SCOTUS ruling a win for tribes

Posted on: 6/7/24

In a 5-4 ruling written by Chief Justice Roberts, the U.S. Supreme Court said on Thursday that tribes can recoup certain administrative expenses associated with running their own healthcare programs. This ruling impacts those tribes that enter into “self-determination” contracts with the Indian Health Service to assume responsibility for administering the healthcare programs that IHS would otherwise operate for the tribe.  

The San Carlos Apache Tribe and the Northern Arapaho Tribe both sued the federal government for breach of contract, contending that although they used the Secretarial amount and program income to operate the healthcare programs they assumed from IHS under their self-determination contracts. IHS failed to pay the contract support costs they incurred by providing healthcare services using program income. 

All parties agreed that the government must reimburse tribal-run programs for at least some administrative costs because tribes incur overhead and administrative expenses that the government does not incur. Such a reimbursement is necessary to prevent a funding gap between tribes and IHS. In addition, tribes can collect funds due from third parties, such as Medicare, Medicaid and private insurers to help finance the programs. However, the issue in front of the court was whether the Indian Self-Determination and Education Assistance Act required IHS to pay contract support costs to support tribal programs funded by such third-party payments. 

The Supreme Court held that under the ISDA, IHS is required to pay the contract support costs that a tribe incurs when it collects and spends program income to further the functions, services, activities, and programs transferred to it from IHS in a self-determination contract. The Court said that “if IHS did not cover these costs to support a tribe’s expenditure of program income, the tribe would have to divert some program income to pay such costs, or it would have to pay them out of its own pocket. Either way, it would face a penalty for pursing self-determination, contrary to the policy underlying ISDA.” Becerra v. San Carlos Apache Tribe (23-250). (Maggie Martin)