Indian Health Service (IHS) Funding: Fact Sheet

April 6, 2016 (R44040)

IHS Overview

The Indian Health Service (IHS) within the Department of Health and Human Services (HHS) is the lead federal agency charged with improving the health of American Indians and Alaska Natives. IHS provides health care for approximately 2.2 million eligible American Indians/Alaska Natives through a system of programs and facilities located on or near Indian reservations, and through contractors in certain urban areas.1 IHS provides services to members of 566 federally recognized tribes. It provides services either directly or through facilities and programs operated by Indian Tribes or Tribal Organizations through self-determination contracts and self-governance compacts authorized in the Indian Self-Determination and Education Assistance Act (ISDEAA).2

The Snyder Act of 19213 provides general statutory authority for IHS.4 In addition, specific IHS programs are authorized by two acts: the Indian Sanitation Facilities Act of 19595 and the Indian Health Care Improvement Act (IHCIA).6 The Indian Sanitation Facilities Act authorizes the IHS to construct sanitation facilities for Indian communities and homes. IHCIA authorizes programs such as urban health, health professions recruitment, and substance abuse and mental health treatment, and permits IHS to receive reimbursements from Medicare, Medicaid, the State Children's Health Insurance Program (CHIP), the Department of Veterans Affairs (VA), and third-party insurers.

Funding Sources

The IHS has three major sources of funding, described here in order of magnitude: (1) discretionary appropriations, (2) collections, and (3) mandatory appropriations. The IHS receives its discretionary appropriations through the Interior/Environment appropriations act,7 unlike most agencies within HHS, which receive their appropriations through the Labor, Health and Human Services and Education appropriations act.8 IHS's discretionary appropriations are divided into two accounts: (1) Indian Health Services and (2) Indian Health Facilities.

As a second source of funding, IHS collects funds as reimbursement for health services provided. IHS, unlike other federal agencies, has the authority to receive reimbursement from other federal programs such as Medicaid, Medicare, and the Department of Veterans Affairs. IHS also receives reimbursements from state programs (such as workers compensation) and from private insurance. IHS, under the authority for reimbursements given in IHCIA, is able to retain these payments to increase services available to its beneficiaries. In addition to reimbursements (its largest source of collections), IHS collects rent from facilities it owns.

The third and smallest source of IHS funding is a mandatory appropriation of $150 million annually to support Special Diabetes Programs for Indians.9 This mandatory funding was extended through FY2017 in the Medicare Access and CHIP Reauthorization Act (MACRA, P.L. 114-10). For FY2017, the President's budget also proposes a new Tribal Behavioral Health Initiative that would provide mandatory funding to IHS for tribes in crisis situations and that would expand the number of scholarship and loan repayment awards for behavioral health providers.

FY2016 Budget Request and Funding History

Table 1 presents IHS's fund from FY2010 through the amounts proposed in the President's FY2017 budget justification. The table shows increases in both appropriated funds and funds collected by IHS. The table presents IHS's two budget accounts—Indian Health Services and Indian Health Facilities—and the funds collected and allocated to programs under these two accounts. Both these collections, and proposed and actual mandatory funding, are subtracted from program-level funding to show the agency's discretionary budget authority.

Table 1. Indian Health Service (IHS)

(Millions of Dollars, by Fiscal Year)

Program or Activity

2010

2011

2012

2013

2014

2015

2016

2017Req.

Indian Health Services Account

4,699

4,731

4,971

4,880

5,189

5,483

5,628

5,984

Clinical and Preventive Services

4,139

4,171

4,335

4,277

4,436

4,652

4,737

4,998

Clinical Services

3,845a

3,877b

4,038c

3,987d

4,142e

4,348f

4,431g

4,682g

Purchased/Referred Care (non-add)h

(779)

(780)

(844)

(801)

(879)

(914)

(914)

(962)

Preventive Health

144

144

147

143

147

154

156

166

Special Diabetes Program for Indiansi

150

150

150

147

147

150

150

150

Other Health Services

560

560

636

603

753

831

891

985

Urban Health Projects

43

43

43

41

41

44

45

48

Indian Health Professions

41

41

41

38

28

48

48

59

Indian Health Professions Expansion (non-add)

 

 

 

 

 

 

 

(10)

Tribal Management/Self-Governance

9

9

9

8

6

8

8

8

Direct Operations

69

69

72

68

66

68

72

70

Contract Support Costsj

398

398

471

448

612

663

718

800

Indian Health Facilities Account

401

410

448

427

460

469

533

578

Maintenance and Improvement

60k

60k

61l

59l

62l

62l

83m

85m

Sanitation Facilities Construction

96

96

80

75

79

79

99

103

Health Care Facilities Construction

29

39

85

77

85

85

105

132

Facilities/Environmental Health Support

193

193

199

194

211

220

223

234

Medical Equipment

23

23

23

21

23

23

23

24

Total, Program Level

5,100

5,140

5,418

5,307

5,649

5,951

6,160

6,562

Less Funds from Other Sources

 

 

 

 

 

 

 

 

Tribal Crisis Response Fund

 

 

 

 

 

 

 

15n

Indian Health Professions Expansion

 

 

 

 

 

 

 

10

Collections

891

915

954

1,021

1,060

1,151

1,194

1,194

Rental of Staff Quarters

6

6

8

8

8

8

9

9

Special Diabetes Program for Indiansh

150

150

150

147

147

150

150

150

Total, Discretionary Budget Authority

4,052

4,069

4,307

4,131

4,435

4,642

4,808

5,185

Sources: Funding amounts are from HHS Budget documents available at http://www.hhs.gov/budget/.

