B-168236, DECEMBER 1, 1969, 49 COMP. GEN. 361

B-168236: Dec 1, 1969

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THE BENEFITS ARE PAYABLE UNDER ANOTHER INSURANCE PLAN. NO INDEBTEDNESS AGAINST THE RETIREE WAS CREATED WITHIN THE PURVIEW OF 5 U.S.C. 5514. NOR DOES THE FACT THE PAYMENT WAS MADE PURSUANT TO THE MILITARY MEDICAL BENEFITS AMENDMENTS OF 1966. 1969: REFERENCE IS MADE TO LETTER OF OCTOBER 25. THE MATTER IS DISCUSSED IN DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 436. THE QUESTION PRESENTED IS STATED IN THE COMMITTEE ACTION AS FOLLOWS: WHERE THE WIFE OF A RETIREE (ENLISTED OR OFFICER) RECEIVES MEDICAL CARE AS AN IN-PATIENT UNDER 10 U.S.C. 1086 AND PAYMENT IS MADE BY THE GOVERNMENT TO THE SOURCE OF CARE BEFORE IT IS DISCOVERED THAT THE WIFE WAS ENROLLED IN ANOTHER INSURANCE PLAN PROVIDED BY LAW OR RELATED TO EMPLOYMENT.

B-168236, DECEMBER 1, 1969, 49 COMP. GEN. 361

MEDICAL TREATMENT -- DEPENDENTS OF MILITARY PERSONNEL -- PRIVATE TREATMENT -- RETIRED PERSONNEL THE WIFE OF A RETIRED MEMBER OF THE UNIFORMED SERVICES HAVING BEEN PAID INSURANCE BENEFITS UNDER A COMMERCIAL PLAN FOR THE MEDICAL CARE RECEIVED AS AN INPATIENT UNDER 10 U.S.C. 1086, WHICH PROVIDES HEALTH BENEFITS AT GOVERNMENT EXPENSE PURSUANT TO CONTRACT, UNLESS AS IMPLEMENTED BY THE CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED SERVICES, THE BENEFITS ARE PAYABLE UNDER ANOTHER INSURANCE PLAN, THE PAYMENT BY THE GOVERNMENT TO THE SOURCE OF THE MEDICAL CARE THAT EXCEEDED ITS LIMITED LIABILITY UNDER SECTION 1086(D), ALTHOUGH AN ERRONEOUS PAYMENT, MAY NOT BE COLLECTED BY A WITHHOLDING FROM THE MEMBER'S RETIRED PAY WITHOUT HIS CONSENT. NO INDEBTEDNESS AGAINST THE RETIREE WAS CREATED WITHIN THE PURVIEW OF 5 U.S.C. 5514, NOR DOES THE FACT THE PAYMENT WAS MADE PURSUANT TO THE MILITARY MEDICAL BENEFITS AMENDMENTS OF 1966, FOR AND ON ACCOUNT OF THE RETIRED MEMBER, PROVIDE THE BASIS FOR AN INVOLUNTARY COLLECTION.

TO THE SECRETARY OF DEFENSE, DECEMBER 1, 1969:

REFERENCE IS MADE TO LETTER OF OCTOBER 25, 1969, FROM THE ASSISTANT SECRETARY OF DEFENSE (COMPTROLLER), REQUESTING A DECISION AS TO WHETHER THE RETIRED PAY OF A MEMBER OF THE ARMED SERVICES MAY BE WITHHELD WITHOUT HIS CONSENT TO RECOVER A PAYMENT MADE BY THE GOVERNMENT IN AN AMOUNT GREATER THAN ITS LIMITED LIABILITY UNDER 10 U.S.C. 1086(D). THE MATTER IS DISCUSSED IN DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCE COMMITTEE ACTION NO. 436.

