In this Memorandum we report on the Trump Administration’s proposed FY 2019 budget for the Indian Health Service (IHS). The Administration issued a summary proposed budget request for federal agencies on February 12 and it was many weeks after that before the detailed IHS Budget Justification was available. The FY 2019 proposed budget was developed long before we knew what final FY 2108 budget amounts would be, and thus the numbers reported as FY 2019 proposed increases or decreases in the IHS Budget Justification are described in relation to the annualized FY 2018 CR – which is essentially FY 2017 funding levels. We reported on the final FY 2018 IHS budget in our General Memorandum 18-013 of April 6, 2018, and we show the FY 2019 proposed account numbers in this Memorandum in relationship to FY 2018 enacted levels (not annualized FY 2018 CR numbers).
Legislative Proposals. The IHS made several legislative proposals as part of its FY 2019 Budget Justification:
• Expand the scope of IHS scholarship and loan repayment awards by not taxing those monies; thus providing more funding for scholarships and loans and not requiring the recipients to count it as income;
• Allow IHS loan repayment and scholarship obligations to be allowed for part time work (20 hours per week) in return for two-year clinical service or accept half the amount of IHS discretionary use of awards in exchange for a two-year service obligation; another option is to work part time clinical and part time administrative services;
• Allow the IHS discretionary use of all USC Title 38 Personnel Authorities which the Veterans Health Administration is allowed to use. The point is to increase the ability for IHS and to recruit and retain health professionals. Currently the IHS can access some, but not all, of these authorities. The Budget Justification notes the need to access the authorities regarding annual leave, hiring non-citizens (often trained in the U.S.) and instituting two-year probationary period for staff appointed under Title 38.
• While not mentioned under Legislative Proposals in the Budget Justification, the Administration proposes bill language to change the funding for the Special Diabetes Program from mandatory to a discretionary basis (see below).
IHS OVERALL FUNDING
FY 2017 Enacted $5,039,886,000
FY 2018 Enacted $5,537,764,000
FY 2019 Admin. Request $5,424,023,000
The FY 2019 requested amount above is for the Services, Contract Support Costs, and Facilities accounts. It also includes $150 million for the Special Diabetes Program for Indians (SDPI) for which the Administration is requesting bill langue to change its funding from mandatory to discretionary spending. Discounting SDPI funding being discretionary, the request figure would be $5,274,023,000 or $263.7 million below the FY 2018 enacted level.
Programs Funding Proposed for Deletion. The Administration proposes to delete all funding for the Community Health Representatives ($62.8 million), the Health Education ($19.8 million), and the Tribal Management ($2.4 million) programs.
Opioid Funding. Proposed is $150 million for the IHS to address the opioid crisis. This is funding that would be passed to IHS from the Department of Health and Human Services – it is part of the $10 billion made available by the Bipartisan Budget Act to address the opioid epidemic and mental health issues. As pass-through funding it would not count against the Interior Appropriations Subcommittees’ allocations. The Budget Justification states; “Funding will be awarded to Tribes using competitive grant amounts based on need with a portion of funding made available to Title V Urban Indian organizations. IHS facilities operating a primary care clinic will be eligible to apply for a federal program award with agreement from the direct service Tribe.” (p. CJ-213). IHS Acting Director Weahkee has testified before Congressional committees with regard to this funding that the IHS is initially looking at the SDPI funding process as a model where the funds are allocated via a needs formula based on tribes submitting eligible applications. IHS has indicated that there will be a tribal consultation process on this funding distribution.
Current Services (Pay Costs/Medical Inflation). $46.7 million for pay raises and $47.9 million for medical inflation (combined, the total is $3.6 million below FY 2018 enacted).
Staffing Packages for Newly Constructed Facilities. $159 million.
CONTRACT SUPPORT COSTS
FY 2017 Enacted Such sums as may be necessary
FY 2018 Enacted Such sums as may be necessary
FY 2019 Admin. Request Such sums as may be necessary
The Administration’s proposal would continue Contract Support Costs (CSC) as a separate appropriation account with an indefinite amount—”such sums as may be necessary.” The FY 2019 estimate is $822,227,000.
