Hooah! TRICARE Liens and Subrogation Rights

Like a lot of health insurance providers, TRICARE is a fantastic resource right up to the moment it sticks its hand in your wallet. Keep reading to find out how to minimize the program's right to claim your settlement money!

Like a lot of health insurance providers, TRICARE is a fantastic resource right up to the moment it sticks its hand in your wallet. Keep reading to find out how to minimize the program's right to claim your settlement money!

Hold up! What's TRICARE?

TRICARE (or as it used to be called, CHAMPUS), is a federal healthcare program serving military personnel; that's going to include active duty service members, the National Guard, retirees, and military families.  I'm sure it simply shocks you to learn that TRICARE, like all federal healthcare programs, is going to have some pretty severe subrogation rights against the third-party recovery of its recipients. TRICARE is split into three regions - the North, South, and West - and North Carolina is in the North region.  Doesn't make a ton of sense, but I suppose these things are somewhat relative.

Who says TRICARE gets a piece of my recovery?

It's the law! The Federal Medical Care Recovery Act (which we predictably refer to as "FMCRA") authorizes the federal government to recover any medical expenses paid to a beneficiary injured under circumstances giving rise to third party liability. Unlike many carriers, FMCRA allows the federal government to assert an independent cause of action against tortfeasors, meaning that the United States can intervene (legalese for "butt into") your lawsuit against the Joe Schmoe who hit you.  Making things more complicated is the fact that the United States can pursue its claim at any time beginning six months after the first date of treatment that TRICARE paid for. So if you get into an accident on January 1 and get checked out at the Emergency Room the same day, TRICARE can pursue its action beginning on July 1; even if you're still treating for your injuries.

Typically, the program will work with you or your attorney in these scenarios; it's rare for the government to unilaterally pursue compensation without your knowledge and consent. The point is that they're allowed to do so if they wish, and unlike other federal programs, TRICARE doesn't have to allow for procurement costs.

What is the extent of TRICARE's recovery rights?

Keep in mind first of all that, like we reviewed above, TRICARE's recovery isn't going to be capped at a given amount or percentage of your recovery, like, say, Medicaid's would be. The program can get back anything that it has spent, even if that means your entire settlement. Not cool, I know, but wouldn't you rather learn this now than after you've spent six months negotiating?

With all that said, it's clear that TRICARE subrogation is going to attach to third-party coverage. What's not clear is whether the subrogation extends to first-party coverage, like uninsured, uninsured, and medical payments. Case law tends to indicate that the only time the federal government can subrogate against first-party coverage is when the particular language of the policy at issue allows the government to do so. This question is going to be answered through a careful review of the policy language itself, and I strongly advise you to have an attorney do that for you.

What does TRICARE have to do in order for its lien to attach?

Not really much of anything, as it turns out. The program doesn't have to give you any notice of its right to recovery. If the carrier gets a bill that includes diagnostic codes characteristic of a third-party liability scenario, you'll generally get a short questionnaire designed to gauge whether you're pursuing a personal injury claim. You're going to need to complete and return this questionnaire within 35 days in order to avoid an interruption of benefits.

In order to determine the lien amount, you'll need to reach out to the contractor, which again is going to depend on which geographic region you're in. Since it can take forever to get a response from these folks, you'll want to reach out to them as soon as you can to request a lien amount.

Once you get a response, you need to audit it carefully to make sure that there isn't any unrelated treatment included in the claimed amount of the lien. If there are unrelated treatments, you'll need to dispute these with the contractor in writing. This isn't a universally-successful measure, but it's certainly more successful than not reviewing the lien or disputing the unrelated charges.

How do TRICARE liens interact with other types of liens?

There's only one type of lien that has a clearly superior claim to TRICARE's, and that's Medicare. TRICARE is going to take clear priority over any other type of lien, whether it's state-based like Medicaid or contract-based like ERISA. While it's rare to see situations like this, it's probable that TRICARE has the same right of recovery as the Veteran's Administration, another federally-originating lien that is inferior to Medicare. 

Anything else I should know?

Keep in mind that FMCRA does not allow for a reduction for attorney's fees the way that other governmental liens do.  That means that if you hired an attorney to handle your claim, that attorney's fee is going to come out after TRICARE gets paid.  So if your recovery is $30,000 with a $15,000 TRICARE lien and a one-third contingent attorney fee, TRICARE will get its $15,000, then the attorney will get one-third of what's left ($5,000), and you'll get the remaining $10,000.  This is different from, say, Medicare, where the attorney would get the first third ($10,000), then Medicare would get its $15,000, then you would get the remaining $5,000.  So TRICARE does throw you a bone every once in awhile.

Lastly, FMCRA allows the program to accept a reduction or even a full waiver of its lien amount if it is determined that "collection would result in undue hardship for the injured party."  While the statute doesn't expressly contemplate what factors the program should take into account, you should use your common sense and keep in mind that the folks you're dealing with are human, too. They'll respond to pictures, overdue bills, journal entries, et cetera.

This is complicated stuff, and you should absolutely call me or another experienced personal injury attorney with any questions.  Be safe out there!