Indian Health Service (IHS) FY2021 Budget
August 21, 2020
Request and Funding History: In Brief
Elayne J. Heisler
The Indian Health Service (IHS) within the Department of Health and Human Services (HHS) is
Specialist in Health
the lead federal agency charged with improving the health of American Indians and Alaska
Services
Natives. IHS provides health care for approximately 2.6 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. IHS provides services to members of

574 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).
The IHS has three major sources of funding: (1) discretionary appropriations, (2) collections, and (3) mandatory
appropriations. In FY2020, IHS also received emergency-designated discretionary appropriations to respond to the
Coronavirus Disease 2019 (COVID-19) pandemic.
Unlike most agencies within HHS, which receive their appropriations through the Labor, Health and Human Services, and
Education Appropriations Act, IHS receives its discretionary appropriations through the Interior/Environment Appropriations
Act. IHS’s discretionary appropriations are currently divided into three accounts: (1) Indian Health Services, (2) Contract
Support Costs, and (3) Indian Health Facilities.
IHS collects payments for the health services it provides. Unlike other federal agencies, IHS has the authority to receive
payments from other federal programs, such as Medicaid, Medicare, and the Department of Veterans Affairs, for the health
services it provides to IHS beneficiaries who are enrolled in those programs. IHS also receives payments from state programs
(such as workers’ compensation) and from private insurance. In addition to these payments, IHS collects rent from the
facilities it owns.
Since FY1998, IHS has received a mandatory appropriation each fiscal year to support the Special Diabetes Program for
Indians. This funding source was most recently extended in the Coronavirus Aid, Relief, and Economic Security Act
(CARES Act; P.L. 116-136), which provided funding for the remainder of FY2020 and for the first two months of FY2021.
This report focuses on (1) the funding that IHS received between FY2015 and FY2019, (2) the funding it has received in
FY2020 as of the date of this report, and (3) the funding that has been proposed for FY2021.

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Contents
IHS Overview .................................................................................................................................. 1
Funding Sources ........................................................................................................................ 1
FY2021 Budget Request and Funding History ......................................................................... 2
IHS Third-Party Collections...................................................................................................... 5

Figures
Figure 1. IHS Reimbursements, by Source: FY2015-FY2019 (Actual) and
FY2020-FY2021 (Expected) ........................................................................................................ 6

Tables
Table 1. Indian Health Service (IHS) .............................................................................................. 3

Contacts
Author Information .......................................................................................................................... 6

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Indian Health Service (IHS) FY2021 Budget Request and Funding History: In Brief

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.1 IHS provides health care for approximately 2.6 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.2 IHS provides services to members
of 574 federally recognized tribes.3 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).4 IHS also awards grants to Urban Indian Organizations (UIOs) to
operate programs in urban areas; there are 41 UIOs.5
The Snyder Act of 19216 provides general statutory authority for IHS.7 In addition, specific IHS
programs are authorized by two acts: the Indian Sanitation Facilities Act of 19598 and the Indian
Health Care Improvement Act (IHCIA).9 The Indian Sanitation Facilities Act authorizes the IHS
to construct sanitation facilities for Indian communities and homes (e.g., providing water to
American Indian/Alaska Native 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. Also, the Public
Health Service Act provides funds for the Special Diabetes Program for Indians grants
administered by IHS.
Funding Sources
In general, IHS has three major sources of funding, described here in order of magnitude: (1)
discretionary appropriations,10 (2) collections, and (3) mandatory appropriations. In FY2020, IHS

