State treasury must help pay for what Indian Health Service doesn’t provide

PIERRE — Some members of the state Legislature want to know how much it’s costing South Dakota’s Medicaid system to help pay for care of American Indian people when the federal Indian Health Service won’t help them.

The issue arose last week during the first meeting of the Legislature’s special committee studying Medicaid reimbursement.

State Social Services Secretary Deb Bowman said there is no question that South Dakota must help pay when the Indian Health Service refers patients to outside providers of health care.

She described the Indian Health Service as “woefully inadequately funded” by Congress and said many services, including even normal births of babies, must be provided through outside clinics, hospitals and specialists.

South Dakota and North Dakota lost a federal court case on the matter in 2005. Bowman said the annual cost was about $4 million at the time of the lawsuit.

She told lawmakers that she will bring back current numbers after her staff has the chance to look at more recent data. “We feel the federal government should pay 100 percent of those costs,” she said. “That’s an interesting dilemma.”

Lawyers for the two states had tried in the court case to argue the federal government should pay the full amount for outside services, the same as the federal government does for care at Indian Health Service facilities.

But a three-judge panel for the United States Court of Appeals Eight Circuit ruled 2-1 that the state governments must pay part of the cost, under the standard state-federal costsharing approach taken in Medicaid known as FMAP.

The FMAP splits are different for each state and are based on three years of personal income data for each state.

South Dakota currently receives 62.55 percent reimbursement from the federal government for Medicaid. State taxpayers are responsible for the other 37.45 percent.

In recent years, South Dakota’s obligation has been increasing.

In 2001, the federal share was 68.25 percent. Each 1 percent swing is worth more than $6.5 million in total Medicaid spending for South Dakota.

Tags: american indians, indian health service, news, state