`United States Court of Appeals
`FOR THE DISTRICT OF COLUMBIA CIRCUIT
`
`
`
`Argued October 1, 2020
`
`
`Decided April 13, 2021
`
`No. 19-5299
`
`SWINOMISH INDIAN TRIBAL COMMUNITY,
`APPELLANT
`
`v.
`
`XAVIER BECERRA, IN HIS OFFICIAL CAPACITY AS SECRETARY,
`U.S. DEPARTMENT OF HEALTH & HUMAN SERVICES, ET AL.,
`APPELLEES
`
`
`Appeal from the United States District Court
`for the District of Columbia
`(No. 1:18-cv-01156)
`
`
`Paul E. Frye argued the cause for appellant. With him on
`the briefs were Rachel A. Sage, Stephen T. LeCuyer, Steven D.
`Gordon, and Philip Baker-Shenk.
`
`
`Lloyd B. Miller, Donald J. Simon, Rebecca A. Patterson,
`and Whitney A. Leonard were on the brief for amici curiae 19
`Native American Tribes and Tribal Organizations and the
`National Congress of American Indians in support of appellant.
`
`
`John S. Koppel, Attorney, U.S. Department of Justice,
`argued the cause for appellees. With him on the brief was
`Daniel Tenny, Attorney.
`
`
`
`2
`
`
`
`Before: KATSAS, RAO and WALKER, Circuit Judges.
`
`Opinion for the Court filed by Circuit Judge WALKER.
`
`WALKER, Circuit Judge: Indian Health Service agreed to
`pay the Swinomish Indian Tribal Community to run a health
`program on the Swinomish Reservation. In this case,
`Swinomish says Indian Health Service shortchanged it.
`
`The district court disagreed. So do we.
`
`
`I.
`
`
`
`A.
`
`
`
`For much of the history of American Indian reservations,
`
`the Bureau of Indian Affairs ran most aspects of tribal
`government. The federal government controlled tribes’ health
`care, education, and policing. The result was that decisions
`crucial to the lives of American Indians were made by
`politicians and bureaucrats
`far
`removed
`from
`tribal
`communities. This was not, to put it mildly, ideal. See H.R.
`Rep. No. 93-1600, at 19 (1974) (“The growth of the
`administrative power of the Bureau of Indian Affairs . . . on
`Indian reservations had effectively destroyed existing tribal
`forms of government.”).
`
`
`So Congress passed the Indian Self-Determination and
`Education Assistance Act, Pub. L. No. 93-638, 88 Stat. 2203
`(1975) (codified as amended at 25 U.S.C. § 5301 et seq.), to
`provide federal funds directly
`to
`tribes
`that “assume
`responsibility for aid programs that benefit their members.”
`Menominee Indian Tribe of Wisconsin v. United States, 136 S.
`Ct. 750, 753 (2016). With regard to health care, tribes in effect
`
`
`
`
`
`3
`
`running health programs
`federal contractors
`become
`previously administered by Indian Health Service. They then
`negotiate contracts with Indian Health Service.
`
`There are, however, limits to the negotiation. No matter
`what, the government must pay the tribe at least what Indian
`Health Service would otherwise have spent to run the same
`program. 25 U.S.C. § 5325(a)(1). This payment is called the
`secretarial amount. See, e.g., Salazar v. Ramah Navajo
`Chapter, 567 U.S. 182, 186 (2012).
`
`Since federal contracts come with expensive compliance
`costs, Congress amended the Act in 1988 to cover those costs.
`Pub. L. No. 100-472, § 205, 102 Stat. 2285, 2292-94 (1988)
`(codified at 25 U.S.C. § 5325). Indian Health Service must
`now also pay “contract support costs” not included in the
`secretarial amount:
`
`There shall be added to the amount required by
`paragraph (1) contract support costs which shall
`consist of an amount for the reasonable costs for
`activities which must be carried on by a tribal
`organization as a contractor to ensure compliance
`with
`the
`terms of
`the contract and prudent
`management, but which —
`
`
`(A) normally are not carried on by the respective
`Secretary in his direct operation of the program;
`or
`
`(B) are provided by the Secretary in support of
`the contracted program from resources other than
`those under contract.
`
`
`Id. § 5325(a)(2).
