Medicaid and Indian Health Programs. Contents. March 2009

Transcription

1 Edward J. Fox, Ph.D. Squaxin Island Tribe, Health and Human Services Director Verné F. Boerner, MPH Student, School of Nursing, OHSU March 2009

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3 Medicaid and Indian Health Programs March 2009 Contents ABSTRACT... i Introduction... 1 American Indians and Alaska Natives... 1 Specific Aims... 1 Methodology... 1 Data Sources:... 1 Unit of Analysis:... 2 Levels of Analysis:... 3 Indian Health Service... 3 The plan of the paper... 4 Medicaid and Medicare & IHS... 5 State Impacts... 8 Arizona... 8 New Mexico... 9 New Mexico & Arizona... 9 Oklahoma Alaska South Dakota Washington Revenue Sources of a Washington Tribe Minnesota Montana California North Dakota Oregon Idaho Medicaid Trends American Indians and Alaska Natives Enrolled in Medicaid American Indian and Alaska Natives Percentage of States Total Medicaid Census Unit of Analysis Estimated Total Medicaid Spending Conclusions and Findings Weaknesses in data: Recommendations, Questions Raised and Further Research... 21

4 ABSTRACT 1,485,431 American Indians and Alaska Natives (AI/ANs) are considered users of the Indian Health Programs of the Nation s 562 Tribes. If expenditures for these users equaled the average user of the American health care system, the total cost of their care would be about $10 billion (using the 2008 per capita expenditure of $6,714). Despite poor health status due to socioeconomic conditions (& historical trauma) most feel the younger age demographic, and location in the lower health cost areas of the American Midwest and West, suggest a slightly lower per capita expenditure. $9 to $10 billion is a reasonable estimate of need for the IHS user population. Is current funding close to this estimate? The two main sources of revenue to fund health care services for these 1.5 million users are the Indian Health Service and the Medicaid program. The IHS funding is fully detailed and easily understood. $3.5 billion (FY 2009) in national funding is distributed to 12 area offices that then distribute funds to each area s tribes in 35 states. The funds are broken down into 13 main budget line items with the largest being funding ($1.5 billion) for Hospitals and Clinics. The second largest line item (at $550 million) is the one that is used to purchase health care outside these facilities and is known as the Contract Health Services line item. Unfortunately, little has been documented about spending for AI/ANs from the two main national health programs; Medicare and Medicaid. In the United States Medicare is the program for America s elderly (65 and over) and Medicaid for America s poorest residents. The CMS recently estimated that about 200,000 Medicare beneficiaries are AI/AN and about 800,000 are receiving Medicaid. If we took average spending for the two programs and assumed all the enrollees were also part of the IHS user population it would suggest that $4 billion is spent on the 1 million beneficiaries ($8,000 times 200,000 for Medicare and $3,000 times 800,000 for Medicaid). If we add this $4 billion to the $3 billion from IHS we get $7 billion; still short of the estimate need of $9 to $10 billion, but a lot closer than without Medicare and Medicaid. This estimate of $4 billion is not accurate, as it greatly overestimates the amount of expenditures for IHS users. The IHS user population enrolled in Medicare and Medicaid is far less than the 1 million AI/AN reported by the Centers for Medicare and Medicaid. The majority of Indians who are eligible for IHS health care services do not live near these reservation based services and have not used them during the 3 year period required to be counted as a user. It is important to develop a better estimate of actual expenditures from the two federal programs for the IHS user population. That does not mean it is easy to do. This paper first examines what is known about the true level of funding from Medicare and Medicaid for IHS users. It then focuses solely on Medicaid funding in an attempt to develop a better understanding of the importance of Medicaid funding to Indian health programs. It utilizes IHS, Tribal, and state level reports to describe the level of expenditures for American Indians and Alaska Natives who are patients of Indian Health Programs. It concludes by noting the great need for more valid and reliable data will not be achieved without changes in how the data is collected. Finally, it cautions against overestimating the actual expenditures by Medicare and Medicaid for American Indians and Alaska Natives while acknowledging the vital importance of these resources. i

