Recent Press Releases

Thune Requests Update on IHS Effort to Modernize Purchased and Referred Care Program

“By bringing payments under the IHS PRC program in line with other federal health care programs, we will be able to stretch limited dollars and expand access to care in Indian Country.”

October 22, 2015

U.S. Sen. John Thune (R-S.D.) today requested an update from Health and Human Services Secretary Sylvia Mathews Burwell on a pending Indian Health Services (IHS) regulation that would extend access to IHS contract care. The pending regulation would expand Medicare-like rate payment methodologies to all health care services contracted under the Purchased and Referred Care (PRC) program, bringing uniformity to reimbursement rates for contract health care services and establishing reimbursement levels that are in line with services like Medicare, Tricare, and VA benefits. First proposed in late 2014, this regulation has yet to be finalized.  

“While the Indian Health Care Improvement Act, which I supported, made needed reforms to health care in Indian Country, considerable work remains to ensure that IHS patients have access to the health care they need,” said Thune. “By bringing payments under the IHS PRC program in line with other federal health care programs, we will be able to stretch limited dollars and expand access to care in Indian Country. The PRC program is not meeting the needs of tribal citizens or being accountable to providers outside the IHS system. I look forward to working with tribes, providers, and the IHS on workable and common-sense solutions to modernize Purchased and Referred Care and ultimately improve the quality of this important program.”  

Physicians and other non-hospital providers currently contracting with IHS through the PRC program are often paid at different rates than what is paid for identical services that are provided under Medicare, Tricare, or VA benefits.

In response to ongoing concerns from private health care providers in South Dakota that contract with IHS, Thune’s letter also requests information on IHS efforts to improve its claims administration process. The request is a follow-up to a 2014 staff-led working group that Thune convened, which included private providers, IHS, and tribal stakeholders, during which the claims administration process under the PRC program was discussed.

Full text of the letter can be found below:

The Honorable Sylvia Mathews Burwell


U.S. Department of Health and Human Services

200 Independence Avenue, SW

Washington, D.C. 20201

Dear Secretary Burwell:

I write today regarding an ongoing rulemaking at the Indian Health Service (IHS) with respect to Medicare-like rate (MLR) payment methodologies in the Purchased and Referred Care (PRC) program, formerly Contract Health Service.

As you know, current law requires only Medicare participating hospitals to accept MLR for services contracted by the IHS.  While in some cases IHS or tribes have negotiated lower rates, the current regulatory structure has led IHS to pay for physician and other non-hospital services at billed charges – often much higher than rates paid by insurers and other federal health care programs.  Pursuant to the Indian Health Care Improvement Act, in 2013, the Government Accountability Office (GAO) released its findings on this issue.  The GAO recommended Congress consider capping rates in this  program, which could save the IHS PRC program millions of dollars annually and ultimately expand patient care.

While Congress has not yet acted, in December 2014, the IHS published a notice of proposed rulemaking to expand the MLR to all health care services contracted under the PRC program.  In the course of the rulemaking process, a number of issues were raised by stakeholders and I am hopeful the final rule will reflect a consideration of many of these concerns and ideas.  I was pleased to see that the rule noted that access to care should not be negatively impacted as this regulatory change moves forward.  As almost a year has passed, I am interested in learning where you and the department are in the rulemaking process and when you expect this rule to be finalized and published. 

As you make changes to reimbursement, it is imperative that improvements in IHS program administration follow.  Providers continue to express frustration with claims administration in the PRC program.  While a MLR may be appropriate, providers should also expect timely payment and a modernized claims process.  In working with tribes, private providers, and the fiscal intermediary, efficiencies in the existing process must be developed.  Last fall, my office gathered stakeholders from IHS, private providers, and tribal health care officials to initiate a dialogue on this issue.  Since that time, discussions have continued, but unfortunately, problems remain.  I would like an update from you on the continuing involvement of IHS staff in the Great Plains Area and headquarters office to identify efficiencies and continue these discussions in South Dakota and across the country. 

I support your policy goal to bring IHS reimbursement in line with other federal programs and expand services.  At the same time, claims administration must be improved.  I urge you to advance this rulemaking and other associated changes that will ensure patients receive needed care while providers are reimbursed in a timely, efficient manner.  I have been exploring these issues over the last several years and I welcome the opportunity to work with you to advance these policy goals.  I look forward to your prompt response.