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  Title	HHS efficiency review blamed for delaying patient care at Indian Health Service
  ID	11625282
  External ID	7901759377
  Author	Angus Chen
  Published Date	July 15, 2025, 3:35 a.m.
  Summary	Staff vacancies force IHS hospitals to reduce surgeries, deliveries, and imaging services On the last day of June, employees at Gallup Indian Medical Center, an Indian Health Service hospital serving
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  URL	https://www.statnews.com/2025/07/15/indian-health-service-new-contract-review-process-bottleneck-to-care/
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  Content ID	7430044
  Key	2b957d5a-5120-40e8-b35c-83a8bdea2dd2
  Content	Staff vacancies force IHS hospitals to reduce surgeries, deliveries, and imaging services On the last day of June, employees at Gallup Indian Medical Center, an Indian Health Service hospital serving residents of the Navajo Nation and nearby areas, received a notice that a key emergency service would be suspended until further notice. The reason given was a new review process implemented in response to an executive order issued by President Trump to “promote efficiency.” Between 5:30 p.m. and 7 a.m., “there will be NO ultrasound on-call coverage from Monday through Friday,” the email read, citing the “new Presidential Appointee Approver and Departmental Efficiency Review.” The New Mexico hospital hadn't been able to fill an ultrasound technician vacancy, meaning physicians caring for certain emergency patients overnight wouldn't be able to immediately diagnose their conditions. In at least one instance, a patient had to be admitted overnight as a safety precaution. According to former and current IHS employees and emails reviewed by STAT, the loss of overnight ultrasound service at Gallup is just one of numerous service and staffing cuts at IHS facilities nationally caused by the new contract review process. Known by the acronym PAA-DER, the process requires contracts and requisitions to get final approval from a top official at the Department of Health and Human Services, IHS's parent agency, which employees described as an onerous procedure that can take weeks or longer. IHS clinicians told STAT that the approval process has become a bottleneck, leading directly or indirectly to delays in care and losses in medical services and personnel. That has included impacts to emergency department staffing, general surgery, labor and delivery, inpatient beds, imaging, and temporarily, some infectious disease testing, IHS employees said. Software contracts also haven't been able to be renewed for at least some IHS regions. UpToDate and LexiComp, medical reference libraries commonly used by physicians, and HealthStream, a training software used with employees, are among the programs that IHS staff told STAT they were now unable to access. The contract review policy stems from the Trump administration's push to increase efficiency and reduce waste in the federal government, an HHS spokesperson told STAT in a statement. “Executive Order 14222 directed agencies to conduct a 30-day internal review of existing contracts and grant-making processes. The goal of this review was to ensure that all federal spending is aligned with the best interests of the American people, and that agency operations are delivering maximum value and transparency,” the statement said. “This review has not interrupted IHS's ability to fulfill its responsibilities.” But STAT spoke with more than 10 individuals familiar with the American Indian health system who said the new procedures are making health care less efficient and potentially harming patients and American Indian communities. “The irony of it is that all this is to move towards efficiency, but it creates inefficiencies. It's the reverse. It's creating an unhealthy America,” said W. Ron Allen, the chairman of the Jamestown S'Klallam Tribe in Washington state and the chair of a Centers for Medicare and Medicaid Services tribal advisory group. “Everything they're doing is going to undermine the direct services capacity for communities.” ‘A really significant slowdown' IHS hospitals rely heavily on contracts. They're used for purchasing supplies like donor blood and equipment like ventilators, as well as for hiring travel nurses, physicians, pharmacists, and technicians, which account for much of the clinical staffing at IHS facilities. Before PAA-DER, the contracting process was already more involved than at private hospitals, because IHS facilities must follow federal acquisition regulations, like publicly advertising bids for contracts. “It was frustrating, but we could get things we needed for patients,” said an IHS hospital administrator who spoke to STAT on the condition of remaining anonymous for fear of reprisal. But with the introduction of PAA-DER, administration staff must now gather data and provide written justification for each acquisition and contract, the administrator said. The Navajo area's five hospitals alone probably account for over 1,000 acquisitions per quarter, the administrator said. Nationwide, IHS operates 21 hospitals, 53 health centers, and 25 health stations. “Every week, we have new acquisitions requirements that just derail anything else that acquisitions is doing. There's a whole bunch of smoldering fires and a new one erupts and we have to send all our resources there,” the administrator said. That can indirectly harm the availability of other services, the administrator said, if staff are too overburdened to attend to normal operations. PAA-DER requests are routed to the acting director of IHS, Benjamin Smith, who needs to approve the contracts and acquisitions. Then, Smith's office sends them to HHS for the Departmental Efficiency Review and final approval. WIRED reported in May that the review goes through the deputy secretary of HHS, currently Jim O'Neill. “That's a really significant slowdown,” the IHS administrator said. “That means anything requiring a service that a private company can fill is just on hold, potentially indefinitely.” Employment contracts appear to be especially vulnerable to the delays, since workers are not being paid while their contracts are undergoing review. During that time, workers may need to find other employment and not return to their original IHS facility. “A lot of these folks, their contracts will last 90 days or 120 days, and ends on the last day. You must renew it then, and you can't renew it early,” explained an IHS clinician who also asked not to be named and works at Gallup Indian Medical Center. “These delays mean a lot of personnel contracts get lost. That's how we lost the ultrasound technician and a lot of nurses.” That puts additional strain on a system that's already understaffed. Across the IHS as a whole, clinics and hospitals have long had over a 30% vacancy rate in staffing. Full-time federal IHS positions can be difficult to fill, employees told STAT, partly because