Establishment of a Federal Medical Assistance Percentage of 100 for Urban Indian Organizations (UIOs)

UIOs are part of IHS: The Indian Health Service (IHS) is the federal agency with primary responsibility for the provision of health care to American Indian/Alaska Native (AI/AN) people.  IHS consists of three parts: facilities through which IHS provides services directly, Tribally-run facilities, and UIOs.

What UIOs are: UIOs were established in 1976 in order to provide high-quality, culturally-competent health care to urban Indians, the term used to described the almost 70% of AI/AN people who live off of reservations.  Today, there are more than 40 UIOs.

Federal government has same obligation to all AI/AN people: All three branches have acknowledged that the federal government’s Trust Responsibility to provide health care to AI/AN people follows them off of reservations and into urban areas.

IHS bills Medicaid: Medicaid is a vital health care program for AI/AN people.  Congress authorized all three parts of IHS to bill Medicaid for services provided to eligible AI/AN people in order to supplement chronic underfunding of IHS and thus better fulfill the Trust Responsibility.

Federal government pays 100% of costs of Medicaid for AI/AN people: In recognition that it would be unfair to states to burden their Medicaid programs with costs for services to eligible AI/AN people that would have been borne by IHS, Congress provided that states would be reimbursed by the federal government at a Federal Medical Assistance Percentage (FMAP) of 100.

UIOs aren’t included in 100% FMAP: However, UIOs were not explicitly mentioned in the law (42 U.S.C. 1396d), and the Centers for Medicare and Medicaid Services claims it lacks the discretion to authorize 100% FMAP for UIOs.

IHS has urged Congress to explicitly provide 100% FMAP for UIOs: It “will help both the state and the UIO access more federal dollars to support health care…The higher rates of payment could support the expansion of UIO service offerings and improve beneficiary care.”  IHS says that would cost $2.3M annually, and the Office of Management and Budget estimates the cost at $80M over ten years.  The Congressional Budget Office (CBO) has said that it would cost $300M over ten years, although some believe that this guesstimate is excessive.

100% FMAP for non-IHS providers?:  More recently, there has been an effort to expand 100% FMAP to all providers of Medicaid services to eligible AI/AN people, whether or not part of IHS, which has been costed by CBO at $3.5B.  Tribes strongly support expansion of 100% FMAP to UIOs but just as strongly oppose 100% FMAP for non-IHS providers because it would undermine efforts to induce states to reinvest savings from FMAP back into the Indian health care service.

NCUIH’s position: Just about everyone—including Republicans, Democrats, Tribal leaders, and UIOs–accepts that it makes no sense to exclude UIOs from 100% FMAP, especially given that they receive just 1% of the IHS budget and deserve additional Medicaid revenue to provide more and even better services to urban Indians.