Catastrophic Health Emergency Fund, 70527-70536 [2024-19421]

Agencies

• DEPARTMENT OF HEALTH AND HUMAN SERVICES
• Indian Health Service

[Federal Register Volume 89, Number 169 (Friday, August 30, 2024)]
[Rules and Regulations]
[Pages 70527-70536]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-19421]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Indian Health Service

42 CFR Part 136

[RIN 0917-AA10]


Catastrophic Health Emergency Fund

AGENCY: Indian Health Service, Department of Health and Human Services 
(HHS).

ACTION: Final rule.

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SUMMARY: The Indian Health Service (IHS or Service) administers the 
Catastrophic Health Emergency Fund (CHEF) pursuant to section 202 of 
the Indian Health Care Improvement Act (IHCIA). The purpose of the CHEF 
is to meet the extraordinary medical costs associated with the 
treatment of victims of disasters or catastrophic illnesses who are 
within the responsibility of the Service. This document finalizes the 
regulations governing the administration of the CHEF, with clarifying 
edits, and responds to comments received on the proposed rule.

DATES: This final rule is effective on October 29, 2024.

FOR FURTHER INFORMATION CONTACT:  For technical questions concerning 
this rule contact: Carl Mitchell, Director, Division of Regulatory and 
Policy Coordination (DRPC), Office of Management Services (OMS), Indian 
Health Service, 301-443-

[[Page 70528]]

6384, [email protected]; or CAPT John Rael, Director, Office of 
Resource Access and Partnerships (ORAP), Indian Health Service, 301-
443-0969, [email protected].

SUPPLEMENTARY INFORMATION: The CHEF was established by section 202 of 
the IHCIA, Public Law 94-437 (25 U.S.C. 1621a). The Patient Protection 
and Affordable Care Act, Public Law 111-148, as amended by the Health 
Care and Education Reconciliation Act of 2010, Public Law 111-152 
(collectively, the Affordable Care Act or ``the ACA''), reauthorized 
the IHCIA and amended the CHEF, directing the Secretary to promulgate 
regulations governing the administration of the CHEF.
    In the Federal Register of July 18, 2023 (88 FR 45867), the IHS 
published a proposed rule entitled ``Catastrophic Health Emergency 
Fund'' with a 60-day comment period.

I. Background
II. Provisions of the Regulation
    A. Definitions
    B. Threshold Cost
    C. Compliance With PRC Regulations
    D. Alternate Resources
    E. Reimbursement Procedure
    F. Recovery of the CHEF Reimbursement Funds
III. Collection of Information Requirements
IV. Summary of Comments
V. Regulatory Impact Analysis
    A. Executive Order 12866
    B. Regulatory Flexibility Act (RFA)
    C. Unfunded Mandates Reform Act (UMRA)
    D. Federalism
    E. Executive Order 13175
    F. Congressional Review Act

I. Background

    The purpose of the CHEF is to meet the extraordinary medical costs 
associated with the treatment of victims of disasters or catastrophic 
illnesses who are within the responsibility of the Service. The IHS 
administers the CHEF to reimburse certain IHS and Tribal purchased/
referred care (PRC) costs that exceed the cost threshold. Although the 
CHEF was first established in 1988, a similar fund was authorized by 
Public Law 99-591, a Joint Resolution continuing appropriations for 
fiscal year (FY) 1987. The IHS developed operating guidelines for the 
management of the CHEF in August of 1987, which were approved by the 
Office of Management and Budget (OMB). Those guidelines were developed 
with input from Tribal Organizations and IHS personnel who work with 
the daily processing and management of Contract Health Services (CHS), 
now known as the Purchased/Referred Care (PRC) Program. Congress passed 
the Indian Health Care Improvement Reauthorization and Extension Act of 
2009, S. 1790, 111th Cong. (2010) (IHCIREA), as section 10221(a) of the 
Patient Protection and Affordable Care Act, Public Law 111-148. Through 
IHCIREA, Congress permanently reauthorized and amended the IHCIA, 
Public Law 94-437. Section 202 of the IHCIA (25 U.S.C. 1621a) 
establishes the CHEF and directs the IHS to promulgate regulations for 
its administration.
    The operating guidelines and twenty-eight (28) years of experience 
(FYs 1987-2015) contributed to the design of the proposed rule 
published on January 26, 2016 (81 FR 4239). Following additional Tribal 
Consultation and additional years of experience, the IHS issued a new 
notice of proposed rulemaking (NPRM). The new NPRM, published on July 
18, 2023 (88 FR 45867), superseded and replaced the proposed rule 
published on January 26, 2016 (81 FR 4239); as such, the 2016 NPRM was 
rescinded.

II. Provisions of This Final Regulation

    This final regulation (1) establishes definitions governing the 
CHEF, including definitions of disasters and catastrophic illnesses; 
(2) establishes that a Service Unit shall not be eligible for 
reimbursement for the cost of treatment from the CHEF until its cost of 
treating any victim of such catastrophic illness or disaster has 
reached a certain threshold cost; (3) establishes a procedure for 
reimbursement of the portion of the costs for authorized services that 
exceed such threshold costs; (4) establishes a procedure for payment 
from the CHEF for cases in which the exigencies of the medical 
circumstances warrant treatment prior to the authorization of such 
treatment; and, (5) establishes a procedure that will ensure no payment 
will be made from the CHEF to a Service Unit to the extent the provider 
of services is eligible to receive payment for the treatment from any 
other Federal, State, local, or private source of reimbursement for 
which the patient is eligible.
    No part of the CHEF, or its administration, shall be subject to 
contract or grant under any law, including the Indian Self-
Determination and Education Assistance Act (ISDEAA), Public Law 93-638 
(25 U.S.C. 5301 et seq.) and may not be allocated, apportioned, or 
delegated to a Service Unit, Area Office, or any other IHS 
organizational unit. Accordingly, the IHS Division of Contract Care 
within ORAP, the IHS, shall remain responsible for administration of 
the CHEF.
    This final regulation incorporates provisions on severability. 
Congress has specifically directed the promulgation of these rules for 
the administration of the CHEF, which is administered by the Secretary, 
United States (U.S.) Department of Health and Human Services (HHS) 
(``the Secretary'') acting through IHS Headquarters. The sole purpose 
of the CHEF is meeting extraordinary medical costs associated with 
treatment of victims of disasters or catastrophic illnesses who are 
within the responsibility of the Service. In the event that any portion 
of the final regulation is declared invalid, the Secretary, acting 
through the IHS, will continue to be responsible for the administration 
of the CHEF. The IHS anticipates that the remainder of the regulation 
could function sensibly and continue to govern the administration of 
the CHEF. For these reasons, if any portion of the final regulation is 
declared invalid, the IHS intends that the remaining provisions be 
severable.
    The final regulation also incorporates clarifying edits to 
Sec. Sec.  136.501, 136.503, and 136.506. Under Sec.  136.501, the IHS 
added a missing comma in the definition of alternate resources. The IHS 
had unintentionally omitted the comma from the proposed rule and 
correction was important to ensure consistency with Sec.  136.61(c). 
The IHS removed an unnecessary comma in the definition of catastrophic 
illness in Sec.  136.501 for clarity. The IHS also corrected a 
typographical error in the preamble regarding the definition of PRC, 
which did not change the definition of PRC under Sec.  136.501. In 
Sec.  136.503(a), the IHS clarified that the initial threshold is being 
established for fiscal year 2024. Under Sec.  136.506, the IHS added 
two clarifications regarding alternate resources, based upon public 
comments received in response to the proposed rule. The first 
clarification regarding alternate resources, located at Sec.  
136.506(b), explains that patients are not required to expend personal 
resources for health services to meet alternate resource eligibility, 
nor are they required to sell valuables or property to become eligible 
for alternate resources. The second clarification, located at Sec.  
136.506(c), explains that when a PRC program pays primary to (i.e., 
before) a Tribal self-insurance plan, this will not impact whether a 
PRC program's expenditures are eligible for reimbursement from the 
CHEF, as long as the Service Unit clearly demonstrates that the PRC 
program was responsible and did in fact assume that responsibility by 
making the payments at issue in the CHEF request. Further details are 
included in response to the comments under section IV, below.