of a dearth of candidates for many rural health positions in general, and because there's a limit on how many jobs IHS can advertise at any given time. In the Navajo area, all five IHS hospitals must share 18 job postings. Thus far, the Gallup hospital has not been able to replace its overnight ultrasound technician. A few days after the email went out, Connie Liu, an obstetrician-gynecologist who recently resigned from the IHS to work at a nearby health center, saw a patient after 5:30 p.m. who needed ultrasound imaging. “A patient came in with a gynecologic issue, and it wasn't clear what was going on when we got a CT,” Liu told STAT. “We needed to get additional imaging, and could not do that until morning and ended up admitting the patient. That's an example of waste, because we didn't get the information we needed.” Delays like this are also potentially dangerous. There are certain medical emergencies where physicians will commonly use ultrasound to make the diagnosis. “That's really important as a gynecologist to diagnose ectopic pregnancies, which can be life-threatening and do require immediate intervention,” Liu said. Gallup Indian Medical Center also has not yet been able to replace some aging ventilators and surgical instruments, said multiple clinicians who work at the medical center. In an email sent to employees on July 11, the hospital leadership told staff that shortages in staffing forced the facility to restrict general surgery care to patients “requiring urgent and emergent intervention,” reduce labor and delivery services, and cut available medical surgical beds by half. “Contracts for most of these positions are in place, but the approval of the purchase requisitions were delayed by the PAA DER process,” said the email, which was seen by STAT. Labor inductions will need to be transferred to other hospitals, the email added. Transfers typically involve moving the patient by air ambulance to a hospital in Flagstaff or Phoenix in Arizona, or Albuquerque, New Mexico, and the travel and the hospital stay must be covered by the Indian Health Service, the IHS hospital administrator told STAT. That could cost more than keeping the service in-house, and such delays can pose risks to the patient. “That's the scary part,” said Jaynie Parrish, executive director of the nonprofit Arizona Native Vote and a member of the Navajo Nation. Parrish said she was worried about the potential for injuries or death that delays could pose when it comes to emergencies, and that cross-state transfers are a burden for patients and families. “These policies, they are life-and-death policies we're talking about,” she said. The difficulty of providing care when services are shrinking is driving clinicians like Liu to quit from the IHS as well. “My colleagues provide excellent care. They're really good doctors and nurses, but the uncertainty and instability presents a moral injury and leads to burnout,” she said. Kennedy adviser pledges to look at ‘bureaucratic processes' HHS Secretary Robert F. Kennedy Jr. has said that he is committed to American Indian health and met with multiple tribal nations over the past year, including the Navajo Nation and tribal leaders in Oklahoma. At the urging of tribal health advocates, Kennedy exempted IHS from the sweeping terminations of probationary workers across the federal government earlier this year. He also recently appointed Mark Cruz, a member of the Klamath Tribes, as a senior adviser to the secretary on Indian health. Cruz is the first person to hold this position. While Cruz said in an interview that he was unfamiliar with PAA-DER, he added that he and Kennedy are committed to improving health care efficiency in tribal communities. Cruz said the IHS is unique among HHS agencies as a large health care system and may need special consideration or exemptions when it comes to federal operations. “I definitely want to take a hard look at what government bureaucratic processes exist that other health systems don't have to face,” Cruz said, referring to IHS. “Because, look, the governmental system is incompatible with operating hospitals.” In particular, Cruz said that he would support more tribes taking over health care facility operations, a process known as 638 contracting. In this, tribes locally operate and manage facilities and receive an annual sum from IHS. The share of tribally operated hospitals has steadily grown over the last decade and now accounts for the majority of IHS hospitals and almost all smaller clinics. Tribally operated facilities are not subject to the PAA-DER process. “What we've seen across the board, when tribes take over these services, programs, functions, or activities that the federal government should otherwise provide, tribes just do it better,” Cruz said. But converting health care services from federal to tribally run can be a complicated decision, said A.C. Locklear, CEO of the National Indian Health Board and a member of the Lumbee Tribe. While many tribes support more self-governance in health care, he said, not all tribes are large enough with sufficient governmental infrastructure to go through the lengthy process and operate their own health care services. “Although it has shown significant success in providing for the wellbeing of those in tribal areas, it's not the answer necessarily for every tribe,” Locklear said. Also, tribally run facilities receive only a small portion of their operating budget from IHS, with the rest coming from private insurers, Medicare, and Medicaid reimbursements. Without more support, some tribes may feel that arrangement does not honor treaties that the U.S. government signed promising to fully provide health care to American Indians, Locklear said. “They have an obligation to provide those services. Giving us a cut of the pie and having us fill in the gap isn't providing the services they said they would provide for,” he said. “Many tribes are under that belief, and they are well within their rights.” Creating new barriers to providing health care in IHS facilities like PAA-DER also fails to honor those treaties, both IHS physicians and tribal health leaders told STAT. “They're in denial,” said Jamestown S'Klallam tribe's Allen, referring to the Trump administration. “They say they understand our government-to-government obligation. It's like those words mean nothing relative to the actual actions that are making matters worse.” STAT's coverage of health inequities is supported by a grant from the Commonwealth Fund . Our financial supporters are not involved in any decisions about our journalism. Angus Chen covers all issues broadly related to cancer including drugs, policy, science, and equity. He joined STAT in 2021 after covering health and science at NPR and NPR affiliate stations. His work has been recognized by national Edward R. Murrow awards, the June L. Biedler prize for cancer journalism, and more. You can reach Angus on Signal at angus.08.
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