§ 1645. — Direct billing of medicare, medicaid, and other third party payors.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 25USC1645]
TITLE 25--INDIANS
CHAPTER 18--INDIAN HEALTH CARE
SUBCHAPTER III-A--ACCESS TO HEALTH SERVICES
Sec. 1645. Direct billing of medicare, medicaid, and other third
party payors
(a) Establishment of direct billing program
(1) In general
The Secretary shall establish a program under which Indian
tribes, tribal organizations, and Alaska Native health organizations
that contract or compact for the operation of a hospital or clinic
of the Service under the Indian Self-Determination and Education
Assistance Act [25 U.S.C. 450 et seq.] may elect to directly bill
for, and receive payment for, health care services provided by such
hospital or clinic for which payment is made under title XVIII of
the Social Security Act (42 U.S.C. 1395 et seq.) (in this section
referred to as the ``medicare program''), under a State plan for
medical assistance approved under title XIX of the Social Security
Act (42 U.S.C. 1396 et seq.) (in this section referred to as the
``medicaid program''), or from any other third party payor.
(2) Application of 100 percent FMAP
The third sentence of section 1905(b) of the Social Security Act
(42 U.S.C. 1396d(b)) shall apply for purposes of reimbursement under
the medicaid program for health care services directly billed under
the program established under this section.
(b) Direct reimbursement
(1) Use of funds
Each hospital or clinic participating in the program described
in subsection (a) of this section shall be reimbursed directly under
the medicare and medicaid programs for services furnished, without
regard to the provisions of section 1880(c) of the Social Security
Act (42 U.S.C. 1395qq(c)) and sections 1642(a) and 1680c(b)(2)(A) of
this title, but all funds so reimbursed shall first be used by the
hospital or clinic for the purpose of making any improvements in the
hospital or clinic that may be necessary to achieve or maintain
compliance with the conditions and requirements applicable generally
to facilities of such type under the medicare or medicaid programs.
Any funds so reimbursed which are in excess of the amount necessary
to achieve or maintain such conditions shall be used--
(A) solely for improving the health resources deficiency
level of the Indian tribe; and
(B) in accordance with the regulations of the Service
applicable to funds provided by the Service under any contract
entered into under the Indian Self-Determination Act (25 U.S.C.
450f et seq.).
(2) Audits
The amounts paid to the hospitals and clinics participating in
the program established under this section shall be subject to all
auditing requirements applicable to programs administered directly
by the Service and to facilities participating in the medicare and
medicaid programs.
(3) Secretarial oversight
The Secretary shall monitor the performance of hospitals and
clinics participating in the program established under this section,
and shall require such hospitals and clinics to submit reports on
the program to the Secretary on an annual basis.
(4) No payments from special funds
Notwithstanding section 1880(c) of the Social Security Act (42
U.S.C. 1395qq(c)) or section 1642(a) of this title, no payment may
be made out of the special funds described in such sections for the
benefit of any hospital or clinic during the period that the
hospital or clinic participates in the program established under
this section.
(c) Requirements for participation
(1) Application
Except as provided in paragraph (2)(B), in order to be eligible
for participation in the program established under this section, an
Indian tribe, tribal organization, or Alaska Native health
organization shall submit an application to the Secretary that
establishes to the satisfaction of the Secretary that--
(A) the Indian tribe, tribal organization, or Alaska Native
health organization contracts or compacts for the operation of a
facility of the Service;
(B) the facility is eligible to participate in the medicare
or medicaid programs under section 1880 or 1911 of the Social
Security Act (42 U.S.C. 1395qq; 1396j);
(C) the facility meets the requirements that apply to
programs operated directly by the Service; and
(D) the facility--
(i) is accredited by an accrediting body as eligible for
reimbursement under the medicare or medicaid programs; or
(ii) has submitted a plan, which has been approved by
the Secretary, for achieving such accreditation.
(2) Approval
(A) In general
The Secretary shall review and approve a qualified
application not later than 90 days after the date the
application is submitted to the Secretary unless the Secretary
determines that any of the criteria set forth in paragraph (1)
are not met.
(B) Grandfather of demonstration program participants
Any participant in the demonstration program authorized
under this section as in effect on the day before November 1,
2000, shall be deemed approved for participation in the program
established under this section and shall not be required to
submit an application in order to participate in the program.
(C) Duration
An approval by the Secretary of a qualified application
under subparagraph (A), or a deemed approval of a demonstration
program under subparagraph (B), shall continue in effect as long
as the approved applicant or the deemed approved demonstration
program meets the requirements of this section.