[[Page 70529]]

A. Definitions

    The IHS establishes the following definitions for governing the 
CHEF, including definitions of disasters and catastrophic illnesses:
    1. Alternate Resources--health care resources other than those of 
the IHS. Such resources include health care providers and institutions, 
and health care programs for the payment of health services including, 
but not limited to programs under title XVIII or XIX of the Social 
Security Act (i.e., Medicare, Medicaid), State or local health care 
programs, and private insurance.
    2. Catastrophic Health Emergency Fund (CHEF)--the fund established 
by Congress to reimburse extraordinary medical expenses incurred for 
catastrophic illnesses and disasters paid by a PRC program of the IHS, 
whether such program is carried out by the IHS or an Indian Tribe or 
Tribal Organization under the ISDEAA.
    3. Catastrophic Illness--a medical condition that is costly by 
virtue of the intensity and/or duration of its treatment. Examples of 
conditions that frequently require multiple hospital stays and 
extensive treatment are cancer, burns, premature births, cardiac 
disease, end-stage renal disease, strokes, trauma-related cases such as 
automobile accidents and gunshot wounds, and certain mental disorders. 
The CHEF is intended to insulate the IHS and Tribal PRC operations from 
financial disruption caused by the intensity of expenses incurred as a 
result of high cost illnesses and/or disasters.
    4. Disasters--situations that pose a significant level of threat to 
life or health or cause loss of life or health stemming from events 
such as tornadoes, earthquakes, floods, catastrophic accidents, 
epidemics, fires, and explosions. The CHEF is intended to insulate the 
IHS and Tribal PRC operations from financial disruption caused by the 
intensity of expenses incurred as a result of high cost illnesses and/
or disasters.
    5. Episode of Care--the period of consecutive days for a discrete 
health condition during which reasonable and necessary medical services 
related to the condition occur.
    6. Purchased/Referred Care (PRC)--any health service that is--
    (a) delivered based on a referral by, or at the expense of, an 
Indian health program; and
    (b) provided by a public or private medical provider or hospital 
that is not a provider or hospital of the Indian health program.
    7. Service Unit--an administrative entity of the Service or a 
Tribal health program through which services are provided, directly or 
by contract, to eligible Indians within a defined geographic area.
    8. Threshold Cost--the annual designated amount above which 
incurred medical costs will be considered for the CHEF reimbursement 
after a review of the authorized expenses and diagnosis.

B. Threshold Cost

    The IHCIA section 202 provides that a Service Unit shall not be 
eligible for reimbursement from the CHEF until its cost of treating any 
victim of a catastrophic illness or event has reached a certain 
threshold cost. The Secretary is directed to establish the initial CHEF 
threshold at--
    (1) the FY 2000 level of $19,000; and
    (2) for any subsequent year, the threshold will not be less than 
the threshold cost of the previous year increased by the percentage 
increase in the medical care expenditure category of the Consumer Price 
Index (CPI) for all urban consumers (United States city average) for 
the 12-month period ending with December of the previous year.
    In the proposed rule, the IHS stated its intention to establish the 
initial threshold of $19,000 for the current FY, which was FY 2023 at 
that time. Since the IHS is publishing this final rule after FY 2023, 
the IHS is setting the initial threshold governed by this rule at 
$19,000 for the current FY, which is FY 2024. In reaching this 
determination, the IHS adopted the recommendation of the IHS Director's 
Workgroup on Improving PRC (Workgroup). The Workgroup, composed of 
Tribal leaders and Tribal and Federal representatives, voted 18-2 to 
recommend $19,000 as the initial threshold. For this recommendation, 
the Workgroup considered several factors, including the following: (1) 
Tribal concerns regarding the lower threshold and the potential to 
exhaust the CHEF earlier in the fiscal year leaving PRC programs 
without the ability to recover costs for treating victims of 
catastrophic illnesses or disasters; and (2) Tribal concerns about 
setting the threshold at the FY 2000 level and then applying the 
Consumer Price Index for All Urban (CPI-U) Medical for each year since 
FY 2000, which would have resulted in a $30,000 plus threshold 
requirement by FY 2013. At this higher level, PRC programs with limited 
budgets would be unable to access the CHEF to seek recovery for 
extraordinary medical costs. Accordingly, the IHS is setting the 
initial threshold at $19,000 for FY 2024, with increases in subsequent 
years based on the annual CPI-U Medical factor. The IHS will publish 
annual updates to the threshold amount yearly in the Federal Register.

C. Compliance With PRC Regulations

    In order to qualify for reimbursement from the CHEF, a Service Unit 
must follow PRC regulations at 42 Code of Federal Regulations (CFR) 
part 136. For example, payment or reimbursement from the CHEF may be 
made for the costs of treating persons eligible for PRC in accordance 
with 42 CFR 136.23 and authorized for PRC in accordance with 42 CFR 
136.24. In cases where the exigencies of the medical circumstances 
warrant treatment prior to the authorization of such treatment by the 
Service Unit, authorization must be obtained in accordance with 42 CFR 
136.24(c). For example, claims for reimbursement of services provided 
that do not meet the 72-hour emergency notification requirements found 
at 42 CFR 136.24(c) will be denied. The applicable Area PRC program 
shall review the CHEF requests for CHEF reimbursement to ensure 
consistency with PRC regulations.

