Navajo Hospital Seeks Injunction To Secure IHS Contract Fast

By Emma Whitford
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Law360 (November 19, 2020, 6:57 PM EST) -- A hospital serving the Navajo Nation is seeking a preliminary injunction to immediately renew its self-determination contract with the Indian Health Service, saying swift action is needed to prevent health care interruptions during the coronavirus pandemic.

Following on the heels of its complaint filed Nov. 13 in New Mexico federal court, Sage Memorial Hospital's Wednesday motion urged the court to immediately compel IHS to renew its contract to prevent the Arizona facility and its patients on the reservation from suffering irreparable harm.

"The Navajo Nation is in the middle of a deadly pandemic that began early in 2020 and today threatens to exceed all previous records of misery and death," the hospital wrote Wednesday. "At a time like this, it is all-hands-on-deck for a fragile health care system that in the best of times is severely under-resourced to serve a population already challenged by disease, poor infrastructure, and extreme remoteness."

Sage has accused IHS of violating the Indian Self-Determination and Education Assistance Act, which allows tribes to enter federal contracts to administer programs the government would otherwise manage directly.

At stake is $1.8 million per month in operating costs, which is needed for the planned construction of a new hospital, Sage claims, as well as affordable PPE from government contractors.

Sage claims that it submitted a draft contract for the years 2021 through 2023 in May, citing an ISDEAA rule that the federal government must approve renewal contracts and funding agreements that are "substantially" similar to their predecessors.

But the pandemic allegedly slowed down the hospital's efforts to renew its "tribal organization" status with the Navajo Nation Council, and IHS subsequently dredged up old claims of financial mismanagement to "undermine and impede" Sage's efforts to renew, according to the hospital.

IHS then allegedly denied Sage's draft contract and issued a press release on Oct. 2 urging Navajo patients to travel to other regional hospitals while Sage is lapsed.

This underscored the need for injunctive relief, the hospital claimed in its Wednesday motion.

"Given the urgent circumstances presented by the pandemic and the need for continuity of care at a time when IHS is already diverting patients away from Sage, Sage respectfully requests that the court act with urgency and all deliberate speed," it wrote.

The hospital also claimed that in order to win a statutory injunction under the ISDEAA, it need only demonstrate that "IHS's actions likely violate the ISDEAA." That bar is easily cleared in this case, the hospital said, because IHS declined to renew a proposed contract that is "substantially" similar to its predecessor. 

"The only changes in the renewal contract were to update dates, correct typographical errors and formatting, and update the Navajo Nation resolution number," Sage wrote. 

As an alternative, Sage offered, the court could issue a temporary restraining order requiring IHS to either fund the new contract or extend the old one on a month-to-month basis while litigation proceeds.

The Navajo Nation and IHS did not immediately respond to requests for comment Thursday.

"Sage is a critical access hospital because it is the only provider in an enormous portion of the Navajo reservation," Lloyd Miller of Sonosky Chambers Sachse Miller & Monkman LLP, counsel for the hospital, told Law360 by email. "Denying Sage the ability to provide care under its self-determination contract is irresponsible in the extreme, particularly in the middle of a killing pandemic. Every day that goes by puts Navajo people at risk."

Navajo Health Foundation is represented by Lloyd B. Miller and Rebecca A. Patterson of Sonosky Chambers Sachse Miller & Monkman LLP.

Counsel information for the federal government was not immediately available.

The case is Navajo Health Foundation-Sage Memorial Hospital Inc. v. Azar et al., case number 1:20-cv-01185, in the U.S. District Court for the District of New Mexico.

--Editing by Jay Jackson Jr.

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Case Information

Case Title

Navajo Health Foundation - Sage Memorial Hospital, Inc. v. Azar et al

Case Number



New Mexico

Nature of Suit

Other Statutory Actions


James O. Browning

Date Filed

November 13, 2020

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