[Senate Report 112-228]
[From the U.S. Government Publishing Office]
Calendar No. 509
112th Congress Report
SENATE
2d Session 112-228
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A BILL TO DEEM THE SUBMISSION OF CERTAIN CLAIMS TO AN INDIAN HEALTH
SERVICE CONTRACTING OFFICER AS TIMELY
_______
September 20, 2012.--Ordered to be printed
_______
Mr. Akaka, from the Committee on Indian Affairs,
submitted the following
R E P O R T
[To accompany S. 2389]
The Committee on Indian Affairs, to which was referred the
bill (S. 2389) to deem the submission of certain claims to an
Indian Health Service contracting officer as timely, having
considered the same, reports favorably without amendment and
recommends that the bill do pass.
PURPOSE
The purpose of S. 2389 is to deem claims submitted to an
Indian Health Service contracting officer pursuant to the
Indian Self-Determination and Education Assistance Act (25
U.S.C. 450 et seq.) on or before October 31, 2005, involving a
claim that accrued after October 1, 1995, and on or before
September 30, 1999, to have been timely submitted.
BACKGROUND
S. 2389 deems timely approximately two dozen contract
claims that were presented to the Indian Health Service in 2005
over alleged contract underpayments which occurred in fiscal
years 1996-1999. These claims were not filed earlier because
tribal contactors reasonably believed that class action
litigation filed in 2001 would protect their interests by
tolling the applicable statute of limitations.
The Indian Self Determination and Education Assistance Act
provides a process whereby Indian tribes or tribal
organizations can assume operation of Federal Indian programs
administered by the Department of the Interior and the Indian
Health Service within the Department of Health and Human
Services. Tribal contractors administer these programs through
contracts or compacts. In addition, this Act also authorizes
the payment of contract support costs to these tribal
contractors. These contract support costs are reasonable costs
for activities which must be carried on by a contractor to
ensure compliance with the terms of the contract and prudent
management. 25 U.S.C. 450j-1(a)(2).
However, contending that these costs were not fully funded,
Indian tribes filed suit against the Indian Health Service
seeking full support costs. See Cherokee Nation of Okla. v.
Leavitt, 543 U.S. 631 and Pueblo of Zuni v. U.S., 243 F.R.D.
436 (D.N.M. 2007). These suits, filed March 5, 1999 and
September 10, 2001, respectively, also sought class
certification comprised of Indian tribes and tribal
organizations operating Indian programs through these contracts
and not fully paid the contract support costs.\1\
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\1\In Cherokee Nation, the plaintiff sought class certification for
tribal contractors with claims arising from 1988 to ``the present''. In
Zuni, the plaintiff sought class certification for tribal contractors
with claims arising from 1993 to ``the present.''
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In the Cherokee Nation case, the District Court denied
class certification on February 9, 2001 and subsequently ruled
on the merits of the case, which the Cherokee Nation appealed.
The court stayed the action in the Zuni case pending the
outcome of the appeal in the Cherokee Nation case. After the
Supreme Court issued its ruling in the Cherokee Nation case,
the Zuni District Court lifted the stay and denied class
certification in 2007 for failing to comply with the mandatory
administrative exhaustion scheme under the Contract Disputes
Act which governs these types of disputes for tribal contracts
and compacts.
Several tribal contractors filed individual claims with the
agency contracting officer, which were all denied as untimely.
On appeal of the denials, tribal contractors argued that the
statute of limitations, for filing these claims was tolled
until class certification was denied. The Civilian Board of
Contract Appeals held that the statute of limitations for
filing these claims was not subject to tolling.\2\ On appeal,
the Federal Circuit Court of Appeals held that the statute of
limitation for these claims was not tolled under the general
class action tolling doctrine, but it was subject to equitable
tolling. The court remanded to the ``for a determination as to
whether, under the circumstances of these cases, the limitation
period should be tolled.''\3\
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\2\Arctic Slope Native Ass'n v. Sebelius, 585 F.3d 784, 790 (Fed.
Cir. 2009).
\3\Id. at 800.
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However, this ruling does not settle whether any claims
were timely nor does it settle the validity of any claim.
Rather, each claim will need to be reviewed through the
administrative process under the equitable tolling doctrine
before any determination of the validity of any claim may be
conducted.
NEED FOR LEGISLATION
Generally, for class action lawsuits, the statute of
limitations for individual class members to pursue their own
claims is suspended while a class action case is pending in the
courts. In 2009 the U.S. Court of Appeals for the Federal
Circuit ruled that this normal rule does not apply in
government contract litigation.\4\ Over the past 8 years, the
entire litigation for these claims has focused on whether they
were timely filed, not whether the government is actually
responsible for having underpaid the contracts. This bill would
contribute to judicial efficiency, but would not predetermine
the outcome or validity of the litigation nor invite more
litigation.
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\4\Arctic Slope Native Ass'n v. Sebelius, 583 F.3d 785 (Fed. Cir.
2009).
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LEGISLATIVE HISTORY
On April 26, 2012, Senator Begich, for himself, Senator
Crapo, Senator Murkowski, and Senator Tester, introduced S.
2389, which was referred to the Committee on Indian Affairs.
SECTION-BY-SECTION ANALYSIS
Section 1. Timely submission of certain claims
This section deems the submission of certain claims to an
Indian Health Service contracting officer as timely.
