Tuesday, February 2, 2010

TRICARE Recovery Limit

Libby,I enjoyed your seminar today and appreciate your speaking with me afterwards. As I stated, I have the following scenario:

- $400,000 in medical expenses
- $200,000 total available coverage
- 30,000 is the tortfeasor liability limits
- $170,000 is UIM limits
- TRICARE lien claim is $100,000
- VA lien is $67,000

Medicare lien (for amounts spent after SS Disability status) $_____?____


1.My research suggests that TRICARE’s recovery is limited to a claim on the $30,000, not bases on $200,000 because the payment was for treatment by a non-military facility. Therefore; they are entitled to recovery only under FMCRA which does not seem to allow liens on UM/UIM benefits (recovery from person liable in tort, or his insurer). Although recovery under 10 USC 1095 would allow recovery of UM/UIM, (recovery from third party payers) that law does not apply since TRICARE's payment was not for treatment at a military facility. My resource, in addition to the plain language, is presentation material from the 2007 UBO/UBU TRICARE Conference. A Cornell Law Institute document also referenced the distinction.

The TRICARE rep has no idea what I'm talking about. Has your office addressed this issue before?

2.Do you have any suggestions about how to deal with all lien holders to best ensure my client gets a good portion of his settlement?

Thanks so much.
Charlotte Attorney

Michael Russell, an attorney in our office, recently addressed your first question for another attorney:

I believe the analysis to this question is actually twofold. First and foremost, you are correct in your assertion that the United States does NOT have a right to the proceeds of first party insurance proceeds under the Federal Medical Care Recovery Act [1(a)., 42 U.S.C.A. 2651(a)]. The Court in Government Employees Ins. Co. v. Andujar, 773 F.Supp. 282, held that the United States did not have a direct right to UM proceeds under FMCRA. The FMCRA only gives the government the right to recover from the tortfeasor. In this case neither the injured party nor their insurer, were considered tortfeasors and thus the government did not have a right to recover on any settlement from the Uninsured/Underinsured motorist portion of an auto policy.

While, there is no direct right under FMCRA there MAY be a right under the express terms of the insurance policy and applicable state law. This second prong of the analysis requires an evaluation of the policy itself. If the government can qualify as an "insured" or "third party beneficiary" under the terms of the policy then they will have a right to these proceeds. In the aforementioned Andujar case the Court looked at the specific provisions of the policy. Because it was determined that GEICO's automobile policy could not be interpreted to include the government as an "insured" (policy actually specifically excluded the government from this classification), the Court held that the government could not recover the proceeds under this alternative theory. Thus in your case I would recommend that you obtain the policy for further analysis. If and when you obtain the policy, we would be more than happy to review the express provisions and determine whether the government could be considered an "insured" with potential rights to the proceeds.

For your second question, I consulted with one of our analysts. Medicare is always first. Their recovery right is strongest. They may compromise due to the policy limits or other extenuating circumstances but they will not compromise for the sake of VA and TRICARE. For reductions from VA and TRICARE, the analyst said he has had more luck securing reductions from the VA. He recommends starting there. He said VA and TRICARE each have a compromise process. Ask the caseworker at the VA and TRICARE for a compromise worksheet to fill out. Fill out that worksheet and write a letter (the compelling story I talked about yesterday) describing why you are requesting a reduction and why it's appropriate. In that letter you will need to include the information that is on the worksheet. The caseworkers at VA and TRICARE might have some additional tips...sometimes they can become your advocate.

I hope this helps!
Please let me know if you have any other questions.

My best,
Elizabeth Vish