Tuesday, February 24, 2009

VA Claims

Posted by Sylvius Von Saucken

What rights of recovery does the VA have?

The “VA claim statute” and its corresponding regulation grant the United States the right to recover reasonable charges in repayment for health care benefits provided to a veteran through the U.S. Department of Veterans Affairs (VA) from certain third parties who would otherwise be liable for the veteran's medical care.

The VA has authority, similar to that provided to CMS under the MSP statute, to recover from third parties payments it has made for injury-related medical care for nonservice-connected disabilities. However, that authority is limited to recovery from the employer or carrier in a WC claim, from a health plan contract, or from an automobile liability policy.

A “disability” is defined under federal law governing VA benefits as “a disease, injury, or other physical or mental defect.” This definition is much broader than the Social Security Act's definition of “disabled.” Thus, a VA claim may exist, even if the claimant is not able to qualify for Medicare or for SSDIB under Social Security based on “disability.”

Finally, the VA's right to recover from third parties is limited to payments for nonservice-connected disabilities. This means that the claimant's disease, injury or other physical or mental defect cannot have been “incurred or aggravated... in the line of duty in the active military, naval or air service.”

While the statute and regulation are silent regarding the VA's right to recover third-party payments received by the claimant, the statute does grant the VA a right of subrogation. Further, the statute grant's the VA the right to intervene in the WC case as a party. It would seem logical that this would imply a duty on the claimant to inform the VA of the existence of the claim in sufficient time to allow it to exercise its right to either institute or intervene in the WC case.

There is no provision under the statute or the regulation that would permit the VA to recover from any third party after there has been a settlement. However, it would also seem to follow that if a claimant settles a WC claim for medical benefits without notifying the VA, the VA would have the ability to enforce its right against the settlement proceeds in the hands of the claimant.
The Supplemental Appropriations Act of 2002 provides that, as between Medicare and VA medical benefits, Medicare is the secondary payer. Thus, Medicare's secondary payer claim for Medicare overpayments must be satisfied before any VA claim against the settlement.