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Published on October 8th, 2009

Court decision could be worth millions

By ALEX DEMARBAN

Tribal entities across the nation that are seeking millions of dollars from the Indian Health Service got a break recently from a federal appeals court.

The U.S. Court of Appeals for the Federal Circuit ruled on Sept. 29 that a test case including the Arctic Slope Native Association could be considered by a lower court, not thrown out as the Indian Health Service had hoped, said attorney Lloyd Miller of Anchorage.

The test case also included the Metlakatla Indian Community in Southeast Alaska and an Oregon group of tribes known as the Confederated Tribes of Coos, Lower Umpqua and Siujslaw Indians.

Other tribal entities are pinning their hopes on the case, Miller said.

The decision is bittersweet for ASNA, said Marie Carroll, president and CEO of the Barrow-based health organization.

Carroll hoped the appeals court would tell the agency to pay ASNA the $2 million it’s owed, she said.

But now the case returns to the Civilian Board of Contractor Appeals for reconsideration.

“We need to go back and make our case again,” she said.

Like other tribal entities around the nation, the three tribes in the test case contract with the Indian Health Agency to provide medical care.

ASNA runs the Barrow regional hospital, which provides medical services to six communities across the vast North Slope.

Like scores of other tribes, ASNA says it’s owed the money because the agency didn’t pay for certain administrative expenses. ASNA’s unpaid costs in this case were incurred between 1996 and 1998.

Those fixed administrative expenses, known as contract support costs, include such things as federally required audits and workers’ compensation insurance.

Carroll said the Barrow hospital needs the money it’s owed. The hospital is small, so the agency provides a relatively small amount of money. But the people needing medical help have risen sharply, along with health care costs.

“We have a lot of needs,” she said.

The Metlakatla tribe is owed close to $1 million, said their lawyer, Geoffrey Strommer of Portland.

The agency didn’t pay Metlakatla what it owed for several years in the 1990s, said Paul Brendible, a tribal councilman.

“I forgot all about the case until our attorneys called us this week,” he said. “We’re happy and hopeful.”

18 other claims filed

Though the appeals court awarded no money, the decision is a good sign for the test-case plaintiffs and other tribal corporations watching the case, Miller said.

About 18 others have filed claims with the contractor appeals board that are similar to ASNA.

Those claims total about $20 million, Miller said.

Those Alaska tribal entities include Southcentral Foundation in Anchorage, Southeast Regional Health Consortium and Tanana Chiefs Conference, Maniilaq Association in Kotzebue, and the Norton Sound Health Corporation in Nome.

“They’ll be thrilled” because their case is alive again, Miller said.

The decision also is promising for other tribal entities who have sued in other venues around the nation, said Strommer.

The recent court decision is good for the tribal corporations, but the case isn’t won yet, he said.

“The United States could appeal, and there are procedural things that could happen in the next 45 days and I don’t know how that will all play out,” Strommer said.

IHS has underpaid contractors for years, Miller said.

To make up the difference, the corporations hire less staff and reduce medical services.

That means less help for a population battling high rates of diabetes, heart disease, alcoholism and suicide.

Indian Health Service officials did not return phone calls last week.

In the past, agency officials have said they didn’t pay all the contract support costs because Congress didn’t provide the money, according to media reports.

In 2005, the U.S. Supreme Court ruled that the agency must pay contract support costs, Miller said. Miller argued that case, which involved the Cherokee Nation and Shoshone Paiute of Nevada.

In 2007, the Yukon-Kuskokwim Health Corp., providing services to communities in the Bethel region, won a settlement that required the agency to pay YKHC $25 million in unpaid administrative costs, plus interest.

Following the Supreme Court decision, IHS has sought to avoid paying what it owed by raising technical challenges to the many lawsuits, Miller said.

The IHS claimed it didn’t have to pay ASNA for costs incurred during the mid-1990s because it didn’t sue within the six years required by federal law.

ASNA sued late because it expected to become part of a class-action case in another, separate lawsuit filed by a Lower 48 tribe, the Zuni, Miller said. The judge never allowed that case to become a class-action lawsuit.

So ASNA, like the other tribal entities, sued on its own, past the six-year deadline.

Last year, the Civilian Board of Contractor Appeals, which handles federal contract disputes, agreed with the Indian Health Service, saying the case was brought too late.

But ASNA appealed that decision, and it became part of the test case that was appealed.

The federal appeals court said the lower court does have the power to consider the case, said Miller.