296 F. Supp. 3d 256
D.C. Cir.2017Background
- Redding Rancheria (the Tribe) entered an ISDEAA self-determination Compact and Funding Agreement with IHS transferring administration of Contract Health Services (CHS). CHS is a non‑entitlement, limited‑fund payor‑of‑last‑resort program; CHEF reimburses extraordinary CHS costs above a threshold.
- The Tribe established a Tribal Self‑Insurance Program (TSIP) in 2012 to procure care at lower negotiated rates and adopted a Coordination of Benefits (COB) scheme: TSIP makes provisional payments and is reimbursed by CHS when CHS is the primary payor; TSIP excludes services eligible for Medicare‑like CHS rates or CHEF.
- The Tribe submitted six CHEF applications for CHS claims where TSIP had made provisional payments; IHS refused to process them, asserting CHEF cannot reimburse payments to tribal self‑insurance and that CHS must pay vendors directly.
- The Tribe sought administrative consultation, regulatory waivers, submitted a final offer under ISDEAA, and pursued a CDA claim — all denied by IHS. The Tribe sued in district court challenging IHS’s CHEF denials and related agency actions.
- The central statutory dispute: interpretation of IHCIA § 1623(b) (payor of last resort added by the ACA 2010) and interplay with 25 U.S.C. § 1621e(f) (no federal recovery against tribally funded self‑insurance absent tribe’s written authorization) and IHS’s preexisting regulation and policy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether IHCIA § 1623(b) bars tribal self‑insurance from being a payor of last resort | Tribe: § 1623(b) covers "health programs operated by" tribes; TSIP is a tribal health program and may be payor of last resort | IHS: § 1623(b) should be read via narrower defined terms ("Indian health program"/"tribal health program") to exclude tribally funded self‑insurance | Held: Court reads § 1623(b) plainly to include health programs operated by tribes; statutory text does not limit payor status to programs funded/administered by IHS, so TSIP may qualify |
| Whether the Tribe's COB/exclusionary clause violates IHCIA or IHS policy | Tribe: exclusionary clause is written authorization under § 1621e(f), allowing the Tribe to designate recovery rights; COB conserves tribal and federal resources | IHS: the conditional/exclusionary clause improperly makes TSIP effectively always primary; inconsistent with IHS policy exception | Held: Court rejects IHS position; § 1621e(f) supports tribal choice and written authorization; Tribe's COB is consistent with statute and permissible |
| Whether IHS regulation (42 C.F.R. § 136.61 payor of last resort) controls over the 2010 statute and IHS policy exception | IHS: its 1990 regulation made CHS the payor of last resort and contains no exception for tribal self‑insurance; later policy‑based exception was superseded by § 1623(b) | Tribe: 2010 statute’s broader language controls; IHS’s post‑hoc regulatory reading is inconsistent with statutory text and Indian‑favoring canons | Held: Court favors statutory plain meaning over IHS regulatory interpretation; agency’s reliance on 1990 regulation is unpersuasive |
| Appropriate remedy for IHS denial of the six CHEF applications | Tribe: reimbursement and declaration that IHS misapplied payor rules; equitable relief and remand | IHS: actions consistent with regulation/policy; CHEF administration not subject to ISDEAA contract remedies | Held: Court grants summary judgment in part, vacates IHS denial as inconsistent with statute, remands to IHS to reconsider the six CHEF applications consistent with the opinion; retains jurisdiction |
Key Cases Cited
- Carcieri v. Salazar, 555 U.S. 379 (2009) (plain‑text statutory interpretation principles guide courts)
- Brown & Williamson Tobacco Corp. v. FDA, 529 U.S. 120 (2000) (courts should read statutory provisions in context to avoid incoherent results)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (framework for judicial deference to reasonable agency interpretations of ambiguous statutes)
- Thomas Jefferson University v. Shalala, 512 U.S. 504 (1994) (agency interpretations of their own regulations receive weight unless contrary to plain language)
- Cobell v. Norton, 240 F.3d 1081 (D.C. Cir. 2001) (canon requiring liberal construction of statutes in favor of Indian tribes; agency interpretations considered but not controlling)