`
`
`
`
`
`4
`
`
`Contract support costs cover indirect administrative
`expenses like audits and computer systems, as well as direct
`expenses like workers’ compensation and unemployment
`taxes. Often, the indirect expenses billed to Indian Health
`Service are a percentage of the total direct costs.
`
`
`Indian Health Service pays the secretarial amount and
`contract support costs so that tribes will not have to use their
`own money to run and support the program. As a result, tribes
`typically don’t bill patients for their medical services. But that
`doesn’t mean tribes can’t earn money elsewhere. Like private
`hospitals and doctors’ offices, they can bill patients’ insurance
`companies, including Medicare and Medicaid. 25 U.S.C.
`§ 1641(d)(1).1
`
`The Indian Self-Determination and Education Assistance
`Act is not silent as to this insurance money. It requires tribes
`to use the insurance money on their health programs. But the
`Act also requires Indian Health Service to fully fund the tribe’s
`program without regard to any insurance money it receives. Id.
`§§ 5325(m), 5388(j).
`
`In other words, if Indian Health Service would have spent
`$3 million on a tribe’s health care back when it provided the
`health care directly, it must now pay that contracting tribe at
`least $3 million — period. This is true even if the tribe earns
`$1 million in insurance revenue. Indian Health Service can’t
`pay the tribe $2 million on the theory that its revenue will make
`
`1 Tribes can earn income from a variety of sources. In this case,
`Swinomish says it earned $636,421 from “third-party billings” and
`received $27,730 as “additional revenue.” Appellant’s Br. at 17.
`Because insurance money makes up
`the vast majority of
`Swinomish’s income, we refer to all third-party revenue as
`“insurance money.”
`
`
`
`
`
`5
`
`up the difference. Instead, the tribe gets to use its $1 million
`earnings however it wants — as long as it is spent on the
`program.
`
`But recall that Indian Health Service must also pay
`contract support costs. Taking the above example, all parties
`would agree that Indian Health Service owes contract support
`costs on the $3 million secretarial amount. But what about the
`additional $1 million the hypothetical tribe receives from
`insurers and spends on health services? The question in this
`case is whether Indian Health Service must pay contract
`support costs on that additional money.
`
`
`
`
`B.
`
`For the past twenty-four years, the Swinomish Indian
`Tribal Community has directly delivered health care to its
`members using funds negotiated through a contract with Indian
`Health Service. As required by statute, supra pp. 2-5, these
`negotiated funds include the secretarial amount and contract
`support costs. Swinomish uses the funds to run a medical clinic
`and provide dental services, substance abuse counseling, and
`other health services.
`
`Those are not the only funds Swinomish spends on its
`medical services. It bills its patients’ health insurance
`providers and spends this revenue on its health services. And
`the Tribe can tap into its general treasury.2
`
`
`
`2 Cf. Appellant’s Br. at 17 (“Thus, even if [Indian Health Service]
`had paid the Tribe’s 2010 [contract support costs] claim in its entirety
`(i.e., for $245,867), the Tribe would still be short $242,885 in
`operating the Federal program.”) (emphasis omitted).
`
`
`
`
`
`6
`
`In 2010, Indian Health Service paid Swinomish a total of
`$3,028,213 to run the health program. But Swinomish claims
`it is owed an additional $245,867 in direct and indirect contract
`support costs calculated as percentages of the money it
`received from insurers and spent on health services. See
`Appellant’s Br. at 15-16. It therefore sued under the Contract
`Disputes Act and Declaratory Judgment Act. 41 U.S.C. § 7101
`et seq.; 28 U.S.C. § 2201; see also 25 U.S.C. § 5331(a).
`
`The district court granted the government’s motion for
`summary judgment. Swinomish Indian Tribal Community v.
`Azar, 406 F. Supp. 3d 18, 32 (D.D.C. 2019).
`
`The Tribe appealed.
`
`
`
`
`
`II.
`
`The Indian Self-Determination and Education Assistance
`Act does not require Indian Health Service to pay for contract
`support costs on insurance money received by Swinomish.
`Neither does Swinomish’s contract with Indian Health
`Service.3
`
`
`A.