5 Introduction American Indians and Alaska Natives American Indians and Alaska Natives (AI/AN) make up a collection of very diverse, culturally rich people. There are 562 federally recognized tribes in the United States, Tribal enrollments range from less than 100 to more than 350,000. (Bureau of Indian Affairs, 2002). Each federally recognized tribe is a sovereign nation, and practices a government-to-government relationship with the United States federal government. Legislation enacted in the last 35 years is reflective of the unique political status of tribes, empowering their governments and allowing them to practice self-determination. Initial implementation of these laws lagged, however momentum has grown in the last 20 years and great strides in improving the quality of life and health status for this collective population has been made. Aggregate data for AI/AN populations should be interpreted carefully as this population consists of groups that vary widely in economic characteristics. However it is still apparent from the aggregate that vast inequities persist for this population. It is the smallest of all US populations, 1.53%, (Ogunwole, 2006) and suffers amongst the highest of disparity levels for many health indicators and amongst the lowest socioeconomic status of all populations. The poverty rate for AI/AN in 1999 was 25.7% compared to 12.4 for the total population. (Ogunwole, 2006). This population also has one of the most disparate rates for level of uninsured with 3-year-average ( ) uninsured rate of 32.1%. (DeNavas- Walt, 2008) These factors indicate that the means-tested programs for Medicaid, Medicare, and States Children s Health Insurance Program would likely be of significant importance to this population as a whole. Specific Aims This paper first examines what is known about the true level of funding from Medicare and Medicaid. It then focuses on Medicaid funding in an attempt to develop a better understanding of the importance of Medicaid funding to Indian health programs. It utilizes IHS, Tribal, and state level reports to describe the level of expenditures for American Indians and Alaska Natives who are patients of Indian Health Programs. It concludes by noting the great need for more valid and reliable data will not be achieved without changes in how the data is collected. Finally, it cautions against overestimating the actual expenditures by Medicare and Medicaid for American Indians and Alaska Natives while acknowledging the vital importance of these resources. Methodology Data Sources: We use pooled data, as opposed to nationally-aggregated data, from twelve state reports (hereafter referred to in the singular for readability unless referring to specific state reports) on Medicaid utilization and payments ranging in periods from 2004 to However, we also looked at Center's for Medicaid and Medicare Services' (CMS) data (a nationally-aggregated data source), as well as US Census data for the various states. The state report data was compared to Indian Health Service (IHS) user population and user 1

6 count data (reported by IHS service area) as well as IHS area budgets. In the cases where the IHS user count data covered multiple state areas or overlapped (shared) a single state, we utilized the user counts and budgets for the specific federally recognized tribes found in the state, or we considered the state reports together to create an overall budget and expenditure picture for the multiple state area before considering the specific Medicaid issues of the individual states. The twelve states that we selected are: Alaska, New Mexico, South Dakota, Oklahoma, Montana, North Dakota, Arizona, Oregon, Washington, Idaho, Minnesota, and California. They represent over 90 percent of the Indian Health Service user population and include all but one (Nashville) of the 12 Areas of the IHS. Unit of Analysis: The unit of analysis is any patient who has accessed services at least once over a three-year period at any of the 700-plus IHS and tribal health care facilities located in the IHS service area (mostly rural areas) in 36 different states. (Indian Health Service, 2008) These individuals are included in the IHS user count. The IHS service area population includes approximately 57% of the AI/AN population (Indian Health Service, 2008). Of those included in the user count, we are interested in those that are also beneficiaries of the Centers for Medicare and Medicaid (CMS) programs, Medicare, Medicaid, and State Children s Health Insurance Program (SCHIP). Two factors make this very challenging; the first is that not all in the IHS user count are eligible for the above state CMS programs, and the second is that not all AI/AN CMS program beneficiaries are included in the IHS user count. This is because approximately and coincidentally 57% of AI/AN people live in urban areas, the majority of whom are outside of the IHS service area and while they are eligible, some are not able to access IHS funded services and therefore are not considered IHS users and thus are not included in the IHS user count. It is the IHS user count that the federal government utilizes in formulas to determine the AI/AN level of need for health care and thus represents the population for which this paper seeks to compare with the CMS and state Medicaid data and reports. This is a challenge as CMS and state reports include a large number of urban Indians that are not included in the IHS user count as they do not access IHS or tribal health programs, yet, given their often poor economic status, many urban Indians are also eligible for Medicaid. Thus the CMS beneficiaries number should and does differ from the IHS user count numbers, and neither should be considered independently when addressing health resources available to Indian health programs. The most accurate method to accomplish this is to utilize sophisticated probabilistic linkage software and analysis tools to conduct periodic linkage studies between the IHS and CMS data. Such methods have been successfully implemented by Tribal Epidemiology Centers for about a decade. This study utilizes a cross comparison between various sources (IHS user population data, state report data, and US Census data) to arrive at estimates for the unit of analysis for each state. 2

7 Levels of Analysis: The unit of analysis examined in this paper is any Medicaid patient who is listed as one of an Indian health program s users; however this cannot be an accurate count without conducting an IHS user population CMS data linkage study. Furthermore, the current available data is surprisingly weak in terms of validity and reliability; CMS data has a loose definition of Indian (it is self-reported), it has changed over time (not reliable). State reports for American Indians are not required, there are no standard reporting elements, and finally such CMS data as there is lags by three years. A workgroup of the CMS Tribal Technical Advisory Group lead by a team from the California Rural Indian Health Board has completed its comprehensive review of CMS data collection and will soon release its findings and a set of recommendations that has been approved by the CMS TTAG (Tribal Technical Advisory Group). At a higher level of analysis we are also interested in payments for these users either directly to an Indian health program, which is in excess of $650 million (Indian Health Service, 2008), or to specialists or hospitals. Typically, states can report how much they have paid to IHS and tribal health programs for AI/AN Medicaid beneficiaries, but not all states do. However, IHS, CMS, and states are not able to say how much has been paid for individuals that are part of the IHS user population when they are referred to hospitals or specialists. This is an important figure as it actually represents the cost avoidance experienced by the IHS and tribal program referring the patient and thus extending its Contract Health Services funding and therefore it lessens the need to ration health care: The Cost Avoidance realized by the Indian health program is due to payments to other providers (including, transportation, pharmacy, specialists and hospitals) that would have been paid by the Indian health program from its CHS funds (a finite amount) but was paid by Medicaid. Indian Health Service [The Indian Health Service s] foundation [is] to uphold the Federal Government's obligation to promote healthy American Indian and Alaska Native people, communities, and cultures and to honor and protect the inherent sovereign rights of Tribes The Indian Health Service (IHS), an agency within the Department of Health and Human Services, is responsible for providing federal health services to American Indians and Alaska Natives. The provision of health services to members of federally-recognized tribes grew out of the special government-to-government relationship between the federal government and Indian tribes. This relationship, established in 1787, is based on Article I, Section 8 of the Constitution, and has been given form and substance by numerous treaties, laws, Supreme Court decisions, and Executive Orders. The IHS is the principal federal health care provider and health advocate for Indian people, and its goal is to raise their health status to the highest possible level. (Indian Health Service, 2005) 3