The Administration proposes to reinstate two provisions from the FY 2016 Appropriations Act for IHS which are contrary to the Indian Self-Determination and Education Assistance Act (ISDEAA) with regard to CSC. The first is the “carryover” clause that could be read to deny the CSC carryover authority granted by the ISDEAA; the other is the “notwithstanding” clause used by IHS to deny contract support cost for their grant programs – Domestic Violence Prevention; Substance Abuse and Suicide Prevention; Zero Suicide Initiative; after-care pilot projects at Youth Regional Treatment Centers; funding for the improvement of third party collections; and accreditation emergencies. Congress has not gone along with those two proposals in the past. In fact, the FY 2018 House Report encourages IHS to provide CSC for its grant programs.
105(l) Clinic Leases. The Administration proposes to amend the law in order to avoid full compensation for leases under section 105(l) of the ISDEAA. The proposed bill language in the IHS Administrative provisions is designed to overrule the decision in Maniilaq Association v. Burwell, 170 F. sup. 3d 243 (D.D.C. 2016) which held that section 105(l) of the ISDEAA provides an entitlement to full compensation for leases of tribal facilities used to carry out ISDEAA agreements. The proposed language would make section 105(l) lease funding entirely discretionary, essentially nullifying the provision. The Administration made the same proposal in last year’s budget, but Congress ignored it.
Continuation of Sections 405 and 406 of General Provisions. The FY 2019 budget proposal would continue by reference sections 405 and 406 of the FY 2015 Appropriations Act. These provisions prohibit BIA and IHS from using FY 2019 CSC funds to pay past-year CSC claims or to repay the Judgment Fund for judgments or settlements related to past-year CSC claims. They do not preclude tribes from recovering such judgments or settlements from the Judgment Fund. The following is from Division G, Title IV of the Act:
Contract Support Costs, Prior Year Limitation
Sec. 405. Sections 405 and 406 of division F of the Consolidated and Further Continuing Appropriations Act, 2015 (Public Law 113-235) shall continue in effect in fiscal year 2019.
Contract Support Costs, Fiscal Year 2019 Limitation
Sec. 406. Amounts provided by this Act for fiscal year 2019 under headings “Department of Health and Human Services, Indian Health Service, Contract Support Costs” and “Department of the Interior, Bureau of Indian Affairs and Bureau of Indian Education, Contract Support Costs” are the only amounts available for contract support costs arising out of self-determination or self-governance contracts, grants, compacts, or annual funding agreements for fiscal year 2019 with the Bureau of Indian Affairs or the Indian Health Service: Provided, That such amounts provided by this Act are not available for payment of claims for contract support costs for prior years, or for repayment of payments for settlement or judgments awarding contract support costs for prior years.
FUNDING FOR INDIAN HEALTH SERVICES
FY 2017 Enacted $3,694,462,000
FY 2018 Enacted $3,952,290,000
FY 2019 Admin. Request $3,945,975,000
HOSPITALS AND CLINICS
FY 2017 Enacted $1,935,178,000
FY 2018 Enacted $2,045,128,000
FY 2019 Admin. Request $2,189,688,000
Current Services/Staffing. $31.7 million for pay increases; $13.5 million for medical inflation; $103.6 million for staffing of new facilities.
Tribal Clinic Leases. The request is $11 million for village built and tribally leased clinics, the same as FY 2018 enacted.
Accreditation Emergencies. The request is $58 million for hospital accreditation emergencies, the same as the FY 2018 enacted level.
New Tribes Funding. $1.9 million is requested for the following newly-recognized or reinstated tribes: the Pamunkey Tribe of Virginia, the United Keetoowah Band of Cherokee Indians (Oklahoma) and the Paskenta Band of Nomlaki Indians (California).
FY 2017 Enacted $182,597,000
FY 2018 Enacted $195,283,000
FY 2019 Admin. Request $203,783,000
Current Services/Staffing. $3.2 million for pay raises; $2.8 million for medical inflation; and $13.9 million for staffing of new facilities.