`
`
`The Indian Self-Determination and Education Assistance
`
`Act requires the government to pay for some contract support
`costs. But for two reasons, the Act’s text and structure do not
`require payment of contract support costs when a tribe spends
`money received from sources other than Indian Health Service,
`like insurance providers.
`
`
`3 We have jurisdiction under 28 U.S.C. § 1291. And we review the
`district court’s decision de novo. Stoe v. Barr, 960 F.3d 627, 629
`(D.C. Cir. 2020).
`
`
`
`
`
`7
`
`
`First, when the Act speaks of contract support costs, it does
`
`not mention money received from third parties, like insurance
`providers. Instead, the Act says reimbursements for contract
`support costs cover activities that “ensure compliance with the
`terms of the contract” conducted by the tribe “as a contractor.”
`25 U.S.C. § 5325(a)(2) (emphasis added).
`
`
`The scope of contract support costs is thus limited to those
`under one “contract” — the one between a “contractor” (the
`tribe) and the contracting agency (Indian Health Service). In
`that contract, a tribe promises to provide certain services to its
`community. In exchange, the government promises to provide
`the tribe with a certain amount of money — the secretarial
`amount — for those services. Then, on top of that, the Act
`requires additional government funding to cover a tribe’s cost
`of complying with the terms of that contract.
`
`
`To be sure, other contracts affect the tribe’s budget. A
`patient might have a contract with a private insurer. Another
`patient may have Medicare or Medicaid. In those instances,
`billing patients’ insurers may lead to more money for the tribe.
`But the Act doesn’t require the government to pay for contract
`support costs on money generated from those other contracts
`— just for money paid by Indian Health Service for “the
`contract.”
`
`
`The Act repeatedly reinforces this limited scope for the
`contract support costs it requires. For example, it guarantees
`reimbursement for contract support costs incurred while
`operating “the Federal program that is the subject of the
`contract” or “the Federal program, function, service, or activity
`pursuant to the contract.” Id. § 5325(a)(3)(A)(i)-(ii) (emphases
`added).
`
`
`
`
`
`
`8
`
`Second, just as the Act speaks of contract support costs
`
`without any mention of insurance money, it elsewhere speaks
`of insurance money without any mention of contract support
`costs. It refers to insurance money at 25 U.S.C. § 5388(j) and
`§ 5325(m) — all without a mention of contract support costs.
`
`
`To the contrary, by requiring Indian Health Service to pay
`a secretarial amount sufficient to support the contracted-for
`services, the Act repeatedly contemplates that the contracting
`parties (a tribe and Indian Health Service) will not factor that
`insurance money into the contract. Insurance money:
`
`
`• “shall be treated as supplemental funding to that
`id.
`negotiated
`in
`the
`funding agreement,”
`§ 5388(j);
`
`
`
`
`
`
`
`• “shall not result in any offset or reduction in the
`amount of funds,” id.; and
`
`• “shall not be a basis for reducing the amount of
`funds otherwise obligated to the contract,” id.
`§ 5325(m)(2).
`
`B.
`
`
`Swinomish’s counter-arguments are unavailing.
`
`Swinomish points out that the Act requires the government
`to fund any contract support cost related to “the Federal
`program.” Id. § 5325(a)(3)(A)(i)-(ii). But in the context of the
`Act, “the Federal program” does not encompass spending
`insurance payments. As covered above, those sections refer to
`“the Federal program that is the subject of the contract” and
`“the Federal program, function, service, or activity pursuant to
`the contract.” Id. (emphases added).
`
`
`
`
`
`9
`
`
`Swinomish is correct to say that it spends insurance money
`on health services. But it also can spend money from the
`Tribe’s general treasury on health services. And if a tribe
`receives private or public grant funding, it can spend that
`money on health services as well. If you take Swinomish’s
`theory of the scope of “the Federal program” to its logical
`conclusion, Indian Health Service would be on the line for
`unlimited contract support costs based on the unlimited sources
`of outside-the-contract funding available to a tribe. That’s not
`what the Act requires. See supra pp. 6-8.
`
`Swinomish is also right when it says it agreed to maintain
`a Third Party Billing program under its contract with Indian
`Health Service. But Swinomish does not point to any
`outstanding costs that Indian Health Service still owes for
`maintaining that program. And the Funding Agreement — the
`contract on which contract support costs are owed in this case
`— doesn’t say that Indian Health Service will pay costs for the
`income the Third Party Billing program brings in. In other
`words, Swinomish gets contract support costs with regard to
`the billing program’s expenses, but not with regard to its
`income.