1 The Indian Health Service (IHS) does not provide care to Native Hawaiians, they instead may receive services
through the Native Hawaiian Health Care Program administered by the Health Resources and Services Administration
(HRSA) at the Department of Health and Human Services (HHS). See HHS, HRS, “Justification of Estimates for
Appropriations Committees, FY2020,” https://www.hrsa.gov/sites/default/files/hrsa/about/budget/budget-justification-
fy2021.pdf, p. 66.
2 For more information about IHS, see CRS Report R43330, The Indian Health Service (IHS): An Overview.
3 HHS, IHS, “Justification of Estimates for Appropriations Committees, FY2021” https://www.ihs.gov/sites/
budgetformulation/themes/responsive2017/display_objects/documents/FY_2021_Final_CJ-IHS.pdf (hereinafter,
FY2021 CJ).
4 P.L. 93-638; 25 U.S.C. §§450 et seq.
5 IHS, “IHS Profile,” https://www.ihs.gov/newsroom/factsheets/ihsprofile/.
6 P.L. 67-85, as amended; 25 U.S.C. §13.
7 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).
8 P.L. 86-121; 42 U.S.C. §2004a.
9 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 Patient Protection and Affordable Care Act (ACA; P.L.
111-148). See CRS Report R41630, The Indian Health Care Improvement Act Reauthorization and Extension as
Enacted by the ACA: Detailed Summary and Timeline
.
10 Because IHS’s main funding source is annual discretionary appropriations, the agency is affected by lapses in
appropriations, which some have raised as an issue. For further discussion, see CRS Report R46265, Advance
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also received emergency-designated discretionary appropriations in laws enacted in response to
the COVID-19 pandemic. In some cases, Indian tribes, tribal organization, and UIOs were
eligible for response funding directly. These funds were not appropriated or transferred to IHS; as
such, they are not discussed in this report.11
Unlike most agencies within HHS, which receive their appropriations through the Labor, Health
and Human Services, and Education Appropriations Act, the IHS receives its discretionary
appropriations through the Interior/Environment Appropriations Act.12 IHS’s discretionary
appropriations are divided into three accounts: (1) Indian Health Services, (2) Contract Support
Costs, and (3) Indian Health Facilities.
In addition to funds appropriated to the agency, IHS collects and expends funds received as
payment for health services provided. IHS has the authority to receive payments from other
federal programs such as Medicaid, Medicare, CHIP, and the VA. IHS also receives payments
from state programs (such as workers compensation) and from private insurance. Under its
IHCIA collection authority, IHS is able to retain these payments to increase services available to
its beneficiaries. In addition to these collections, IHS collects rent from the facilities it owns.
In most years, the smallest source of IHS funding is a mandatory annual appropriation of $150
million to support the Special Diabetes Program for Indians.13 This funding was extended through
November of 2020 in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L.
116-136). Congress is considering proposals to further extend program funding.14 For FY2020,
emergency discretionary appropriations provided in response to COVID-19 were $1.85 billion,
making these funds a significant source of agency funding in FY2020.
FY2021 Budget Request and Funding History
Table 1
presents IHS’s funding from FY2015 through the President’s proposed FY2021 budget
submission. The table shows increases during that interval in both discretionary appropriated
funds and funds collected by IHS, whereas the mandatory appropriations generally stayed at the
same level. The table presents IHS’s three budget accounts—Indian Health Services, Contract
Support Costs, and Indian Health Facilities—and the funds collected and allocated to programs
under these accounts. To show regular discretionary budget authority only, collections and
proposed and actual mandatory funding are subtracted from program-level funding. The FY2020
emergency supplemental appropriations for COVID-19 response are also subtracted.
Although regular discretionary appropriations for IHS have increased over time, the largest
funding increase relative to the prior year was in FY2018. In particular, FY2018 funding included
increases for a number of programs funded under the Indian Health Facilities account, which
includes maintenance and improvement and construction of new facilities. In addition, the
FY2018 appropriation increased funding for mental health and alcohol and substance abuse