THE QUESTION PRESENTED IS STATED IN THE COMMITTEE ACTION AS FOLLOWS:

WHERE THE WIFE OF A RETIREE (ENLISTED OR OFFICER) RECEIVES MEDICAL CARE AS AN IN-PATIENT UNDER 10 U.S.C. 1086 AND PAYMENT IS MADE BY THE GOVERNMENT TO THE SOURCE OF CARE BEFORE IT IS DISCOVERED THAT THE WIFE WAS ENROLLED IN ANOTHER INSURANCE PLAN PROVIDED BY LAW OR RELATED TO EMPLOYMENT, AND THEREAFTER THE COMMERCIAL PLAN PAID BENEFITS DIRECTLY TO HER, WITH THE RESULT THAT THE GOVERNMENT PAID THE SOURCE OF CARE AN AMOUNT GREATER THAN ITS LIMITED LIABILITY UNDER 10 U.S.C. 1086(D), CAN THE RETIRED PAY OF THE RETIRED MEMBER BE WITHHELD WITHOUT HIS CONSENT TO RECOVER THE ERRONEOUS PAYMENT MADE BY THE GOVERNMENT?

BY LONG CUSTOM AND PRACTICE MILITARY MEDICAL FACILITIES HAVE PROVIDED HOSPITALIZATION FOR DEPENDENTS OF PERSONNEL OF THE ARMED SERVICES ON ACTIVE DUTY ON A SPACE-AVAILABLE BASIS. THE DEPENDENTS' MEDICAL CARE ACT OF JUNE 7, 1956, 70 STAT. 250, 37 U.S.C. 401 NOTE (1952 ED.), AUTHORIZED THE USE OF MILITARY MEDICAL FACILITIES OR CIVILIAN INSURANCE PLANS FOR HOSPITALIZATION OF CERTAIN DEPENDENTS OF ACTIVE-DUTY MILITARY PERSONNEL. NO SIMILAR PROGRAM WAS PROVIDED FOR RETIRED MILITARY PERSONNEL OR THEIR DEPENDENTS, WHO WERE LIMITED TO MILITARY MEDICAL FACILITIES ON A SPACE- AVAILABLE BASIS PRIOR TO 1967.

THE MILITARY MEDICAL BENEFITS AMENDMENTS OF 1966, APPROVED SEPTEMBER 30, 1966, PUBLIC LAW 89-614, 80 STAT. 862, 10 U.S.C. 1071 NOTE, AUTHORIZED A NEW AND EXPANDED HOSPITALIZATION AND OUTPATIENT PROGRAM IN CIVILIAN FACILITIES FOR RETIRED MILITARY MEMBERS AND THEIR SPOUSES AND CHILDREN AS WELL AS AN EXPANSION OF THE TYPES OF CARE AUTHORIZED IN MILITARY MEDICAL FACILITIES FOR THEM, THAT IS, GENERALLY ALL TYPES OF CARE EXCEPT NURSING OR CONVALESCENT HOME-TYPE CARE, ON A COST-SHARING BASIS.

IN ORDER TO PREVENT DOUBLE PAYMENT AND COVERAGE OF PERSONS WHO MIGHT BE ENROLLED IN OTHER PLANS BY VIRTUE OF EMPLOYMENT SUBSEQUENT TO RETIREMENT, SUBSECTION (D) OF SECTION 1086, TITLE 10, UNITED STATES CODE, WAS ENACTED AS FOLLOWS:

(D) NO BENEFITS SHALL BE PAYABLE UNDER ANY PLAN COVERED BY THIS SECTION IN THE CASE OF A PERSON ENROLLED IN ANY OTHER INSURANCE, MEDICAL SERVICE, OR HEALTH PLAN PROVIDED BY LAW OR THROUGH EMPLOYMENT UNLESS THAT PERSON CERTIFIES THAT THE PARTICULAR BENEFIT HE IS CLAIMING IS NOT PAYABLE UNDER THE OTHER PLAN.