Oral Health Care. $800,000 is proposed to be transferred from the Direct Operations account to backfill vacant dental health position in Headquarters as requested in the FY 2018 Joint Explanatory Statement.
FY 2017 Enacted $ 94,080,000
FY 2018 Enacted $ 99,900,000
FY 2019 Admin. Request $105,169,000
Current Services/Staffing. $1.5 million for pay costs; $1.4 million for medical inflation; and $7.7 million for staffing of new facilities.
ALCOHOL AND SUBSTANCE ABUSE
FY 2017 Enacted $218,353,000
FY 2018 Enacted $227,788,000
FY 2019 Admin. Request $235,286,000
Current Services/Staffing. $2.9 million for pay raises; $4.5 million for medical inflation; and $8.7 million for staffing of new facilities.
FY 2017 Enacted $928,830,000
FY 2018 Enacted $962,695,000
FY 2019 Admin. Request $954,957,000
Current Services/Staffing. $22 million for medical inflation, $3.6 million for staffing of a new facility. The staffing money is for the Fort Yuma Health Center in Winterhaven, California, an outpatient facility which is replacing an inpatient facility.
CHEF. $51.5 million is proposed for the Catastrophic Health Emergency Fund which is $1.5 million below the FY 2018 enacted level.
INDIAN HEALTH CARE IMPROVEMENT FUND
No new funding is requested for the Indian Health Care Improvement Fund, which was funded at $72,280,000 in FY 2018, although those funds are built into the base. The FY 2018 House Report language notes the funds are provided “in order to reduce disparities across the IHS system.” FY 2018 bill language provides that the Fund “may be used, as needed, to carry out activities typically funded under the Indian Health Facilities Account.” IHS recently testified that the federal/tribal workgroup on the Fund has been meeting and hopes to have recommendations regarding a distribution formula by late May after which tribal consultation will occur.
PUBLIC HEALTH NURSING
FY 2017 Enacted $78,701,000
FY 2018 Enacted $85,043,000
FY 2019 Admin. Request $87,023,000
Current Services/Staffing. $1.4 million for pay raises; $1.3 million for medical inflation; and $6.8 million for staffing of new facilities.
FY 2017 Enacted $18,663,000
FY 2018 Enacted $19,871,000
FY 2019 Admin. Request -0-
The Budget Justification notes: “In order to prioritize health care services and staffing of newly constructed facilities, the Budget discontinues the Health Education program.” (p. CJ-129)
COMMUNITY HEALTH REPRESENTATIVES
FY 2017 Enacted $60,325,000
FY 2018 Enacted $62,888,000
FY 2019 Admin. Request -0-
The Budget Justification notes: “In order to prioritize health care services and staffing of newly constructed facilities, the Budget discontinues the Community Health Representatives program.” (p. CJ-129)
HEPATITIS B and HAEMOPHILUS
IMMUNIZATION (Hib) PROGRAMS IN ALASKA
FY 2017 Enacted $2,041,000
FY 2018 Enacted $2,127,000
FY 2019 Admin. Request $2,035,000
Current Services. $37,000 for pay raises; $48,000 for medical inflation.
URBAN INDIAN HEALTH
FY 2017 Enacted $47,678,000
FY 2018 Enacted $49,315,000
FY 2019 Admin. Request $46,422,000
Current Services. $726,000 for pay raises; $955,000 for medical inflation.
INDIAN HEALTH PROFESSIONS
FY 2017 Enacted $49,345,000
FY 2018 Enacted $49,363,000
FY 2019 Admin. Request $43,394,000
Current Services. $52,000 for pay raises.
Programs funded under Indian Health Professions are: Health Professions Preparatory and Pre-Graduate Scholarships; Health Professions Scholarships; Extern Program; Loan Repayment Program; Quentin N. Burdick American Indians Into Nursing Program; Indians Into Medicine Program; and American Indians into Psychology.
Loan Repayment Program. The Administration proposes $36 million for the loan repayment program, the same as FY 2018 enacted.
