Episode description

Welcome to Supreme Court Opinions. In this episode, you’ll hear the Court’s opinion in Becerra v San Carlos Apache Tribe.

In this case, the court considered this issue: Must the Indian Health Service pay “contract support costs” not only to support IHS-funded activities, but also to support the tribe’s expenditure of income collected from third parties?

The case was decided on June 6, 2024.

The Supreme Court held that the Indian Self-Determination and Education Assistance Act (ISDA) requires the Indian Health Service (IHS) to pay contract support costs for activities tribes carry out under self-determination contracts, including costs incurred when spending program income from third-party payers. Chief Justice John Roberts authored the opinion of the Court, affirming the decisions of the Ninth and Tenth Circuits.

ISDA Sections 5325(a)(2) and (a)(3)(A) require the Indian Health Service (IHS) to pay “contract support costs” to tribes that take over healthcare programs the IHS previously operated. These costs cover reasonable expenses tribes incur to ensure they comply with their contracts with IHS. The tribes' contracts require them to collect and spend “program income” (like insurance payments) to carry out the healthcare programs they took over. When tribes use this program income as required and incur administrative and overhead costs as a result, those costs fit squarely within what the law defines as reimbursable “contract support costs.”

The Court rejected IHS's arguments that Section 5326 prohibits paying these costs. That provision was meant to prevent IHS from paying costs related to separate contracts tribes have with other parties, which isn’t the situation here. Rather, here, the contract support costs are directly attributable to and associated with the tribes' contracts with IHS, because those contracts themselves require the tribes to collect and spend the program income that generates the costs. Therefore, ISDA requires IHS to pay the contract support costs the tribes incur from spending program income as their IHS contracts demand.

Justice Brett Kavanaugh authored a dissenting opinion, joined by Justices Clarence Thomas, Samuel Alito, and Amy Coney Barrett. The dissent argued that ISDA’s contract support cost provisions do not extend to the costs associated with spending third-party income, emphasizing that the majority’s interpretation could lead to significant financial implications and potentially disrupt the allocation of federal funds.

The opinion is presented here in its entirety, but with citations omitted. If you appreciate this episode, please subscribe. Thank you.