Appropriations for the Indian Health Service: Issues and Options for Congress.
11 For information about funding made available to the Indian Health Service, Indian tribes, tribal organizations, and
UIOs in response to COVID-19, see CRS Insight IN11333, COVID-19 and the Indian Health Service.
12 For more information, see CRS Report R44934, Interior, Environment, and Related Agencies: Overview of FY2019
Appropriations
, and CRS Report R45083, Labor, Health and Human Services, and Education: FY2018 Appropriations.
13 U.S. Department of Health and Human Services, Indian Health Service, “Special Diabetes Program for Indians,”
October 2016, http://www.ihs.gov/newsroom/factsheets/diabetes/.
14 Such proposals include, for example, in the 116th Congress, S. 3937, and H.R. 2680. See also CRS Insight IN11063,
Special Diabetes Programs Expire in FY2020: Policy Considerations and Extension Proposals, and CRS Report
R46331, Health Care-Related Expiring Provisions of the 116th Congress, Second Session.
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services, and provided new funding for the Indian Health Care Improvement Fund, which
distributes funds to facilities that have low funding levels relative to the populations they serve.15
These increases generally were sustained in FY2019 and FY2020. Although the FY2021 request
represents a total increase in IHS appropriations, this is not due to increases in all accounts.
Rather the increases in the Indian Health Services account and in expected collections exceed the
requested decreases in the Indian Health Facilities account.
The President’s FY2021 request includes funding for two new line items. First, it proposes
funding for electronic health records, which IHS is in a multi-year process of updating.16 The
President’s budget would provide $125 million for this activity, an increase from the $8 million
provided in FY2020. The second budget item is a legislative proposal for a new indefinite
appropriation that would be similar to the structure of the Contract Support Costs account;
however, in this instance, the appropriation would be for tribal leases. As it does with the Contract
Support Costs account, IHS has a legal obligation to pay for these lease costs pursuant to a 2016
court decision, Maniilaq Association v. Burwell,17 which requires IHS to reimburse “the Tribe or
Tribal Organization for its reasonable facility expenses” when IHS enters into a “lease,” upon
request, with any tribe or tribal organization that is furnishing a facility that supports ISDEAA
programs.18 In other words, since FY2018 IHS has been paying lease costs in instances when an
Indian tribe or tribal organization provides the facility for an ISDEAA program. Since that time,
lease costs have increased from $18 million in FY2018 to $125 million in FY2020. In the table
below, lease costs amounts for FY2018-FY2020 are not delineated separately; they are instead
included within the Indian Health Services account.19 The President’s budget would provide $101
million for these leases as a separate discretionary account.20
Table 1. Indian Health Service (IHS)
(Millions of Dollars, by Fiscal Year)
FY2021
Program or Activity
2015
2016
2017
2018
FY2019 FY2020 Request
Indian Health Services
4,820a
4,909
5,035
5,296
5,447
7,507
5,925
Account

15 HHS, IHS, “Indian Health Care Improvement Fund,” https://www.ihs.gov/ihcif/.
16 FY2021 CJ, pp. 101-103.
17 170 F. Supp. 3d 243 (D.D.C. 2016). To carry out ISDEAA programs to deliver services on behalf of IHS, Indian
tribes or tribal organizations may “lease” their facilities to IHS. These leases are entered into under the authority of
Section 105(l) of ISDEAA (and are also referred to as Section 105(l) leases). A 2016 court decision, Maniilaq
Association v. Burwell
, required that IHS enter into a “lease,” upon request, with any tribe or tribal organization
furnishing a facility that supports ISDEAA programs, and that under any such lease, IHS reimburse “the Tribe or Tribal
Organization for its reasonable facility expenses.” This holding could extend to other instances when an Indian tribe or
tribal organization furnishes a tribally leased or owned facility in support of the programs, services, functions, and
activities carried out under its ISDEAA contract or compact. In other words, if an Indian tribe or tribal organization
provides the facility for an ISDEAA program, IHS may have the responsibility to pay reasonable facility costs under
these leases. IHS has interpreted the decision as it having this responsibility and has been paying these costs since
FY2018. Both the Senate and the House Appropriations Committees raised the issue of these funds during hearings for
FY2020 appropriations, and the House directed the agency in report language to consider whether these costs should be
a separate line item (H.Rept. 116-100, p. 115). See discussion in FY2021 CJ, pp. 269 and 274.
18 Language drawn from Letter from Michael D. Weahkee, Assistant Surgeon General, United States Public Health
Service, and Acting Director, Indian Health Service to Tribal Leaders and Urban Organization Leader, July 18, 2018,
https://www.ihs.gov/newsroom/includes/themes/responsive2017/display_objects/documents/2018_Letters/
DTLL_DUIOLL_07102018.pdf.
19 Ibid. In FY2018, IHS provided $18 million for these leases. For FY2020 amounts, see FY2021 CJ, pp. 229-230.
20 See https://www.whitehouse.gov/wp-content/uploads/2020/02/hhs_fy21.pdf, pp. 443-443.
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FY2021
Program or Activity
2015
2016
2017
2018
FY2019 FY2020 Request
Coronavirus Testing,