8 IHS provides health services through a national network of clinics and hospitals. There are twelve regional (geographic) service areas to which funds are distributed. Funds are appropriated as a discretionary program by Congress each year, which, along with Medicaid, makes up one of two main sources of revenue to fund health care services for the 1,485,431 IHS users. The IHS funding is fully detailed and easily understood. $3.6 billion (FY 2009) in national funding is distributed to the 12 area offices that then distribute funds to each of the area s tribes in 35 states. The funds are broken down into 13 main budget line items with the largest being funding ($1.5 billion) for Hospitals and Clinics. The second largest line item (at $550 million) is the one that is used to purchase health care outside these facilities and is known as the Contract Health Services line item. CHS monies are used to cover services that are not provided at the individual IHS facilities; such programs must refer these patients out for contract services. Each tribe has a CHS budget line item. Unfortunately, IHS is chronically underfunded and thus has suffered budget shortfalls, additionally years of inflation and mandatory costs have further eroded financial resources, resulting in year after year of severe rationing of care. The plan of the paper Throughout the paper evidence of spending gleaned from state-level reports from 12 states that represent over 90% of the IHS user population is presented. The paper first presents a review of the evidence of Medicaid importance for each state in this study of 12 states. Following the state by state review data for one Washington State tribe is examined for evidence of the importance of Medicaid funding to the program. Secondly, summary tables present the level of Medicaid funding for IHPs and rank order the states across several measures of the level of Medicaid resources available to IHPs. Medicaid spending for IHS users is then compared to IHS funding for the same population with the finding that IHPs receive approximately the same amount (with variations across the Areas of IHS) from each source. The paper concludes with its main finding about Medicaid s importance to Indian health programs. Finally, areas for further research are suggested by questions raised about trends in Medicaid funding. In order to set the stage for the analysis that follows it would be wise to consider the level of IHS funding to the 12 Area Offices of the agency and their respective user populations. 4

9 IHS User Population & Area Allowances Area 2007 User Population 2007 % of Total Population Area Allocation 2007 % of Total Allocation Aberdeen 119, % $249,716, % Alaska 134, % 437,811, % Albuquerque 85, % 130,573, % Bemidji 100, % 144,247, % Billings 70, % 143,522, % California 75, % 130,872, % Nashville 47, % 101,746, % Navajo 237, % 354,785, % Oklahoma 313, % 394,892, % Phoenix 153, % 239,437, % Portland 100, % 195,952, % Tucson 24, % 41,599, % 1,463,752 $2.5 billion Medicaid and Medicare & IHS With the passage of the Indian Health Care Improvement Act in 1976, the IHS was given the authority to bill for services provided to American Indians and Alaska Natives who are beneficiaries of CMS programs. The Congress directed that revenue accruing to the IHS was to be used to ensure that IHS facilities met the safety standards, including appropriate equipping, staffing, quality of clinical care, and accreditation of services. (Indian Health Service, 2008) The most significant source of revenue for IHPs after the Indian Health Service is a federal agency the Centers for Medicare and Medicaid Services (CMS). Medicaid is the number one source of funds identified and accessed by application of the Alternative resource rule. This rule states that IHS is the secondary payor to Medicaid, Medicare or other payors and requires application of these resources before approving the expenditure of IHS funds. However, little has been documented or published about spending for AI/ANs from the two main national health programs. Medicare is the program for America s elderly (65 and over) and Medicaid for America s poorest residents. At the February 27 meeting of the TTAG, CMS officials stated that about 200,000 Medicare beneficiaries are AI/AN and about 800,000 are currently receiving Medicaid. 5