(d) Examination and implementation of changes
(1) In general
The Secretary, acting through the Service, and with the
assistance of the Administrator of the Health Care Financing
Administration, shall examine on an ongoing basis and implement--
(A) any administrative changes that may be necessary to
facilitate direct billing and reimbursement under the program
established under this section, including any agreements with
States that may be necessary to provide for direct billing under
the medicaid program; and
(B) any changes that may be necessary to enable participants
in the program established under this section to provide to the
Service medical records information on patients served under the
program that is consistent with the medical records information
system of the Service.
(2) Accounting information
The accounting information that a participant in the program
established under this section shall be required to report shall be
the same as the information required to be reported by participants
in the demonstration program authorized under this section as in
effect on the day before November 1, 2000. The Secretary may from
time to time, after consultation with the program participants,
change the accounting information submission requirements.
(e) Withdrawal from program
A participant in the program established under this section may
withdraw from participation in the same manner and under the same
conditions that a tribe or tribal organization may retrocede a
contracted program to the Secretary under authority of the Indian Self-
Determination Act [25 U.S.C. 450f et seq.]. All cost accounting and
billing authority under the program established under this section shall
be returned to the Secretary upon the Secretary's acceptance of the
withdrawal of participation in this program.
(Pub. L. 94-437, title IV, Sec. 405, as added Pub. L. 100-713, title IV,
Sec. 402, Nov. 23, 1988, 102 Stat. 4818; amended Pub. L. 102-573, title
IV, Sec. 404, title VII, Sec. 701(c)(3), Oct. 29, 1992, 106 Stat. 4566,
4572; Pub. L. 104-313, Sec. 2(d), Oct. 19, 1996, 110 Stat. 3822; Pub. L.
105-277, div. A, Sec. 101(e) [title III, Sec. 336], Oct. 21, 1998, 112
Stat. 2681-231, 2681-295; Pub. L. 105-362, title VI, Sec. 601(a)(2)(B),
Nov. 10, 1998, 112 Stat. 3285; Pub. L. 106-417, Secs. 3(a), 4, Nov. 1,
2000, 114 Stat. 1813, 1816.)
References in Text
The Indian Self-Determination and Education Assistance Act, referred
to in subsec. (a)(1), is Pub. L. 93-638, Jan. 4, 1975, 88 Stat. 2203, as
amended, which is classified principally to subchapter II (Sec. 450 et
seq.) of chapter 14 of this title. For complete classification of this
Act to the Code, see Short Title note set out under section 450 of this
title and Tables.
The Social Security Act, referred to in subsec. (a)(1), is act Aug.
14, 1935, ch. 531, 49 Stat. 620, as amended. Titles XVIII and XIX of the
Act are classified generally to subchapters XVIII (Sec. 1395 et seq.)
and XIX (Sec. 1396 et seq.) of chapter 7 of Title 42, The Public Health
and Welfare. For complete classification of this Act to the Code, see
section 1305 of Title 42 and Tables.
The Indian Self-Determination Act, referred to in subsecs. (b)(1)(B)
and (e), is title I of Pub. L. 93-638, Jan. 4, 1975, 88 Stat. 2206, as
amended, which is classified principally to part A (Sec. 450f et seq.)
of subchapter II of chapter 14 of this title. For complete
classification of this Act to the Code, see Short Title note set out
under section 450 of this title and Tables.
Codification
November 1, 2000, referred to in subsecs. (c)(2)(B) and (d)(2), was
in the original ``the date of enactment of the Alaska Native and
American Indian Direct Reimbursement Act of 1999'', which was translated
as meaning the date of enactment of Pub. L. 106-417, the Alaska Native
and American Indian Direct Reimbursement Act of 2000, to reflect the
probable intent of Congress.
Section was formerly set out as a note under section 1395qq of Title
42, The Public Health and Welfare.
Amendments
2000--Pub. L. 106-417, Sec. 4(a), reenacted section as in effect on
Nov. 9, 1998. For text of section as reenacted, see 1998 Amendment note
below.
Pub. L. 106-417, Sec. 3(a), amended section generally. For text of
section prior to amendment, see subsecs. (a) to (d) of section as set
out in 1998 Amendment note below.
Subsec. (e). Pub. L. 106-417, Sec. 4(b), struck out subsec. (e). For
text of subsec. (e) prior to amendment, see subsec. (e) of section as
set out in 1998 Amendment note below.
