Medical Care Recovery (Continued from page 32)


fered an injury or disease. Finally, the injury or disease must be under circum- stances that create tort liability under state law upon some third person. When all three conditions are met, a right of recov- ery arises in favor of the United States against the third party tortfeasor. The right created by the FMCRA is an independent right of recovery for the gov- ernment, separate from the injured party’s tort recovery. The United States’ right is not “subrogated” to the rights of the in- jured party and, therefore, the use of the term “lien” is not appropriate. Because the Government’s right to recover arises from statute and is an independent right, a release given by the injured party to a


third person does not affect the government’s claim. The United States is also specifically authorized to intervene or join in any action at law brought by or through the injured party against the li- able third party. Alternatively, the United States may bring an original suit within the statutory limitation period of three years.


Although the FMCRA still remains an


effective method of recovery, in some states it lost its effectiveness with the en- actment of no-fault insurance statutes because there must be third party tort li- ability before the United States can recover. To correct this recovery problem, in 1990, Congress amended Title 10, United States Code, Section 1095. Sec- tion 1095’s original purpose was to provide primary authority for the United


States to recover the reasonable value of medical care from health benefits insur- ers for care provided in a military treatment facility. By amending the stat- ute to include fault and no-fault automobile insurance carriers with health benefits insurers, Congress authorized the United States to recover in no-fault states and against underinsured, uninsured, per- sonal injury protection and medical payment portions of the injured party’s insurance. USAA v. Perry, 102 F.3d 144 (5th Cir 1996). While Section 1095 provides a broad


group of potential avenues of recovery, along with a six-year statute of limitations against the injured party’s insurance policy, it is limited to recovery for costs incurred in a military treatment facility. Section 1095b was added to cover situa- tions where the treatment was provided outside the military treatment facility by the military’s equivalent of a health main- tenance organization, TRICARE. The combined reach of the FMCRA, Section 1095 and Section 1095b covers most situ- ations, but it is sometimes necessary for the government to look beyond these stat- utes to satisfy a claim. In those limited cases, the United States has had great suc- cess under state law using the theory of a third-party beneficiary to a contract. Although the FMCRA and 10 USC 1095 allow the United States to pursue its claims independent of the injured party, in practice, Army claims’ attorneys prefer that, while pursuing recovery on his own behalf, the injured party assert the claim of the United States. This can be done because the Army and the injured party share a common interest in recov- ering damages from the tortfeasor. By entering into an agreement with the United States, the injured party’s counsel avoids intervention by the United States, maintains control over the case, gets com- plimentary copies of military medical records, gains easier access to military doctors as fact witnesses and is allowed to include the medical bills as an item of special damages. The actual agreement between counsel and the United States authorizes the in- jured party’s counsel to include the government’s claim for medical care as an item of special damages in the injured party’s complaint. Unfortunately, the FMCRA and Section 1095 do not have a statutory exception allowing payment for private attorney’s fees and costs similar to Medicare and, therefore, the general pro- hibition against private attorneys’ collecting fees and costs for representing


34 Trial Reporter


(Continued on page 36) Winter 2006


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