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RESOLVING FEDERAL EMPLOYEE HEALTH BENEFIT ACT AND FEDERAL MEDICAL CARE RECOVERY ACT LIENS IN PERSONAL INJURY CASES

by Thomas D. Begley, Jr., CELA

 

Federal Employee Health Benefit Act

The Federal Employee Health Benefit Act (FEHBA) provides group health insurance for federal employees.[1] Although there is no statutory right of subrogation or reimbursement, FEHBA contains a preemption provision under which the terms of insurance contracts issued by its private carriers purportedly preempts state and local law.[2] However, the Supreme Court has held that FEHBA does not provide contract insurers with a federal cause of action or federal jurisdiction in a subrogation/reimbursement claim, leaving the matter to the state courts, and it further called into question whether a FEHB plan may assert any contractual recovery right at all against a beneficiary where such claims are prohibited by state law; the Court was “not prepared to say” that a carrier’s contract with the government “would displace every condition state law places on that recovery.”[3]

Federal Medical Care Recovery Act

The federal statutory scheme provides several independent bases for recovery of medical costs expended on behalf of government personnel and their dependents for injury or disease not connected to their military or other government service, but the Federal Medical Care Recovery Act (FMCRA)[4] establishes standards generally applicable to claims of all federal departments and agencies. Significantly, while the government may exercise its recovery rights under the statute by making claims directly against third-party tortfeasors, the statute authorizes no such claims against a beneficiary. The statute provides, inter alia, that in any case in which the United States furnishes or pays for medical or dental care and treatment under circumstances creating third-party tort liability for such expenses, the United States shall have a right to recover from the third party the reasonable value of such care and treatment.[5] The United States also has an independent right to recover from the third party the total amount of pay for a member of the Uniformed Services for any period in which the member is unable to perform his or her duties as a result of the injury or disease and is not assigned to perform other military duties.[6]

[1] 38 U.S.C. § 1725(a)(1).

[2] 5 C.F.R. § 890.

[3] Empire HealthChoice v. McVeigh, 547 U.S. 677 (2006).

[4] 42 U.S.C. § 2651.

[5] 42 U.S.C. § 2651(a).

[6] 42 U.S.C. § 2651(b).

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