expenditure of income collected from third parties.

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