Tribal Organizations Oppose Enhanced FMAP Provisions in BCRA Letter

July 21, 2017

The Honorable Mitch McConnell
S-230 The Capitol
Washington, DC 20510

Re: Tribal Organizations Oppose Enhanced FMAP Provisions in BCRA

Dear Senator McConnell:

On behalf of the National Indian Health Board (NIHB), the National Congress of American Indians (NCAI), National Council on Urban Indian Health (NCUIH), and the Tribal Nations we serve, we write to express our opposition to the federal medical assistance percentage (FMAP) provisions in Section 138 of the Senate's Better Care Reconciliation Act of 2017 (BCRA) as revised on July 13, 2017. Section 138 would provide significant additional Medicaid funds to states with no guarantee that these resources would be used to support the Indian health system or provide better care to individual American Indians and Alaska Natives (AI/ANs). This is not what Congress intended when it authorized the Indian Health Service (IHS) and Tribes to bill Medicaid in order to supplement chronic underfunding, providing 100% FMAP so that states would not bear this cost. This radical departure from over 40 years of federal policy should not be undertaken without nationwide Tribal consultation. Instead, we recommend only extending 100% FMAP to urban Indian health programs (UIHPs or UIOs as defined by the Indian Healthcare Improvement Act), as they are an integral part of the IHS I/T/U system (Indian Health Service/Tribal facilities/Urban Indian health programs). (See legislative text below). These resources need to support and improve the lives of AI/ANs across the nation.

Congress Intended 100% FMAP to Support the Indian Health System
The United States has a unique responsibility, agreed to long ago and reaffirmed many times by all three branches of government, to provide health care to Tribes and their citizens. Through the cession of millions of acres of land through treaties and other agreements, Tribes provided the United States with its land base in return for certain guarantees. Among the most sacred of these guarantees is the provision of health care.

In order to fulfill this responsibility, the federal government created the Indian health system, which is unlike any other health care delivery system in the country. However, the federal government has not done its part to fulfill the responsibility to provide adequate health services to AI/ANs. The Indian health system has been chronically underfunded for decades, with Congress appropriating only about 50% of the need.

In 1976, Congress authorized IHS and Tribes to bill Medicaid, which Congress described "as a much-needed supplement to a health care program which for too long has been insufficient to provide quality health care to the American Indian."* At the same time, Congress provided that states would receive 100% FMAP for "services which are received through an Indian Health Service facility whether operated by the Indian Health Service or by an Indian Tribe or Tribal organization" 42 U.S.C. § 1396d(b). UIHPs were not yet established during the Congressional authorization to allow IHS to bill Medicaid, but have since become an integral part of the Indian health care system. The 100% FMAP provision allows Congress to provide critical resources to the Indian health system while not shifting this responsibility to the states. Congress "took the view that it would be unfair and inequitable to burden a State Medicaid program with costs which normally would have been borne by the Indian Health Service."**

The 100% FMAP provision ensured that state Medicaid costs did not rise as a result of authorizing IHS and Tribes to bill Medicaid. Importantly, however, it also ensured that these additional federal resources were to be provided only for services that are "received through" IHS or Tribal facilities. The current 100% FMAP provision is linked to the Indian health system and specifically designed to ensure that those facilities can access Medicaid resources at no cost to the states.

Section 138 would provide 100% FMAP for services rendered by "any provider" to a Tribal citizen. With 100% FMAP no longer tied to the Indian health system, states would receive significant additional federal Medicaid dollars. There is nothing, however, that would guarantee that these funds be used to support the Indian health system or provider greater services or expand access to care for individual AI/ANs outside the Indian health system. It would provide new funding to the States, without any guarantee that funds would go to Indian health. This is not what Congress intended.

