Indian Health Service (IHS) Funding: Fact Sheet

Indian Health Service (IHS) Funding: Fact Sheet

Indian Health Service (IHS) Funding: Fact Sheet

July 17, 2017 (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 three accounts: (1) Indian Health Services, (2) Contract Support Costs, and (3) Indian Health Facilities.

As a second source of funding, IHS collects funds as reimbursement for health services provided. IHS 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), but no further appropriations have been enacted for FY2018. The President's budget requests continued mandatory funding for this program for FY2018.

FY2018 Budget Request and Funding History

Table 1 presents IHS's funding from FY2010 through the amounts proposed in the President's FY2018 budget submission. The table shows increases in both appropriated funds and funds collected by IHS. 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. 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

2017

2018 Req.

Indian Health Services Account

4,300a

4,335a

4,500a

4,432a

4,714a

4,820a

4,909

5,035

4,918

Clinical and Preventive Services

4,139

4,171

4,335

4,277

4,566

4,652

4,737

4,860

4,753

Clinical Services

3,845

3,877

4,038

3,987

4,271

4,348

4,431

4,553

4,446

Hospitals and Health Clinics

1,754

1,763

1,811

1,749

1,791

1,837

1,857

1,935

1,870

Purchased/ Referred Care

779

780

844

801

879

914

914

929

914

Collections

891

915

954

1,021

1,172

1,151

1,194b

1,194b

1,194b

Mental Health/Alcohol and Substance Abuse

267

267

270

259

264

272

287

312

288

Dental Services

153

154

159

157

165

174

178

183

180

Preventive Health

144

144

147

143

148

154

156

160

157

Special Diabetes Program for Indians

150

150

150

147c

147c

150

150

147c

150

Other Health Services

162

162

165

155

148

168

171

175

165

Urban Health Projects

43

43

43

41

41

44

44

48

45

Indian Health Professions

41

41

41

38

33

48

48

49

43

Tribal Management/Self-Governance

9

9

9

8

6

8

8

8

5d

Direct Operations

69

69

72

68

68

68

72

70

72

Contract Support Costs Accounte

398

398

471

448

587

663

718

718

718

Indian Health Facilities Account

401

410

448

427

460

469

532

554

456

Maintenance and Improvement

60

60

61

59

62

62

82

84

69

Rental of Staff Quarters

6

6

8

8

8

8

9

9

9

Sanitation Facilities Construction

96

96

80

75

79

79

99

102

75

Health Care Facilities Construction

29

39

85

77

85

85

105

118

100

Facilities/Environmental Health Support

193

193

199

194

211

220

223

227

192

Medical Equipment

23

23

23

21

23

23

23

23

20

Total, Program Level

5,100

5,144

5,418

5,307

5,761

5,951

6,160

6,307

6,092

Less Funds from Other Sources

Collections

891

915

954

1,021

1,172

1,151

1,194

1,194

1,194

Rental of Staff Quarters

6

6

8

8

8

8

9

9

9

Special Diabetes Program for Indiansf

150

150

150

147

147

150

150

147

150

Total, Discretionary Budget Authority

4,052

4,069

4,307

4,131

4,435

4,642

4,808

4,957

4,739

Sources: Funding amounts are from HHS Budget documents available at http://www.hhs.gov/budget/. Amounts for FY2010-FY2015 and FY2018 are from IHS's congressional justifications. FY2016 and FY2017 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.

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

a. From FY2010-FY2015, Contract Support Costs were included in the Indian Health Services account.

b. Estimated amount of collections included in the FY2018 Budget Justification.

c. PHSA Section 330C provides an annual appropriation of $150 million for this program, this amount was reduced in FY2013, FY2014, and FY2017 by 2% because of budget sequestration. See CRS Report R42050, Budget "Sequestration" and Selected Program Exemptions and Special Rules.

d. The FY2018 budget does not request funds for Tribal Management Grants.

e. Beginning in FY2016, Contract Support Costs were funded as an indefinite discretionary appropriation.

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

IHS Collections

IHS facilities collect reimbursements from third-party payors for services provided to IHS beneficiaries who are also enrolled in other programs. These collections comprise a growing percentage of IHS's clinical services budget (see Table 1). 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 enrolled in 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.

Figure 1. IHS Reimbursements by Source, FY2010-FY2015 (Actual), FY2016-FY2018 (Expected)

Sources: Figure created by CRS. Funding amounts for FY2010-FY2015 and FY2018 are taken from IHS's congressional budget justification documents, available at http://www.hhs.gov/budget/. FY2016 and FY2017 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.

Author Contact Information

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

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 R44470, Interior, Environment, and Related Agencies: FY2017 Appropriations.

8.

For more information, see CRS Report R44691, Labor, Health and Human Services, and Education: FY2017 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/.