IHS Announces New Medicare-Like Rates Regulation

IHS Implements New Medicare Like Rate Regulation for Tribes

The Indian Health Service (IHS) announced that it will be implementing a new regulation that gives IHS, Tribal, and Urban Indian health programs the ability to cap payment rates at a “Medicare-Like rate” to physician and other non-hospital providers and suppliers who provide services through the Purchase and Referred Care (PRC formally CHS) program.

Background: The PRC budget supports essential health care services from non-IHS or non-Tribal providers and includes inpatient and outpatient care, emergency care, transportation, and medical support services such as diagnostic imaging, physical therapy, laboratory, nutrition, and pharmacy services. PRC programs routinely pay full-billed charges for non-hospital services, including physician services. On average, this would add up to 70% more than would be paid by Medicare. As a result, the PRC program was running out of funds each year.

There was some Tribal concerns on changing this rule because many believed that lowering the rates would cause many providers to stop contracting with I/T/Us.  However, implementing rates for non-hospital based providers will more likely increase the volume of services being sought which will result in providers achieving more volume to offset the decrease in rates.

The proposed rule is opt-in and not a requirement.  This is in recognition of Tribal sovereignty and self-determination as Tribes have the right to negotiate with providers and determine how best to meet the needs of their community when providing health care.

The IHS announcement and the published rule states that the final rule became effective on March 20, 2016. IHS recognizes that this rule will have significant Tribal implications so in order to ensure that all concerns are taken into account, it will be implemented as a final rule with another 60 days for the public to provide comment on the rule.  In addition, IHS will be conducting outreach and education to PRC administrators and participating providers and suppliers so that everyone is on the same page with the rule and there are no adverse impacts on the PRC system.

If you have comments or questions, please contact Eric Jordan, ANHB Policy Analyst at ejordan@anhb.org.