Fort McDermitt Paiute and Shoshone Tribe v. Xavier Becerra

6 F.4th 6
Court of Appeals for the D.C. Circuit·Decided July 23, 2021·No. 19-5336·Published·Cited by 7 cases

Opinion

United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 16, 2020 Decided July 23, 2021

No. 19-5336

FORT MCDERMITT PAIUTE AND SHOSHONE TRIBE, APPELLEE

v.

XAVIER BECERRA, SECRETARY OF HEALTH & HUMAN SERVICES, ET AL., APPELLANTS

Appeal from the United States District Court for the District of Columbia (No. 1:17-cv-00837)

Joshua Dos Santos, Attorney, U.S. Department of Justice, argued the cause for appellants. With him on the briefs were Ethan P. Davis, Acting Assistant Attorney General when the briefs were filed, and Daniel Tenny, Attorney.

Rebecca A. Patterson argued the cause for appellee. With her on the brief were Colin C. Hampson and Whitney A. Leonard.

Before: TATEL, MILLETT and KATSAS, Circuit Judges.

Opinion for the Court filed by Circuit Judge KATSAS.

KATSAS, Circuit Judge: The Fort McDermitt Paiute and Shoshone Tribe assumed sole control of a medical clinic that the Indian Health Service previously had operated to benefit two different tribes. In determining the clinic’s funding, the agency withheld the amount that it had budgeted as benefitting members of the second tribe. The agency also withheld an amount equal to the Medicare and Medicaid reimbursements received from operating the clinic. We hold that the Indian Self-Determination and Education Assistance Act permits the second withholding but not the first.

I

A

The Indian Health Service (IHS), a federal agency within the Department of Health and Human Services, “provide[s] health care services to Indians and Indian tribes.” 25 U.S.C. § 1661(a)(1). Congress funds the agency through lump-sum appropriations that grant it considerable discretion “in the proper ordering of its priorities.” Lincoln v. Vigil, 508 U.S. 182, 193 (1993); see 25 U.S.C. §§ 13, 1621. The agency uses its funding to administer hospitals and other health programs that provide care to tribal members. Id. § 1661(c)(2), (3).

The Indian Self-Determination and Education Assistance Act of 1975 (ISDA) allows Indian tribes to assume control of the health programs that IHS operates on their behalf. Title I of the statute allows tribes to assume control of specific programs by entering self-determination contracts with the federal government. See 25 U.S.C. § 5321(a). Title V allows tribes to enter self-governance compacts, which can cover a wider range of programs on a more permanent basis. See id. §§ 5384, 5385(b)(2); 1 Cohen’s Handbook of Federal Indian

Law § 22.02 (2019) (compacts provide “significant additional flexibility in program administration”).

To form a self-governance compact, a tribe must agree to both a compact and a funding agreement with IHS. 25 U.S.C. §§ 5384(a), 5385(a). The compact must “set forth the general terms of the government-to-government relationship” between the parties. Id. § 5384(b). The funding agreement must identify both the programs that the tribe will administer, id. § 5385(d)(1), and the funding that IHS will provide, id. § 5385(d)(2)(B).

Subject to the availability of appropriations, tribes participating in self-governance are entitled to IHS funding for both “direct program costs” and “contract support costs.” 25 U.S.C. § 5388(c). This appeal concerns only direct program costs, which courts have also called the “secretarial amount.” See Salazar v. Ramah Navajo Chapter, 567 U.S. 182, 186 (2012). Under ISDA, the secretarial amount must not be less than what IHS “would have otherwise provided for the operation of the programs or portions thereof” but for the self- governance compact. 25 U.S.C. § 5325(a)(1).

When IHS and a tribe cannot agree on funding, the tribe may submit a final offer to the agency. 25 U.S.C. § 5387(b). IHS then has forty-five days to approve or reject the offer. Id. If IHS does not timely reject an offer, “in whole or in part,” ISDA deems the agency to have accepted it. Id. Upon a partial rejection, IHS must give the tribe “the option of entering into the severable portions of a final proposed compact or funding agreement … that [IHS] did not reject.” Id. § 5387(c)(1)(D). If IHS rejects a proposed funding amount as too high, the tribe must be allowed to proceed with a “lesser funding amount.” Id.

In addition to the secretarial amount and contract support costs, Indian health programs may receive income from third

parties, including reimbursements from Medicare and Medicaid for treating their beneficiaries. 42 U.S.C. §§ 1395qq(a), 1396j(a). When IHS operates a health care program, it bills and receives reimbursements from Medicare and Medicaid. See id. IHS must place the reimbursements “in a special fund” and use them only as authorized by the Indian Health Care Improvement Act (IHCIA). 25 U.S.C. § 1641(c)(1)(A), (B). When a tribe operates a health care program through a self-governance compact, it may elect to bill for and receive those reimbursements directly. Id. §§ 1603(25), 1641(d)(1).

B

The Fort McDermitt Paiute and Shoshone Tribe is a federally recognized Indian tribe with a reservation in parts of Nevada and Oregon. Prior to the events in this case, IHS provided health care to the tribe through a clinic in McDermitt, Nevada, and an accompanying emergency medical services (EMS) program. Most of the clinic’s patients are members of the Fort McDermitt tribe or their beneficiaries. Nonetheless, federal law entitles members of other tribes also to receive care at the clinic. 42 C.F.R. § 136.12(a).

In 2016, the Fort McDermitt notified IHS of their intent to assume responsibility for the clinic and a portion of the EMS program. Upon qualifying for self-governance, the tribe submitted to IHS a draft compact and funding agreement. The parties reached an impasse on several issues, including the clinic’s secretarial funding. In its final offer to the agency, the tribe requested about $603,000 annually to provide medical care at the clinic. IHS rejected that amount and awarded only about $53,000.

The numbers diverged for two reasons. First, the parties disputed whether the Fort McDermitt were entitled to all the

funds that IHS previously had spent on the clinic or whether the agency could withhold the portion of funds that it previously had allocated to benefit members of another tribe. As a general matter, IHS allocates funding among health care programs according to the number of eligible users who live in the area assigned to each tribe. See Indian Health Service, Special General Memorandum 95-02 (Apr. 19, 1995). Applying that standard, IHS funded the clinic to benefit both the Fort McDermitt and the nearby Winnemucca Tribe. In determining the secretarial amount, IHS took the position that it could not include what it described as the Winnemucca’s “tribal share” of clinic funding without that tribe’s consent.1 The Fort McDermitt responded that they were entitled to all of the clinic’s funding because they would be assuming responsibility for all of its operations.

Second, the parties disputed the treatment of third-party income. Before the Fort McDermitt assumed control of the clinic, IHS collected Medicare and Medicaid payments on the tribe’s behalf for treatment that the clinic provided to Medicare and Medicaid beneficiaries. In its final offer, the tribe sought to include the value of those payments in the secretarial amount, even though the tribe now collects the payments from Medicare and Medicaid directly. IHS denied the request.

After IHS refused to fund the clinic at the level requested, the Fort McDermitt entered into the severable portions of its proposed compact and funding agreement. Because the Fort McDermitt had asked to take over the entire clinic, and because IHS did not reject that request, the tribe assumed full control of

1 When IHS and the Fort McDermitt discussed the final offer, the Winnemucca lacked a recognized governing body and thus could not provide consent. Although the tribe now has such a body, it has taken no position in this litigation.

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