D. Alternate Resources

    In accordance with section 202(d)(5) of the IHCIA [25 U.S.C. 
1621a(d)(5)], alternate resources must be exhausted before 
reimbursement is made from the CHEF. No reimbursement shall be made 
from the CHEF to any Service Unit to the extent that the provider of 
treatment is eligible to receive payment for the treatment from any 
other Federal, State, local, or private source of reimbursement for 
which the patient is eligible. Medical expenses incurred for 
catastrophic illnesses and events will not be considered eligible for 
reimbursement if they are payable by alternate resources, as determined 
by the IHS. The IHS is the payer of last resort and, if the provider of 
services is eligible to receive payment from other resources, the 
medical expenses are payable by PRC and reimbursable by the CHEF only 
to the extent that the IHS would not consider the other resources to be 
``alternate resources'' under the applicable authorities. Expenses paid 
by alternate resources are not eligible for payment by PRC or 
reimbursement by the CHEF. However, if the patient is found to have 
been eligible for alternate resources at the time of service, the 
Service Unit shall promptly return all funds reimbursed from the CHEF 
to the IHS Headquarters CHEF account.

E. Reimbursement Procedure

    A patient must be eligible for PRC services and the Service Unit 
must adhere to regulations (42 CFR 136.23(a)

[[Page 70530]]

through (f)) governing the PRC program to be reimbursed for 
catastrophic cases from the CHEF. Once the catastrophic case meets the 
threshold cost for the year at issue and the Service Unit has 
authorized PRC resources exceeding that threshold requirement, the 
Service Unit may qualify for reimbursement from the CHEF. Reimbursable 
costs are those costs that exceed the threshold cost after payment has 
been made by all alternate resources such as Federal, State, local, 
private insurance, and other resources. Reimbursement of PRC 
expenditures incurred by the Service Unit and approved by the PRC 
program at IHS Headquarters will be processed through the respective 
IHS Area Office. Reimbursement from the CHEF shall be subject to 
availability of funds, and usually done on a first in first out for 
complete applications.

F. Recovery of the CHEF Reimbursement Funds

    In the event a PRC program has been reimbursed from the CHEF for an 
episode of care and that same episode of care becomes eligible for and 
is paid by any Federal, State, local, or private source (including 
third-party insurance), the PRC program shall return all the CHEF funds 
received for that episode of care to the CHEF at the IHS Headquarters. 
These recovered CHEF funds will be used to reimburse other approved 
CHEF requests.

III. Collection of Information Requirements

    Prior to implementing the rule, the IHS may be required to develop 
new information collection forms that would require approval from the 
OMB in accordance with the Paperwork Reduction Act of 1995, 44 United 
States Code (U.S.C.) 3507(d).

IV. Summary of Comments

    The IHS received comments \1\ from eight Tribal entities. Their 
comments are grouped by topic and summarized below, together with 
responses. No other comments were received.
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    \1\ See generally, public comments posted in response to Docket 
ID #IHS-2016-0002-0022, 09/15-22/2023, https://www.regulations.gov/docket/IHS-2016-0002/comments.
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Threshold

    Comment: The IHS received seven comments in full support of the 
threshold establishment, including two commenters who specifically 
supported the adjustment language. An additional commenter \2\ 
supported the establishment of the threshold, but opposed the annual 
adjustment based upon the CPI and would like to see the threshold 
maintained at $19,000 permanently.
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    \2\ Docket ID #IHS-2016-0002-0023, 09/15/2023, https://www.regulations.gov/comment/IHS-2016-0002-0023.
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    Response: The IHS appreciates the comments and in response to the 
comment opposing adjustment, the IHS clarifies here that the annual 
adjustment in the final rule is mandated by the specific language of 25 
U.S.C. 1621a(d)(2)(B).

Process (General)

    Comment: The IHS received four comments in support of the process, 
either generally or in regards to certain parts of the process.
    Response: The IHS appreciates the supportive comments.
    Comment: An additional commenter \3\ expressed concerns about 
unspecified timelines in the processing of the CHEF reimbursement 
requests and recommended specific deadlines, including deadlines for 
review and submission by the Area Office, review and submission by IHS 
Headquarters, and payment by the Fiscal Intermediary (FI).
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    \3\ Docket ID #IHS-2016-0002-0029, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0029.
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    Response: The IHS takes this opportunity to clarify that the FI is 
not involved in payment of the CHEF reimbursements. The IHS considered 
whether to add the recommended deadlines, but it has decided not to do 
so at this time. For the time being, the IHS believes that the concern 
is sufficiently addressed by the provision permitting a Service Unit to 
appeal as a ``deemed denial'' after 180 calendar days. See Sec.  
136.509(b). Also, the IHS has established a process that it believes 
will expedite review and approval of CHEF claims once they are received 
which typically occurs within 60 calendar days.
Process (Appeals)
    Comment: The IHS received four comments in support of the appeals 
process set out in the proposed rule.
    Response: The IHS appreciates the supportive comments.
    Comment: An additional commenter \4\ expressed concerns about the 
timeline to provide written notice of the denial, believing 130 
business days from receipt to be excessive, and recommended that this 
timeline be changed to 40 days, consistent with the deadline to submit 
an appeal.
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    \4\ Docket ID #IHS-2016-0002-0029, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0029.
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    Response: The IHS considered whether to shorten this timeline and 
it has decided not to do so at this time. The vast majority of CHEF 
claims do not take 130 business days to process. The IHS has 
established a process that expedites review and approval of CHEF claims 
once they are received. On average, it takes less than 1 month for IHS 
Headquarters to review, process and initiate payment. There may be 
situations based upon volume and complexity of cases that require much 
longer. The IHS has also considered the time that the Area Offices need 
to fulfill their roles in the process and how the timeline affords the 
Service Units an opportunity to supplement missing and/or 
indecipherable information.

