A Capehart Scatchard Blog

Veterans Administration/Tricare Subrogation Rights – Issues in Workers’ Compensation Practice Requiring a Proactive Approach

By on June 18, 2019 in Workers' Comp with 0 Comments

By:  Alfred Vitarelli, Esq., Shareholder, Stark & Stark

Yes, it’s me again with yet another nightmare-inducing minefield to trap the unwary practitioner. Well, perhaps that’s an extreme analogy. But since we are dealing with Department of Defense-based health coverage, I believe a military-themed introduction is a necessity. Ok, I’ve got it: think of these liens as submarines, lurking underwater, undetectable unless the destroyer above uses sonar to locate it. Hmmm…I think I’ll take a break and order up “The Hunt for Red October,” or that Burt Lancaster/Clark Gable classic, “Run Silent, Run Deep.” Ok Al, enough with the movies, get down to business…..”one ping only.” Sorry, just had to get a line from a movie in here. Sorry if it makes no sense. Watch one of the above movies!

Ok, why do I say a proactive approach is needed? Well, for one, many Petitioners are covered by VA health insurance or Tricare. Tricare, you say? Yes. Tricare is a Department of Defense health benefit plan for uniformed service members, retirees and their families. They are established under CHAMPUS, the Civilian Health and Medical Program of the Uniformed Services. Both VA health coverage and Tricare are secondary payers with respect to workers’ compensation treatment and both have rights of subrogation under federal law. The primary source of the right of recovery is found in the Federal Medical Care Recovery Act, 42 U.S.C 2651. However, both the VA and Tricare have additional statutory and Code provisions addressing recovery procedures, which will come up while researching these lien issues.

Both the Veterans Administration and Tricare have a right of recovery of any amounts paid for ineligible treatment. For purposes of this article, ineligible treatment is treatment provided for a work-related injury. Simply put, both entities have statutory rights to recover the cost of treatment provided for a work-related injury or condition to a covered beneficiary. Keep in mind, however, that while the VA covers veterans, Tricare covers service members, retirees and their families, so Tricare’s right to recovery of course extends to all such covered persons. This places an additional responsibility on the practitioner, which I’ll discuss later.

The VA collection rules are found in 38 CFR 17.106. It states in part:

“(a)(1) VA has the right to recover or collect reasonable charges from a third-party payer for a nonservice-connected disability in or through any VA facility to a veteran who is also a beneficiary under the third-party payer’s plan.” Later, this section defines a third-party payer as “…an entity, other than the person who received the medical care or services at issue…responsible for the payment of medical expenses on behalf of a person through insurance, agreement or contract.” A listing of third-party payers includes: “(F) workers’ compensation program or plan sponsor, underwriter, carrier or self-insurer.” Pretty comprehensive, no?

Tricare’s collection rules are found in 32 CFR 199.12. The General statement (a) states:

“This section deals with the right of the United States to recover from third-parties the costs of medical care furnished to or paid on behalf of TRICARE beneficiaries. These third-parties may be individuals or entities that are liable for tort damages to the injured TRICARE beneficiary or a liability insurance carrier covering the individual or entity. These third-parties may also include other entities who are primarily responsible to pay for the medical care provided to the injured.”

Please note the emphasis on reimbursements from third parties. This requires the respondent to also be actively involved in the handling of such liens, at least in my opinion.

The recovery provisions under the rules for both the VA and Tricare are very similar. Each allows suit to be filed in federal court against a third-party payer within six years of the last day of the provision of the medical care or services for which recovery or collection is sought. However, they are much too extensive to include them here. I therefore recommend they be read in full, as they also refer to other statutory and rule provisions which will also impact the handling of WC matters involving VA/Tricare payments. By way of example, I’ll just point to one:

VA/Tricare “reasonable charges,” determined in accordance with federal law and regulation, “shall be” judicially noticed. See: 44 U.S.C. 1507. The government is not required to litigate reasonableness of administrative fixed rates. Billing rates are not subject to challenge for unreasonableness or arbitrariness. There are many more which may impact any case at a given time, so when dealing with these liens, do the research!

Now it’s time for some practical ideas for handling claims involving the VA/Tricare. As I noted earlier, many people are covered by the VA or Tricare. For the petitioner’s attorney this will require asking a potential client at the first interview if he or she is covered by either program. In my prior article in this blog on Medicaid/NJ Family Care I pointed out that even people working for employers which provide excellent health care are covered by those programs due to the cost of the employee’s share of premiums, co-payments, etc. The same situation exists with Tricare. Just the other day I interviewed a woman working for a company with good employer-provided health care. However, she was covered by Tricare, since her husband was retired from the Navy.

Another issue I really need to address is whether there are requirements in these recovery Acts or Codes placing a direct responsibility on an attorney to place the VA/Tricare on notice of a WC claim filed by a beneficiary where some treatment has been provided by one of these programs. While I am unaware of any such written requirement, keep in mind that the beneficiary (your client) does have a duty to cooperate in recovery efforts. Further, the attorney has a duty to properly represent the client. So, my position is yes, notice should be given even if no inquiry from either program has been sent to the attorney or client.

I believe respondents need to be pro-active here. I previously quoted provisions of the VA and Tricare recovery Codes. Both clearly state recovery is against a third party payer, and define a third party payer as including workers compensation programs and carriers. In addition, I need to cite a further VA Code provision:

38 C.F.R. 17.106 (c): VA’s right to recover or collect is exclusive. The only way for a third party payer to satisfy its obligation under this section is to pay the VA facility or other authorized representative of the United States. Payment by a third party payer to the beneficiary does not satisfy the third-party’s obligation under this section. (Emphasis added.)

This section, referring to an obligation on the part of the third party payer, emphasizes the need for the respondent to be pro-active, in my opinion. On its face, this section prohibits a settlement whereby the respondent pays petitioner a sum of money to satisfy a VA/Tricare lien. Its import, however, emphasizes the respondent’s role in satisfying a lien. Respondents therefore need to act quickly in determining if a claimant is covered by VA/Tricare as early as possible following receipt of a First Report of Injury. In claims where the petition is the first notice of claim, respondent’s counsel should immediately determine this information.

In closing, I’ll first provide two websites to visit when faced with payments by the VA/Tricare. For the VA I found the VA’s Office of General Counsel’s website quite helpful. This is www.va.gov.ocg/collections.asp. For Tricare I suggest visiting their website at www.tricare.mil and go to Forms/Claims/ThirdPartyLiability.

I’d also like to state that of the various liens discussed in my articles, those from the VA and Tricare, seem to be less understood than others. It is hoped this article will alert practitioners to them. All parties must recognize the importance of identifying and addressing payments made by one of these Department of Defense health care programs. The statutes and rules are extensive and complex but do provide guidance in navigating the shoals of DoD liens. There, I closed with another naval reference!!

(Editor’s Note:  Many thanks to Alfred Vitarelli, Esq., a frequent contributor to this blog, for an incredibly helpful explanation on how to deal with VA and Tristar liens.  This is an area of law that employers, adjusters, and practitioners must understand, and the rules are not exactly the same as those with CMS and Medicare.  Keep this blog by your side because we will all be dealing with VA and Tristar liens on a fairly regular basis.)

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John H. Geaney

About the Author

About the Author:

John H. Geaney, an executive committee member and shareholder with Capehart Scatchard, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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