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June 11, 2018


June 11 , 2018

Muscogee (Creek) Nation Files Lawsuit Against Indian Health Service for 9 Years of Underpayment of Funds


OKMULGEE, Okla. – The Muscogee (Creek) Nation has filed a lawsuit in the U.S. District Court for the Northern District of Oklahoma against the U.S. Indian Health Service demanding $94 million in government funding for the 2006 to 2014 fiscal years.

The lawsuit comes after MCN has worked effortlessly the past three years to reconcile the underfunding of indirect contract support costs with IHS for IHS programs and services.

However, after no resolution with IHS, the MCN has filed a formal complaint stating the government had not been reimbursing the MCN with adequate contract support costs funding by miscalculating MCN’s revenue received from avenues such as third-party insurance.

MCN Principal Chief James R. Floyd came into his administration in January of 2016 with the Nation in a healthcare deficit that needed immediate attention. While doing so, Floyd, along with MCN Secretary of Health Shawn Terry and staff, noticed the miscalculations, which were traced back to 2006.

Although the underfunding of contract support costs had occurred for years, Floyd said there is very loose correlation, if any, to the previous deficit.

However, since then, the MCN has been out of deficit for some time, has corrected its calculations for IHS contract support costs and has been receiving the correct reimbursement.

Floyd, who was a former IHS upper management employee for 11 years, was familiar with the calculations of contract support costs and had witnessed similar cases with IHS and other tribes.

With the filing of the lawsuit, the Nation has been able to get a firm that is working on contingency, which will not cost the Nation anything if the case does not prevail.

“We feel comfortable that we will prevail in the case,” Floyd said. “We have a very good firm and for the citizens, it is not cutting out of healthcare money to pay for the cost of the suit. They’re working on contingency. So, if we don’t prevail we’re not out any money.”

Because of the funding shortage in administrative support costs, the MCN healthcare system had to use funding from patient care to make up for the difference.

If the Nation prevails in the suit, the MCN citizens and patients will benefit from the $94 million in money to be paid back.

Terry said it’s an everyday struggle to provide the resources and level of care that the citizens deserve because the U.S. Government funds IHS at about 30 percent of need.

“This lawsuit going back to 2006 is us trying to ensure that we’re maximizing the amount of funds we are eligible for,” Terry said. “It’s our responsibility to make sure we’re maximizing that and stretching those dollars as far as we can but at the end of the day, we want IHS fully funding so that our people can be taken care of at the level that they deserve.”

MCN Attorney General Kevin Dellinger, MCN First Assistant Attorney General Lindsay Dowell and Lloyd B. Miller and Rebecca A. Patterson of Sonosky Chambers Sachse Endreson & Perry, LLP, are representing the Nation in the MCN v. Alex Azar et al case.