The Alaska Native Tribal Health Consortium (ANTHC), a leading force in delivering comprehensive healthcare services to Alaska Native and American Indian people throughout Alaska, announced a significant milestone on June 27, 2014: a landmark settlement agreement with the U.S. Indian Health Service (IHS). This resolution marked the culmination of years of persistent negotiation and addressed the long-standing issue of overdue contract support costs, impacting the provision of essential health services to a vast and geographically dispersed population. The settlement underscored the importance of honoring contractual obligations and ensuring the financial stability of Tribal health organizations dedicated to serving underserved communities.
The agreement specifically resolved the non-payment of contract support costs spanning a period of 14 years. These costs, legally and contractually obligated by the IHS, represented vital financial resources necessary for the effective operation of healthcare programs serving over 143,000 Alaska Native and American Indian individuals residing within the state. The underpayment of these costs had historically placed a significant strain on the ANTHC’s resources, diverting funds intended for direct patient care and other essential services. The Alaska Native Tribal Health Consortium has long advocated for the fair compensation necessary to uphold its commitment to the health and well-being of the communities it serves.
The terms of the settlement involved a one-time payment of $153 million from the federal government to the ANTHC. This amount comprised $115.5 million, representing the outstanding contract support costs, combined with an additional $37.5 million in accrued interest. This landmark figure not only addressed the financial shortfall but also recognized the significant economic impact of the delayed payments over the years. The size of the settlement was particularly noteworthy, establishing it as the largest contract support cost settlement ever reached by the IHS with any Tribe or Tribal health organization nationwide, highlighting the scale of ANTHC’s operations and the extent of the underpayment.
Andy Teuber, then Chairman and President of the ANTHC, expressed both satisfaction and continued concern regarding the settlement. While acknowledging the positive impact of the agreement in enabling the ANTHC to continue improving critically needed healthcare access for one of the nation’s most underserved populations, Teuber also emphasized the persistent challenges posed by the overall IHS budget. He pointed out that the IHS funding level remained less than half of what was needed to provide basic healthcare for Alaska Native and American Indian people, underscoring the ongoing need for increased investment in Tribal health services. The Alaska Native Tribal Health Consortium leadership remained committed to advocating for equitable funding and improved healthcare outcomes for the communities they serve.
The foundation for this settlement rests upon the Indian Self-Determination and Education Assistance Act, a pivotal piece of legislation that empowers Tribes and Tribal organizations to contract with the IHS to administer health programs and provide healthcare services. This act recognizes the federal government’s trust responsibility to ensure the health and well-being of Alaska Native and American Indian people. The ANTHC, along with other Alaska Tribes and Tribal organizations, has embraced this opportunity to administer the entire Alaska Tribal Health System (ATHS), a comprehensive network of healthcare providers serving communities across the vast and diverse landscape of Alaska.
Contract support costs encompass the fixed expenses incurred by Tribes and Tribal organizations in the operation of these health programs. These expenses include essential administrative functions such as audits, insurance premiums, and regulatory compliance. When these costs are not fully reimbursed, Tribal providers are forced to reallocate resources away from direct patient care, preventative services, and community outreach programs, ultimately compromising the quality and accessibility of healthcare services. The underpayment of contract support costs therefore represents a direct impediment to the fulfillment of the federal government’s trust responsibility and the health and well-being of Alaska Native and American Indian people.
Prior to this landmark agreement, six other ATHS organizations had successfully negotiated settlements of contract support costs. However, many other Alaska Tribal health organizations still had pending claims, highlighting the systemic nature of the underpayment issue. The Arctic Slope Native Association, the Cherokee Nation, and the Shoshone Paiute Tribes played a crucial role in paving the way for these settlements through their tireless efforts and advocacy. These Tribes initiated the legal battle for fair compensation, ultimately securing two victories in the U.S. Supreme Court. The leadership at ANTHC and throughout the ATHS acknowledged the invaluable contributions of these Tribal partners in establishing the legal precedent necessary to rectify the historical underpayment of contract support costs.
The ANTHC extended its gratitude to the Alaska Congressional Delegation, including Senators Mark Begich and Lisa Murkowski, and Congressman Don Young, for their unwavering support in holding the IHS accountable and ensuring a timely settlement process. These elected officials played a critical role in advocating for the rights of Tribal health organizations and ensuring that the federal government honored its contractual obligations. Furthermore, the ANTHC recognized the contributions of Senators Maria Cantwell and Jon Tester, and Representatives Mike Simpson, Ken Calvert, Jim Moran, Betty McCollum, and Tom Cole, for their efforts in rejecting attempts to override the Supreme Court victories and for appropriating sufficient funding to cover all contract support costs. This represented a significant departure from previous practices, where only a fraction of the obligated funds were allocated. The ANTHC also expressed appreciation to President Obama’s Administration for its commitment to upholding the rule of law and honoring Tribal contracts on a going-forward basis.
In addition to the efforts of elected officials, the ANTHC acknowledged the invaluable contributions of legal counsel Lloyd Benton Miller and the law firm of Sonosky, Chambers, Sachse, Miller & Munson. The expertise of Dr. David Mather, who provided expert assistance over three decades in negotiating these contracts and supporting ANTHC throughout the negotiations, was also recognized. Furthermore, the Southcentral Foundation and its Vice President of Finance, Lee Olson, were commended for their skill and expertise in navigating the complex financial aspects of the settlement. The ANTHC emphasized that without the dedication and expertise of these individuals and organizations, reaching this historic settlement would not have been possible.
Finally, the Alaska Native Tribal Health Consortium extended its thanks to the Washington Post and other media outlets that reported on the injustice of Tribes and Tribal organizations not being fully paid under their contracts with the federal government. The ANTHC also recognized the U.S. Chamber of Commerce and the National Congress of American Indians for their support of the Tribes’ efforts in the Supreme Court. These collective efforts raised awareness of the issue and helped to create a climate of accountability that ultimately contributed to the successful resolution of the contract support cost dispute.