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SEARHC Reaches $53M Settlement With IHS

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The SouthEast Alaska Regional Health Consortium (SEARHC) has reached an agreement with the U.S. Indian Health Service to settle SEARHC’s outstanding claims against the IHS for unpaid contract support costs. Under the agreement, the IHS has agreed to pay SEARHC $39.5 million plus interest, totaling approximately $53 million, to settle the organization’s contract support costs claims for the years 1999 through 2013.??

SEARHC is a tribal health organization that compacts with the IHS under the Indian Self-Determination and Education Assistance Act to carry out the federal government's obligation to provide health care services to the Alaska Native and American Indian people of Southeast Alaska. Contract support costs consist of those reasonable program expenses as well as other administrative and overhead costs associated with carrying out the health care services SEARHC provides on behalf of the IHS. These costs are required to be paid in full under the Indian Self-Determination and Education Assistance Act, SEARHC’s compact with the IHS, and recent U.S. Supreme Court decisions. SEARHC’s contract support costs claims arose from the IHS’ failure to pay these costs in full, which required SEARHC to utilize program funds meant to provide direct health care services to SEARHC patients in order to meet the shortfall. This settlement resolves SEARHC’s claims for 15 years of contract support costs underpayments by the IHS and will now permit SEARHC to devote more resources to providing direct health care services.

“This is a very good settlement and has concluded several years of legal wrangling and political advocacy in Washington, DC. I could not be more pleased to have these issues come to resolution and look forward to focusing our efforts in a more constructive direction,” said SEARHC President and CEO, Charles Clement.

In a press release, SEARHC recognized the efforts of Alaska Senators Mark Begich and Lisa Murkowski, and Congressman Don Young in working to hold IHS accountable for full payment of contract support costs and encouraging timely resolution of tribes’ and tribal organizations’ outstanding contract support cost claims. SEARHC also thanked the commitment made by President Obama's Administration to honor Tribal contracts in the future.

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