PRC Authorities

    Comment: The IHS received two comments in support of following the 
PRC authorities, meaning that only appropriately-paid PRC expenditures 
are eligible for CHEF reimbursement.
    Response: The IHS appreciates the supportive comments.
    Comment: The IHS also received two comments \5\ in opposition, 
based upon their belief that the CHEF statute is not restricted to PRC 
and that direct care costs should qualify for reimbursement from the 
CHEF.
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    \5\ Docket ID #IHS-2016-0002-0026, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0026.
     Docket ID #IHS-2016-0002-0027, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0027.
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    Response: Reimbursements from the CHEF are limited to expenditures 
by PRC programs, consistent with the CHEF statute and congressional 
intent. The CHEF statute, at 25 U.S.C. 1621a(d)(1), specifically 
authorizes the Secretary to promulgate regulations establishing the 
types of disasters and illnesses for which ``the cost of the treatment 
provided under contract'' will be reimbursed. This explicit reference 
to services provided under contract demonstrates that the CHEF is 
intended to provide reimbursement for PRC (formerly known as contract 
health services) program expenditures.
    This interpretation is further supported by the legislative history 
of the CHEF statute. When the CHEF statute was first introduced in 
1983, reimbursement from the CHEF was to be for ``. . . the cost of 
treatment, whether provided under contract or in a Service or Service-
supported facility . . .''. HR 4567, 98th Congress, 1st Session (Nov. 
18, 1983). However, following legislative hearings and several rounds 
of amendment over the next 2 years, the language providing 
reimbursement from

[[Page 70531]]

the CHEF for treatment costs incurred ``in a Service or Service-
supported facility'' was removed from the proposed legislation, leaving 
only reimbursement for treatment provided under contract. See HR 1426, 
99th Congress, 1st Session (May 23, 1985), and S 277, 99th Congress, 
1st Session (May 16, 1985). In a report accompanying the Senate version 
of the bill, a summary of the bill noted that it established ``[a]n 
Indian Catastrophic Health Emergency Fund . . . to relieve the 
financial burden on the contract health care budget of the Indian 
Health Service . . .''. S. Comm. Rep. 99-62 (May 16, 1985). Finally, 
funds for the CHEF are appropriated through the PRC line item, further 
indicating that Congress intends for the CHEF funds to be used to 
reimburse PRC costs, not direct care costs.
    Comment: An additional commenter \6\ expressed concerns about the 
definition of PRC and recommended that a different definition be 
created for purposes of reimbursements from the CHEF.
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    \6\ Docket ID #IHS-2016-0002-0029, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0029.
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    Response: Based upon the tie between the CHEF and expenditures by 
PRC programs, as discussed in the response above, the IHS has utilized 
the statutory definition of PRC. The IHS did correct a typographical 
error in the preamble regarding the definition of PRC, which did not 
change the definition of PRC under Sec.  136.501. Otherwise, the IHS 
has decided to finalize the rule without changes to this definition.

Alternate Resources, Sec.  136.501

    Comment: The IHS received a comment in support of the language 
regarding alternate resources in Sec.  136.501.
    Response: The IHS appreciates the supportive comment.
    Comment: The IHS also received two comments \7\ that supported the 
absence of the term ``Tribal'' from the list of alternate resources 
and/or explaining that they read the rule to exclude Tribal self-
insurance as an alternate resource. The IHS also received five comments 
\8\ that recommended an explicit exclusion for Tribal self-insurance 
and four of those commenters sought a broader exclusion for Tribal 
programs or Tribal resources.
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    \7\ Docket ID# IHS-2016-0002-0023, 09/15/2023, https://www.regulations.gov/comment/IHS-2016-0002-0023.
    Docket ID #IHS-2016-0002-0029, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0029.
    \8\ Docket ID #IHS-2016-0002-0027, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0027.
    Docket ID #IHS-2016-0002-0024, 09/15/2023, https://www.regulations.gov/comment/IHS-2016-0002-0024.
    Docket ID #IHS-2016-0002-0025, 09/05/2023, https://www.regulations.gov/comment/IHS-2016-0002-0025.
    Docket ID #IHS-2016-0002-0026, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0026.
    Docket ID #IHS-2016-0002-0028,09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0028.
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    Response: The IHS appreciates this opportunity to clarify the 
change between the 2016 NPRM and the 2023 NPRM. Consistent with the 
IHS' current PRC policy, the IHS assumes that Tribal self-insurance is 
not an alternate resource for purposes of the CHEF. However, the IHS 
has also long recognized that Tribal self-insurance plans can choose to 
pay primary to PRC, meaning they can choose to be an alternate resource 
to PRC. This is a coordination between the payers of last resort, with 
one needing to pay primary to the other, but until the IHS is informed 
otherwise, the IHS assumes that the Tribal self-insurance does not wish 
to be an alternate resource. For tribally operated PRC programs, the 
Tribal Health Program would decide how to coordinate with Tribal self-
insurance. For example, a Tribal Health Program may decide to 
coordinate in a complicated manner in order to maximize discounts. This 
coordination process will not impair eligibility for reimbursement from 
the CHEF, as long as the Tribal Health Program clearly demonstrates 
that their PRC program was responsible and did in fact assume that 
responsibility by making the payments at issue in the CHEF request. 
This is not an issue of who must pay primary; it is a factual question 
of whether the PRC program paid. Again, regardless of whether the PRC 
program is operated by the IHS or a Tribal Health Program, when a PRC 
program pays primary to (i.e., before) the Tribal self-insurance plan, 
this will not impair the PRC program's eligibility for reimbursement 
from the CHEF. The IHS added clarification in this regard to Sec.  
136.506.
    For programs or resources other than Tribal self-insurance, it will 
depend upon the circumstances. For example, if a Tribal Health Program 
is reasonably accessible or available to meet the patient's needs 
through direct care, PRC cannot be authorized for that care, meaning it 
cannot be reimbursed from the CHEF. Similarly, when sponsorship occurs 
through private insurance (i.e., not Tribal self-insurance), the 
private insurance would be an alternate resource.
    Unrelated to this issue, the IHS is adding a missing comma to the 
definition of alternate resources in Sec.  136.501, to ensure it is 
consistent with Sec.  136.61(c).