Notes: Individual amounts may not add to subtotals or totals due to rounding.

a. Includes $891 million in collections from Medicare, Medicaid, CHIP, private insurance, and other programs.

b. Includes $915 million in collections from Medicare, Medicaid, CHIP, private insurance, and other programs.

c. Includes $954 million in collections from Medicare, Medicaid, CHIP, private insurance, and other programs.

d. Includes $1,021 million in collections from Medicare, Medicaid, CHIP, private insurance, and other programs.

e. Includes $1,060 million in collections from Medicare, Medicaid, CHIP, the Department of Veterans Affairs, private insurance, and other programs.

f. Includes $1,151 million in collections from Medicare, Medicaid, CHIP, the Department of Veterans Affairs, private insurance, and other programs.

g. Includes an estimated $1,194 million in collections from Medicare, Medicaid, CHIP, the Department of Veterans Affairs, private insurance, and other programs.

h. This was previously referred to as "Contract Health Services."

i. PHSA Sec. 330C provides an annual appropriation of $150 million through FY2017 for this program. These mandatory funds were subject to a 2% sequestration in FY2013 and FY2014. See CRS Report R42050, Budget "Sequestration" and Selected Program Exemptions and Special Rules.

j. Beginning in FY2016, Contract Support Costs were funded as an indefinite discretionary appropriation. For FY2018 and beyond, the President's budget includes a proposal to reclassify Contract Support Costs as a mandatory three-year appropriation.

k. Includes $6 million that IHS received from rental of staff quarters.

l. Includes $8 million that IHS received from rental of staff quarters.

m. Includes $9 million that IHS expects to receive from rental of staff quarters.

n. These funds would be part of a new Administration legislative proposal that would aim to improve Tribal Behavioral Health through funding for crisis response for Indian Tribes that experience a behavioral health crisis and would increase funding for IHS scholarship and loan repayment for behavioral health providers.

IHS Collections

Collections from third-party payors for health services provided comprise a growing percentage of IHS's clinical services budget. Medicaid is the largest source of IHS's collections—approximately 69% of all reimbursements collected in FY2015, the most recent year of final data available—followed by Medicare (22% in FY2015) and private insurance (9% in FY2015). Beginning in FY2014, IHS began receiving reimbursements from the VA for services provided to IHS beneficiaries who were also eligible for services through the VA (these reimbursements were 0.7% of all of IHS's third-party collections in FY2014 and FY2015). For FY2013, reimbursements were approximately $340,000; therefore, these funds are not visible in Figure 1. However, reimbursements have increased since FY2014 and are expected to increase in FY2016.

Figure 1. IHS Reimbursements by Source, FY2010-FY2017 (Expected) (Dollars in Millions)

Source: Funding amounts for FY2010, FY2011, FY2012, FY2013, FY2014, FY2015, FY2016, and FY2017 are taken from IHS's FY2012, FY2013, FY2014, FY2015, FY2016, and FY2017 congressional budget justification documents, respectively. These documents are available at http://www.hhs.gov/budget/.

Author Contact Information

[author name scrubbed], Specialist in Health Services ([email address scrubbed], [phone number scrubbed])

Acknowledgments

LaTiesha Cooper, Research Assistant, provided assistance with the tables and figures included in this report.

Footnotes

1.

For more information about the Indian Health Service (IHS), see CRS Report R43330, The Indian Health Service (IHS): An Overview.

2.

P.L. 93-638; 25 U.S.C. §§450 et seq.

3.

P.L. 67-85, as amended; 25 U.S.C. §13.

4.

The Snyder Act established this authority as part of the Bureau of Indian Affairs within the Department of the Interior. The Transfer Act of 1954 (P.L. 83-568) transferred this authority to the U.S. Surgeon General within the Department of Health, Education, and Welfare (now the Department of Health and Human Services).

5.

P.L. 86-121; 42 U.S.C. §2004a.

6.

P.L. 94-437, as amended; 25 U.S.C. §§1601 et seq., and 42 U.S.C. §§1395qq and 1396j (and amending other sections). This act was permanently reauthorized as part of the ACA. See CRS Report R41630, The Indian Health Care Improvement Act Reauthorization and Extension as Enacted by the ACA: Detailed Summary and Timeline.

7.

For more information, see CRS Report R44061, Interior, Environment, and Related Agencies: FY2016 Appropriations.

8.

For more information, CRS Report R44287, Labor, Health and Human Services, and Education: FY2016 Appropriations.

9.

U.S. Department of Health and Human Services, Indian Health Service, "Special Diabetes Program for Indians," January 2015, http://www.ihs.gov/newsroom/factsheets/diabetes/.