TRICARE's Right Against Uninsured Motorist Funds

Question: Does TRICARE have a right of subrogation against Uninsured Motorist funds? I read a 1991 district court case out of Kansas, 773 F. Supp. 282, that appears to say that United States was not entitled under the Medical Care Recovery Act to the proceeds of an automobile victim's uninsured motorist benefits. If that is the case should that fact be verified with the Army through the act out of an abundance of caution?

Tennessee Attorney

Answer: I believe the analysis to this question is actually twofold. First and foremost, you are correct in your assertion that the United States does NOT have a right to the proceeds of first party insurance proceeds under the Federal Medical Care Recovery Act [§ 1(a)., 42 U.S.C.A. § 2651(a)]. The Court in Government Employees Ins. Co. v. Andujar, 773 F.Supp. 282, held that the United States did not have a direct right to UM proceeds under FMCRA. The FMCRA only gives the government the right to recover from the tortfeasor. In this case neither the injured party nor their insurer, were considered tortfeasors and thus the government did not have a right to recover on any settlement from the Uninsured/Underinsured motorist portion of an auto policy.

While, there is no direct right under FMCRA there MAY be a right under the express terms of the insurance policy and applicable state law. This second prong of the analysis requires an evaluation of the policy itself. If the government can qualify as an “insured” or “third party beneficiary” under the terms of the policy then they will have a right to these proceeds. In the aforementioned Andujar case the Court looked at the specific provisions of the policy. Because it was determined that GEICO’s automobile policy could not be interpreted to include the government as an “insured” (policy actually specifically excluded the government from this classification), the Court held that the government could not recover the proceeds under this alternative theory. Thus in your case I would recommend that you obtain the policy for further analysis. If and when you obtain the policy, we would be more than happy to review the express provisions and determine whether the government could be considered an “insured” with potential rights to the proceeds.

While it may not be necessary to alert the government initially, a proper evaluation of the beneficiary’s automobile policy would help to determine if the government would be able to recover any funds from such a settlement.