Sequestration Takes Toll on IHS Services – Funds Increase Requested for FY 2014

by U.S. Medicine

June 8, 2013

By Sandra Basu

WASHINGTON — While the Obama administration recently introduced its proposed Fiscal Year 2014 budget, tribal advocates still have FY 2013 on their minds and are expressing worry about the impact that sequestration is having on healthcare funds for American Indians and Alaska Natives (AI/AN) for the remainder of the fiscal year.

“The sequestration cuts are literally a matter of life and death for American Indians and Alaska Natives,” Indian Health Board chairperson Cathy Abramson told lawmakers at a recent hearing.

Abramson made her comments at a hearing held by the Senate Indian Affairs Committee, in which lawmakers heard testimony regarding President Barack Obama’s FY 2014 budget request, which proposes $4.4 billion in discretionary budget authority for FY 2014, an increase of $124 million, or 2.9%, over the FY 2012 enacted funding level.

Despite the proposed increase for FY 2014, IHS will incur $220 million in sequestration cuts to the FY 2013 budget — which, according to IHS estimates, will result in a reduction of 3,000 inpatient admissions and 804,000 outpatient visits for AI/ANs.

“Although we look at these [budget] increases, we also have to acknowledge the difficult financial times that we are in. On March 1, sequestration took effect and mandated automatic across-the-board cuts to federal programs. Sequestration will have a significant impact on tribal government,” acknowledged Sen. Maria Cantwell (D-WA), who chairs the Senate Indian Affairs Committee.

Behavioral Health AffectedAbramson pointed out to lawmakers that AI/ANs are known to suffer disproportionally from several health problems. According to IHS, they die at higher rates than other Americans from alcoholism (552% higher), diabetes (182% higher), unintentional injuries (138% higher), homicide (83% higher) and suicide (74% higher).

For example, Abramson pointed out, behavioral health services on the Pine Ridge Reservation in South Dakota will be reduced because of sequestration. She said the reservation suffers regularly “with suicide, alcoholism and other substance-abuse issues.”

“There have been 100 suicide attempts in 110 days on Pine Ridge. Because of sequestration they will not be able to hire two mental health service providers,” she said.

Another example she cited is the Alaska Native Tribal Health Consortium, which will discontinue its Community Health Aid training program and close the Bill Brady Healing Center that provides alcohol and drug treatment to Native Alaskans, both because of sequestration.

“[The National Indian Health Board (NIHB)] asks you to work with your colleagues in Congress to restore the $240 million in IHS funding eliminated due to sequestration and rescissions since FY 2011 and enact legislation that permanently exempts the Indian Health Service from sequestration,” she told lawmakers.

Also testifying was National Congress of American Indians President Jefferson Keel, who told the committee in written testimony that the sequester reductions to tribal programs undermine Indian treaty rights and obligations ratified under the Constitution.

“In exchange for land, the United States agreed to protect tribal treaty rights, lands, and resources, including provision of certain services for American Indian and Alaska Native tribes and villages, which is known as the federal Indian trust responsibility,” he said.

Increased for FY 2014

IHS Director Yvette Roubideaux, MD, meanwhile, said that if this proposed FY 2014 budget is enacted, IHS appropriations will have increased by 32% since FY 2008.

 “The appropriations increases received in the past five fiscal years are making a substantial difference in the quantity and quality of healthcare we are able to provide to AI/ANs,” she said.

Roubideaux said the request includes $35 million to fund the medical inflationary cost for the Contract Health Services programs. CHS funds are used to purchase healthcare that IHS is unable to provide through its own network.

Roubideaux said that, while four years ago there was only enough funding for “life or limb” referrals, increased CHS funding in recent years means that almost half of federal CHS programs are funding referrals beyond Medical Priority 1. The increased CHS funding also means the IHS Catastrophic Health Emergency Fund, which previously ran out of funding for high cost cases in June each year, is able to fund cases through August, she explained.

Other proposed increases in the budget include $77.3 million for staff and to operate newly constructed health facilities, $6 million for pay increases for federal and tribal staff, and $5.8 million for contract support costs for ongoing contracts and compacts.

Roubideaux also acknowledged, however, that sequestration’s impact on IHS programs will be “significant.”

“Overall, the $220 million reduction in the IHS budget for FY 2013 is estimated to result in a reduction of 3,000 inpatient admissions and 804,000 outpatient visits for American Indians and Alaska Natives (AI/ANs),” she said in written testimony. “The implementation of efficient spending initiatives, e.g., reducing travel and conference spending, has also changed the way IHS conducts its business, and IHS is committed to continuing these efforts regardless of the current fiscal environment.”


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