When this authority was granted in 1976, it added a new class of providers – IHS and Tribal health facilities – but the law did not negate a state’s existing obligation to provide Medicaid services to all eligible individuals, including AI/ANs. Prior to the enactment of 100% FMAP for services received through IHS/Tribal facilities, states paid their share of Medicaid for AI/ANs outside Indian Health system. The law did not alter that, and instead provided 100% FMAP to offset the cost to the State of authorizing a new class of providers to bill Medicaid, and help provide additional resources to the chronically underfunded IHS. The change outlined in this provision would contradict this principle and, in turn, allow states to have additional funds for AI/AN citizens, and provide no additional resources to the Indian system or individual AI/ANs.

The Current 100% FMAP Provision Supports Innovation
The current 100% FMAP provision allows Tribes to work with states to design Medicaid programs in a way that accommodates and supports the unique needs of the Indian health system. States are given broad authority to tailor their Medicaid programs to their populations. Yet, what works for a state's non-Indian population may not be suitable for Tribal citizens. The 100% FMAP provision ensures that states can craft exceptions to their state Medicaid programs to account for the unique needs of the Indian health system without incurring additional costs.

Unlinking 100% FMAP from the Indian health system, as proposed by BCRA Section 138, would take away this unique incentive for states to work with Tribes to create Medicaid innovations that best support the Indian health system. Further, this drastic legislative move is not needed. In February 2016, the Centers for Medicare & Medicaid Services (CMS) issued a State Health Official (SHO) Letter, No. 2016-002 that expanded its interpretation of its 100% FMAP policy. This SHO Letter allows non-IHS/Tribal providers to be reimbursed at 100% FMAP so long as services are provided under a care coordination agreement with an IHS or Tribal provider. This ensures that services remain "received through" an IHS or Tribal facility as required by statute while also providing sufficient flexibility so that non-IHS/Tribal providers are reimbursed at 100% FMAP for services they provide to eligible AI/ANs. By coordinating care in this manner, it also ensures that IHS/Tribal facilities continue to provide culturally appropriate care to AI/ANs.

Nationwide Tribal Consultation is Required
Section 138 proposes a radical departure from over 40 years of federal Indian Medicaid policy. Such a dramatic shift should not be undertaken without nationwide Tribal consultation. Part of the United States' unique responsibility to AI/ANs involves consulting with Tribes prior to taking legislative actions that will affect them. Section 138 will affect Tribes in different states in a variety of ways, and there has not yet been wide outreach to Tribal governments to receive input on this proposal.

Instead of the large-scale change found in BCRA, any legislation amending 100% FMAP should include urban Indian health programs, in accordance with NIHB Resolution 17-06 and NCAI Resolution SD-15-070. We strongly urge Congress not to move forward with Section 138 without the input of Tribes throughout the country to help craft legislative language.

Section 138 would fundamentally change the way that states interact with Tribes, funneling significant federal Medicaid resources to states without linking these resources to the Indian health system. Congress intentionally linked 100% FMAP to services received through the IHS and Tribal facilities. This has both ensured that states do not bear the burden of allowing IHS and Tribes to bill Medicaid as well as provided Tribes with the ability to work with states to design Medicaid programs that suit the unique needs of the Indian health system. NIHB opposes Section 138 and strongly urges that the Senate not proceed with any changes to the 100% FMAP provision, besides the extension of 100% FMAP to UIHPs, prior to a full and fair opportunity for Tribes to consider and weigh in on any legislative proposals.

If there is any assistance we can provide on this topic, or any others, please do not hesitate to contact NIHB Executive Director, Stacy A. Bohlen at or (202) 507-4070.

Yours In Health,

Vinton Hawley
National Indian Health Board

Brian Cladoosby
National Congress of American Indians

Ashley Tuomi
National Council on Urban Indian Health

100% FMAP Fix for Urban Indian Health Programs

Section X. Extension of Full Federal Medical Assistance Percentage to Urban Indian Organizations

* Amend 42 USC 1396d(b), replacing with a comma the period after “section 1603 of title 25)”; and

** Add: “or through an urban Indian organization (as defined in section 4 of the Indian Health Care Improvement Act) pursuant to a grant or contract with the Indian Health Service under title V of the Indian Health Care Improvement Act.”