Alternate Resources, Sec.  136.506

    Comment: A commenter \9\ recommended revisions to clarify that if a 
patient is required to pay premiums or cost-sharing out of pocket, it 
would not be an alternate resource.
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    \9\ Docket ID #IHS-2016-0002-0029, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0029.
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    Response: The IHS appreciates this comment and the opportunity to 
clarify this issue. Through policy, the IHS has already explicitly 
recognized that IHS beneficiaries are not required to either expend 
personal resources for health services to meet alternate resource 
eligibility, or to sell valuables or property to become eligible for 
alternate resources. The IHS added clarifying language to Sec.  
136.506, to make sure this is clear for purposes of CHEF reimbursement.
    Comment: The IHS also received a comment \10\ recommending 
revisions to this section that explicitly exclude Tribal resources and 
Tribal self-insurance.
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    \10\ Docket ID #IHS-2016-0002-0026, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0026.
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    Response: Please see the response to the same comment regarding 
Sec.  136.501, including the explanation of the clarification added to 
Sec.  136.506. For the same reasons, the IHS is not presupposing how 
Tribal Health Programs and Tribal self-insurance may wish to coordinate 
amongst each other. That coordination is not an IHS decision to make. 
The IHS is looking factually at whether the PRC program was ultimately 
responsible and did in fact make the payment at issue in the CHEF 
reimbursement request. The IHS takes this opportunity to clarify again 
the following two points: (1) IHS-operated PRC programs do not treat 
Tribal self-insurance as alternate resources unless and until the 
Tribe's governing body clearly asks them to do so through a Tribal 
Resolution; and (2) regardless of whether the PRC program is operated 
by the IHS or a Tribal Health Program, if a PRC program pays primary to 
Tribal self-insurance, that PRC program's eligibility for reimbursement 
from the CHEF is not impaired in any way. The Service Unit simply needs 
to show that their PRC program paid the amount at issue in the CHEF 
request, because the CHEF is not intended to reimburse

[[Page 70532]]

programs other than PRC. As noted above, the IHS has added 
clarification in response to this comment under Sec.  136.506.

Consultation

    Comment: Two comments \11\ requested additional Tribal Consultation 
before the proposed rule is finalized, based upon fundamental changes 
they thought needed to be considered through Tribal Consultation.
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    \11\ Docket ID #IHS-2016-0002-0026, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0026.
    Docket ID #IHS-2016-0002-0027, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0027.
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    Response: The IHS has already held a number of Tribal Consultations 
on the proposed rule, including multiple in-person and telephonic 
Tribal Consultations. The IHS has also repeatedly sought 
recommendations from Tribal representatives on the Director's 
Workgroup. The IHS does not intend to do any further Tribal 
Consultation before finalizing this rule. As more fully discussed 
below, the fundamental changes suggested by these two commenters are 
outside the scope of rulemaking. However, the IHS will assess the final 
CHEF regulations following implementation, and we will look to hold 
future Tribal Consultations to receive input from Tribal Health 
Programs regarding potential improvements.

Supplementary Tribal Funds

    Comment: Two commenters \12\ recommended changing the rule to give 
``credit'' to Tribal expenditures that supplement direct care budgets 
or PRC.
---------------------------------------------------------------------------

    \12\ Docket ID #IHS-2016-0002-0026, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0026,
    Docket ID #IHS-2016-0002-0027, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0027.
---------------------------------------------------------------------------

    Response: Direct supplements to the PRC program (i.e., adding funds 
directly to the PRC program, for PRC expenditure in accordance with PRC 
authorities) are eligible for reimbursement from the CHEF on the same 
basis as PRC-appropriated funds. We understand that a number of Tribes 
operate Tribal self-insurance plans outside of an ISDEAA agreement and 
may consider those plans to be a ``supplement'' to the PRC program. 
However, this is not a direct supplement of funds to the PRC program 
for expenditure by the PRC program in accordance with PRC authorities, 
meaning the expenditures by those Tribal self-insurance plans are not 
reimbursable by the CHEF. Similarly, expenditures by the direct care 
programs are not eligible for CHEF reimbursement. The IHS appreciates 
the opportunity to clarify these points, but for these reasons and 
those stated above, the IHS is not making any changes in response to 
the comment.

Other

    Comment: Two commenters \13\ recommended adding language regarding 
the Indian canon of statutory construction and trust responsibilities.
---------------------------------------------------------------------------

    \13\ Docket ID #IHS-2016-0002-0026, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0026.
    Docket ID #IHS-2016-0002-0027, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0027.
---------------------------------------------------------------------------

    Response: Because these suggestions are outside the scope of the 
proposed rule, the IHS did not make any changes. However, the IHS notes 
that it did consider the Indian canon of statutory construction for 
purposes of establishing the initial CHEF threshold.
    Comment: A second commenter \14\ recommended splitting the 
regulation into two phases to first address the threshold alone, then 
address all remaining aspects of the proposed rule.
---------------------------------------------------------------------------

    \14\ Docket ID # IHS-2016-0002-0026, 09/18/2023, https://www.regulations.gov/comment/IHS-2016-0002-0026.
---------------------------------------------------------------------------

    Response: Congress directed the promulgation of CHEF regulations on 
a number of items, including topics beyond the threshold cost. See 25 
U.S.C. 1621a(d). Following extensive consultation, the IHS needs to 
move forward with finalizing the regulations, as directed by Congress. 
For these reasons, the IHS is not making changes in response to this 
comment.
    Comment: One commenter \15\ indicated support, generally, for CHEF 
reimbursement of payments to non-PRC providers.
---------------------------------------------------------------------------

    \15\ Docket ID # IHS-2016-0002-0030, 09/22/2023, https://www.regulations.gov/comment/IHS-2016-0002-0030.
---------------------------------------------------------------------------

    Response: In the proposed rule, the IHS sought comment on whether 
payments by PRC programs to patients, or other individuals or entities 
that are not PRC providers, should be included as eligible for CHEF 
reimbursement under these regulations and if so, under what 
circumstances. The IHS received no comments regarding payments to 
patients, such as reimbursements to patients who needed to pay out-of-
pocket for their healthcare expenses prior to authorization by the PRC 
program. The IHS also did not receive any comments regarding payments 
made on behalf of patients in these circumstances. This is not an issue 
faced by IHS-operated PRC programs. We were seeking comments in case 
the Tribal Health Programs dealt with different scenarios or 
experiences. The IHS did not receive sufficient information to consider 
changes in this regard.

V. Regulatory Impact Analysis

    We have examined the impacts of this rule as required by Executive 
Order (E.O.) 12866 on Regulatory Planning and Review (September 30, 
1993); section 604 of the Regulatory Flexibility Act (RFA), Public Law 
96-354 [5 U.S.C. 601-612], as amended by subtitle D of the Small 
Business Regulatory Fairness Act of 1996, Public Law 104-121; the 
Unfunded Mandates Reform Act (UMRA) of 1995, Public Law 104-4; E.O. 
13132 on Federalism (August 4, 1999); E.O. 13175 on Consultation and 
Coordination with Indian Tribal Governments; and the Congressional 
Review Act.

