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104th Congress                                            Rept. 104-742
                        HOUSE OF REPRESENTATIVES

 2d Session                                                      Part 1
_______________________________________________________________________


 
         EXTENSION OF INDIAN HEALTH CARE DEMONSTRATION PROGRAM

                                _______
                                

 August 1, 1996.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3378]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 3378) to amend the Indian Health Care Improvement Act to 
extend the demonstration program for direct billing of 
Medicare, Medicaid, and other third party payors, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                          Purpose of the Bill

    The purpose of H.R. 3378 is to amend the Indian Health Care 
Improvement Act to extend the demonstration program for direct 
billing of Medicare, Medicaid, and other third party payers.

                  Background and Need for Legislation

    In 1988, the Indian Health Care Improvement Act authorized 
a demonstration program to allow up to four tribally-operated 
Indian Health Service (IHS) hospitals or clinics to test 
methods for direct billing for and receipt of payment for 
health services provided to Medicare and Medicaid eligible 
patients. The program was established to determine whether 
collections could be increased through direct involvement of 
the tribal health care providers versus the current practice 
which required billings and collections be routed through the 
IHS.
    The law requires IHS to report to Congress on the 
demonstration program at the end of the 1996 fiscal year 
(September 30, 1996). This report is to evaluate whether the 
objectives have been fulfilled, and whether direct billing 
should be allowed for other tribal providers who operate an 
entire IHS facility.
    Bristol Bay Area Health Corporation (BBAHC) is one of the 
four facilities which was selected to participate in the 
demonstration program. The BBAHC has expressed success and 
satisfaction with the program. It reports dramatically 
increased collections for Medicaid and Medicare services, 
thereby providing additional revenues for Indian health 
programs at these facilities. In addition, there has been a 
significant reduction in the turn-around time between billing 
and receipt of payment. Finally, BBAHC reports increased 
efficiency by being able to track their own billings and 
collections and being able to respond quickly to resolve 
problems and answer questions.
    All participants want to extend the demonstration program 
authority for two more years to give Congress time to review 
the IHS report on the program and to determine the future 
course of the program. Without this extension, the four 
participants would have to close down their direct billing/
collection departments and return to the old system of IHS-
managed collection departments. This would mean the dismantling 
of highly specialized administrative staff and would have an 
immediate negative impact on revenue collection.

                            Committee Action

    H.R. 3378 was introduced by Congressman Don Young (R-AK) on 
May 1, 1996, and referred primarily to the Committee on 
Resources and additionally to the Committee on Commerce. 
Congressman G.V. ``Sonny'' Montgomery (D-MS) was added as a 
cosponsor on May 21, 1996. On June 19, 1996, the full Committee 
on Resources met to mark up H.R. 3378. The bill was ordered 
reported with no amendments by voice vote.

                      Section-by-Section Analysis

         Section 1. Extension of Certain Demonstration program

    Section 1 amends the Indian Health Care Improvement Act to 
extend the direct billing demonstration program for two years, 
through Fiscal Year 1998.

            Committee Oversight Findings and Recommendations

    With respect to the requirements of clause 2(l)(3) of rule 
XI of the Rules of the House of Representatives, and clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
the Committee on Resources' oversight findings and 
recommendations are reflected in the body of this report.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that the 
enactment of H.R. 3378 will have no significant inflationary 
impact on prices and costs in the operation of the national 
economy.

                        Cost of the Legislation

    Clause 7(a) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in carrying out 
H.R. 3378. However, clause 7(d) of that rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974.

                     Compliance With House Rule XI

    1. With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, H.R. 
3378 does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 3378.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rules of the House of Representatives and 
section 403 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 
3378 from the Director of the Congressional Budget Office.