10 If the average spending for both Medicare and Medicaid programs and the assumption that all of the above enrollees were also part of the IHS user population were applied, it would suggest that $4 billion is spent on the 1 million beneficiaries ($8,000 times 200,000 for Medicare, totaling $1.6 billion, and $3,000 times 800,000 for Medicaid, totaling $2.4 billion). If this total ($4 billion) was then added to the $3.6 billion from IHS 2009 appropriation, the total federal resources dedicated to AI/AN IHPs would be $7.6 billion; still short of the estimated need of $10 billion, but a lot closer than without Medicare and Medicaid. Unfortunately, this estimate of $4 billion is not accurate, as it overestimates the amount of expenditures for IHS users. The IHS user population enrolled in Medicare and Medicaid is far less than the 1 million AI/AN reported by the Centers for Medicare and Medicaid. As stated earlier, a significant amount of Indians who are eligible for IHS health care services do not live near these reservation-based services and have not used the services during the 3 year period required to be counted as a user however these individuals are included in most state reports and are included in CMS data. Therefore the CMS estimate of 1,000,000 AI/AN beneficiaries greatly overstates the supplement to IHS funding that Medicaid and Medicare provides to meet the overall level of need of the IHS user population. It is important to develop a better estimate of actual expenditures for the user population from the two federal programs. Still, it is quickly evident that Medicaid has grown significantly in importance from 1996 to IHS and tribal health programs experienced robust growth rates in Medicaid enrollment and utilization between 1997 and The first signs of stabilization appeared in some states (early innovators like Washington and Oregon) in 2001 and some states appeared to have reached a plateau by Funding for IHS has been relatively static over most of this time period with purchasing power lost to inflation. In 2008, a typical Indian health program has 25% to nearly 50% of its patients bills paid by Medicaid, an increase from 1995 when such revenues comprised less than 10% Indian health programs revenues. The plateau of utilization of Medicaid is thought to be attributable to the efficacy and sophistication of policies and practices of Indian health programs for enrolling patients in Medicare and Medicaid. The leveling may also be representative of improved/developed economies and tribes lifting their people out of poverty. Whatever the reason, in 2008 Medicaid expansion has leveled off in several IHS areas. As might be expected, the early leaders in Medicaid collections are now the areas with the smallest increases. Conversely and expectantly, late adopters of Medicaid enrollment policies and practices are now seeing the largest increases. However, improvement in Medicaid enrollment is needed as some areas still lag far below the average and some IHS service units lag far below their own area s average. This indicates that there is still a need for education and outreach to some programs, but most are well aware of importance of Medicaid funding. Information on Medicare is even less revealing. What is known at this point is that Medicare is a small, but growing component of total revenues; particularly since the 6

11 demographics of AI/AN is changing and life expectancy is increasing for this population. IHS reported Medicare payments of $161 million in FY The actual total is somewhat higher than this since it only reports payments to IHS health programs and does not include payments to Tribal IHPs for referrals. One important point that has to be presented in this paper is that while the tribes see the partnership between IHS and CMS as beneficial, most take the position that they should not have to rely on a means-tested program such as Medicaid to meet their members' health needs. Tribes argue that treaties signed by the Federal government establishes a legal and moral obligation to provide health care services. This was in exchange for ceding their lands and other resources to the United States. By applying a means-tested enrollment many tribes feel that the federal government is not meeting the provisions of their treaties. Population Estimates for 12 Study States The review of 12 states whose Indian population contains 90% of IHS users follows. The choice of states does include all states with very large IHS user populations. The smaller states of Oregon and Idaho are included to complete the set of states included in the Portland Area of the Indian Health Service. Minnesota is included since it has a significant number of IHS users who are also Medicaid beneficiaries, but the state of Wisconsin, with a significant Indian population is not, nor is Michigan simply to keep the review more manageable. There are 35 states with IHS-funded health programs (sometimes called Reservation States since they also have reservations), but those not in the study would not add much to the analysis since their IHS user population is so small. The Nashville area has no states represented in the study; again for practical reasons as the Area s states stretch all along the Gulf and Atlantic coasts and its population is less than 80,000 users Population Estimates State AI/AN % of State Population Arizona 4.5% 277,732 Alaska 13.1% 88,026 New Mexico 9.7% 189,152 Oklahoma 6.8% 244,326 South Dakota 8.6% 67,614 Minnesota 1.0% 51,922 California 0.7% 265,936 Washington 1.5% 92,791 Montana 6.3% 59,500 North Dakota 5.2% 33,219 Oregon 1.8% 67,269 Idaho 1.1% 16,250 US Census 2007 AI/AN Population Estimate 7

