The Indian Health Service rejected a request from the corporation to shift medical care for Ketchikan Natives to the Ketchikan hospital from Mount Edgecumbe Hospital in Sitka. The Southeast Alaska Regional Health Consortium, which runs Mount Edgecumbe, will receive about $1.8 million in federal funds to care for the Ketchikan Natives in the 2000 fiscal year under the IHS ruling in early April. The decision has been appealed to the Department of the Interior. KIC took over clinic services for Natives in the Ketchikan area in 1997, but SEARHC retained the hospital contract. When KIC sought hospital funds, the regional consortium said losing the business would set a dangerous precedent and affect services to 19 other tribes in the consortium. The Ketchikan group didn't submit its request to withdraw fiscal year 2000 hospital funding from SEARHC until after both tribal groups signed funding agreements for the fiscal year, IHS said. Mike Mahsetky of the IHS said that in the future, KIC could remove hospital services in its funding agreement with SEARHC and provide care locally. He said there are good arguments on both sides. But, limited dollars and high transportation costs have to be balanced against what providing inpatient services in a community does to the Native health care in Alaska to avoid compromising the system.