1998--Pub. L. 105-362 repealed section. Prior to repeal, section
read as follows:
``Sec. 1645. Demonstration program for direct billing of medicare,
medicaid, and other third party payors
``(a) The Secretary shall establish a demonstration program under
which Indian tribes, tribal organizations, and Alaska Native health
organizations, which are contracting the entire operation of an entire
hospital or clinic of the Service under the authority of the Indian
Self-Determination Act, shall directly bill for, and receive payment
for, health care services provided by such hospital or clinic for which
payment is made under title XVIII of the Social Security Act (medicare),
under a State plan for medical assistance approved under title XIX of
the Social Security Act (medicaid), or from any other third-party payor.
The last sentence of section 1905(b) of the Social Security Act shall
apply for purposes of the demonstration program.
``(b)(1) Each hospital or clinic participating in the demonstration
program described in subsection (a) of this section shall be reimbursed
directly under the medicare and medicaid programs for services
furnished, without regard to the provisions of section 1880(c) of the
Social Security Act and sections 1642(a) and 1680c(b)(2)(A) of this
title, but all funds so reimbursed shall first be used by the hospital
or clinic for the purpose of making any improvements in the hospital or
clinic that may be necessary to achieve or maintain compliance with the
conditions and requirements applicable generally to facilities of such
type under the medicare or medicaid program. Any funds so reimbursed
which are in excess of the amount necessary to achieve or maintain such
conditions or requirements shall be used--
``(A) solely for improving the health resources deficiency level
of the Indian tribe, and
``(B) in accordance with the regulations of the Service
applicable to funds provided by the Service under any contract
entered into under the Indian Self-Determination Act.
``(2) The amounts paid to the hospitals and clinics participating in
the demonstration program described in subsection (a) of this section
shall be subject to all auditing requirements applicable to programs
administered directly by the Service and to facilities participating in
the medicare and medicaid programs.
``(3) The Secretary shall monitor the performance of hospitals and
clinics participating in the demonstration program described in
subsection (a) of this section, and shall require such hospitals and
clinics to submit reports on the program to the Secretary on a quarterly
basis (or more frequently if the Secretary deems it to be necessary).
``(4) Notwithstanding section 1880(c) of the Social Security Act or
section 1642(a) of this title, no payment may be made out of the special
fund described in section 1880(c) of the Social Security Act, or section
1642(a) of this title, for the benefit of any hospital or clinic
participating in the demonstration program described in subsection (a)
of this section during the period of such participation.
``(c)(1) In order to be considered for participation in the
demonstration program described in subsection (a) of this section, a
hospital or clinic must submit an application to the Secretary which
establishes to the satisfaction of the Secretary that--
``(A) the Indian tribe, tribal organization, or Alaska Native
health organization contracts the entire operation of the Service
facility;
``(B) the facility is eligible to participate in the medicare
and medicaid programs under sections 1880 and 1911 of the Social
Security Act;
``(C) the facility meets any requirements which apply to
programs operated directly by the Service; and
``(D) the facility is accredited by the Joint Commission on
Accreditation of Hospitals, or has submitted a plan, which has been
approved by the Secretary, for achieving such accreditation prior to
October 1, 1990.
``(2) From among the qualified applicants, the Secretary shall,
prior to October 1, 1989, select no more than 4 facilities to
participate in the demonstration program described in subsection (a) of
this section. The demonstration program described in subsection (a) of
this section shall begin by no later than October 1, 1991, and end on
September 30, 2000.
``(d)(1) On November 23, 1988, the Secretary, acting through the
Service, shall commence an examination of--
``(A) any administrative changes which may be necessary to allow
direct billing and reimbursement under the demonstration program
described in subsection (a) of this section, including any
agreements with States which may be necessary to provide for such
direct billing under the medicaid program; and
``(B) any changes which may be necessary to enable participants
in such demonstration program to provide to the Service medical
records information on patients served under such demonstration
program which is consistent with the medical records information
system of the Service.
``(2) Prior to the commencement of the demonstration program
described in subsection (a) of this section, the Secretary shall
implement all changes required as a result of the examinations conducted
under paragraph (1).
``(3) Prior to October 1, 1990, the Secretary shall determine any
accounting information which a participant in the demonstration program
described in subsection (a) of this section would be required to report.
``(e) The Secretary shall submit a final report at the end of fiscal
year 1996, on the activities carried out under the demonstration program
described in subsection (a) of this section which shall include an
evaluation of whether such activities have fulfilled the objectives of
such program. In such report the Secretary shall provide a
recommendation, based upon the results of such demonstration program, as
to whether direct billing of, and reimbursement by, the medicare and
medicaid programs and other third-party payors should be authorized for
all Indian tribes and Alaska Native health organizations which are
contracting the entire operation of a facility of the Service.
