CHS Program Funding and Service Eligibility Requirements

The CHS program is funded through annual appropriations and must   Based on the  operate within the limits of available appropriated funds.regulations that IHS has established for the CHS program, a number of  requirements must be met in order for a service to be eligible for CHS  payment.payment, local CHS programs must consider the following:   Based on the requirements, before approving a service for  Is the patient a member or descendent of a federally recognized  tribe or someone with close ties to the tribe? CHS Payment Process

In general, three entities are involved in the CHS payment process:   (1) the local CHS program, (2) the provider, and (3) IHS’s fiscal  intermediary (FI). 2. External provider submits a claim to IHS’s FI. Health Care Coverage Options in PPACA Affecting American Indians and Alaska Natives

PPACA made significant changes to the Medicaid program and included  new health care coverage options that may benefit American Indians and  Alaska Natives. More than Two-Thirds of CHS Claims Were Paid within 6 Months but Some Took Much Longer to Pay

For CHS services delivered in fiscal year 2011, a majority of providers’  claims were paid within 6 months of the service delivery date, but some  took much longer. The percentage of claims paid more than 6 months after  service delivery was much smaller, with 19 percent of claims being paid  between 6 months and 1 year after services were delivered, and about   8 percent paid more than 1 year after services were delivered. 2.) 3.) Among the three main steps in the payment process, the step that most  often took the longest in the payment process was the first step—the time  from date of service to the issuance of the purchase order. 4.) The first of two  measures that IHS uses to assess the timeliness of the first step in the  provider payment process is the average time it takes for IHS to issue a  purchase order after a service has been provided. However, the  GPRA measure does not provide a clear picture of the timeliness of  purchase order issuance because it combines self-referrals with some  IHS referrals when calculating the average time it takes for IHS to issue a  purchase order, even though the timing of when purchase orders are  issued relative to service delivery can be very different for the two referral  types. Officials from one local  CHS program told us that for these referrals, it may take only one day  from the date of service to issue the purchase order. The other measure  that IHS uses to assess the timeliness of the first step in the provider  payment process is how long it takes from the time IHS is notified of a  claim to when the agency makes a decision about it. In addition, CHS officials reported that  staffing shortages and limited funding contribute to delays in processing  payments to providers. Evaluating  a service against each of the service eligibility requirements involves  multiple steps, some of which depend on the CHS program receiving  information from providers, patients, and others, and delays can occur  during the evaluation of some of these eligibility requirements, according  to CHS officials. Some CHS program officials noted that their number of staff was below  these standards. New Coverage Options in PPACA May Provide IHS an Opportunity to Simplify CHS Eligibility Rules

New health care coverage options available to many IHS beneficiaries as  a result of provisions in PPACA could provide IHS with an opportunity to  simplify the complex eligibility rules of the CHS program. As we  previously reported, however, many American Indians and Alaska Natives  may gain new health care coverage beginning in 2014 as a result of  PPACA, which could alleviate some constraints on CHS program funds. Recommendations for Executive Action

In an effort to ensure that IHS has meaningful information on the  timeliness with which it issues purchase orders authorizing payment  under the CHS program and to improve the timeliness of payments to  providers, we recommend that the Secretary of HHS direct the Director of  IHS to: modify IHS’s claims data system to separately track IHS referrals and  self-referrals, revise the GPRA measure for the CHS program so that  it distinguishes between these two types of referrals, and establish  separate timeframe targets for these referral types; and  improve the alignment between CHS staffing levels and workloads by  revising its current practices, where appropriate, to allow available  funds to be used to pay for CHS program staff. HHS also concurred with our recommendation that  as HHS and IHS monitor the effect that new coverage options available to  IHS beneficiaries through PPACA have on CHS program funds, IHS  proactively develop potential options to streamline program eligibility  requirements. Medicaid Expansion: States’ Implementation of the Patient Protection and  Affordable Care Act. Indian Health Service: Health Care Services Are Not Always Available to  Native Americans.
Why GAO Did This Study

IHS provides health care to American Indians and Alaska Natives. When services are unavailable from IHS, IHS's CHS program may pay for care from external providers. GAO previously reported on challenges regarding the timeliness of CHS payments and the number of American Indians and Alaska Natives who may gain new health care coverage as a result of PPACA. PPACA mandated GAO to review the CHS program. This report examines (1) the length of time it takes external providers to receive payment from IHS after delivering CHS services; (2) the performance measures IHS has established for processing CHS provider payments; (3) the factors that affect the length of time it takes IHS to pay CHS providers; and (4) how new PPACA health care coverage options could affect the program. To conduct this work, GAO analyzed fiscal year 2011 CHS claims data, interviewed IHS officials, including officials in four IHS areas, and reviewed agency documents and statutes.

What GAO Found

For Indian Health Service (IHS) contract health services (CHS) delivered in fiscal year 2011, a majority of claims were paid within 6 months of the service delivery date, but some took much longer. Specifically, about 73 percent of claims were paid within 6 months of service delivery, while about 8 percent took more than 1 year. The CHS payment process consists of three main steps: (1) the local CHS program issues a purchase order to the provider authorizing payment (either before service delivery, or after, such as in emergency situations), (2) the provider submits a claim for payment, and (3) IHS pays the provider. GAO found that the first step took the longest--often taking more than 2 months.
IHS uses three measures to assess the time it takes to approve and then process payments to CHS providers. Two of the measures concern the first step in the payment process (purchase order issuance) and the third concerns the final step (making the payment). One of the measures IHS uses to assess the timeliness of the first step is the average time it takes to issue a purchase order after a service has been delivered; IHS's current target for this measure is 74 days. However, the measure does not provide a clear picture of timeliness for this activity as it combines data for two different types of CHS services--those for which payment eligibility was determined prior to service delivery and those for which eligibility was determined after service delivery. IHS officials told GAO that when eligibility is determined prior to service delivery, it may take only one day from the date of service to issue the purchase order. Including this type of service in the calculation, therefore, lowers the overall average.
The complexity of the CHS program affects the timeliness of provider payments. IHS program officials make decisions on what care will be funded on a case-by-case basis, evaluating each case against a number of eligibility requirements involving multiple steps. This process can lead to payment delays. Officials noted that delays also can occur when processing payments and that staffing shortages can affect the timeliness of payments. Some program officials noted that their staffing levels were below standards established by IHS.
New coverage options in the Patient Protection and Affordable Care Act (PPACA) may provide an opportunity to simplify CHS eligibility requirements. PPACA made significant changes to the Medicaid program and included new health care coverage options that may benefit many American Indians and Alaska Natives beginning in 2014. IHS officials reported the agency developed the current CHS program eligibility requirements to manage CHS program funding constraints. In particular, some of the complexities of the program were designed to allow the program to operate within the constrained levels of program funding. With the availability of new coverage options under PPACA, some constraints on CHS program funds could be alleviated, providing IHS an opportunity to streamline service eligibility requirements and expand the range of services it pays for with CHS funds.

What GAO Recommends

GAO recommends that IHS revise an agency measure of the timeliness with which purchase orders are issued, use available funds as appropriate to improve the alignment between CHS staffing levels and workloads, and proactively develop potential options to streamline CHS eligibility requirements. The agency concurred with two recommendations, but did not concur with the recommendation to use available funds to improve CHS staffing levels. GAO believes the recommendation is valid as discussed in the report.