By: Nick Bonds, Esq.
Any time a group health plan has to deal with a unique type of provider, they start playing by a different set of rules. Today we focus on one provider in particular: the Military Treatment Facility (“MTF”), and the powerful tools they have at their disposal to seek payments from plans.
Modern efforts by the U.S. government to recoup military spending on medical care date back at least to World War II. At that time, the U.S. Department of Defense (“DoD”) (then the War Office) was primarily focused on recovering money spent caring for servicemembers injured by the tortious acts of third parties – essentially subrogating against private parties that injured their soldiers. Over time, federal courts determined that the DoD did not have the authority to pursue this type of recovery without legislation sanctioning a cause of action. Eventually, Congress obliged, creating the Federal Medical Care Recovery Act (“FMCRA”), which created a federal reimbursement and subrogation right against liable third parties.
This legislation evolved as military health care programs grew more complex. With the development of programs like the Civilian Health and Medical Program of the Uniformed Services (“CHAMPUS”) and then Tricare, as well as the introduction of the U.S. Department of Veterans Affairs (“VA”), and of course the expansion of the Military Health System (“MHS”) itself, a need became apparent for a mechanism by which these programs could recover medical care costs from workers’ compensation plans, automobile insurance coverage, and eventually private health insurers and self-funded health plans.
10 U.S.C. § 1095, which established the Third Party Collection Program and allows the DoD to collect from health insurance plans the health care costs incurred on behalf of insured military retirees and their dependents. The statute allows MTFs to collect from third-party payers (e.g., insurance carriers, medical services, or health plans the reasonable costs of care incurred at a medical treatment facility to the extent the insurer would pay if the services were provided at a civilian hospital. This means that a third-party payer (e.g., a self-funded plan) could not deny claims from a MTF simply based on a “Government Facilities” exclusion.
Most importantly however, as mentioned above, an MTF would not be bound by a self-funded health plan’s timely filing deadlines. Claims brought by a provider under 10 U.S.C. § 1095 are consider considered indebtedness to the United States government; which are only time-barred after six years (see 28 U.S. Code § 2415). This means that an MTF can bring a claim past not only the self-funded plan’s filing deadline, but well beyond the deadline for the plan’s stop-loss policy. This could easily lead to a situation where a Plan Sponsor finds themselves obligated to pay claims to a military hospital with little to no hope of being reimbursed by their carrier.
This fact pattern may sound familiar to plans that have had their claim denial overturned by an independent review organization (“IRO”). Under the Affordable Care Act (“ACA”), self-funded plans must cover these overturned claims, but the process of appealing and overturning these claims pushes them well beyond the incurral or payment period mandated by the applicable stop-loss policy. Similar to the situation with MTFs, plans find themselves statutorily obligated to pay claims that would typically be denied by the stop-loss carrier. Thankfully, a number of stop-loss carriers provider riders their policies allowing such overturned claim denials to be considered “covered,” and therefore reimbursable. This type of rider may come at a premium, but it can be invaluable to a plan that finds itself saddled with exception high, exceptionally tardy claims by an IRO.
Plans that know they have a participant population that is likely to seek treatment from a military hospital need to be aware of 10 U.S.C. § 1095 and the difficult position it can put them in. Any time a plan is dealing with unique providers (e.g., MTFs, VA providers, critical access hospitals) special rules may come in to play that can shake up the standard playing field. The Phia Group is here to help plans understand which rules they need to play by.