CHS 101

Overview of the Contract Health Service (CHS)
Who is Eligible for CHS?
What Data is Collected for CHS-and Why?
CHS Authorization Process Flow [PDF-76KB]
Where is CHS Data Stored?

Overview of the Contract Health Service (CHS)

CHS funds are used in situations where: (1) no IHS direct-care facility exists, (2) the direct-care element is incapable of providing the required emergency and/or specialty care, (3) the direct-care element has an overflow of medical care workload, and (4) to supplement alternate resources. The IHS purchases the needed basic healthcare services from private local and community healthcare providers that include:

• Hospital care
• Physician services
• Outpatient care
• Laboratory
• Dental
• Radiology
• Pharmacy
• Transportation services (e.g. ground and air ambulance)

The CHS program supports the provision of care in IHS and tribally operated facilities by contracting healthcare services that would otherwise not be available.

The CHS program is administered through twelve IHS Area Offices that consist of 155 IHS and tribally operated service units. The facilities include two major IHS-operated medical centers and one tribally operated medical center; however, most of the IHS and tribally operated facilities are small rural community hospitals and health centers that provide basic primary care services. Because not all tribes have access to IHS or tribally operated facilities, healthcare services are limited and there is an increasing demand for CHS to access needed healthcare. With the increasing costs of pharmaceuticals and medical care, as well as the growing population, there is a high demand from all Areas on the CHS program to provide needed healthcare.

The IHS fiscal intermediary (FI) contract with Blue Cross/Blue Shield of New Mexico provides a mechanism of payment for services purchased in the private sector and ensures that payments are made accurately and timely according to contractual requirements and maintains a centralized medical and dental claims reimbursement system. The FI process functions within the CHS program and the IHS payment policy and meets the standards of the medical industry. In addition to providing payments to vendors, the FI provides program support services that collects, compiles, and organizes workload and financial data, as well as generating statistical reports to the IHS that support the administration of CHS programs.² [CHS FY2004 Budget Request: http://www.ihs.gov/AdminMngrResources/budget/downloads/fy_2004/ihs-55_contract_health_service.doc [DOC]]

Who is Eligible for CHS?

1. An individual must be of Indian descent and belong to the Indian community, which may be verified by tribal descendency or census number. A non-Indian woman pregnant with an eligible Indian's child is eligible for CHS during pregnancy through post partum (usually six weeks).

2. An individual must reside within his/her Tribal Contract Health Service Delivery Area (CHSDA). The Tribal CHSDA encompasses the Reservation, trust land, and the counties that border the reservation. The following individuals also must meet the residency requirements:
   • Students who are temporarily absent from his/her CHSDA during full-time attendance of boarding school, college, vocational, technical, and other academic education. The coverage ceases 180 days after completing the study.

   • A person who is temporarily absent from his/her CHSDA due to travel, employment, etc. Eligibility ceases after 180 days.

   • Children placed in foster care outside of the CHSDA by court order.

   • Other Indian persons who maintain "close social and economic ties" with the Tribe.

3. CHS funds are limited to medical or dental services considered medically necessary and listed within the established Area IHS medical/dental priorities. A copy of the Area IHS medical/dental priorities is available at the local IHS health centers and hospitals.

4. An individual must apply for and use all alternate resources that are available and accessible, such as Medicare A and B, state Medicaid, state or other federal health program, private insurance, etc. The IHS is the "payor of last resort" of persons defined as eligible for CHS, notwithstanding any state or local law or regulation to the contrary. The IHS facility is also considered a resource, and therefore, the CHS funds may not be expended for services reasonably accessible and available at IHS facilities.

5. The federal regulations require proper notification of the appropriate IHS official before CHS assistance is authorized. In "non-emergency" cases, the patient, or an individual or agency acting on behalf of the patient, or the medical provider must notify the respective IHS CHS specialists or Chief Executive Officer prior to the provision of medical care and service in a non-IHS facility. In "emergency" cases, the same party(ies) mentioned above must notify the respective official(s) within 72 hours after the beginning of the treatment or after admission to a non-IHS facility. For an elderly or disabled person, the notification period may be extended from 72 hours to 30 days in emergency situation.

To be eligible for CHS, an individual must meet all five eligibility factors listed above. A referral by an IHS physician to a non-IHS provider does not automatically qualify a patient for CHS. The IHS is not obligated to pay for medical or dental services under the CHS program unless funds are available and authorized. Therefore, it is important that every person needing CHS assistance-the patient, patient's family or significant others, or non-IHS providers (physicians and/or hospitals)-promptly notify and receive approval from appropriate IHS officials.³ [Public Information on Contract Health Service Program: http://www.ihs.gov/generalweb/webcomponents/ documents/hldb/648-200104190848529.doc [DOC-KB]. For additional information on CHS eligibility, please refer to the IHS Manual, Part 2, Chapter 3-Contract Health Services, Section 2-3.7 or access the following URL: http://www.ihs.gov/publicinfo/publications/ihsmanual/part2/pt2chapt3/pt2chtp3.htm]

What Data is Collected for CHS-and Why?

• Chart facility code
• Chart number
• CHS paid amount
• Date of service
• Patient identifiers
• Primary diagnosis code (ICD9)
• Primary APC Recode
• Provider affiliation code
• Provider disc code
• Vendor TP code

The issue of accurate CHS data is vital to Areas and Tribes: CHS data are used to produce user population data. The Division of Facilities Planning and Construction is dependent on user population information to determine Area and Tribal funding allocation.

Where is CHS Data Stored?

In this context, CHS data are referred to as purchase orders (PO). The purchase orders remain open in the system until they are:

• closed,
• partially cancelled,
• or completely cancelled.

A closed purchase order indicates that final payment has been made to the CHS provider and final payment has been posted to the purchase order in CHS/MIS.

Purchase orders are partially cancelled when the cost is overestimated and the obligation funds need to be corrected.⁴ [Example-Partially Canceled Purchase Order:
A purchase order was issued for an office visit with an estimated cost of $75.00. Before the CHS FI paid the vendor, it was discovered the patient had private insurance, therefore the CHS cost is only the co-pay of $15.00, necessitating a partial cancel of $60.00.]

When the partial cancel is complete, it restores funds from the Federal/local budget accounting system back to the CHS program, making it available for other uses.

A purchase order created in error would be completely canceled.

CHS FI
CHS data are also stored in the Indian Health Service Claims Processing System (IHSCPS). For federal and tribal sites using the services of the CHS FI, electronic data exports are made from the CHS/MIS to the CHS FI. The exports contain new purchase orders needing payment. The FI loads this data into its application-the Indian Health Service Claims Processing System. The FI also receives a hardcopy of the purchase order and claim from the CHS provider.