A. Executive Order 12866

    Executive Order 12866, as amended by Executive Order 14094, directs 
agencies to assess all costs and benefits of available regulatory 
alternatives and, if regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety effects, distributive impacts, 
and equity). Section 3(f) of Executive Order 12866, as amended, defines 
a ``significant regulatory action'' as one that is likely to result in 
a rule that may: (1) have an annual effect on the economy of $200 
million or more in any one year (adjusted every three years by the 
Administrator of the Office of Information and Regulatory Affairs 
(OIRA) for changes in gross domestic product), or adversely affect in a 
material way a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, territorial, 
or Tribal governments or communities (2) create a serious inconsistency 
or otherwise interfering with an action taken or planned by another 
agency; (3) materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or (4) raise legal or policy issues for which 
centralized review would meaningfully further the President's 
priorities or the principles set forth in Executive Order 12866. OIRA 
has determined that this is a significant regulatory action as defined 
by Executive Order 12866, section 3(f).

B. Regulatory Flexibility Act (RFA)

    RFA requires analysis of regulatory options that minimize any 
significant economic impact of a rule on small entities, unless it is 
certified that the

[[Page 70533]]

final rule is not expected to have a significant economic impact on 
small entities. HHS certifies that this final rule is not expected to 
have a significant economic impact on small entities, because the rule 
only governs reimbursements of certain expenditures made by Service 
Units under PRC authorities. Many PRC programs are operated by the 
Federal Government, through the IHS. The remaining PRC programs are 
operated by Tribes and Tribal Organizations under ISDEAA agreements 
with the IHS. Presently, there are 62 federally operated PRC programs 
and 188 tribally operated PRC programs. Some of the entities operating 
PRC programs may be small entities, but the rule does not directly 
impact a substantial number of small entities and the rule is not 
expected to reduce their revenues or raise their costs.

C. Unfunded Mandates Reform Act (UMRA)

    Section 202 of UMRA (Pub. L. 104-4) requires an assessment of 
anticipated costs and benefits before proposing any rule that may 
result in expenditure by State, local, and Tribal governments, in 
aggregate, or by the private sector of $100 million or more (adjusted 
annually for inflation) in any one year. The current threshold after 
adjustment for inflation is $183 million (in 2023 dollars), using the 
most recent full year of data for the Implicit Price Deflator for the 
Gross Domestic Product. We find that this rule will not have an effect 
on the economy that exceeds the UMRA threshold in any one year. The IHS 
FY 2023 annual appropriation for the CHEF was $54 million. Thus, this 
final rule is not anticipated to have an effect on State, local, or 
Tribal governments in the aggregate, or by the private sector that 
exceed the UMRA monetary threshold.

D. Federalism

    E.O. 13132 establishes certain requirements that an agency must 
meet when it promulgates a proposed rule (and subsequent final rule) 
that imposes substantial direct requirement costs on State and local 
governments, preempts State law, or otherwise has federalism 
implications. We reviewed this rule under the threshold criteria of 
E.O. 13132 and determined that it would not have substantial direct 
effect on States, on the relationship between the Federal Government 
and States, or on the distribution of power and governmental 
responsibilities among the various levels of the government(s). As this 
rule has no Federal implications, a federalism summary impact statement 
is not required.

E. E.O. 13175

    This rule has Tribal implications under E.O. 13175, Consultation 
and Coordination with Indian Tribal Governments, because it would have 
a substantial direct effect on one or more Indian Tribes.
    The first proposed CHEF rule, published on January 26, 2016 (81 FR 
4239), was developed with input from Tribes and IHS personnel who work 
with the daily processing and management of PRC resources. 
Specifically, the IHS Director's Workgroup met and discussed the CHEF 
guidelines on October 12-13, 2010, and June 1-2, 2011, in Denver, 
Colorado, and on January 11-12, 2012, in Albuquerque, New Mexico. This 
Workgroup is a Federal-Tribal workgroup established in 2010 to provide 
advice and recommendations on strategies to improve the PRC Program to 
the IHS Director. In addition, the IHS issued Tribal Leader letters 
related to the development of these regulations on February 9, 
2011,\16\ and May 6, 2013.\17\
---------------------------------------------------------------------------

    \16\ https://www.ihs.gov/sites/newsroom/themes/responsive2017/display_objects/documents/2011_Letters/02-09-2011%20DTL%20Letter%20and%20Attachment.pdf.
    \17\ https://www.ihs.gov/sites/newsroom/themes/responsive2017/display_objects/documents/2013_Letters/05-06-2013_DTLL_CHS_WG_Recommendations.pdf.
---------------------------------------------------------------------------

    The IHS sought additional Tribal input throughout the development 
of the new proposed rule. Specifically, Tribal Consultations were held 
in the fall of 2016, including multiple in-person and telephonic Tribal 
Consultation sessions.\18\ The proposed regulations were also a topic 
of discussion during multiple meetings of the IHS Director's Workgroup. 
At meetings of the Workgroup in 2015 and 2018, the Workgroup 
recommended establishing a $19,000 CHEF threshold. Moreover, in 
November 2020, the Workgroup recommended that the IHS promulgate new 
regulations based on Workgroup input. Based on the recommendation of 
the Workgroup, the threshold amount of $19,000 was proposed to be 
established for the current fiscal year, which at the time was FY 2020.
---------------------------------------------------------------------------

    \18\ https://www.ihs.gov/sites/newsroom/themes/responsive2017/display_objects/documents/2016_Letters/55914-1_CHEF_DTLL_07292016.pdf.
---------------------------------------------------------------------------

F. Congressional Review Act (CRA)

    Before a rule can take effect, the CRA requires agencies to submit 
to the U.S. House of Representatives, U.S. Senate, and the Comptroller 
General a report containing a copy of the rule and a statement 
identifying whether it is a ``major rule.'' 5 U.S.C. 801. The OMB 
determines if a final rule constitutes a major rule. The CRA defines a 
major rule as any rule that the Administrator of OMB's Office of 
Information and Regulatory Affairs finds has resulted in or is likely 
to result in--(A) an annual effect on the economy of $100,000,000 or 
more; (B) a major increase in costs or prices for consumers, individual 
industries, Federal, State, or local government agencies, or geographic 
regions, or (C) significant adverse effects on competition, employment, 
investment, productivity, innovation, or on the ability of United 
States-based enterprises to compete with foreign-based enterprises in 
domestic and export markets. 5 U.S.C. 804(2).
    This final rule is not a major rule for purposes of the 
Congressional Review Act. HHS/IHS will submit a report, including the 
final rule, to both houses of Congress and the Government 
Accountability Office for review.

List of Subjects in 42 CFR Part 136

    Alaska Natives, Health, Health facilities, Indians, Purchased/
referred care (formerly contract health services).

    For the reasons set out in the preamble, the IHS amends 42 CFR part 
136 as set forth below:

PART 136--INDIAN HEALTH

0
1. The authority citation for part 136 is revised to read as follows:

    Authority: 42 U.S.C. 2001 and 2003; 25 U.S.C. 13; and 25 U.S.C. 
1621a.