1,846b

Treatment and Related Services
Clinical and Preventive
4,652
4,737
4,860
5,117
5,259
5,458
5,737
Services
Clinical Services
4,348
4,431
4,553
4,800
5,259
5,130
5,445
Hospitals and Health Clinics
1,837
1,857
1,935
2,055
2,147
2,325
2,432
Electronic Health Records





8
125
Purchased/ Referred Carec
914
914
929
963
965
965
965
Collectionsd
1,151
1,194
1,194
1,194
1,194
1,194
1,269
Mental Health/Alcohol and
272
287
312
323
351
355
363
Substance Abuse
Indian Health Care Improvement



72
72
72
72
Fund
Dental Services
174
178
183
193
205
211
219
Preventive Health
154
156
160
179
175
178
142
Special Diabetes Program
150
150
147e
150
150
150
150f
for Indians
Other Health Services
168
172
175
179
188
203
188
Urban Health Projects
44
44
48
49
51
58
50
Indian Health Professions
48
48
49
49
57
65
52
Tribal Management/Self-
8
8
8
8
8
8
5
Governance
Direct Operations
68
72
70
72
72
72
81
Contract Support Costs
663
718
718
763
822
820
855
Accounta
Payment for Tribal Leases






101
Indian Health Facilities
469
532
554
876
887
920
780
Account
Maintenance and
62
82
84
176
176
177
178
Improvement
Rental of Staff Quartersd
8
9
9
9
9
9
10
Sanitation Facilities
79
99
102
192
192
194
193
Construction
Health Care Facilities
85
105
118
243
243
259
125
Construction
Facilities/Environmental
220
223
227
241
252
262
260
Health Support
Medical Equipment
23
23
23
24
24
28
24
Total, Program Level
5,951
6,160
6,307
6,935
7,156
9,247
7,661
Less Funds from Other Sources







Col ections
1,151
1,194
1,194
1,194
1,194
1,194
1,269
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FY2021
Program or Activity
2015
2016
2017
2018
FY2019 FY2020 Request
Rental of Staff Quarters
8
9
9
9
9
9
10
Special Diabetes Program
150
150
147
150
150
97
150f
for Indians
Coronavirus Testing,
Treatment and Related
Services





1,846

Total, Regular
4,642
4,808
4,957
5,582
5,953
6,048
6,232
Discretionary Budget
Authority

