reports

Analysis of Medicaid payments for American Indians and Alaska Natives

Baltimore, MD, USA: CMS Tribal Affairs Group..

CMS Tribal Affairs Group, Baltimore, MD, USA

The Indian Health Service (IHS) is a discretionary federal program that provides only part of the health care needed by the American Indians and Alaska Natives (AIAN) who use the IHS and Tribal health care facilities of the IHS system. The facilities serve remote rural areas, often as the only local provider and at higher per capita operating costs than experienced by larger providers in less remote areas. When more costly specialized or hospital care is needed, the care must be paid through contracts with providers (Contract Health Services) if funds allow, or the AIAN must find and pay non-IHS providers for the care they need. Because of the limited budget appropriated to the IHS, the IHS estimates that it provides only about 54% of the per capita costs of health care needed by AIAN they serve. In 1976 Congress authorized providers of the IHS system to bill Medicaid and other federal entitlement programs for users of their facilities who were eligible for the programs. Children’s Health Insurance Program (CHIP) payments to the facilities were authorized when program benefits first became available in 1997.
The IHS estimates that 25% of the total per capita costs of health care needed by AIAN Active Users is paid by alternate resources including Medicaid, Medicare, CHIP and private insurance. The AIAN survey data on which this calculation is based is now more than 20 years old. Yet this fraction of 25% is used by IHS in calculation of allocations of any new federal funds they receive to IHS system providers to reduce any gap in uncovered health care costs. Furthermore the fraction is fixed at 25% regardless of the IHS or Tribal facility, or the IHS service delivery Area in which they are located. To understand how the IHS methods designed to improve equity of health care funding across IHS Areas are actually performing, there is a need to determine how much revenue third-parties are paying to all providers for health care of AIAN Active Users, and to determine how those amounts vary across the IHS Areas, if not across all IHS and Tribal facilities.
The largest alternate resource to the IHS for AIAN Active Users is Medicaid. Medicaid pays for care received not only through the IHS and Tribal health care facilities, but also from any other Medicaid provider. Medicaid has grown to provide a substantial but largely unknown fraction of the health care coverage for AIAN who use the IHS system. While the ‘Medicaid fraction’ is clearly the largest part of the 25% fraction of alternate resources used by IHS in its allocation of new funds, it is not known what the Medicaid fraction is for AIAN who use IHS and Tribal facilities nor how much it varies across IHS Areas.
The main goal of this report is to determine how Medicaid payments (including Medicaid-CHIP payments) for personal health care services of AIAN who use the IHS system of health care providers (IHS AIAN) vary across the 12 Areas of the IHS. These Medicaid payments include the total per capita payments for Medicaid claims per Medicaid recipient regardless of the Medicaid provider paid. Providers to IHS AIAN include not only IHS and Tribal facilities, and the providers that they contract with to provide services, but also any other Medicaid provider that IHS AIAN use. In the report we compare Medicaid payments across the IHS Areas in two ways:
     First we compare the average payment per IHS AIAN Medicaid recipient per year for all the IHS Areas after performing statistical adjustments of the payment for a number of factors that differ among the IHS Areas that are known to affect health care spending;
     Second we compare the ‘Medicaid fraction’ of the total health care costs for the ‘IHS Active Users’ in all Areas using the unadjusted average payment per IHS Active User Medicaid recipient, and applying the adjustments used in the IHS methodology in its determinations of unmet health care needs for its Health Care Improvement Fund allocations.
     A third set of findings emerged in pursuit of the first and second comparisons that was key to the main goal of the report. We found a group of “IHS Active Users” enrolled in Medicaid for whom payment were exceptionally low, even after adjustments. These IHS Active Users were Medicaid recipients who had no IHS Program claims. Since these Medicaid recipients might have lower payments because IHS and Tribal facilities were not collecting all the Medicaid payments they were entitled to, we investigated how much lower the average payment was for these Medicaid recipients for all the IHS Areas after applying the same statistical adjustments used for the first comparison we reported.
To be sure to include any “IHS Active Users” not identified in Medicaid data extracted from the Medicaid Statistical Information System (MAX) for 2006, we used Medicaid data that had been linked with 2006 IHS Active User data identified by the registry in the IHS National Data Warehouse (NDW). The linkage and its findings were described in a previous report. The linkage identified 550,000 AIAN Medicaid and Medicaid-CHIP enrollees who were users of the IHS system of health care providers. Of those IHS AIAN, nearly half a million (496,000) were recipients of Medicaid paid services during the year, 472,000 had Medicaid paid services from IHS and Tribal health care facilities for care they provided themselves directly or through Contract Health Services.
Medicaid payments for personal health care services during 2006 for AIAN Medicaid and Medicaid-CHIP enrollees who were users of the IHS system of health care providers (IHS AIAN) are found to be $ 2.05 billion. This includes payments to all Medicaid providers for medical, behavioral and dental services. Amounts paid by payers other than Medicaid to cover claims filed with Medicaid (mainly private insurance) are much lower, $15 million, but they are included in the payments analyzed in this report because they play an important role in the Nashville Area. In a prior report we found that excluding these third-party payments for Medicaid claims inappropriately lowers IHS AIAN payments per Medicaid recipient in the Nashville Area by a third. We describe here the analyses and findings for the three objectives outlined above: