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Funding continues to be a critical issue for healthcare organizations serving Indian Country.  The Indian Health Service is the main funding source for these providers, however IHS funds only cover between 50% and 70% of the services needed to provide healthcare to the people.

The Indian Health Care Improvement Act (IHCIA) gave IHS and Tribal 638 facilities the ability to bill third party payers (Medicare, Medicaid, and Private Health Insurance).  This additional funding stream has become a critical component of funding healthcare in Indian country.  These resources now make up between 30% and 50% of the funding for healthcare for the Native American people.


The Centers for Medicare and Medicaid Services (CMS) is the federal agency that gives individual healthcare providers the ability to bill these third party payers.  In order to bill third party payers, healthcare organizations have federal and state laws, rules, and regulations that must be followed.  CMS, along with the Office of the Inspector General (OIG), and the Office of Civil Rights (OCR), have been auditing and inspecting healthcare providers for compliance with federal and state laws, rules, and regulations for many years in the private sector.  They have now begun focusing on healthcare providers funded by the government including IHS and Tribal health facilities.


The results of federal audits in Indian Country have been devastating. 


The federal government has discovered that our IHS and Tribal health facilities have NOT been compliant.  For example, CMS has inspected the IHS service units in Winnebago, NE, Pine Ridge, SD, Rosebud, SD, and Rapid City, SD.  Winnebago has lost their ability to bill third party payers.  Sioux San Hospital in Rapid City was placed on the “Immediate Jeopardy” list which is the final step before removing their ability to bill third party insurance.  Pine Ridge and Rosebud were both placed on the “Immediate Jeopardy” list and have entered into a Systems Improvement Agreement for the next year in order to maintain the ability to bill third party.  CMS is now running those hospitals instead of the Indian Health Service. 

On the tribal side, the California Rural Indian Health Board had to pay back a SAMHSA grant worth over $5 million, and the Rocky Boy Health Board in Montana was found to have been overpaid almost $300,000 by the federal government.

All of these penalties were due to compliance violations because they didn’t have an effective program to monitor and sustain compliance with federal and state laws, rules, and regulations.


If the same situation were to occur in your own organization, it would devastate the healthcare system.  Healthcare providers in Indian Country cannot absorb a 30%-50% reduction in funding without some serious consequences to the people.


Compliance has been a challenging issue for IHS and Tribal healthcare facilities.  It is clear that the federal government has picked the “low hanging fruit” in the private sector, and it appears to be focusing on health care providers serving Indian Country.

Most health care providers strive to deliver quality care and submit correct claims for payment, However compliance remains a serious problem for providers who bill government programs.  The U.S. Government Accountability Office has designated the Medicare and Medicaid programs to be at high risk for improper payments. Improper payments “include those made for treatments or services that were not covered by program rules, that were not medically necessary, or that were billed for but never provided.”  We have a number of Federal and State laws to deter and punish those who fraudulently seek to obtain improper payments from federal programs. Federal laws include, but are not limited to, the following:
•    The Health Care Fraud Statute;
•    The False Claims Act;
•    The Health Insurance Portability and Accountability Act (HIPAA)
•    The Anti-Kickback Statute;
•    Exclusion Provisions; and
•    The Civil Monetary Penalties Law.

Our tribal and IHS facilities are facing increasing scrutiny through audits from the Centers for Medicare and Medicaid Services (CMS), the Office of the Inspector General (OIG), and the Office of Civil Rights (OCR).  CMS is conducting unannounced visits to evaluate core compliance.  The Office of Civil Rights has begun phase II of HIPAA enforcement audits.  The OIG continues to investigate and prosecute healthcare fraud and abuse.


For example, the Office of Civil Rights is auditing every healthcare provider in the country over the next three years for HIPAA compliance.  CMS is conducting unannounced audits of IHS and Tribal Health facilities, and the OIG is focusing its fraud and abuse efforts on documentation of medical necessity for services billed to federal healthcare programs.  This doesn’t give providers much time to prepare.

The results of these activities have had and will continue to have a devastating effect on healthcare providers who serve Native American people.  Facilities have been placed in "immediate jeopardy" status of losing their privileges of billing Medicare and Medicaid.  The OCR has fined well-known medical facilities millions of dollars in civil penalties.  The OIG has also fined many providers for not following the rules.

All of this can be prevented by an effective Compliance Program which covers Core Compliance, HIPAA Privacy and Security, the Federal Anti-Kickback Laws, and all other federal, state, and local laws, rules, and regulations.

What will you do when the auditors come to your door?  Native American Healthcare Group can provide your organization with the tools needed to thrive in today's market-based healthcare system. Our programs and services can keep your organization compliant, and we can make sure that you are receiving all of the third party revenue that you deserve.


Tim Pederson

Tim Pederson is an enrolled member of the Oglala Sioux Tribe. He has 25 years of experience in Healthcare Administration, 3rd Party Billing, Compliance, and HIPAA. A graduate of Concordia College in Moorhead Minnesota with a degree in Hospital Administration, Tim is recognized as an expert in healthcare management. Tim has experience in building healthcare providers from the ground up and implementing all systems from scratch through the people with whom he works.  He also serves as a healthcare billing and compliance expert witness for Thomson Reuters Expert Witness Services.

When he is not working, Tim enjoys serving his community.  He is on the board of directors for several charitable organizations.  He also enjoyes working with the family's horses.  Breaking and training horses has taught him a great deal about how to better interact with people to make sure that they have a complete understanding of what we are trying to learn together.  


Tim lives with his family in Rapid City, SD.

C. Michael Davis

Mike Davis has spent most of his career in Healthcare Compliance. A 28 year veteran working in the Medicare program, Mike retired as the Director of the Augusta, GA Medicare office. Since then, Mike’s main emphasis has been in developing and implementing CMS and regulatory compliance programs for healthcare providers focusing on cost efficiency and “Doing the Right Thing”. He has significant experience in the area of criminal and civil fraud and abuse prosecutions, having assisted many U.S. Attorneys in case preparation and witnessing. Mike has trained Compliance Officers, Compliance Boards, and Healthcare Executives and works with organizations to implement effective working compliance programs.

Mike and his wife live in Augusta, GA.

Improving Healthcare and Outcomes for Providers Who Serve Native Americans.
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