A tribal hospital is suing the Indian Health Service in New Mexico federal court for suddenly reducing its funding by $16 million during a pandemic, a decision that has sent shock waves through Indian Country.
Attorneys for the Fort Defiance Indian Hospital Board told Law360 on Monday that the $16 million cut represents the first major funding denial to tribal health services since the D.C. Circuit’s unexpected ruling against the Cook Inlet Tribe last year, which found that IHS was not responsible for the costs of operating an alcohol treatment center under the tribe’s Indian Self-Determination and Education Assistance Act contract.
Lloyd B. Miller of Sonosky Chambers Sachse Endreson & Perry LLP, who represents the Fort Defiance Indian Hospital, said IHS cited the D.C. Circuit decision as the reason for reducing the hospital’s funding by 90% in December, one month after the proposed contract review period was over.
According to the lawsuit filed on Friday, the IHS itself had calculated the hospital’s indirect contract support costs at $18.5 million in October 2021 — less than two weeks before the agency review period was over.
“What’s shocking about the case is the agency was sending in the paperwork to the tribe, saying, … ‘We think it’s going to be 18.5 million,’” and were going back and forth with the tribe over its request for an additional $100,000, Miller said. Then, just before the Nov. 1 deadline to accept or deny the proposed contract renewal, IHS slashed the funding to $1.5 million.
The funding cut endangers health services for some 47,000 Navajo Nation members, according to the complaint, at a time when its current staff “is struggling to stay on top of the current positive COVID 19 patient case load.” Now, the hospital will be forced to eliminate certain low-revenue programs, including those that benefit elders and rural communities, it said.
Miller told Law360 that the agency’s decision to gut support for the Fort Defiance Indian Hospital “has caused reverberations across Indian Country.” Miller has represented tribes in litigation against the Indian Health Service for decades, and in 2005, he won a U.S. Supreme Court ruling that established the government’s responsibility to pay contract support costs under the ISDA.
“There are calls for congressional investigation into this, congressional amendments, [and] there have been calls for the IHS to reverse course to at least stop any further reductions until there’s a lot more study and tribal consultation,” he said.
Fort Defiance argued on Friday that the agency passed the 90-day deadline under the ISDA to accept or deny its proposed contract renewal and that by law, the proposal must be accepted by default. The complaint also states that IHS violated the statute by failing to fund a renewal contract that was “materially indistinguishable” from its prior contract, which was approved by the agency in 2018.
According to the complaint, “IHS was also required to share relevant information with [Fort Defiance Indian Hospital Board] to avoid declination of the proposal and to provide necessary requested technical assistance to avoid the declination,” but never did.
Finally, the hospital asserted that the ISDA prohibits the government from reducing funding in subsequent years. The complaint seeks immediate injunctive relief in an order compelling the IHS to accept and fully fund its proposed contract renewal.
“I think the agency is out of control,” Miller said, “and either the courts or Congress has to bring some sanity back.”
IHS declined to comment on the pending litigation.
Fort Defiance Indian Hospital Board is represented by Lloyd B. Miller and Rebecca A. Patterson of Sonosky Chambers Sachse Miller & Monkman LLP and Steven Boos of the Law Office of Stephen Boos LLC.
Counsel for the government could not be determined.
The case is Fort Defiance Indian Hospital Board Inc. v. Becerra et al., case number 1:22-cv-00098, in U.S. District Court for the District of New Mexico.
–Editing by Steven Edelstone.
Leave a Reply