0
2. Add subpart L, consisting of Sec. Sec.  136.501 through 136.510, to 
read as follows:
Subpart L--Indian Catastrophic Health Emergency Fund
Sec.
136.501 Definitions.
136.502 Purpose of this subpart.
136.503 Threshold cost.
136.504 Reimbursement procedure.
136.505 Reimbursable services.
136.506 Alternate resources.
136.507 Program integrity.
136.508 Recovery of reimbursement funds.
136.509 Reconsideration and appeals.
136.510 Severability.


Sec.  136.501  Definitions.

    Alternate resources means health care resources other than those of 
the Indian Health Service (IHS or Service). Such resources include 
health care providers and institutions, and health care programs for 
the payment of health services including but not limited to programs 
under title XVIII or XIX of the Social Security Act (i.e., Medicare, 
Medicaid), State or local health care programs, and private insurance.

[[Page 70534]]

    Catastrophic Health Emergency Fund (CHEF) means the fund 
established by Congress to reimburse extraordinary medical expenses 
incurred for catastrophic illnesses and disasters paid by a purchased/
referred care (PRC) program of the IHS, whether such program is carried 
out by the IHS or an Indian Tribe or Tribal Organization under the 
Indian Self-Determination and Education Assistance Act (ISDEAA).
    Catastrophic illness refers to a medical condition that is costly 
by virtue of the intensity and/or duration of its treatment. Examples 
of conditions that frequently require multiple hospital stays and 
extensive treatment are cancer, burns, premature births, cardiac 
disease, end-stage renal disease, strokes, trauma-related cases such as 
automobile accidents and gunshot wounds, and some mental disorders. The 
CHEF is intended to insulate the IHS and Tribal PRC operations from 
financial disruption caused by the intensity of expenses incurred as a 
result of high cost illnesses and/or disasters.
    Disaster means a situation that poses a significant level of threat 
to life or health or causes loss of life or health stemming from events 
such as tornadoes, earthquakes, floods, catastrophic accidents, 
epidemics, fires, and explosions. The CHEF is intended to insulate the 
IHS and Tribal PRC operations from financial disruption caused by the 
intensity of expenses incurred as a result of high cost illnesses and/
or disasters.
    Episode of care means the period of consecutive days for a discrete 
health condition during which reasonable and necessary medical services 
related to the condition occur.
    Purchased/referred care means any health service that is--
    (1) Delivered based on a referral by, or at the expense of, an 
Indian health program; and
    (2) Provided by a public or private medical provider or hospital 
which is not a provider or hospital of the Indian health program.
    Service Unit means an administrative entity of the Service or a 
Tribal Health Program through which services are provided, directly or 
by contract, to eligible Indians within a defined geographic area.
    Threshold cost means the annual designated amount above which 
incurred medical costs will be considered for the CHEF reimbursement 
after a review of the authorized expenses and diagnosis.


Sec.  136.502  Purpose of this subpart.

    The CHEF is authorized by section 202 of the Indian Health Care 
Improvement Act (IHCIA) [25 U.S.C. 1621a]. The CHEF is administered by 
the Secretary, Department of Health and Human Services (HHS) (``the 
Secretary'') acting through the Headquarters of IHS, solely for the 
purpose of meeting extraordinary medical costs associated with 
treatment of victims of disasters or catastrophic illnesses who are 
within the responsibility of the Service. This subpart:
    (a) Establishes definitions of terms governing the CHEF, including 
definitions of disasters and catastrophic illnesses for which the cost 
of treatment provided under contract would qualify for payment from the 
CHEF;
    (b) Establishes a threshold level for reimbursement for the cost of 
treatment;
    (c) Establishes procedures for reimbursement of the portion of the 
costs incurred by Service Units that exceeds such threshold costs, 
including procedures for when the exigencies of the medical 
circumstances warrant treatment prior to the authorization of such 
treatment by the Service; and
    (d) Establishes procedures for reimbursements pending the outcome 
or payment by alternate resources.


Sec.  136.503  Threshold cost.

    A Service Unit shall not be eligible for reimbursement from the 
CHEF until its cost of treating any victim of a catastrophic illness or 
disaster for an episode of care has reached a certain threshold cost.
    (a) The threshold cost shall be established at the level of $19,000 
for fiscal year 2024.
    (b) The threshold cost in subsequent years shall be calculated from 
the threshold cost of the previous year, increased by the percentage 
increase in the medical care expenditure category of the Consumer Price 
Index for all urban consumers (United States city average) for the 12-
month period ending with December of the previous year. The revised 
threshold costs shall be published yearly in the Federal Register.


Sec.  136.504  Reimbursement procedure.

    Service Units whose scope of work and funding include the purchase 
of medical services from private or public vendors under PRC are 
eligible to participate. The CHEF payments shall be based only on valid 
PRC expenditures, including expenditures for exigent medical 
circumstances without prior PRC authorization. Reimbursement from the 
CHEF will not be made if applicable PRC requirements are not followed.
    (a) Claim submission. Requests for reimbursement from the CHEF must 
be submitted to the appropriate IHS Area Office. Area PRC programs will 
review requests for reimbursement to ensure compliance with PRC 
requirements, including but not limited to: patient eligibility, 
medical necessity, notification requirements for emergent and non-
emergent care, medical priorities, allowable expenditures, and 
eligibility for alternate resources. Following this review, Area PRC 
programs may provide Service Units an opportunity to submit missing 
information or to resubmit documents that are indecipherable. Area PRC 
programs will then forward all requests to the Division of Contract 
Care, along with any recommendations or observations from the Area PRC 
program regarding compliance with PRC or other CHEF requirements. The 
Division of Contract Care will adjudicate the claim based upon an 
independent review of the claim documentation, but it may consider any 
recommendations or observations from the Area PRC program.
    (b) Content of claims. All claims submitted for reimbursement may 
be submitted electronically utilizing the secure IHS system(s) 
established for this purpose or may be submitted in paper form but must 
include:
    (1) A fully completed Catastrophic Health Emergency Fund 
Reimbursement Request Form.
    (2) A statement of the provider's charges on a form that complies 
with the format required for the submission of claims under title XVIII 
of the Social Security Act. For example, charges may be printed on 
forms such as the Centers for Medicare & Medicaid Services (CMS) 1500, 
UB-04 (formerly CMS-1450), American Dental Association (ADA) dental 
claim form, or National Council for Prescription Drug Program (NCPDP) 
universal claim forms. The forms submitted for review must include 
specific appropriate diagnostic and procedure codes.
    (3) An explanation of benefits or statement of payment identifying 
how much was paid to the provider by the Service Unit for the 
catastrophic illness or disaster. Payments to the patient or any other 
entity are ineligible for the CHEF reimbursement.
    (4) The Division of Contract Care may request additional medical 
documentation describing the medical treatment or service provided, 
including but not limited to discharge summaries and/or medical 
progress notes. Cases may be submitted for 50%

[[Page 70535]]

reimbursement of eligible expenses pending discharge summaries. Medical 
documentation must be received to close the CHEF case.
    (c) Limitation of funds and reimbursement procedure. Because of the 
limitations of funds, full reimbursement cannot be guaranteed on all 
requests and will be based on the availability of funds at the time the 
IHS processes the claim. To the extent funds are available, the CHEF 
funds may not be used to cover the cost of services or treatment for 
which the funds were not approved. Unused funds, including but not 
limited to, funds unused due to overestimates, alternate resources, and 
cancellations must be returned to the CHEF.