Sources: Funding amounts are from HHS budget documents available at https://www.ihs.gov/budgetformulation/
congressionaljustifications/. Amounts for FY2015, FY2017, FY2018, FY2019, FY2020, and the FY2021 request are
from IHS’s congressional justifications. (The FY2020 amount for Coronavirus Testing, Treatment and Related
Services is from CRS analysis of FY2020 supplemental appropriations acts enacted as of the date of this report.)
FY2016 amounts are from IHS’s operating plan for FY2017, available at https://www.ihs.gov/budgetformulation/
includes/themes/newihstheme/display_objects/documents/FY2017-IHS-Operating-Plan.pdf.
a. In FY2015, Contract Support Costs were included in the Indian Health Services account. Beginning in
FY2016, Contract Support Costs were funded as an indefinite discretionary appropriation. Amounts for
FY2020 and FY2021 are estimated and may later be adjusted to reflect the amount provided.
b. This amount is the total funds appropriated to IHS in three COVID-19 response laws. IHS did not receive
funding in the first response law (P.L. 116-123). The second law enacted in response to COVID-19, the
Families First Coronavirus Response Act, provided $64 mil ion to IHS for COVID-19 testing, administration
of the test, and related items and services. The Coronavirus Aid, Relief, and Economic Security Act (CARES
Act; P.L. 116-136) provided an additional $1.032 bil ion to prepare for, prevent, and treat coronavirus, and
the Paycheck Protection Program and Health Care Enhancement Act (P.L. 116-139 ) transferred $750
mil ion to IHS from Public Health and Social Services Emergency Fund for COVID-19 testing and related
purposes. Additional funding was also made available directly to Indian tribes, Tribal organizations, and
Urban Indian Organizations through transfers from other HHS agencies. For more information, see CRS
Insight IN11333, COVID-19 and the Indian Health Service. See also CRS Report R46316, Health Care Provisions
in the Families First Coronavirus Response Act, P.L. 116-127
, and CRS Report R46325, Fourth COVID-19 Relief
Package (P.L. 116-139): In Brief
.
c. This was previously referred to as “Contract Health Services.”
d. For information on IHS col ections, see IHS budget requests, available at https://www.ihs.gov/
budgetformulation/congressionaljustifications.
e. PHSA Section 330C provides an annual appropriation of $150 mil ion for this program; this amount was
reduced in FY2017 by 2% because of budget sequestration. See Office of Management and Budget, “OMB
Report to the Congress on the Joint Committee Reductions for Fiscal Year 2017,” February 9, 2016, p. 19,
https://obamawhitehouse.archives.gov/sites/default/files/omb/assets/legislative_reports/sequestration/
jc_sequestration_report_2017_house.pdf. See also CRS Report R42050, Budget “Sequestration” and Selected
Program Exemptions and Special Rules
.
f.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act; P.L. 116-136) provides $25.07 mil ion
for October and November of 2020 (i.e., the first two months of FY2021).
IHS Third-Party Collections
IHS facilities collect payments from third-party payors for services provided to IHS beneficiaries
who are also enrolled in other programs. These collections—which represent the amounts
collected by IHS-operated facilities—are a significant source of IHS’s clinical services (see Table
1
)
, adding more than $1 billion to IHS’s clinical services budget. Collection data, however, are
incomplete because facilities operated by Indian tribes, tribal organizations, and UIOs are not
required to report these data. Although it is not possible for the Congressional Research Service to
determine the degree to which the data provided by IHS-operated facilities may underestimate
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Indian Health Service (IHS) FY2021 Budget Request and Funding History: In Brief

true collections, it is possible that this underestimate may be significant, given that some facilities
report that such collections account for more than 60% of their budget, according to IHS.21
With regard to the sources of the collections, Medicaid is the largest source of IHS’s
collections—accounting for approximately 68% of all third-party collections in FY2019, the most
recent year of final data available—followed by Medicare (21% in FY2019) and private
insurance (9% in FY2019). Beginning in FY2014, IHS began receiving payments from the VA for
services provided to IHS beneficiaries who were enrolled in the VA (these payments were 2% of
all of IHS’s third-party collections in FY2019). For FY2021, VA estimates were based on a
shorter collection period; as such, unlike other revenue types, IHS predicts that these payments
from VA will decline from $28 million to $9 million in FY2021.22
Figure 1. IHS Reimbursements, by Source: FY2015-FY2019 (Actual) and
FY2020-FY2021 (Expected)

Source: Figure created by CRS. Funding amounts are from FY2015-FY2021. HHS Budget documents are
available at https://www.ihs.gov/budgetformulation/congressionaljustifications/.


Author Information

Elayne J. Heisler

Specialist in Health Services


21 FY2021 CJ. p. 188.
22 FY2021 CJ. pp. 188-193.
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Indian Health Service (IHS) FY2021 Budget Request and Funding History: In Brief



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