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Nevada tribe finally paid for health services contract
Wednesday, April 26, 2006

After nearly a decade of fighting the federal government all the way to the U.S. Supreme Court, a Nevada tribe was finally paid for a self-determination contract on Tuesday.

In a settlement filed in federal court, the Department of Health and Human Services agreed to pay the Shoshone-Paiute Tribes $3.7 million for not meeting its trust responsibilities. "The Supreme Court has ruled that the Indian Health Service is liable for not paying contract support costs," the consent order stated.

Once interest is factored in, the tribe will receive over $6 million to provide health services on the Duck Valley Reservation, according to Lloyd Miller, the Washington, D.C. attorney who won the Supreme Court ruling on behalf of the Shoshone-Paiutes and the Cherokee Nation. Negotiations are ongoing to resolve the Cherokee's unpaid contract costs, Miller said.

Additionally, on behalf of the Zuni Tribe of New Mexico, Miller is pursuing a class action against the federal government. The tribe claims HHS and IHS underpaid self-determination contracts by at least $200 million in a case that could involve over 300 tribal governments.

All told, hundreds and hundreds of millions of dollars are at stake. But the federal government, through the Clinton and Bush administrations, has been reluctant to pay tribes for the cost of administering health care and other services under the Indian Self-Determination Act.

Even after the Supreme Court delivered its unanimous 8-0 ruling in March 2004, the IHS failed to ask for more money to fully fund the contracts. The Bureau of Indian Affairs, also affected by the decision, finally asked for additional self-determination funds in its budget for fiscal year 2007.

At the same time, former Interior Secretary Gale Norton told Congress that the case won't force the department to pay the entire costs of the contracts due to a subsequent rider in an appropriations act.

But in the eyes of Indian Country leaders, the issue is simple. A contract is a promise to pay, they say, and the federal government treats tribal and Alaska Native contractors differently by failing to fund the entire contract.

"Failure to adequately fund contract support costs is defeating the very programs that appear to be helping improve health conditions for American Indians and Alaska Natives," said Sally Smith, the chair of the National Indian Health Board, said in Senate testimony a year ago this month.

The Supreme Court was of a similar mindset. The government "does not deny that, were these contracts ordinary procurement contracts, its promises to pay would be legally binding," Justice Stephen G. Breyer wrote, emphasizing the disparate treatment of Indian versus non-Indian contractors.

Tribes and Alaska Natives have backed legislation to clarify that IHS and BIA must fully fund the contracts. But at Congressional hearings, Bush officials say they don't have the resources to carry out their trust responsibilities.

According to the National Congress of American Indians, the contract support cost shortfall at the IHS and BIA exceeds $162 million for the fiscal year that ends this October.

The IHS, for its part, doesn't dispute that it only pays about 20 percent of the contract support costs it owes to tribes and Alaska Natives.

The Duck Valley Reservation is serviced by the Owyhee Service Unit. According to the IHS, about 1,300 people are active users and patients, a figure that increases about 1.8 percent every year.

Contract Support Costs Consent Order:
Shoshone-Paiute Tribes v. HHS (April 25, 2006)

Supreme Court Decision Cherokee Nation v. Leavitt:
Sylalbus | Opinion [Breyer] | Concurrence [Scalia]

Relevant Links:
Contract Support Cost Litigation - http://www.cscclass.net
NCAI Contract Support - http://www.ncai.org/Contract_Support.36.0.html
Indian Health Service, Phoenix Area - http://www.ihs.gov/FacilitiesServices/AreaOffices/Phoenix