Sec.  136.505  Reimbursable services.

    The costs of catastrophic illnesses and disasters for distinct 
episodes of care are eligible for reimbursement from the CHEF in 
accordance with the medical priorities of the Service. Only services 
that are related to a distinct episode of care will be eligible for 
reimbursement. Some of the services that may qualify for reimbursement 
from the fund are:
    (a) Emergency treatment.
    (b) Emergent and acute inpatient hospitalization.
    (c) Ambulance services; air and ground (including patient escort 
travel costs).
    (d) Attending and consultant physician.
    (e) Functionally required reconstructive surgery.
    (f) Prostheses and other related items.
    (g) Reasonable rehabilitative therapy exclusive of custodial care 
not to exceed 30 days after discharge.
    (h) Skilled nursing care when the patient is discharged from the 
acute process to a skilled nursing facility.


Sec.  136.506  Alternate resources.

    (a) Expenses paid by alternate resources are not eligible for 
payment by PRC or reimbursement by the CHEF. No payment shall be made 
from the CHEF to any Service Unit to the extent that the provider of 
services is eligible to receive payment for the treatment from any 
other Federal, State, local, or private source of reimbursement for 
which the patient is eligible. A patient shall be considered eligible 
for such resources and no payment shall be made from the CHEF if:
    (1) The patient is eligible for alternate resources; or
    (2) The patient would be eligible for alternate resources if he or 
she were to apply for them; or
    (3) The patient would be eligible for alternate resources under 
Federal, State, or local law or regulation but for the patient's 
eligibility for PRC, or other health services, from the Indian Health 
Service or Indian Health Service funded programs.
    (b) Patients are not required to expend personal resources for 
health services to meet alternate resource eligibility, nor are they 
required to sell valuables or property to become eligible for alternate 
resources.
    (c) When a PRC program pays primary to (i.e., before) a Tribal 
self-insurance plan, this will not impact whether the PRC program's 
expenditures are eligible for reimbursement from the CHEF, as long as 
the Service Unit clearly demonstrates that the PRC program was 
responsible and did in fact assume that responsibility by making the 
payments at issue in the CHEF request.
    (d) The determination of whether a resource constitutes an 
alternate resource for the purpose of the CHEF reimbursement shall be 
made by the Headquarters of the Indian Health Service, irrespective of 
whether the resource was determined to be an alternate resource at the 
time of PRC payment.


Sec.  136.507  Program integrity.

    All the CHEF records and documents will be subject to review by the 
respective IHS Area Office and by IHS Headquarters. Internal audits and 
administrative reviews may be conducted as necessary to ensure 
compliance with the regulations in this part and the CHEF policies.


Sec.  136.508  Recovery of reimbursement funds.

    In the event a Service Unit has been reimbursed from the CHEF for 
an episode of care and that same episode of care becomes eligible for 
and is paid by any Federal, State, local, or private source (including 
third party insurance) the Service Unit shall return all the CHEF funds 
received for that episode of care to the CHEF at the IHS Headquarters. 
These recovered CHEF funds will be used to reimburse other valid CHEF 
requests.


Sec.  136.509  Reconsideration and appeals.

    (a) Any Service Unit to whom payment from the CHEF is denied will 
be notified of the denial in writing together with a statement of the 
reason for the denial within 130 business days from receipt.
    (b) If a decision on the CHEF case is not made by the CHEF Program 
Manager within 180 calendar days from receipt, the Service Unit that 
submitted the claim may choose to appeal it as a deemed denial.
    (c) In order to seek review of a denial decision or deemed denial, 
the Service Unit must follow the procedures set forth in paragraphs 
(c)(1) and (2) of this section.
    (1) Within 40 business days from the receipt of the denial provided 
in paragraph (a) of this section, the Service Unit may submit a request 
in writing for reconsideration of the original denial to the Division 
of Contract Care. The request for reconsideration must include, as 
applicable, corrections to the original claim submission necessary to 
overcome the denial; or a statement and supporting documentation 
establishing that the original denial was in error. If no additional 
information is submitted the original denial will stand. The Service 
Unit may also request a telephone conference with the Division of 
Contract Care, to further explain the materials submitted, which shall 
be scheduled within 40 business days from receipt of the request for 
review. A decision by the Division of Contract Care shall be made 
within 130 business days of the request for review. The Division of 
Contract Care Director, or designee, shall review the application de 
novo with no deference to the original decision maker or to the 
applicant.
    (2) If the original decision is affirmed on reconsideration, the 
Service Unit will be notified in writing and advised that an appeal may 
be taken to the Director, Indian Health Service, within 40 business 
days of receipt of the denial. The appeal shall be in writing and shall 
set forth the grounds supporting the appeal. The Service Unit may also 
request a telephone conference through the Division of Contract Care, 
which shall be scheduled with the Director or a representative 
designated by the Director, to further explain the grounds supporting 
the appeal. A decision by the Director shall be made within 180 
calendar days of the request for reconsideration. The decision of the 
Director, Indian Health Service or designee, shall constitute the final 
administrative action.


Sec.  136.510  Severability.

    If any provision of this subpart is held to be invalid or 
unenforceable by its terms, as applied to any person or circumstance, 
or stayed pending further agency action, the provision shall be 
construed to continue to give the maximum effect to the provision 
permitted by law, including as applied to those not similarly situated 
or to dissimilar circumstances. However, if such holding is that the 
provision of this subpart is invalid and unenforceable in all 
circumstances, the provision shall be

[[Page 70536]]

severable from the remainder of this subpart and shall not affect the 
remainder thereof.

    Dated: August 26, 2024.
Xavier Becerra,
Secretary, Department of Health and Human Services.
[FR Doc. 2024-19421 Filed 8-29-24; 8:45 am]
BILLING CODE 4166-14-P