12 State Impacts Arizona Arizona has the nation s largest reservation-based population and it is no surprise that it leads in most categories of spending by Medicaid for its IHS user population. 11% of the state s Medicaid population is American Indian (about 120,000) with 58% living on reservation and 69% of the total actually receiving care from Indian Health Programs and the balance from the state s managed care contracted plans. It is expected that the urban Indian population is more likely to choose a managed care plan offered by Medicaid, however Phoenix has a medical center and several ambulatory clinic s within the metro area. Recent state reporting of high quality data depict an active and engage state working well with Tribes to enroll their citizens in the Medicaid program. The 142% rate of growth in Medicaid expenditures for this population from 2003 to 2007 attests to this fact. Overall payments to the state s largely Indian Health Service run programs rose from $116 million in 2003 to a formidable $282 million in State Fiscal Year A shift in health care delivery for IHPs (both IHS and tribal programs) is evident in the astounding rise in payments to outpatient (ambulatory) clinics which witnessed an increase from $16 million in payments in 2003 to $163 million in 2007! $26.5 million of the 2007 total is payments from Managed Care plans to IHPs. The estimated amount of payments to IHPs for the user population of these programs is $400 million to $500 million. $650 to $750 million is a conservative estimate of the total Medicaid spending for the state s IHS user population. IHS 2007 spending of $635 million for the Navajo, Phoenix, and Tucson Areas is actually somewhat less than that total for Arizona since about 34,000 of the estimated 85,000 Navajo receiving Medicaid are New Mexico residents. In addition the Phoenix Area includes over 20,000 users in Nevada and California. Consider also that over half of the patients at the Phoenix Indian Medical Center are Navajo (not necessarily current residents of the Navajo Nation) and you can see that one has to be satisfied with a less than precise accounting for Indian health finance in Arizona. It is very likely, however, that Medicaid expenditures exceed IHS funding for the residents of the state who are also in the state s IHS user population-- keeping in mind that IHS s area boundaries include Tribes and Indian people outside the state Total Medicaid Payments to Arizona Indian Health Programs State Fiscal Year Total Medicaid Payments to IHS/638 inpatient outpatient ,552,456 $ 99,979,768 $ 16,572, ,021,117 $ 112,237,598 $ 74,783, ,992,260 $ 118,257,592 $ 132,734, ,883,785 $ 123,623,162 $ 144,260, ,351,325 $ 119,234,536 $ 163,116,789 The clear trend in Arizona is that of a late adopter that has caught the wave of growth in income by accessing the Medicaid Program (Source Molina, 2008). 8

13 New Mexico New Mexico is a late arrival to maximizing its Medicaid program revenues. Like Arizona, but without the same high quality data to fully chart its progress, New Mexico now has 75,722 American Indians enrolled in Medicaid; 35,000 are Navajo. 18.2% of the states Medicaid population is Indian, a higher percent than Arizona, compared to 10.2% of the total population that is AI/AN. In 2007 it was reported that $65 million was paid to the State s IHPs, but an estimated $275 million was expended overall for the state s IHS user population. Unfortunately, the data to substantiate trends over time and payments to IHPs is not available. Nonetheless, one can say that Medicaid has made a substantial contribution to building the resources available to the state s large Indian population. In the past 4 years the state has vigorously engaged Tribes and Pueblos in consultation on how to improve the health of the state s Indian population by addressing long term care, behavioral health and health care generally. Medicaid was the catalyst that sparked this supportive Tribal-State relationship to address health issues. The state has convened a truly impressive number of meetings to address a large number of issues. More than just talk the money has started to flow in New Mexico. New Mexico & Arizona It is no easy task to separate the four overlapping IHS Areas in the two states of New Mexico and Arizona. However, the following table overcomes that obstacle by sidestepping the issue by combined the two states and the four IHS Areas for analytic purposes. It takes New Mexico and Arizona spending for AI/ANs and then compares it to the total for the 4 IHS Areas that have 90% of their census in those two states. The purpose of the table is simply to compare IHS funding to Medicaid expenditures. As with all such reported expenditures the Medicaid expenditures overstate somewhat the amount expended for IHS user population. It seems reasonable, however, to conclude that Medicaid ($867 million) is at least equal to IHS allowances if one treats the two states as one. New Mexico & Arizona Tribes IHS Area Allowances & Medicaid Payments FY 2007 IHS Area Allowance Medicaid ALBUQUERQUE $ 130,573,304 NM Medicaid $365 million NAVAJO $ 354,785,382 AZ Medicaid $575 million (for SFY TUCSON $ 41,599, , AHCCCS, 2009) PHOENIX $ 239,437,836 $282 million was paid directly to IHPS in Arizona in SY 2008.an estimated $220 million payments for specialist and hospital care for a total of $502 million for IHS users. Total Arizona & New Mexico $ 766,395,674 $940,000,000 9

14 Oklahoma Regular reports with valid measures and reliable data are now a feature of the Oklahoma Medicaid Program and its managed care SoonerCare Program. Unfortunately, longitudinal data is not easily obtained, but it appears that the State and Tribes are fully engaged and accessing Medicaid. Oklahoma is home to the one of the nation s largest Indian populations. Over 13% of the Medicaid population is Indian (83,338 January 2009), double the percentage (6.8%) of the state total population. The state goes on to report that 76,249 reported American Indian only and just 7,089 reported Indian multiple race and less than 1000 Indian with Hispanic ethnicity. The state has the largest Indian population enrolled in Medicaid managed care with 58,484 members of SoonerCare. The state allows these enrollees to also receive care at IHPs and IHPs are paid for services to these patients. The state reports that $85 million was paid to the state s IHPs that serve over 40 tribes in widespread communities across the entire state. Payments for the user population of these programs for specialty and hospital care are not readily available, but it is estimated to exceed $200 to $250 million in SFY Given the large number of AI/ANs enrolled in Medicaid the estimate of expenditures seems low, but this may reflect the modest benefit package and restrictive eligibility standards of the state Medicaid program compared to other states furthest west and north of Oklahoma. Medicaid spending is less than the IHS allowance of nearly $400 million (2007), but unlike most states the IHS spending is larger (in fact decidedly larger) than the Medicaid expenditures. It is not clear if this means greater financial difficulties for the state s IHPs, but this is likely unless the rate of employer based insurance is higher than that found in other IHS areas and other states. Alaska Alaska is unique in one highly significant aspect; the high cost of delivering services to a population that is spread across an area that could only be appreciated by fellow Alaskans or perhaps a Canadian. Distance, severe climate, small population widely dispersed in small villages have not stopped Alaska Natives from building what is truly deserving of the description of an Alaskan Native Health System. While all the other states in this study are located in relatively lower cost health care catchment areas, Alaska is at the other extreme. The factors mentioned also result in difficulty recruiting and retaining qualified staff. Alaska Natives have tried to address each of their unique cost drivers by efficient management of transportation, collaboration wherever economies of scale are achievable, the use of telemedicine, unique compensation packages that often include housing and liberal vacation allowances, and innovative provider classifications such as community health aides and dental health aides. All of these innovations have helped, but none has managed to bring the needed level of care to Alaska Natives without a level of expenditure that is at least 50% higher than the mainland Indian Health Programs. Alaska Tribes are fully compacted (638) with only minimal IHS presence in the Alaska Area Office. The state should be treated as an outlier in most comparisons and it s relatively high level of funding should not be confused with the reality that the system is underfunded. While Arizona can claim to have the greatest level of expenditure for AI/ANs no state exceeds the percentage of its population that is Alaska Native or American Indian. Fully 10

