The federal government has changed its requirements for approving orthodontic work for First Nations children after settling a prolonged legal battle with an Alberta family over whether a young girl with chronic tooth pain could have the cost of her braces covered by Ottawa.

The family of Josey Willier sought payment from the federal government for the dental work after her doctors declared the braces medically necessary to address extreme discomfort. Health Canada bureaucrats deemed the work ineligible for federal funding because it did not meet its stringent requirements. The family unsuccessfully appealed three times to Health Canada before pursuing legal action.

As CBC News first reported, the federal government spent in excess of $110,000 fighting Stacey Shiner, the teen's mother, in court to block payment for the $8,000 procedure. The Federal Court ultimately agreed with the government's refusal to pay on the grounds that her procedure did not meet clear criteria — but Ottawa has now settled just days before the Federal Court of Appeal was expected to render its own decision.

This is a huge step forward. - Stacey Shiner

The federal government has agreed to cover the cost of Willier's braces and will amend its policy to ensure more First Nations children can receive medically necessary orthodontic treatment. New Indigenous Services guidelines for approving such procedures will be released June 15.

"This is a huge step forward," Shiner said of the government's decision to pay for her daughter's work. "Even though it took a while to get here, I am grateful that the people we worked with at the federal government were listening and actually made a change that will make a difference in the lives of First Nations and Inuit children."

In a statement, Indigenous Services Minister Jane Philpott said she was pleased that a settlement has been reached and there's a chance now to "clarify how pain can be considered under clinical evidence."

"Through the Non-Insured Health Benefits program, Indigenous Services Canada provides 100 per cent coverage for orthodontic treatment when determined to be medically necessary," the minister said, referring to the federal program that pays the health care costs of status Indians.

"Officials from my department have reviewed Ms. Shiner's concerns and will be implementing a number of revisions to the Non-Insured Health Benefits Orthodontic Policy by June 15, 2018, for the purpose of increasing access for First Nations and Inuit children," she said. "I firmly believe that the actions ... will result in improved access to orthodontic services for First Nations and Inuit children."

Stacey Shiner has been fighting the federal government over its refusal to pay for her daughter's dental care. (CBC)

Willier took over-the-counter pain medication daily for two years because of extreme discomfort associated with impacted teeth and a severe overbite, among other ailments. A Calgary-based orthodontist, Mark Antosz, recommended braces to avoid invasive jaw surgery in the future.

The department determined Willier's case fell short after it consulted with four orthodontists of its own choosing. Those doctors did not physically examine Willier.

Before this announcement, a claimant must have "severe and functionally handicapping malocclusion" (overbite) to be eligible for financial support from Health Canada.

Health services for First Nations people living on reserve are funded almost exclusively by the federal government. While provincial health care plans often exclude dental care, the federal program for First Nations includes regular cleanings, X-rays, root canals and other procedures.