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    • 25 JUN 15
    • 0

    Sage Prevails on Fourth Claim for Relief

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    In an 89-page opinion, the United States District Court for the District of New Mexico ruled that Sage Memorial Hospital is entitled to judgment on its fourth claim for relief in Sage’s lawsuit against the Indian Health Service. In April of this year, Sage succeeded in obtaining a preliminary injunction requiring IHS to continue to fund Sage under the Indian Self-Determination and Education Assistance Act (“ISDEAA”) while the lawsuit is pending. Sage’s fourth claim for relief alleged that IHS had not committed to issue a decision on Sage’s unpaid Contract Support Costs (“CSC”) claim within a reasonable time, as the ISDEAA requires. As explained by the District Court, Contract Support Costs include “overhead, administrative costs and federally mandated audits and liability insurance,” and the Court observed that the
    Supreme Court recently ruled that IHS must pay tribes and tribal organizations the “full amount” of CSC incurred in performing their contracts. Opinion at page 59.

    The District Court ruled in favor of Sage. First, the Court ruled that IHS did not provide any date certainbut only a conditional date, and Sage’s claim should therefore be “deemed denied” under the ISDEAA – thus permitting Sage to seek a federal court determination of its entitlement to CSC. Second, the Court ruled that, even if the conditional October 2015 date had been a date certain, IHS’ fourteen month schedule was an unreasonably long period of time to make such a decision. The Court observed that IHS has to deny all CSC claims, because it has no money to pay them. Rather, IHS relies on the Judgment Fund to pay these debts, but can only access the Judgment Fund after a tribal organization appeals IHS’ denial to a federal court or other higher authority. The District Court’s judgment now gives Sage the ability to more quickly receive its unpaid CSC. IHS had defended its 14-month schedule on three grounds – the size of Sage’s claim, the complexity of the claim, and the need for more information from Sage. The District Court disagreed, finding that the amount of Sage’s claim “is not unusually large,” that Sage’s claim “also does not appear to be unusually complex,” and that “it appears that Sage provided all of the information that [IHS] requested.” Opinion at pages 81-83. Sage may now present its CSC claim to the District Court for a decision on the amount of CSC to which Sage is entitled.

    Sage greatly appreciates the support of its staff, patients, the Chapters, and Council Delegates throughout the litigation, most notably Delegates Lee Jack, Sr., Alton Joe Shepherd, Kee Allen Begay, Jr., and Raymond Smith, Jr. Sage will continue to provide high-quality medical services to its patients and looks forward to working with IHS to continue to improve the delivery of health care to all Navajo citizens.

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