15 40% of Alaska Medicaid population is Alaska Native compared to just 8% of the total state population. The quality of data for the state is excellent. The state Medicaid program paid $134 million directly to Alaska Native providers in SFY 2007 for 52,000 AI/AN patients; the vast majority Alaska Natives. An additional $356 million was paid to non- Native providers. Alaska received $437 million from the Indian Health Service in the federal fiscal year slightly less than the $490 million in Medicaid expenditures in SFY Compared to the recent trend in Arizona, however, Medicaid payments declined in Alaska from 2004 to $40 million less was paid to Alaska Native programs in 2007 compared to Some programs have had to pay back some Medicaid payments. Most agree that the era of rapid growth in Medicaid payments has ended. Alaska was an early adopter of Medicaid outreach and enrollment initiatives and is now a mature program with a slow rate of growth (and reduction in some years). Having noted the new trend it is important to also note that the level of expenditures is high and a significant sources of revenue. South Dakota South Dakota has some of the most severe health care statistics in the United States. Large land-based reservations have large populations that are remote from major medical centers. Poor economic prospects, but fierce pride and a determination to maintain a glorious cultural tradition that abhors the thought of migration to larger population centers confront resource constraints that seem to ensure poor health outcome. How bad are these resources deficiencies? Located with North Dakota and a few Iowa and Nebraska Tribes in the Aberdeen Area most of the area s tribes have health programs operated by the Indian Health Service. South Dakota reports that in SFY % of it Medicaid population is American Indian and 26% of its total expenditures. 36,355 AI/AN beneficiaries make it the fourth largest Indian Medicaid population in the country. The total expenditures are estimated at between $185 and $200 million in Washington Long considered one of the nation s most innovative states for Indian health policy, the state was an early adopter of Medicaid. In fact, recent trends depict a stabilized and flat rate of growth with an actual decline in Medicaid payments for Medical care between 2007 and The state has over 100,000 AI/ANs, but this represents less than 2% of the state s total population. Less than 25,000 AI/ANs are enrolled in Medicaid and the number who are in the IHS user population of the states Tribes is less than 20,000. The maturity of the Tribes involvement in the Medicaid program is evident in the growth of the past five years with a fairly steady rate of growth. In recent years dental and mental health service have outpaced the growth of medical services. The following table depicts the Medicaid payments of the past five years to Washington State IHPs. 11

16 Payments to WA IHPs 2004 $22,158, $21,321, $25,056, $35,778, $37,615,062 Within the total of payments there are two divergent trends. Medicaid Care payments went down in SFY 2008, but mental health payments increased. It is not clear why Medical payments declined. Washington Tribes have a highly developed consultation process. A tribal health organization, the American Indian Health Commission of Washington State was established in response to state-level health care reform in Its main work of the past 15 years has been making the Medicaid program work for Washington s Indian Health Programs. In fact, much of the advances established in Washington and Oregon then became the basis of programs in much larger states (in terms of larger IHS users). In 2009 HR 1 and HR 2 codified in federal law what has long been policy in Washington: No costsharing for American Indians, protection from estate recovery, no forced enrollment in managed care plans, and guaranteed payment from managed care plans when they provide services to American Indians who are also members of these plans. The mechanism to bring these issues to the national level was another tribal organization; the Northwest Portland Area Indian Health Board. The role of Indian health organizations is an untold story in print, but well-known in Indian health programs. These organizations are the promoters of innovations and their diffusion. 12