``(f) The Secretary shall provide for the retrocession of any
contract entered into between a participant in the demonstration program
described in subsection (a) of this section and the Service under the
authority of the Indian Self-Determination Act. All cost accounting and
billing authority shall be retroceded to the Secretary upon the
Secretary's acceptance of a retroceded contract.''
Subsec. (c)(2). Pub. L. 105-277 substituted ``2000'' for ``1998''.
1996--Subsec. (c)(2). Pub. L. 104-313 substituted ``1998'' for
``1996''.
1992--Subsec. (b)(1). Pub. L. 102-573, Sec. 701(c)(3)(A),
substituted ``sections 1642(a)'' for ``sections 402(c)'' and made
technical amendment to reference to section 1680c(b)(2)(A) to reflect
renumbering of corresponding section of original act.
Subsec. (b)(4). Pub. L. 102-573, Sec. 701(c)(3)(B), substituted
``section 1642(a)'' for ``section 402(c)'' in two places.
Subsec. (c)(2). Pub. L. 102-573, Sec. 404(1), substituted ``1996''
for ``1995''.
Subsec. (e). Pub. L. 102-573, Sec. 404(2), substituted ``1996'' for
``1995''.
Effective Date of 2000 Amendment
Pub. L. 106-417, Sec. 3(c), Nov. 1, 2000, 114 Stat. 1816, provided
that: ``The amendments made by this section [amending this section and
sections 1395qq and 1396j of Title 42, The Public Health and Welfare]
shall take effect on October 1, 2000.''
Pub. L. 106-417, Sec. 4(a), Nov. 1, 2000, 114 Stat. 1816, provided
that the reenactment of this section by section 4(a) is effective Nov.
9, 1998.
Pub. L. 106-417, Sec. 4(b), Nov. 1, 2000, 114 Stat. 1816, provided
that the amendment made by section 4(b) is effective Nov. 10, 1998.
Findings
Pub. L. 106-417, Sec. 2, Nov. 1, 2000, 114 Stat. 1812, provided
that: ``Congress finds the following:
``(1) In 1988, Congress enacted section 405 of the Indian Health
Care Improvement Act (25 U.S.C. 1645) that established a
demonstration program to authorize 4 tribally-operated Indian Health
Service hospitals or clinics to test methods for direct billing and
receipt of payment for health services provided to patients eligible
for reimbursement under the medicare or medicaid programs under
titles XVIII and XIX of the Social Security Act (42 U.S.C. 1395 et
seq.; 1396 et seq.), and other third party payors.
``(2) The 4 participants selected by the Indian Health Service
for the demonstration program began the direct billing and
collection program in fiscal year 1989 and unanimously expressed
success and satisfaction with the program. Benefits of the program
include dramatically increased collections for services provided
under the medicare and medicaid programs, a significant reduction in
the turn-around time between billing and receipt of payments for
services provided to eligible patients, and increased efficiency of
participants being able to track their own billings and collections.
``(3) The success of the demonstration program confirms that the
direct involvement of tribes and tribal organizations in the direct
billing of, and collection of payments from, the medicare and
medicaid programs, and other third party payor reimbursements, is
more beneficial to Indian tribes than the current system of Indian
Health Service-managed collections.
``(4) Allowing tribes and tribal organizations to directly
manage their medicare and medicaid billings and collections, rather
than channeling all activities through the Indian Health Service,
will enable the Indian Health Service to reduce its administrative
costs, is consistent with the provisions of the Indian Self-
Determination Act [25 U.S.C. 450f et seq.], and furthers the
commitment of the Secretary to enable tribes and tribal
organizations to manage and operate their health care programs.
``(5) The demonstration program was originally to expire on
September 30, 1996, but was extended by Congress, so that the
current participants would not experience an interruption in the
program while Congress awaited a recommendation from the Secretary
of Health and Human Services on whether to make the program
permanent.
``(6) It would be beneficial to the Indian Health Service and to
Indian tribes, tribal organizations, and Alaska Native organizations
to provide permanent status to the demonstration program and to
extend participation in the program to other Indian tribes, tribal
organizations, and Alaska Native health organizations who operate a
facility of the Indian Health Service.''
Section Referred to in Other Sections
This section is referred to in title 42 sections 1395qq, 1396j.
