Supreme Court delivers expensive victory for tribal health care

The decision is a win for tribal self-governance, but puts new pressure on the Indian Health Service's already stretched federal budget.

Back in 2019, the Eastern Shoshone Tribe in central Wyoming started gearing up to take over management of the Indian Health Service clinic that served its community. However, those plans were held up by the pandemic, which was also a stark reminder of why the tribe wanted local control of the clinic to begin with. 

“We had run into problems,” said John St. Clair, chairman of the tribe’s business council — problems rolling out COVID-19 testing and vaccines, hiring and retaining health care workers, and getting sick tribal members the care they needed. 

“The biggest obstacle was the Indian Health Service,” St. Clair said. “It wasn’t necessarily the management, it was just the red tape that they have to go through.”

The Indian Health Service didn’t respond to a request for comment about pandemic response on the Eastern Shoshone Tribe’s Wind River Reservation.

The tribe could have bypassed the red tape if it had been running the clinic on its own. So, the business council prepared an application to take over management via a 638 self-governance compact with the IHS. Its application was approved, and as of July 1, the Eastern Shoshone Tribe calls its own shots on things like clinic staffing, specialty care and which patients to serve. 

“We’re going to make our clinic so that anyone can use it,” St. Clair said. “It doesn’t matter whether they’re enrolled or not enrolled or even a Native person.”

The ability to bill more patients, particularly those covered under private insurance, will help the clinic’s bottom line and support expanded and improved health care services, St. Clair said. 

Tribal nations are entitled to health care provided directly by the Indian Health Service. That’s part of the federal government’s constitutionally mandated trust and treaty responsibility to tribal nations.

But according to the Self-Governance Communication and Education Tribal Consortium, more than half opt instead to take the federal money set aside for their health care needs and manage operations locally. 

“We have shown that when [tribes] have control, we do a much better job,” said Ron Allen, chairman of that consortium and of the Jamestown S’klallam Tribe. “We seem to be able to respond faster. We’re able to make decisions faster.”

Allen said a recent U.S. Supreme Court decision will open the door for more tribes to assume control of IHS clinics and hospitals. In Becerra v. San Carlos Apache Tribe, the Supreme Court justices put the federal government on the hook for more of the administrative costs those tribes incur, including while the tribes bill Medicaid, Medicare and private insurers. 

“And it’s a big number,” Allen said of the administrative costs. “It’s a very large component of tribal clinics’ and hospitals’ budgets.”

Attorneys for the federal government estimated tribally run health care systems spend between $800 million and $2 billion annually on that kind of overhead. 

“So, [the Supreme Court decision] was a very big encouragement for tribes,” Allen said. 

And a very big financial headache for the Indian Health Service, which now has to come up with that extra money.

“The bill that’s coming due is going to be large,” on top of a massive existing shortfall, said Elizabeth Reese, a law professor at Stanford University. “The Indian Health Service is just embarrassingly and shamefully underfunded.”

The agency was funded at less than $7 billion in 2024, compared to the $51 billion advocates estimate it would take for the IHS to actually meet Native people’s health care needs and its trust and treaty obligations to tribal nations.

Reese said Congress has a few options: It could appropriate more federal dollars to fund the IHS’ new mandate to reimburse more overhead costs.

“I, of course, knowing the fights that Congress has about money, am skeptical that that is where we will end up,” Reese said. She said that it’s more likely cuts are coming for other parts of the already stretched IHS budget that pays for everything from facilities maintenance to operations to health care. 

Because, unlike most federal health care programs, the agency runs on discretionary funding. 

“Which means that every year its funding is on the chopping block,” Reese said. “Every year, its funding doesn’t automatically grow with inflation.” 

In a statement, the IHS urged Congress to move its funding over to the mandatory side of the federal budget to insulate it from painful cuts. That’s how Medicare, Medicaid and the Children’s Health Insurance Program are funded. 

For now, St. Clair said proper reimbursement will help tribes like his improve health care offerings. 

“It comes at an opportune time for us,” St. Clair said. “We can look at expanding our services right off. We can look at having an ambulance, and the county and the tribes have been talking about that for a long time.”

Plus, St. Clair said the tribe can get moving on building new facilities, offering more transportation assistance and hiring specialist physicians. Those are improvements the Eastern Shoshone Tribe has been waiting for.