               Congressional Budget Office Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 24, 1996.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: At your request, the Congressional 
Budget Office (CBO) has reviewed H.R. 3378, which would amend 
the Indian Health Care Improvement Act by extending a 
demonstration program for direct billing of Medicare, Medicaid, 
and other third party payers. The bill was ordered reported by 
the Committee on Resources on June 19, 1996. Because this bill 
would not affect direct spending or receipts, pay-as-you-go 
procedures would not apply. The bill contains no private-sector 
or intergovernmental mandates as defined in Public Law 104-4.
    The demonstration program was created in 1988 to allow 
participants to bill directly, and receive reimbursements from, 
third-party payers for services rendered. The program is 
limited to four hospitals or clinics operated under the Indian 
Self-Determination Act by tribes, tribal organizations, or 
Alaska Native health organizations. H.R. 3378 would extend the 
demonstration program by two years, through September 30, 1998. 
Tribally-operated facilities that do not participate in the 
program can operate as Federally-Qualified Health Centers 
(FQHCs) or can choose to file claims through the Indian Health 
Service (IHS).
    Participating facilities report that the program has had a 
favorable impact on their budgets by increasing the efficiency 
and decreasing the turn-around time of the billing and payment 
processes. They are also entitled to the Medicare and Medicaid 
reimbursement rates that the IHS has negotiated with HCFA. By 
allowing participants to bill directly for services rendered, 
rather than working through the IHS for reimbursement, the 
demonstration program may reduce IHS administrative costs 
slightly.
    If you wish further details on this estimate, we will be 
pleased to provide them. The staff contacts are Anne Hunt 
(federal estimate); Julia Matson (private sector mandate 
analysis); and John Patterson (intergovernmental mandate 
analysis).
            Sincerely,
                                             James L. Blum,
                                      (For June O'Neill, Director).

                    Compliance With Public Law 104-4

    H.R. 3378 contains no unfunded mandates.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

         SECTION 405 OF THE INDIAN HEALTH CARE IMPROVEMENT ACT

  demonstration program for direct billing of medicare, medicaid, and 
                        other third party payors

    Sec. 405. (a) * * *
          * * * * * * *
    (c)(1) * * *
    (2) From among the qualified applicants, the Secretary 
shall, prior to October 1, 1989, select no more than 4 
facilities to participate in the demonstration program 
described in subsection (a). The demonstration program 
described in subsection (a) shall begin by no later than 
October 1, 1991, and end on September 30, [1996] 1998.
          * * * * * * *
                            A P P E N D I X

                              ----------                              

                          House of Representatives,
                                     Committee on Commerce,
                                    Washington, DC, August 1, 1996.
Hon. Don Young,
Chairman, Committee on Resources, Longworth House Office Building, 
        House of Representatives, Washington, DC.
    Dear Mr. Chairman: On June 19, 1996, the Committee on 
Resources ordered reported H.R. 3378, a bill to amend the 
Indian Health Care Improvement Act to extend the demonstration 
program for direct billing of Medicare, Medicaid, and other 
third party payors. It is my understanding that you would like 
the Committee on Commerce to be discharged from consideration 
of this measure.
    I have a number of concerns about proceeding in this 
manner. As you know, this Committee has invested countless 
hours in Medicaid reform legislation. The status of our reform 
efforts makes separate consideration of H.R. 3378 somewhat 
awkward. Despite my position on this matter, I do understand 
your interest in having H.R. 3378 move forward expeditiously, 
since authorization for these demonstration projects ends 
September 30, 1996. Therefore, the Committee on Commerce will 
agree to be discharged from consideration of this legislation.
    By agreeing to be discharged from consideration, this 
Committee does not waive its jurisdictional interest in the 
matter. I reserve the right to seek equal conferees during any 
House-Senate conference that may be convened on this 
legislation.
    I want to thank you and your staff for your assistance in 
providing the Commerce Committee with a timely opportunity to 
review its interests in H.R. 3378. I would appreciate your 
including this letter as a part of the Resource Committee's 
report on H.R. 3378, and as part of the record during 
consideration of this bill by the House.
            Sincerely,
                                   Thomas J. Bliley, Jr., Chairman.
                                ------                                

                          House of Representatives,
                                    Committee on Resources,
                                    Washington, DC, August 1, 1996.
Hon. Thomas J. Bliley, Jr.,
Chairman, Committee on Commerce, Rayburn House Office Building, 
        Washington, DC.
    Dear Mr. Chairman: I appreciate your willingness to have 
the Committee on Commerce discharged from further consideration 
of H.R. 3378, a bill to amend the Indian Health Care 
Improvement Act to extend a demonstration program for direct 
billing of Medicare, Medicaid and other third party payors.
    I understand your concerns relating to the larger issue of 
Medicaid reform but believe it is the right to do to allow this 
very limited demonstration program, which has improved 
efficiency and saved money for those involved, to be extended 
beyond its expiration at the end of next month.
    Thank you again for your cooperation and that of your staff 
in this very busy time for us all. I look forward to bringing 
this bill to the Floor in early September with your help.
            Sincerely,
                                               Don Young, Chairman.