Medical Care Recovery-Analysis of the Government's Right to Recover Its Medical Expenses

Author:by Major Bruce E. Kasold

Tnis artzcle examines the ftve basic methods through which the governmat can recover its medical ezpmes, i.e., the Medical Care re coven^ Act, med-pay insurance, unimred mto7iSt ewerage, no-fault, and worker's compensation. It discuses the intoplay ofeachrecovrry method and provides practical pidelims to the recov~y judge advocate. In addition, this article coneludes that the gourn-m a t has erroneously acquiesed on two issues: the effect of the injuved party's contributory negligence on the government's tort claim and the effect sf no-Jault statutes on the gmnnment's tort claim. Finally, by discussing the interplay of each came of action this article attempts to inspzre new efferts in asserting the gourn-mat's basic right to recover in tort


    Every year the Department af Defense (DOD)' spends millions of dollars for the medical treatment of military personnel, their dependents, and other pemons entitled to medical treatment at govern- 'Judge Advocate General's Corps, United Slates Army Currently assmed BJ Officer-in-Charge, \'I1 Corps. Augaburg Branch Office, 1884 Io present Formerly as-signed = Litigation Attorney. Tort Branch. Lillgaflon Dlvlalon. Office of The Judge Adrocafe General. US Army. 1881-83,

    Chief of Admlnierraflve Law. Fort Belroir,

    > ~rgmia, 1879-81: Platoon Leader, S 1. 4th Infantry Divraian IMechanaed), Fort Car-son, Colorado, 1973.76 LL M , Georgetown Enwerrlty Law Center. 1982, J D University of Flonda. 1979, B S , United Stales Mdnary Academy 1973 Completed 32d Judge Advocate Officer Graduaw Course, 1884, 9lsf Judge Advocate Officer Baric Course, 1978 Author of TovordDCfinrtroñIflkBono

    FtdeSenimtr Systor, 31 U. Fla L. Re\, 41 11883). Member of the bars of the Stare of Flonda, the Court af Military Appeals. and the L S Army Court of Military Review This slliele w= oilglnally submitted a8 a thesis m partial sallsfaefion of the requiremenf~ of the 326 Judge AdvocBre Officer Graduate Course

    gams In calendar ye- 1983 agency collections were

    )The Veterans Adminutration and Pubbc Health Service also have recovery pro- Army I 8,178,811 80haw (L 6,794,610.92AaForce: I 7,893,667 23

    VA 3 6.63S.lSZ.W

    PH.S s 437.84711TOTAL $29,843,218 16

    ment expen~e.~ A significant portion of these dollars 1s spent for care

    rendered for injuries suffered as a resuit of the tortious conduct of

    An equally significant portion of thew dollars is spent for care which may be the contractual or statutory obligation of a third party Pursuant to congressional statutes and governmental p011cy. each armed service has instituted a medical care recovery program designed to recover the medical expenses DOD incurs bur which are the contractual obligation of another party or the result of third party negligence Because of frequent personnel transfers due to military needs. the recovery attorney lacks the luxury of time in developing expertise in this field. To insure an effective program the attorney must quickly become familiar with the many legal bases upon which the government's medical expenses may be recovered. This article will examine those legal bases and focus on the parameters and weaknesses of the government's right to recover medical expenses and provide practical guidance and suggestions for recovering these expenses In addition, this article will discuss the interplay of the government's tort cause of action and its contractual or statutory right to benefits Finally. it will address the degree to which state no-fault la\is are affecting the gmernment's right to reC"ver I" tort 6

    'Member? of the armed forcer end their dependents are entitled ID free or subs,-dized care 10 C S C 44 1071-1078 (1982) "he government also prowdes free medlcal care for federal civilian employees 6 US C 64 8101-8150 (1982). .4merican seamen 42 U 8 C 4 249 (1076 & Supp V 19811 Veterans 38 U S C 44 610(a!. 612 11876). and Coast Guard. Coast and Geodetic Survey. and Publlc Health Servlre Commnramned Corps perrannel 42 U S C 4 253W (1876)

    'The Aa Force 1s the only lervlce currendb mslnfslnlng B breakdarn of Its COI-le~llon~

    In calendar year 1983 It collected $4.218 761, 01 roughly 57 percent of Its

    c~llectmn~from the fhlrd party farlfeasor 01 the lnsumr Telephone Conlersallon

    with W q m William Albright. Gorvernment Recoven Sectron Claims and Ton Sec tmn Office of The Judge Adiocale General US A a Force

    *In calendar year 1083. the Aa Force collected $3,874,906 23 or approxlmatelv 47 per~enioi 11s collections. pursuant to B ~onfra~~ualor statutory obligation of B third

    party I

    'Eo U 8 Dep'r of Aim). Reg Na 27 40. Legal Serncer-Llflgarlan. ch 5 (16 June 1973). Alr Force Reg No 112-1. Clam13 and Tort Llflgatlon ch

