Local Indian Health Services employees who were told last week that their jobs would not be renewed will instead be able to keep working while federal officials reevaluate job regulations.

Late last week, three employees at Sioux San Hospital and three in Pine Ridge were told that their "time-limited" appointments, which were due to expire, could not be renewed, Aberdeen Area IHS executive officer Allen Davis said.

Davis said his office was directed by national IHS officials not to renew any more time-limited appointments, citing a federal Office of Personnel Management finding that the office was "abusing its limited-time appointments." Davis said the policy change was as much a surprise to him as it was to the affected employees.

"We just followed that direction and informed these employees that we can't renew your appointments, based on OPM regulations," Davis said. With no advance notice, "we had no way of transitioning into that."

Even though he carried out the orders, Davis doesn't believe the federal personnel regulations fit the scenario at Indian Health Service. He contacted national IHS officials who agreed Wednesday to grant Aberdeen and other regional offices a reprieve in carrying out its directive.

Davis said federal officials will consult with regional IHS directors, then evaluate whether to allow administrators to renew time-limited appointments. If the policy is changed, the reprieve will give administrators time to find ways to make the change that will minimize disruption to patient care and the effect on longtime employees.

"We're just like in a grace period right now. We really don't know which way this is all going to go," Davis said. "This is a national thing. It didn't just impact the Aberdeen area."

The six area employees affected by last week's announcement have been reappointed, he said.

In the Aberdeen area, which includes South Dakota, North Dakota and Nebraska, IHS has about 1,900 permanent employees, Davis said. It also has about 322 employees working on time-limited appointments for a few years at a time.

About 4 percent of time-limited employees are paid through grants approved for a certain length of time. Others are covered by appropriated or special federal funding.

Most time-limited employees in the Aberdeen area - about 82 percent, according to Davis - are paid through money that IHS collects from insurance companies, Medicare or Medicaid.

Grants and federal funds are often renewed. When that happens, employees are often rehired for another funding period. For example, an employee might hold the same job for four four-year grant periods, making him a 16-year employee of Indian Health Service - even though his job is considered "time-limited."

Time-limited employees receive the same benefits as permanent employees and are largely equivalent to permanent employees, Davis said.

To comply with the federal Office of Personnel Management's regulations, Davis would have to turn time-limited positions into permanent positions. The problem, he said, is that the funding that pays for time-limited employees isn't guaranteed.

Insurance and other third-party funding "is only as good as our ability to collect, and it's only as good as our third-party payers are in reimbursing us," he said. "What this policy, in effect, would be asking us to do would be to make permanent appointments without permanent money."

Other regional IHS offices have done that. But if their funding fluctuates - for example, if their insurance collections are down - they can run into problems paying the bills. Deficit spending isn't allowed.

Davis said his office has managed its money well. "We spend down to the penny," he said. "We don't return money to the Treasury, … but we've never been in the red."

The Office of Personnel Management's regulations involve all federal agencies. But many at Indian Health Service, including Davis, believe those regulations apply to some agencies more than others. In some cases, the rules haven't been updated to keep up with changes in policy and practice.

Eventually, some of those rules may change. For now, the Aberdeen Area IHS office will continue to operate as it has been until national officials make a decision.

"If they take forever, that's just fine by me," Davis said. "It's been working fine."

Sen. John Thune's office is working with IHS officials to address the issue.

Contact Heidi Bell Gease at 394-8419 or heidi.bell@rapidcityjournal.com