Monday, February 1, 2010

Tricare Insured Plaintiff

Is there a Duty to Notify Tricare before disbursing settlement monies?


I have a client insured with Tricare. My client suffered medical negligence at an army hospital and sought treatment at a private hospital for follow-up reparative surgery. Her medical specials are all from the private hospital and surgeons, only a portion of which was paid by Tricare.

When settling a case with a Tricare insured plaintiff, is Tricare treated as Medicare and Medicaid would be? Namely, before disbursing funds, MUST I notify Tricare before disbursing settlement monies to my client (as compared to the private health insurance company, who, if they do not send a notice of lien, the lawyer has no obligation to notify a private health insurer of suit and settlement monies?

Thanks in advance for your comments
South Carolina Attorney

With respect to Tricare's scope of recovery, the U.S. military's rights arise under the Medical Care Recovery Act (42 U.S.C. Sections 2651-53). The MCRA states that when the Federal Government provides treatment or pays for treatment of an individual who is injured or suffers a disease, the Government is authorized to recover the reasonable value of that treatment from any third party legally liable for the injury or disease. The statute provides an independent right of recovery, but only for those payments actually made. (The statute does not contemplate any recovery for future payments to be made. (32 C.F.R. Section 757.14(a) and (d))).

Below is some additional information regarding US Navy reimbursement claims (from a recent opinion letter we prepared):

"...It is significant to note that the Navy's recovery right is NOT initially in the form of a notice of lien, or a claim. Instead, the Navy typically sends a letter to plaintiff's counsel requesting that counsel recognize the Navy's interest, and to take action consistent with protecting that interest by maintaining contact with the Navy's Legal Service Ofice (NLSO), thereby requesting approval before compromising the Navy's interests.

In exchange for plaintiffs' cooperation, the Navy would provide free of charge access to Navy doctors and access to Naval medical records and would not complicate the litigation process by becoming directly involved.

Please note that the Judge Advocate General's ("JAG") designee has limited rights to compromise a claim of more than $40,000 (42 CFR Section 757.19), and that any waiver or compromise involving a claim worth more than $40,000 will require investigation by the JAG office and additional documentation (42 CFR 757.18).

The Navy has no legal right to hire private attorneys to prosecute the Government's claim, but would refer any matter to the Dept. of Justice. 5 USCA Section 3106. Instead, the Navy would rather be a part of the settlement process by using plaintiff's private attorney to ensure that the government's interests are represented in the settlement process. The Navy does not want to be an additional party plaintiff, but wants its rights protected. Please note that the Government will take action to secure its interests (in a separate lawsuit) should "cooperation" from plaintiff and/or his counsel be withheld.

So, the bottom line is that the Navy would likely want (claimant) to do its work, and wants his "cooperation" to protect the Navy's interests in the lawsuit (assuming there are third party tortfeasors).

The one issue that keeps arising is to what extent does the Navy recognize procurement costs. So far, the only time that such costs are noted are when the reimbursement would cause a hardship. There are factors that the Navy's Legal Service Office can review, but those do not necessarily mean that the Navy is willing to compromise the reimbursement amount..."

I hope this helps.

My best,
Matt Garretson