See Legislative Proposals Sections elsewhere in this Memorandum regarding IHS loan repayment and scholarship programs.
FY 2017 Enacted $2,465,000
FY 2018 Enacted $2,465,000
FY 2019 Admin. Request -0-
The Tribal Management grant program, authorized in 1975 under the authority of the Indian Self-Determination and Education Assistance Act, provides competitive grant funding for new and continuation grants for the purpose of evaluating the feasibility of contracting IHS programs, developing tribal management capabilities, and evaluating health services.
The Budget Justification notes: “The budget request does not fund this program to prioritize funding for direct care services.” (p. CJ-159)
FY 2017 Enacted $70,420,000
FY 2018 Enacted $72,338,000
FY 2019 Admin. Request $73,431,000
IHS estimates that 58.7 percent of the Direct Operations budget would go to Headquarters and 41.3 percent to the 12 Area Offices. Tribal Shares funding for Title I contracts and Title V compacts are also included.
Current Services. $1 million for pay increases. In addition, $800,000 is transferred to Dental Services to backfill dental vacancies in Headquarters per the direction of the FY 2018 House Appropriations report.
FY 2017 Enacted $5,786,000
FY 2018 Enacted $5,806,000
FY 2019 Admin. Request $4,787,000
Current Services. $52,000 for pay raises.
The Self-Governance budget supports implementation of the IHS Tribal Self-Governance Program including funding required for Tribal Shares; oversight of the IHS Director’s Agency Lead Negotiators; technical assistance on tribal consultation activities; analysis of Indian Health Care Improvement Act new authorities; and funding to support the activities of the IHS Director’s Tribal Self-Governance Advisory Committee.
The IHS notes in its FY 2019 budget justification that in FY 2017, approximately
$2 billion was transferred to tribes to support 94 ISDEAA Title V compacts and 120 funding agreements.
SPECIAL DIABETES PROGRAM FOR INDIANS
While the entitlement funding for the Special Diabetes Program for Indians (SDPI) has not been part of the IHS appropriations process, tribes and tribal organizations often include support for this program in their testimony on IHS funding. The Bipartisan Budget Act extended the SDPI program for fiscal years 2018 and 2019 at $150 million each year.
However, the Administration has proposed to change the SDPI from a program whose funds are mandatory to one whose funds are discretionary. Under that proposal, the SDPI funds would then come through the Interior, Environment and Related Agencies appropriations bill and would count against the allocations of those Subcommittees. The proposed bill language to put the funding on a discretionary basis is: “For making grants under 330C of the Public Health Service Act, $150,000,000 to remain available until expended.” (p. CJ-19)
FUNDING FOR INDIAN HEALTH FACILITIES
FY 2017 Enacted $545,424,000
FY 2018 Enacted $867,504,000
FY 2019 Admin. Request $505,820,000
The amount is $361 million below FY 2018 enacted and $40 million below FY 2017 enacted.
MAINTENANCE AND IMPROVEMENT
FY 2017 Enacted $ 75,745,000
FY 2018 Enacted $167,527,000
FY 2019 Admin. Request $ 75,745,000
The proposed reduction is $92 million below FY 2017 and FY 2018 enacted levels. As of October 1, 2016, the Backlog of Essential Maintenance, Alteration, and Repair is $515.4 million. Maintenance and Improvement (M&I) funds are provided to Area Offices for distribution to projects in their regions.
FACILITIES AND ENVIRONMENTAL HEALTH SUPPORT
FY 2017 Enacted $226,950,000
FY 2018 Enacted $240,758,000
FY 2019 Admin, Request $228,852,000
Current Services/Staffing. $3.9 million for pay costs increases; $317,000 for medical inflation; and $14.6 million for staffing of newly opened facilities.
FY 2017 Enacted $22,966,000
FY 2018 Enacted $23,706,000
FY 2019 Admin. Request $19,952,000
The Budget Justification notes the request consists of $441,000 for medical inflation, $14.4 million for new and routine replacement of medical equipment for 1,500 federally and tribally-operated health facilities; $5 million for new medical equipment in tribally-constructed health facilities and $500,000 for the TRANSAM program.