17 Revenue Sources of a Washington Tribe Example of an Indian Health Program Figure 1 Indian Health Program Revenues: Example of a Washington Tribe The chart above depicts revenue sources of a Washington Tribe. IHS funding makes up a majority of its resources, but Medicaid represents nearly $1 million in funding for the program. It is not known how much Medicaid pays for patients that the tribe refers to specialists or hospitals, but it is likely in excess of $500,000. These are funds that would otherwise come from the Tribe s Contract Health Services budget. This means Medicaid is actually as much as 35-40% of the tribes resources if we defined that term to include funding to pay for the care of patients referred by the health program. Tribal own-source funding is very hard to determine and clearly is greater for more economically successful tribes. Tribes are justifiably sensitive about highlighting these expenditures. It may be that the greatest expenditure is for health insurance for tribal members followed by the transfer of tribal dollars to the health program. In the Northwest the range is great, so an estimated average of about 5 to 10% in tribal own sources funding masks great variation between tribes. Washington s experience is similar to many states: That is, Medicaid spending (both payments to Indian health programs and payments to other providers) is nearly the same amount as IHS allowances to tribes for Indian health program patients. Washington Indian health programs receive about $110 million in IHS funding and between $85 to $105 million in Medicaid payments. Medicaid pays in excess of $130 million for AI/ANs in 13

18 Washington, but some of this is to the many Urban Indians who are not counted in the user population of Washington s federally recognized tribes. Minnesota No one familiar with the Dakotas and Minnesota would be surprised that Minnesota Tribes enjoy more benefits from the Medicaid program. Surprising, however, is how little is known about expenditures for the state s 51,922 (2007) AI/ANs. Since most AI/AN are located in the remote northern regions of the state their socio-economic profile is more similar to North or South Dakota than to a state like Washington to which it otherwise bears many similarities. CMS reported spending $147 million on AI/ANs in its 2005 MMIS file. It also reported that per capita expenditures on this population were second only to Alaska. Minnesota Tribes have a relatively low level, per capita, of IHS funding and it is clear that Medicaid is a larger source of funds for most of the state s IHPs than the Indian Health Service. State-Tribal interaction is not as active as one might think considering the importance of this revenue source, but Tribes report good relationships with their counterparts in state government, less so with state government and agency leadership. It may be that Tribe simply benefit from being in a state with a decidedly generous Medicaid program. Minneapolis has one of the largest Urban Indian Populations in the Nation and it is likely that much of the total expenditure reported by CMS is for the Urban Population. Unfortunately for this study, this means it is difficult to report clear findings for the IHS user population. Montana Montana has recently begun a vigorous relationship with Tribes on expanding Medicaid. 25% of the State s Medicaid population in American Indian (21,415 in 2006) and most are also part of the IHS User Population of the state s Indian Health Programs. Only Alaska and South Dakota have a larger percentage of AI/ANs in their state s Medicaid program. The state paid $30 million to IHPs in SFY 2006 compared to just $16 million in SFY 2002 indicating a strong rate of growth. Another $75 to $80 million is estimated in expenditures for care that would otherwise have been purchased through tribal Contract Health Service funds. In the past three years the state s Tribes have sought state support for special provisions in the state Medicaid Plan (State Plan Amendment, SPA). The state is well positioned politically with the largest number of Indian legislators in any state legislature. In addition the state s Tribes enjoy a good relationship with the Chairman of the US Senate Finance Committee, Sen. Max Baucus. This support was critical in several new amendments to Medicaid that prohibit cost sharing for Indian beneficiaries of Medicaid and Children s Health Insurance (Titles XIX and XXI of the Social Security Act). California California is a paradox. It has the largest Indian population in the nation (over 400,000 multi-race, 265,963 one race in 2005) and the second largest number of tribes of any state (105) after Alaska. However, less than ¼ of 1% of the state s Medicaid population is 14

19 Indian. Overall data quality is poor and it is nearly impossible to determine how many of the state s over 40,000 AI/ANs who receive Medicaid are also IHS users. An estimated $19 million was paid to IHPs in SFY It difficult as well to determine how much of the $131 million CMS reported spending for AI/ANs in 2005 was on behalf of users of IHPs, but it is likely around $30 to $40 million resulting in a total impact of at most $60 million for the 75,000 IHS users in the state. Tribal-state interactions are regular and meaningful, but one gets the sense the due to the tiny proportion of Medi-Cal beneficiaries who are also IHS user s the state s attention to the needs of IHPs is far less than needed and far less than what occurs in most other states in this study. North Dakota Very little quality information is available for the state. The CMS MMIS reports $56.8 million in spending on 14,810 AI/ANs in North Dakota may have one of the poorest uptake rates of any of the states in this study. Medicaid expenditures for AI/ANs are less than 1/3 of South Dakota s total despite having a similar socioeconomic profile for its Indian population that is 1/2 of South Dakota s. This suggests an under-enrollment of eligible AI/ANs. The state does not appear to have a very active state-tribal relationship for Medicaid policymaking. Oregon Oregon state has met with Oregon Tribes since 1995 to develop policies to maximize Indian participation in the Oregon Health Plan. Tribes have successfully proposed changes in enrollment that allow cost based reimbursement. In 2004 $17 million was paid to IHPs, but there is no recent report to document the expected increase in this total. Just 2.1% of the state Medicaid population is AI/AN, but this is more than the 1.4 percent of the total state population that is AI/AN. The state does not have a rich benefit package and its eligibility standards are lower than neighboring state of Washington. Idaho Very little quality information is available for the state. The state has conducted regular quarterly meetings since 1996 with Medicaid as the main subject of discussion and policymaking. It is estimated that there are about 4,000 IHS users and payments total about $25 million for all AI/ANs in a state where most Indians live on our near the state s three large reservations (Shoshone Bannock, Nez Perce, and Coeur d Alene.). It appears that states and tribes have all recognized the importance of Medicaid at some point in the past decade. Tribes are increasing their Medicaid revenues and meeting on a regular basis in most states. The next section of the paper highlights the more recent trend of slowing growth in Medicaid revenues in two states. 15