COMMITTEE RECOMMENDATION AND TABULATION OF VOTE
In an open business meeting on June 28, 2012, the Committee
on Indian Affairs, by voice vote, adopted S. 2389 and ordered
the bill reported to the Senate, with the recommendation that
the Senate do pass S. 2389 as reported.
COST AND BUDGETARY CONSIDERATIONS
The following cost estimate, as provided by the
Congressional Budget Office, dated August 6, 2012, was prepared
for S. 2389:
S. 2389--A bill to deem the submission of certain claims to an Indian
Health Service contracting officer as timely
Summary: S. 2389 would amend federal law regarding certain
health care claims submitted to the Indian Health Service
(IHS). Specifically, the bill would deem certain claims
submitted to an IHS contracting officer on or before October
31, 2005, involving a claim that accrued between October 1,
1995, and September 30, 1999, to have been submitted within the
period specified by the statute of limitations.
CBO estimates that enacting S. 2389 would increase direct
spending from the Judgment Fund of the U.S. Treasury by $12
million over the 2013-2022 period. Because the legislation
would affect direct spending, pay-as-you-go procedures apply.
Enacting S. 2389 would not affect revenues.
CBO also estimates that implementing S. 2389 would have an
insignificant effect on spending subject to appropriation.
S. 2389 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated
budgetary impact of S. 2389 is shown in the following table.
The costs of this legislation fall within budget function 800
(general government).
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By fiscal year, in millions of dollars--
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2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2013-2017 2013-2022
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CHANGES IN DIRECT SPENDING
Estimated Budget Authority.................................. 0 0 0 0 2 2 2 2 2 2 2 12
Estimated Outlays........................................... 0 0 0 0 2 2 2 2 2 2 2 12
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Basis of estimate: The Indian Health Service (IHS) operates
a network of health care clinics and hospitals in tribal areas.
Because there are situations in which IHS patients require
additional health care services that are not available at local
IHS service sites, the agency contracts with private health
care practitioners and facilities to supplement the care
available to those patients. Certain private contract health
care providers have contended that the reimbursement they
received from IHS in the mid-to-late 1990s was insufficient to
cover the full cost of providing care to IHS patients under the
Indian Self-Determination and Education Assistance Act, and
they resubmitted some of those claims from the 1990s in 2005.
However, IHS determined that the providers had submitted those
claims after the time allowed for claims submission had
expired, removing them from consideration.
S. 2389 would allow the claims specified above to be
resubmitted for payment by the government because these claims
now would be considered ``submitted timely.'' According to
legal representatives involved in the matter, the total value
of the claims affected by this bill is about $25 million.
The outcome of the claims against the government that would
result from enacting S. 2389 is uncertain, both with respect to
the amount of any damages that might be awarded to the health
care providers and the timing of any resolution. Assuming
enactment around the end of fiscal year 2012, CBO believes
there is some probability that litigation brought based on
these claims would result in a settlement payable within the
2013-2022 period from the Treasury's Judgment Fund (a
permanent, indefinite appropriation for claims and judgments
against the United States). In a recent Supreme Court decision
(in the case Salazar v. Ramah Navajo Chapter, 132 S. Ct. 2181
(2012)), the Court removed one of the government's defenses
against such claims.
Taking into account the uncertainty of the outcome, CBO
assumes that about half of the resubmitted claims would be paid
under S. 2389. Therefore, CBO estimates that enacting this bill
would increase direct spending by $12 million over the 2013-
2022 period. Those payments would be made from the Judgment
Fund. Given the extended length of time required to settle
similar litigation, CBO expects that outlays would probably not
begin until 2017 or later.
Pay-as-you-go considerations: The Statutory Pay-As-You-Go
Act of 2010 establishes budget-reporting and enforcement
procedures for legislation affecting direct spending or
revenues. The net changes in outlays and revenues that are
subject to those pay-as-you-go procedures are shown in the
following table.
CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR S. 2389, AS ORDERED REPORTED BY THE SENATE COMMITTEE ON INDIAN AFFAIRS ON JUNE 28, 2012
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By fiscal year, in millions of dollars--
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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2012-2017 2012-2022
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NET INCREASE IN THE DEFICIT
Statutory Pay-As-You-Go Impact....................... 0 0 0 0 0 2 2 2 2 2 2 2 12
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Intergovernmental and private-sector impact: S. 2389
contains no intergovernmental or private-sector mandates as
defined in UMRA.
Estimate prepared by: Federal Costs: Robert Stewart; Impact
on State, Local, and Tribal Governments: Lisa Ramirez-Branum;
Impact on the Private Sector: Marin Randall.
Estimate approved by: Holly Harvey, Deputy Assistant
Director for Budget Analysis.
REGULATORY AND PAPERWORK IMPACT STATEMENT
Paragraph 11(b) of rule XXVI of the Standing Rules of the
Senate requires that each report accompanying a bill evaluate
the regulatory and paperwork impact that would be incurred in
carrying out the bill. The Committee believes that the
regulatory impact of S. 2389 will be minimal.
EXECUTIVE COMMUNICATIONS
The Committee has received no communications from the
Executive Branch regarding S. 2389.
CHANGES IN EXISTING LAW
In compliance with subsection 12 of rule XXVI of the
Standing Rules of the Senate, the Committee finds that the
enactment of S. 2389 will not effect any changes in existing
law.