`
`that Swinomish’s backup
`That of course means
`argument — that it contracted for the contract support costs in
`question — fails. Perhaps the contract could have provided
`that Indian Health Service would pay for any compliance costs
`associated with any money spent from insurance revenue. But
`it didn’t. Instead, Section 6 of the contract says contract
`support costs “will be calculated and paid in accordance with”
`the Act, with any other statutory restrictions, and with Indian
`Health Service’s standard policy. J.A. 51-52. That policy does
`not cover compliance costs related to insurance money. See
`Indian Health Manual – Part 6, Chapter 3.
`
`
`
`
`
`10
`
`
`Next, Swinomish’s interpretation of 25 U.S.C. § 5388(c)
`
`is also unpersuasive. Tribes can run health programs under
`either Subchapter I or V of the Act. Section 5388(c) explains
`the funding available to tribes under a Subchapter V contract,
`like the Funding Agreement in this case:
`
`
`The Secretary shall provide funds under a
`funding agreement under this subchapter in an
`amount equal to the amount that the Indian
`tribe would have been entitled to receive
`under self-determination contracts under this
`chapter, including amounts for direct program
`costs specified under [Subchapter I] and
`amounts for contract support costs specified
`under [Subchapter I], including any funds that
`are specifically or functionally related to the
`provision by the Secretary of services and
`benefits to the Indian tribe or its members, all
`without regard to the organizational level
`within the Department where such functions
`are carried out.
`
`
`25 U.S.C. § 5388(c).
`
`
`Swinomish says this provision expands the funds Indian
`Health Service must pay a tribe under Subchapter V — the
`subchapter under which Swinomish runs its health program.
`The Tribe argues the phrase “including any funds . . . related to
`the provision by the Secretary of services and benefits”
`encompasses money received from patients’ insurers.
`
`We disagree. The word “including” is first used to clarify
`the types of funding already available under Subchapter I, not
`expand them. This is consistent with the ordinary use of the
`
`
`
`
`
`11
`
` And nothing else in Section 5388(c) suggests
`term.
`“including” should be given a different meaning when it is used
`again in the same sentence. Absent any clear language that
`Subchapter V tribes are entitled to more funds, like support
`costs on expended income, Swinomish’s interpretation of
`Section 5388(c) is not convincing.
`
`
`Finally, Swinomish fears that an adverse decision today
`will mean a tribe is penalized (with less funding) when it
` See 25 U.S.C.
`chooses to directly bill third parties.
`§ 1641(d)(1). To illustrate this fear, assume Indian Health
`Service is in charge of the billing. It collects $200,000 in
`insurance revenue. Indian Health Service must — and does —
`spend all of this money on the program.
`
`Now assume that a tribe contracts to collect third-party
`insurance itself. It, too, earns $200,000 in revenue. And it, too,
`must spend this money to improve the program. But
`remember, the tribe is on the hook for additional compliance
`costs the federal government doesn’t have to pay. Let’s say
`those costs are 25% of whatever is spent on the program. So
`we take the $200,000 in insurance money and subtract $50,000
`to cover those extra-contractual compliance costs. In this
`scenario, $150,000 is used on the program — $50,000 less than
`when Indian Health Service, which didn’t have to account for
`the compliance costs, was running the billing program.
`
`Although Swinomish endorsed the assumptions behind
`that hypothetical at oral argument, it is not at all clear that this
`hypothetical reflects the reality. And more to the point, even
`under the hypothetical, the government still fully funded “the
`contract.” Id. § 5325(a)(2) (emphasis added). Because Indian
`Health Service paid contract support costs attached to the
`contract expenses, the Tribe didn’t have to spend its own funds
`to comply with the Funding Agreement.
`
`
`
`
`
`12
`
`
`That is all the statute requires.
`
`
`
`*
`
`*
`
`*
`
`The Act does not require Indian Health Service to pay for
`
`contract support costs on insurance money spent on the health
`program. Nor did Indian Health Service contractually agree to
`pay for those costs. We affirm the judgment of the district
`court.
`
`
`
`
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