20 Medicaid Trends Trends in Medicaid Expenditures The two charts that follow depict two states where Medicaid revenues have stagnated or declined. Alaska experienced a decline in 2005 and 2006 and Washington has seen a decline from SFY 2007 to SFY 2008 in Medicaid Payments for Medical encounters. This represents the first time Medicaid has declined since Medicaid growth has slowed e.g., Alaska it has declined. Washington Medicaid Payments ($millions) $120 $100 $80 $60 $40 $20 $0 $ Medicaid Payments to AIAN Tribal & non tribal Providers Despite the evidence of stagnation or decline in Alaska and Washington the overall trend seems to be that of steady increases in most states. As noted above, Oklahoma, New Mexico and Arizona; the three largest IHS user population states have seen large increases in Medicaid payments. The following table depicts the trend in Arizona. 16

21 Growth of Medicaid Payments to IHPs in Arizona 2003 to 2007 The chart depicts extreme growth in payments to inpatient ambulatory clinics and hospital outpatient over the five years and smaller increases to hospitals. The overall rate of growth in Medicaid payments to IHPs from 2003 to 2007 was 142%. Consider that this growth occurred at the same time as IHS funding increased by less than 15% over the same time period. It is not hard to imagine Medicaid has caught the attention of those responsible for decisions on Indian health in Arizona. It is now possible to take the data in the state by state review and produce tables that rank the 12 states by various measures, spending on AI/ANs, percentage of Medicaid population that is AI/AN and total number of AI/ANs enrolled in Medicaid. 17

22 American Indians and Alaska Natives Enrolled in Medicaid The chart above provides and easy comparison of enrollment of AI/ANs in state Medicaid programs. Most information on American Indians and Alaska Natives and the Medicaid Program labels them OTHER (see the Kaiser Family Foundations Medicaid databases). That is, Indians are typically not detailed as a subpopulation to be examined. The chart above is suggestive of the importance of Medicaid to AI/ANs in a study that focuses on these programs. Contrast this to a study of the overall Medicaid program where the significance of Medicaid to IHPs is lost due to the small numbers. Certainly, state officials in Arizona, Oklahoma, New Mexico, Alaska and South Dakota consider their AI/AN population large enough to deserve their attention. Whether or not this is also true for California, Washington, Minnesota, Oregon or Idaho is not as easily answered in the affirmative. The following chart demonstrates more clearly why it is equally possible that state Medicaid officials may, in fact, not pay attention to their AI/AN populations when the population is as small as it is in the later states. 18

23 American Indian and Alaska Natives Percentage of States Total Medicaid Census Even a cursory examination of this chart suggests which states are likely to have greater engagement with State and Tribal health programs. From Alaska to Arizona we see surprisingly large percentages of AI/ANs in some state Medicaid programs. It is beyond the reach of this study to determine if, in fact, states with a high percentage of AI/AN Medicaid enrollees have more active and more positive State-Tribal relationships. Anecdotal evidence suggests that the correlation is not high. Alaska, New Mexico, Oregon and Washington have reported excellent relationships with their state Medicaid programs and South Dakota, North Dakota, and Idaho have reported poor relationships. Recent years have seen markedly improved relationships in Montana and Oklahoma. Idaho and California have reported ongoing difficulties and mixed success in actively engaging their states. Tribes often report that they are able to build good relationships with state staff, but official state policy is not as supportive as these staff. The simple reason is usually that it does take time to understand the Indian health programs different resources and needs, but permanent staff with more time spent of Indian health issues are more likely to understand than rotating department or division directors. 19

24 Estimated Total Medicaid Spending The following table depicts an attempt to estimate the total spending on IHS users in the 12 states. It is based on available state reports compared to the CMS MMIS report of Most of the state reports are from SFY 2007 or SFY It is important to state that although the estimate is based on actual state reports it is only an estimate. In addition, it is not always clear if the data is from a State fiscal year, calendar year, or federal fiscal year so comparison need to be made with that in mind. The purpose of the table is to give a sense of the magnitude of resources Medicaid provides to IHPs and to give a sense of its relative importance in various states. One should not lose sight of the fact the Medicaid is now a critical source of funding for nearly every Indian Health Program in the country; regardless of which state that program operates. Findings It is without question that Medicaid is important, even critical to Indian health programs. Medicaid s positive impact on Indian Health Programs not only alleviates pressures on internal budgets to maintain facility safety standards, including appropriate equipping, staffing, and quality of clinical care. It provides funding to maintain accreditation, but also and perhaps more importantly it provides protection of the Contract Health Service line item to individual program budgets easing the level of rationing of healthcare substantially. There are some areas of the IHS, perhaps most, where Medicaid payments exceed IHS funding. This is a new reality that few would have guessed. The fact that Alaska, New 20