Judge: Federal government owes Cook Inlet Tribal Council for costs of running substance-abuse treatment center

A federal judge has ruled that the Indian Health Service illegally refused to pay Cook Inlet Tribal Council the full costs associated with running a substance-abuse treatment facility, a decision that could be worth millions of dollars for the tribal organization and others like it, an attorney said.

The Nov. 7 ruling adds to other court decisions that have required the Indian Health Service and Bureau of Indian Affairs to also pay overhead expenses, known as “contract support costs," when they contract with tribal-run organizations to deliver services.

Nationwide in recent years, tribal groups have already received hundreds of millions of dollars for long-overdue payments tied to those costs, said Lloyd Miller, an Anchorage attorney who helped handle the case for CITC.

[Indian Health Service settles $193 million in claims to tribal health organizations]

This new decision “sets a national precedent,” underscoring that the overhead costs include utilities, maintenance and other expenses required to run a facility, he said.

The Indian Health Service on Wednesday said it could not comment on current litigation, including whether it would appeal Sullivan’s decision.

“IHS is fully committed to paying full contract support costs in accordance with the Indian Self-Determination and Education Assistance Act,” the agency said, in an email from Joshua Barnett, an IHS public affairs specialist.

The agency first contracted with CITC in 1992 to provide addiction-recovery services at the Alaska Native Alcohol Recovery Center, said Judge Emmet Sullivan, U.S. District Court judge for the District of Columbia, in his 39-page opinion.

The center was later named the Ernie Turner Center, for the late Athabascan who died in 2010 after creating addiction treatment programs for Native people, following his own recovery from alcoholism.

The Alaska Native population suffers “strikingly” high rates of death attributed to alcohol — seven times higher than for non-Natives in 2016, the state health department reported in May. Also that year, Alaska Natives represented 75 percent of the state’s alcohol-poisoning deaths, but about 15 percent of the population.

Sullivan ruled that the federal health agency must determine the full facility costs that it owes CITC since 2014.

CITC says it’s owed $465,000 for 2014 alone.

Miller said the organization, providing social services to Alaska Natives in the Cook Inlet region, has filed similar claims against IHS for more than a decade. He said the final award could amount to several million dollars.

The lack of payment has reduced the recovery services that CITC provides, officials said.

“The costs of running the facilities are fixed costs,” Miller said. “If the government doesn’t reimburse those costs, CITC has to make cuts and not hire staff to make up the difference.”

The center is one of the few residential treatment centers in Alaska, offering a unique, village-care model that gets strong results, said Lisa Rieger, CITC chief legal officer. It emphasizes support from peers, with traditional amenities that include a carving room and therapeutic sweat lodge.

“We’re very pleased that the judge made the right decisions on the legal issues,” she said. “We look forward to resolving the case.”

In 2016, CITC sold the 14-bed Ernie Turner Center in Midtown Anchorage to Southcentral Foundation, a Native-owned health care provider operating the SCF detox program there.

In August, CITC unveiled a new 16-bed residential treatment facility, opening the Ernie Turner Center in Chugiak.

In the case, CITC argued that it had received only $12,000 annually to run the facility since 1992, an amount now well below actual costs.

The federal agency argued it had increased the payment over the years, but failed to cite “any evidence in the record or to otherwise support this assertion,” Sullivan wrote.

Sullivan ruled the agency’s position was inconsistent with its own guidelines and the Indian Self-Determination Act.

Miller called Sullivan’s decision “decisive,” leaving little daylight for appeal. It could collectively be worth tens of millions of dollars annually, ultimately benefiting other tribal organizations fighting to receive full facility costs, he said.

“The judge ruled against the government in so many different ways, it’s difficult to see a basis for appeal,” Miller said.