Colville tribal citizens left on the hook when Indian Health Service doesn’t pay medical bills

By Melanie Henshaw InvestigateWest

Jarred-Michael Erickson was surprised when he opened the $600 bill for hearing tests taken when his child was born two years earlier.

The bill should not have been his to pay. Erickson is the chairman of the Confederated Tribes of the Colville Reservation. The cost and administration of his health care — and that of all tribal citizens — is the trust responsibility of the federal government.

But the Indian Health Service didn't pay the bill, despite the fact that it had approved the procedure, and Erickson faced a choice: Pay it himself or take a hit to his credit score.

"I ended up getting to the point where it's about to go to collections, and I'm just gonna pay it," he said. "I had the money at the time — and I made even less than I do now, and it hurt me more then — but I was like, I can't have it impact my credit, so I paid it."

Citizens of federally recognized tribes across the country face the same choice thousands of times each year when the IHS fails to pay bills for services patients receive outside the agency's facilities through its purchased and referred-care program.

Erickson says Colville is no exception. The issue is particularly severe for tribal citizens who receive health care directly through the IHS, like the Colville, where a tribal government has no say in the agency's administration of health care services. Most tribes operate their own health services, using federal funding.

Tribal officials call the Colville Service Unit "Exhibit A" demonstrating the agency's billing failures.

Today, that $600 bill is far from Erickson's mind. Instead, he worries for other Colville citizens facing surprise medical bills of their own, often much larger — like the instances tribal officials recounted from tribal members of $17,000 in bills for cancer treatment and $40,000 for emergency surgery.

A federal audit of more than 800,000 IHS claims for the referred-care program between 2013 and 2016, the most recent available, found that more than 32,000 were not paid within the required 30-day window. That figure was just a snapshot of the millions of claims processed by the agency.

The failure to pay was just one problem identified in the audit, which found that the IHS, which is responsible for providing health care to tribal citizens, failed to follow federal regulations for administering the referred care program in the vast majority of cases.

The unpaid bills are contributing to a medical debt crisis among Native Americans that U.S. Rep. Kim Schrier, D-Wash., has described as "devastating." Medical debt among Native Americans amounts to roughly $3,700 per person — 20% higher than the national average, according to the federal Consumer Financial Protection Bureau.

"It makes you just pissed off, just angry, just mad, and you get in the position, where you're pulling your hair out, or pulling teeth, it's like, 'Oh my gosh, I shouldn't have to be fighting this hard for what should be done already,'" Erickson said.

Erickson said paying for health care "should already be done by the federal government through their trust responsibilities," which are long-established legal obligations the federal government holds toward tribal nations and citizens.

The failures to pay further strain an already-fragile relationship between tribal citizens and the IHS. They also add to the obstacles facing tribal citizens in accessing health care. InvestigateWest reported in August that Native Americans in the Northwest have worse access to health care and higher rates of death from preventable and treatable causes, contributing to shorter life expectancies than other racial groups.

The IHS would not agree to an interview with InvestigateWest for this story, but provided a statement with details about the program, indicating the agency was taking steps to address the number of unpaid bills.

Tribal leaders are seeking solutions from Congress, and two bipartisan bills recently introduced by Washington legislators are attempting to address the issues by proposing legislation to address IHS' failures.

"It's plain unfair for tribal members' credit scores to suffer simply because IHS is late reimbursing providers for care," Sen. Patty Murray, D-Washington, who is co-sponsoring one of the bills, said in a written statement. "These inefficiencies are no fault of the tribal members who are seeing their credit dinged."

Failure to Pay

The IHS's failure to pay is particularly common for citizens of the three tribes within the geographical boundaries of Washington that receive care directly through the IHS: the Colville Tribes, the Spokane Tribe, and the Confederated Tribes and Bands of the Yakama Nation.

For Colville citizens, issues with the referred care program discourage some from seeking care altogether, according to tribal officials. And the problems have only worsened over the years, Erickson says. Erickson and other members of the Colville Business Council, the governing body of the Colville Tribes, regularly receive calls from tribal citizens on the receiving end of unexpected bills.

Tribal officials sought to remedy the issue by addressing it directly with the IHS over several years, to no avail. Erickson traveled to Capitol Hill in July to testify before the House Subcommittee on Indian and Insular Affairs about ongoing issues with the IHS, including the referred care program.

"On the Colville Reservation, these management deficiencies have resulted in tribal members having their credit negatively impacted because of unpaid medical bills, fewer health providers, and even deaths," Erickson said in a written statement.

The IHS, due to underfunding and a lack of capacity and facilities, cannot provide its patients with comprehensive health care. If an IHS health care provider determines a patient needs treatment beyond its capabilities, it refers them to an external provider, and if approved by the agency, it will reimburse that provider. Purchased and referred care also is available for tribal members living farther than 40 miles from an IHS or tribal health care facility, a common situation in the rural Northwest.

Tribal citizens in Washington need IHS reimbursement any time they go to a hospital, an emergency room or see a specialist. Most IHS patients in the Northwest — about 72 percent — require IHS reimbursement for dental care, too.

Though tribal members in Washington often have no other choice than to ask IHS for reimbursement on a claim, the IHS doesn't comply with federal regulations for handling the vast majority of claims, according to a 2020 report from the Office of the Inspector General of Health and Human Services. That report found errors in 84% of cases it reviewed.

