“Must I remind the Obama administration that self-determination contracts are the core of our nation’s federal trust relationship with Indian tribes?”

Murkowski: Administration Shirking Indian Health Cost Reimbursement

Rob Capriccioso
May 16, 2013


One of the leading senators focused on Indian affairs says the Obama administration is shirking its responsibility to reimburse Indian tribes for contract support costs they incur to improve the health and welfare of American Indian citizens.

Sen. Lisa Murkowski (R-Alaska) is telling tribal leaders the Obama administration is ignoring the tribal-friendly 2012 Supreme Court decision, Salazar v. Ramah Navajo Chapter. The high court ruled that the federal government must pay not only for self-determination programs run fully by tribes—including health clinics, hospitals and safety programs—but also for any services tribes contract out to assist in running such programs. The ruling was widely seen as a major victory for tribes, which have been arguing for decades that treaties require federal payment of all tribal health and welfare costs. (Related story: Supreme Court: Government Must Pay Tribal Contract Support Costs)

The Indian Self Determination and Education Assistance Act (ISDEA) of 1975 also says the federal government must cover those costs, but both the Bureau of Indian Affairs (BIA) and Indian Health Service (IHS) have often ignored this requirement, much to the chagrin of tribes and some members of Congress. The National Congress of American Indians notes in a fact sheet that tribal leaders have repeatedly complained about this issue, with some arguing that they are forced to foot millions of dollars in bills for such services.

Congress attempted to remedy the problem in 1988, calling for the BIA and IHS to pay all fixed contract support costs associated with the administration of programs run by tribes, but federal agencies have continued to skirt the law—a trend that seems to be persisting in a new way under the Obama administration, according to Murkowski and some experts on Indian affairs.

The senator says the Ramah decision should have been a rallying cry for the administration to make sure all agencies were paying the contract support costs due to tribes. Instead, she says, President Barack Obama’s recent 2014 budget request and a proposed policy change suggest this is not the goal.

Murkowski went on the record about the problem in a recent hearing of the Senate Committee on Indian Affairs on April 25. “Must I remind the Obama administration that self-determination contracts are the core of our nation’s federal trust relationship with Indian tribes?” she said. “Rather than delivering justice to tribes in the adequate payment of contract support costs for the operation of Indian programs, the administration has decided to forgo justice, and hand the issue over to Congress to address in the appropriations process—a decision that dramatically alters the federal Indian Self-Determination Statute without consultation of the tribes, nor this authorizing committee.”

Lloyd Miller, an Indian affairs lawyer with Sonosky Chambers involved in several tribal contract support disputes with the federal government, shed some light on the budget request and on the proposed policy change that concerns Murkowski. He testified in that same hearing that the Obama administration “has not embraced the rule of law—it has instead sought to change it.”

Miller told the Senate the administration is proposing that the BIA and IHS—not Congress—will specify how much each tribe will be paid for contract support costs, and the agencies would do so only after the contract support cost appropriation is enacted, and after the agencies have made an assessment about how they wish to divide up that appropriation. “They would do all this long after the tribes had signed their contracts, long after the tribes had substantially performed those contracts, and long after the tribes had incurred costs carrying out those contracts,” Miller testified. “In essence, the administration proposes that a tribe should contract to run a hospital, clinic or detention center for a full year, but that if any shortfall occurs in the required administrative costs—costs that the government, itself, set in the first place—then the tribe must somehow contribute the unpaid balance.”

Miller said this policy shift would be compounded by the president’s 2014 budget request, which falls $140 million short of what is required to honor all tribal contracts with the IHS, and $12 million short of what is required to honor all BIA contracts.

He added that the administration’s policy is a continuation of a “head-in-the-sand” attitude by the federal government regarding its contract obligations to tribes. “They have acted as if these contracts were just another program to be balanced against other programs or activities the agencies felt were important to prioritize, including protecting and growing their internal bureaucracies. They have treated these self-determination contracts as second-class contracts, and the Indian tribes as second-class contractors. They would never behave in this fashion if an IHS hospital were contracted out to Sisters of Providence, or a BIA detention center were contracted out to the Corrections Corporation of America. Yet they find it perfectly acceptable to do so when the contract is with an Indian tribe.” 

A group of tribes and Indian leaders known as the National Tribal Contract Support Cost Coalition is also making the case that the administration’s plan for Indian contracts may be unconstitutional under the Fifth Amendment, as well as illegal under the Appropriations Clause of the Constitution, because the proposed policy changes tells the tribes they must do their contracted work and must accept less-than-full payment. The group has asked the administration to withdraw its proposal, and Indian affairs leaders are urging the Senate Committee on Indian Affairs, the House Subcommittee on Indian and Alaska Native Affairs and the Senate Appropriations Committee to reject the administration’s effort to alter both the annual appropriations bill and the fundamental nature of Indian Self-Determination Act contracts. 

“If a sea-change in federal Indian policy is to be considered by Congress… due deliberation should begin with this committee,” Miller testified. “Such changes should not be worked through stealth amendments made to appropriations laws.”