On June 6, 2024, the Supreme Court decided Becerra v. San Carlos Apache Tribe, No. 23-250, holding that the Indian Self-Determination and Education Assistance Act (ISDA), 25 U.S.C. § 5301 et seq., requires the Indian Health Service (IHS) to reimburse tribes for contract support costs the tribe incurs when it collects and spends revenue from third parties such as Medicare, Medicaid, and private insurers.
Under the ISDA, Indian tribes that wish to assume responsibility for administering the health care programs that IHS would otherwise operate for the tribe may do so by entering into a “self-determination contract” with IHS. Tribes that enter into such contracts are entitled to reimbursement for certain expenses incurred by the tribes in administering those contracts. Specifically, IHS is required to reimburse the tribe for so-called “contract support costs,” which include “direct program expenses for the operation of the Federal program” and “any additional administrative or . . . overhead expense incurred by the [tribe] in connection with the operation of the Federal program, function, service, or activity pursuant to the contract.” 25 U.S.C. § 5235(a)(3)(A).
Two Indian tribes, the San Carlos Apache Tribe, located in southeastern Arizona, and the Northern Arapaho tribe, located in central Wyoming, filed separate lawsuits against IHS for breach of contract in federal district court, alleging IHS did not adequately reimburse either tribe for the contract support costs incurred by each tribe — specifically, the costs the tribes had incurred in collecting program income. The district courts in each case ruled for IHS, and the Ninth and Tenth Circuits each reversed, ruling in favor of the tribes.
The Supreme Court held in favor of the tribes, finding that when a tribe spends program income to further the health care programs it assumes from IHS and incurs contract support costs, the costs it incurs are “directly attributable” to the self-determination contract and therefore must be covered by IHS. The Court explained that a contrary reading of the statute would impose a penalty on tribes for opting in favor of greater self-determination and noted that Congress’s consistent directive to IHS is to place contracting tribes in the same financial position as IHS, so that tribes do not face a self-determination penalty when they take control of their own health care. Applying those principles, the Court reasoned that contract support costs are necessary to prevent a funding gap between tribes and IHS.
Chief Justice Roberts delivered the opinion of the Court, in which Justices Sotomayor, Kagan, Gorsuch, and Jackson joined. Justice Kavanaugh filed a dissenting opinion, in which Justices Thomas, Alito, and Barrett joined.
DOWNLOAD OPINION OF THE COURT