REGULATIONS IMPLEMENTING 10 U.S.C. 1086 PROVIDE THAT WHEN BENEFITS HAVE BEEN PROVIDED IN GOOD FAITH BY THE SOURCE OF CIVILIAN CARE AND IT IS SUBSEQUENTLY DETERMINED THAT THE PERSONS CONCERNED WERE NOT IN FACT ENTITLED TO HEALTH BENEFITS AT GOVERNMENT EXPENSE UNDER THE CIVILIAN HEALTH AND MEDICAL PROGRAM OF THE UNIFORMED SERVICES (CHAMPUS), COLLECTION AND OTHER LEGAL ACTION WILL BE TAKEN ONLY AGAINST THE SPONSOR, GUARDIAN, OR INDIVIDUAL WHO WAS NOT ENTITLED TO THE BENEFITS (SEE PARAGRAPH 34, AR 40-121). SUCH REGULATION, HOWEVER, DOES NOT PRESCRIBE THE MANNER OR MEANS OF RECOVERY.

IT IS STATED IN THE COMMITTEE ACTION THAT THE SCOPE OF THE CITED REGULATION IS INTENDED TO COVER SITUATIONS NOT ONLY WHERE THE PERSON RECEIVING CARE WAS NOT ENTITLED TO ANY BENEFITS, BUT ALSO WHERE, AS HERE, BENEFITS PAID BY THE GOVERNMENT EXCEEDED THOSE TO WHICH SHE WAS ENTITLED UNDER 10 U.S.C. 1086(D), AND THAT THE ISSUE PRESENTED IS WHETHER ANY STATUTORY AUTHORITY EXISTS FOR THE RECOVERY OF SUCH GENERAL INDEBTEDNESS DUE THE GOVERNMENT IN THE CIRCUMSTANCES SO AS TO PERMIT THE WITHHOLDING OF RETIRED PAY OF THE RETIRED SERVICE MEMBER (SPONSOR) WITHOUT HIS CONSENT.

SECTION 5514 OF TITLE 5, U.S.C. PROVIDES THAT WHEN THE HEAD OF THE GOVERNMENT AGENCY CONCERNED DETERMINES THAT AN EMPLOYEE OR MEMBER OF THE ARMED SERVICES IS INDEBTED TO THE UNITED STATES BECAUSE OF AN ERRONEOUS PAYMENT MADE TO OR ON BEHALF OF THE INDIVIDUAL, THE AMOUNT OF THE INDEBTEDNESS MAY BE COLLECTED BY DEDUCTION FROM THE CURRENT PAY ACCOUNT (INCLUDING THE RETIRED PAY ACCOUNT) OF THE INDIVIDUAL. SUBSECTION 1007(C) OF TITLE 37, U.S.C. PROVIDES THAT, UNDER REGULATIONS PRESCRIBED BY THE SECRETARIES CONCERNED, AN AMOUNT THAT AN ENLISTED MEMBER OF THE ARMY OR THE AIR FORCE IS ADMINISTRATIVELY DETERMINED TO OWE THE UNITED STATES MAY BE DEDUCTED FROM HIS PAY.

THE COMMITTEE ACTION POINTS OUT THAT THE APPLICABLE RULE SET FORTH IN THE DEPARTMENT OF DEFENSE MILITARY PAY AND ALLOWANCES ENTITLEMENTS MANUAL-- TABLE 7-7-4, RULE 2, COLUMN C-PROVIDES IN EFFECT THAT AN INDEBTEDNESS FOR MEDICAL SERVICES FURNISHED A DEPENDENT (FOR UNPAID HOSPITAL BILLS) MAY BE COLLECTED FROM THE CURRENT PAY OF MILITARY PERSONNEL ONLY WITH THE MEMBER'S CONSENT, THEREBY SUGGESTING THAT THE ABOVE-CITED STATUTORY PROVISIONS ARE NOT FOR APPLICATION, PARTICULARLY IN VIEW OF OUR HOLDING IN 39 COMP. GEN. 415 (1959) THAT THE STATUTE FROM WHICH 37 U.S.C. 1007(C) WAS DERIVED WAS NOT INTENDED TO APPLY TO A MEMBER IN A RETIRED STATUS.