    *Wmv contend that the na-fault ~tafufes have completely eliminated the govern

    15 (I lul) 1083)

    .Vri Fault lniurerr 21 B C L Rev 623 (1880) 162


    Medical care reco~ery efforts by the military' began as early as 1948 when the War Department amended an existing regulation to provide for the administrative collection of medical expense^,^ as well as other related expense^,^ incurred by the government LF a result of injuries to service members caused by the tortious acts of third parties. Potential claims had already reached a significant levello when the authority of the government to recoup these ex-penses was challenged in United States u. Standard Oil.11 This case arose out of a typical vehicular accident case involving clear negii-gence on the part of an employee of Standard nil which resulted in injuries to a service member Private John Etzel.lz Private Etzel spent several days in the hospital at a cost to the government of $123 34.13 In addition, he continued to receive his pay while he was hospitalized amounting to $69.31.'+ The government's claim for reimbursement of these expenses was denied by Standard Oil and the United States flied suit.15

    'Some rec~~eiieswere being made pu~usnlto the Federal Employee's Compen- sanan Act all016 The Veteran's Administration also began recovenen 8n the 1030sFor s discussion af these early reeovener, see Long, The Federal llalical Caw RBCOV- le1 A CueStudy m lhe Creation oJFrdmal Common Low, 18 Vi11 L Rev 353, 358-59 (1073)

    U S

    Dep't of Army, Reg No. 25-220. Claims In Favor af The United Stater, (13 May, 1043) The regulation failed Lo sfale my legal basis for the government's claim

    At the distnct court, the government argued generally that the common law doctdne per quod smitium arnisit,'e which arose out of the master-servant relationship and permitted a master to recover damages related to the lass af his Servant," should he expanded to include the state-soldier relationship.ln The district court accepted this analogy and found in favor of the government.le Interestingly, the court never addressed the issue of whether state or federal law was applicable and apparently applied general concepts of the corn mon law.zo On appeal, the Ninth Circuit directly addressed the issue of which law was applicable.2' Noting the absence of federal legislatian in the area, the court determined that state substantive law would be controlling.2z The court further noted that the master's cause of action for loss of his servant's services had been codified in California23 and Lt held that the state-soldier relationship did not fall within this condif~ation.~~

    Accordingly, the government had no cause of action.

    On certiorari.2s the Supreme Court upheid the Kinth Circuit's uiti-mate ruling that the United States could not recover Its expenses; however, its rationale was completely different. The Court made two significant decisions which resulted in its affirmance of the appellate court's ruling Fint, It held that State law did not govern the issue of whether the government had a cause of action le Second, after noting that there was not existing federal cause of action" and recognizing its own abiiity to either create federal common lawz8 or

    "60 F Supp 807 (S D Cal 1945) A~luslly,the dwtrlel court opinion never men- tions this eau~eof action by name It IS clear, however. that lhls ls the cause af Bcllm

    that the 80rernmen1 argued should have been applled to IIS sIuatlun See the Suorame Court Iducusimn on thls sublecf Standad 011. 332 U S at 312 314 See &o tang mpm note 7. at 360-62has arflele suprn note 7, at 355-55, 360-62

    "Profess01 Long pmvldes an excellent dlieusmn of the pm WOd Cause of acflon tn

    lS6O F Supp at 810,The district coulf reasoned that the soldler-state relarionihlp created an even higher duty than the male1 senant relafmnshlp Idat 810-13"153 F 26 558. 860 (8th Cu 18461**Id=Id at 860"Id st 861"'322 E S 301 11846)

    "id sf 305 Although ~f did not do 80 below. the government argued tho PolltlOn to the Supreme Court Id

    "'Id sf 307

    *'Id sf

    308 When Con@esr has not acted, the courts are free to shape federal Cam-mon law and may lmk to sfale law far guidance They may also adapt state law


    sppllcable federal law m whole or ~n part See obo Long. %pro note 7, 81 362-67


    adopt existing state law as the federal law,28 the court elected to defer to Congress to determine what the federal law should be

    In holding that state law was inapplicable to the government's potential tort cause of action, the Court relied heavily on its per. ception that the state-soldier relationship WBS uniquely federal in nature and that state law should not govern the rights and duties that a m from it.31 The Court WBS also influenced by the belief that the government's attempt to recover its expenses WBS a matter of

    federal fiscal policy and better governed by federal While IC ISunclear to what dewe this later perception affected the Court's ultimate holding that federal law governed the issue at hand, it 1s

    clear that this perception was the primary basls for the Court's deferral to Conwss; as landlords of the federal treasury Congress could and should act to protect it.a3 Finally, while the Coun's decision to reject the adoption of state law as the governing federal law...

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