Not mentioned in the Budget Justification is the authority to use up to $2.7 million for purchase of ambulances which is close to the amount of the decrease proposed for the Medical Equipment account. Bill language would continue the option for the IHS to use this amount for purchase of ambulances.
Construction of Sanitation Facilities
FY 2017 Enacted $101,772,000
FY 2018 Enacted $192,033,000
FY 2019 Admin. Request $101,772,000
The proposed amount is $91 million below the FY 2018 enacted level.
The sanitation facilities construction program provides funding for sanitation projects to serve new or like-new housing, existing homes, emergency projects, and studies and training related to sanitation facilities construction projects. The funds cannot be used to provide sanitation facilities for Department of Housing and Urban Development-built homes.
Construction of Health Care Facilities
FY 2017 Enacted $117,991,000
FY 2018 Enacted $243,480,000
FY 2019 Admin. Request $ 79,500,000
The reduction from FY 2018 would be $164 million. No funds would be provided for the Small Ambulatory Program which received $15 million in FY 2018 nor for New and Replacement Quarters which received $11.5 million in FY 2018.
CONTINUING BILL LANGUAGE
The FY 2019 budget would continue language from previously enacted bills, including the following:
IDEA Data Collection Language. Continue the BIA authorization to collect data from the IHS and tribes regarding disabled children in order to assist with the implementation of the Individuals with Disabilities Education Act (IDEA). The provision is:
Provided further, That the Bureau of Indian Affairs may collect from the Indian Health Service and tribes and tribal organizations operating health facilities pursuant to Public Law 93-638 such individually identifiable health information relating to disabled children as may be necessary for the purpose of carrying out its functions under the Individuals with Disabilities Education Act. (20 U.S.C. 1400, et. seq.)
Prohibition on Implementing Eligibility Regulations. Continue the prohibition on the implementation of the eligibility regulations, published September 16, 1987.
Services for Non-Indians. Continue the provision that allows the IHS and tribal facilities to extend health care services to non-Indians, subject to charges. The provision states:
Provided, That in accordance with the provisions of the Indian Health Care Improvement Act, non-Indian patients may be extended health care at all tribally administered or Indian Health Service facilities, subject to charges, and the proceeds along with funds recovered under the Federal Medical Care Recovery Act (42 U.S.C. 2651-2653) shall be credited to the account of the facility providing the service and shall be available without fiscal year limitation.
Assessments by DHHS. Continue the provision which provides that no IHS funds may be used for any assessments or charges by the Department of Health and Human Services “unless identified in the budget justification and provided in this Act, or approved by the House and Senate Committees on Appropriations through the reprogramming process.”
Limitation on No-Bid Contracts. Continue the provision regarding the use of no-bid contracts. The provision specifically exempts Indian Self-Determination agreements:
Sec. 411. None of the funds appropriated or otherwise made available by this Act to executive branch agencies may be used to enter into any Federal contract unless such contract is entered into in accordance with the requirements of Chapter 33 of title 41 United States Code or chapter 137 of title 10, United States Code, and the Federal Acquisition Regulations, unless:
(1) Federal law specifically authorizes a contract to be entered into without regard for these requirements, including formula grants for States, or federally recognized Indian tribes; or
(2) such contract is authorized by the Indian Self-Determination and Education and Assistance Act (Public Law 93-638, 25 U.S.C. 450 et seq.) or by any other Federal laws that specifically authorize a contract within an Indian tribe as defined in section 4(e) of that Act (25 U.S.C. 450b(e)); or
(3) Such contract was awarded prior to the date of enactment of this Act.
Use of Defaulted Funds. Continue the provision that allows funds collected on defaults from the Loan Repayment and Health Professions Scholarship programs to be used to make new awards under the Loan Repayment and Scholarship programs.
Please let us know if we may provide additional information or assistance regarding FY 2019 Indian Health Service appropriations.