IN SMITH V JACKSON, 241 F. 747 (1917), AFFIRMED BY THE SUPREME COURT IN 246 U.S. 388 (1918), IT WAS HELD THAT THE CURRENT COMPENSATION OF AN OFFICER OR EMPLOYEE OF THE UNITED STATES MAY NOT BE WITHHELD UNDER THE GOVERNMENT'S GENERAL RIGHT OF SET-OFF OF DEBTS DUE THE UNITED STATES FROM THE DEBTOR. AS A GENERAL RULE RETIRED OR RETAINER PAY IS NOT SUBJECT TO ADMINISTRATIVE SET-OFF WITHOUT THE DEBTOR'S CONSENT. BAKER V MCCARL, 24 F.2D 897(1928).

IN MELVILE V UNITED STATES, 23 CT. CL. 74 (1888), THE SECRETARY OF THE NAVY, DURING THE ABSENCE OF THE NAVAL OFFICER ON AN ARCTIC EXPLORING EXPEDITION, INCREASED AN ALLOTMENT OF HIS PAY TO HIS WIFE WITHOUT HIS KNOWLEDGE OR CONSENT BY THE TOTAL SUM OF $650. NOTWITHSTANDING THE GOVERNMENT'S CONTENTION THAT THE PAYMENT WAS MADE BY THE SECRETARY OF THE NAVY FOR THE SUPPORT OF THE OFFICER'S WIFE ON THE THEORY THAT HE WAS LIABLE FOR DEBTS INCURRED FOR HIS WIFE'S SUPPORT AND SHE WAS THEREFORE HIS AGENT TO RECEIVE THE ADDITIONAL ALLOTMENT PAYMENTS, THE COURT OF CLAIMS HELD THAT THE GOVERNMENT WAS WITHOUT POWER TO PAY THE EXTRA ALLOTMENT AND THAT THE MONEY WITHHELD FROM HIS PAY SHOULD BE RESTORED TO HIM.

IN 33 COMP. GEN. 309 (1954), WE HELD THAT THE MERE ERRONEOUS PAYMENT OR OVERPAYMENT OF ALLOTMENT OR FAMILY ALLOWANCE TO THE WIFE OF A SERVICE MEMBER DOES NOT IN ITSELF PROVIDE A BASIS FOR COLLECTION FROM THE SERVICE MEMBER. IT SHOULD BE NOTED THAT THE PAYMENT OF FAMILY ALLOWANCES AUTHORIZED FOR DEPENDENTS OF ENLISTED MEMBERS OF THE ARMED SERVICES DURING WORLD WAR II, LIKE THE PAYMENTS FOR MEDICAL AND HOSPITAL CARE HERE CONCERNED, WERE MADE FOR THE BENEFIT AND FOR THE ACCOUNT OF THE MEMBERS OF THE ARMED SERVICES. EVEN SO, IN THE ABSENCE OF PARTICIPATION IN THE BENEFITS CONFERRED BY THE ERRONEOUS PAYMENTS OR OVERPAYMENTS OR SOME FAULT ON HIS PART, THIS OFFICE REGARDED THE RIGHT OF THE GOVERNMENT TO COLLECT FROM THE SERVICE MEMBER AS TOO DOUBTFUL TO WARRANT RETENTION OF MONEYS COLLECTED FROM THE MEMBER OR FORMER MEMBER.

WE DO NOT VIEW THE ERRONEOUS PAYMENT HERE INVOLVED AS CREATING AN INDEBTEDNESS DUE FROM THE RETIRED MEMBER WITHIN THE PURVIEW OF 5 U.S.C. 5514. ALSO, THE FACT THAT PAYMENTS FOR MEDICAL AND HOSPITAL CARE FOR DEPENDENTS OF RETIRED MEMBERS OF THE ARMED SERVICES UNDER THE MILITARY MEDICAL BENEFITS AMENDMENTS OF 1966 ARE MADE FOR AND ON ACCOUNT OF THE RETIRED MILITARY MEMBER DOES NOT, IN ITSELF, IN OUR OPINION PROVIDE ANY BASIS FOR INVOLUNTARY COLLECTION FROM THE RETIRED PAY OF THE MILITARY MEMBER. YOUR QUESTION, THEREFORE, IS ANSWERED IN THE NEGATIVE EXCEPT WHERE THE MEMBER CONSENTS TO SUCH COLLECTION.