By Corinne Sebren
A federal court in Michigan recently issued a decision that has the potential to reverse decades of progress made within the American Indian health care system. That is why more than 300 tribal governments from throughout the country have lined up to oppose the decision.
In Saginaw Chippewa Indian Tribe v. Blue Cross Blue Shield, Case No. 16-cv-10317 (E.D. Mich., Aug. 7, 2020), the Tribe sued Blue Cross Blue Shield of Michigan for failing to charge so-called Medicare Like Rates (MLR) for certain health care claims.
The district court ruled against the Tribe, incorrectly holding that only Purchased/Referred Care (PRC) payments funded with Indian Health Service (IHS) funds qualified for MLR. PRC-authorized payments funded by the Tribe's self-insured plan did not qualify. As such, the Tribe was forced to pay Blue Cross millions of dollars more for health care services, than it should have.
The case is currently up on appeal in the Sixth Circuit, where those 300-plus tribal governments joined Saginaw Chippewa in requesting a reversal of the district court’s decision.
If affirmed, there are serious implications for tribal governments that coordinate benefits with their own self-insured plans and supplement their own health programs with tribal funds. However, there is hope that the appeal will result in a reversal of the lower court’s decision.
The district court made at least three serious errors:
First, the court looked to IHS's FAQs on MLR, interpreting them to mean that the MLR regulations require both PRC program authorization and an IHS-funded PRC payment. This is wrong because basing its decision on the nonbinding FAQs violated statutory requirements of the Indian Self-Determination and Education Assistance Act.
Further, even if the FAQs were binding, they are more internally consistent with supporting tribal interests. Viewed holistically, the FAQs actually better support the Tribe’s interpretation than BCBSM’s, but the court opted to ignore them. The district court’s interpretation was also in error because PRC-authorized payments at MLR do not need to be solely funded by IHS.
Second, the court misapplied Redding Rancheria v. Hargan, 296 F. Supp. 3d 256 (D.D.C. 2017), a case where a California federal court held that tribal self-insured plans can make payments at MLR if they are coordinated with and paid through the tribe’s PRC program.
The Saginaw Chippewa court believed Redding Rancheria paid for PRC solely with IHS funds, when in fact, the Rancheria used tribal self-insurance plan funds to supplement its PRC program and coordinate benefits.
Third, the court failed to properly apply the Indian canons of construction. To the extent the MLR regulations and associated statutes are ambiguous, they must be interpreted to support tribal interests.
The court’s decision in no way benefited tribal interests. Instead, if the decision sticks, tribal governments will have to either spend more resources to supplement their health care programs or reduce health care services altogether.
For those interested in tribally self-determined health care, Saginaw Chippewa v. BCBSM is one to watch.
Corinne Sebren is a Law Clerk at Galanda Broadman, PLLC, an Indigenous rights law firm, and a 2021 graduate of the University of Washington School of Law. Corinne joins Galanda Broadman, PLLC, this Fall as an Associate Attorney after completing the bar exam. Her practice focuses on American Indian health law, litigation involving tribal governments and enterprises, and Indigenous civil rights.