In addition to failing to pay many claims on time, other requirements, such as approving claims for referred care within five days of submission to the agency, were not followed either, the report found.

More recent data shows that the issue has persisted. The IHS deferred or denied 120,000 purchased and referred care requests totaling roughly $552 million in spending from eligible patients in fiscal 2022, according to the Kaiser Family Foundation, a health policy and research nonprofit.

The IHS is also required to notify providers within five days of any service rendered for which patients are not responsible. In the Portland Service Area, those notices aren't being sent at all, according to Brian Gunn, a Colville citizen, attorney and lobbyist for the tribe.

When a bill goes unpaid, the provider eventually sends it to a collections agency, which will pursue payment and report the individual's debt to credit bureaus, negatively affecting their credit score.

That causes a cascade of negative impacts — higher interest rates for loans, mortgages and credit cards, higher insurance premiums, and increased difficulties with services where credit is considered, including rental housing, employment and even setting up utilities.

Out of Pocket

When Erickson received the medical bill for his child's hearing tests, it wasn't the first bill — or the last. Nor is he the only member of the Colville Business Council directly impacted by the billing failures.

"From what I've gathered from all the people I've talked to, they're like, 'Well, that money's gone,'" Erickson said. "I could have gone for back-to-school clothes, I could have gone for Christmas gifts. I could have gone for who knows what, just food, other bills that we all got to pay. So, yeah, frustrating. Frustrating's not even the word."

The IHS's low budget intensifies the pressure on its purchased and referred care program. The IHS received just under $7 billion for fiscal 2024, with around $1 billion of that funding earmarked for the referred care program, far below the $10 billion the agency requested.

The IHS is a payer of last resort, meaning it will only cover bills once all other payment methods, like Medicare or private insurance, are exhausted.

Tribal officials with the Colville describe a cycle of mismanagement that results in the problem only getting worse. The fear of being sent to collections stops Colville citizens from seeking care at their local IHS clinic. But because fewer patients go to the clinic, the local IHS service unit has its funding decreased for all programs, including referred care.

"Not only are people not getting the care they need, or getting sent to collections, our budget is going down because of the domino effect of the mismanagement of the program," Gunn said.

Gunn said he and his father also received unexpected medical bills after receiving purchased and referred care that the IHS should've covered.

Erickson went through the long process to have the procedures for his child's birth preapproved by the IHS — so when he received the $600 bill from Sacred Heart Hospital in Spokane for the newborn's hearing tests two years later, he went to the agency to rectify the issue.

All services rendered through the purchased and referred care program must be preapproved by the IHS, except in the case of an emergency.

The IHS rebuffed him. Two years after Erickson's child's birth, the agency informed him it would not pay the bill it previously approved for coverage.

"I'm like, how is that not gonna be covered?" Erickson said. "It's not my fault they billed me two years later. ... It was one of those (bills) that went through the process through IHS, we got everything we're supposed to, did everything right, and they told us we had to pay it and they weren't gonna pay it."

Erickson downplays the $600 payout, reasoning that he can't fixate on his own billing woes with the IHS, instead staying focused on the "bigger issues" his citizens are facing — like five-figure unexpected bills for cancer treatment and other critical procedures. Tribal officials declined to provide specific patient details.

There's no method for reimbursement once a tribal citizen settles an outstanding bill that the IHS was responsible for.

"I'm counting that money as gone, and that's unfortunate, because I could do a lot with $600 for my kids," Erickson said.

Proposed Solutions

Legislators are eyeing possible fixes for the issue after consulting with tribal government officials. That includes the Protecting Native Americans Credit Act, recently proposed in the House of Representatives by Schrier, the Washington congresswoman, and Rep. Dusty Johnson, R-S.D. That bill, drafted in consultation with the Colville Tribes, would instruct credit bureaus to retroactively eliminate medical debt for Native Americans impacted by the IHS' billing failures.

"The damage caused by these unpaid, unprocessed claims can be devastating for members of our tribal communities," Schrier said in a statement. "The outstanding debt and impact on their credit score are incredibly harmful to their financial future."

There's also a proactive approach — after input from the Colville Tribes and working closely with Gunn, Sen. Maria Cantwell, D-Wash. and Sen. Mike Rounds, R-S.D., proposed bipartisan legislation in the Senate this May called the Purchased and Referred Care Improvement Act.

The bill would require the IHS to reimburse non-tribal providers for referred care within 30 days, create a process to reimburse patients for any out-of-pocket costs and ensure that even if the agency fails to reimburse, individual tribal citizens are not held liable for unpaid bills. Tribal advocates are pushing for the inclusion of a provision that would allow tribal citizens to submit for retroactive reimbursement for past claims they settled out of pocket.

Without improved structure and repayment plans, health care options and outcomes for Native American communities receiving care through the IHS could further deteriorate, tribal advocates say.

Since its inception in the 1950s, the IHS has failed to build trust with Native American and Alaska Native communities, its reputation marred by accusations of mismanagement, poor care and abuse, advocates say.

"Rebuilding that trust is a huge thing, that I don't know that some, in their lifetime, will ever rebuild with IHS," Erickson said. "It's like, 'Well, I'm just gonna keep going (outside the IHS system), because I can't trust that they're gonna do their job properly."

InvestigateWest (invw.org) is an independent news nonprofit dedicated to investigative journalism in the Pacific Northwest. Reporter Melanie Henshaw covers Indigenous affairs and communities in the region. Reach her directly at or at (971) 258-1430.