B-82658, JAN 18, 1974, 53 COMP GEN 474

B-82658, JAN 18, 1974, 53 COMP GEN 474

MEDICAL TREATMENT - PUBLIC - HEALTH INSURANCE COVERAGE OF EMPLOYEE - FAILURE TO FILE CLAIM EFFECT THE REGULATORY AUTHORITY OF THE SECRETARY OF STATE PROVIDED BY SECTION 941 OF THE FOREIGN SERVICE ACT OF 1946, 22 U.S.C. 1156, TO PAY THE MEDICAL COSTS OF OFFICERS AND EMPLOYEES AND THEIR DEPENDENTS IS SUFFICIENTLY BROAD TO ENABLE THE SECRETARY TO REQUIRE FOREIGN SERVICE MEMBERS HAVING PRIVATE HEALTH INSURANCE TO FILE CLAIMS WITH CARRIERS FOR BENEFITS TO REIMBURSE THE EXPENDITURES MADE ON THEIR BEHALF BY THE GOVERNMENT FOR MEDICAL CARE INCIDENT TO ILLNESS OR INJURY. THEREFORE, A FOREIGN SERVICE MEMBER WHO NEGLIGENTLY FAILED TO TIMELY FILE FOR HEALTH INSURANCE BENEFITS AND THUS DID NOT OBTAIN THE PRIVATE HEALTH INSURANCE BENEFITS TO WHICH ENTITLED FOR ILLNESS OR INJURY, AND FOR WHICH MEDICAL CARE WAS PROVIDED AT THE EXPENSE OF THE GOVERNMENT, IS INDEBTED FOR THE AMOUNT WHICH HE WOULD HAVE RECEIVED HAD HE RECOUPED THE INSURANCE.

TO THE DIRECTOR, ACTION, JANUARY 18, 1974:

THIS REFERS FURTHER TO THE LETTER OF JULY 25, 1973, FROM MR. BRUCE A. WILBURN, ASSOCIATE DIRECTOR, ADMINISTRATION AND FINANCE, REQUESTING A DECISION FROM THIS OFFICE CONCERNING THE INDEBTEDNESS OF MR. DAVID H. ROGERS, A FORMER EMPLOYEE OF ACTION, FOR EXPENSES PAID ON HIS BEHALF FOR MEDICAL SERVICES HE AND HIS WIFE RECEIVED DURING HIS SERVICE AT NEW DELHI, INDIA.

THE AMOUNT OF MONEY IN QUESTION IS $596.53 REPRESENTING THE TOTAL COST TO THE DEPARTMENT OF STATE OF MEDICAL SERVICES PROVIDED FOR MR. ROGERS IN DECEMBER 1968 ($198.24) AND FOR MRS. C. ROGERS IN NOVEMBER 1969 ($398.29). THE ISSUE OF MR. ROGERS' INDEBTEDNESS ARISES FROM QUESTIONS AS TO INTERPRETATION OF THE LAW AND REGULATIONS GOVERNING THE DEPARTMENT OF STATE MEDICAL AND HEALTH PROGRAM IN THE LIGHT OF OUR DECISION B-82658, FEBRUARY 9, 1949.

THAT DECISION HELD, INTER ALIA, THAT IN A CASE IN WHICH MEDICAL EXPENSES OF A MEMBER OF THE FOREIGN SERVICE ARE PAID UNDER PROVISIONS OF SECTION 941 OF THE FOREIGN SERVICE ACT OF 1946, 60 STAT. 1029, AUGUST 13, 1946, AS AMENDED, 22 U.S.C. 1156, AND THE INDIVIDUAL IS COVERED BY A PRIVATE HEALTH INSURANCE PLAN THE DEPARTMENT OF STATE SHOULD DEDUCT FROM ITS PAYMENT THE AMOUNT OF ANY SUCH COVERAGE. IN THE CASE PRESENTED AND FROM MR. WILBURN'S LETTER, IT APPEARS IN OTHER CASES THE EMPLOYEES CONCERNED OR THEIR DEPENDENTS RECEIVED MEDICAL SERVICES UNDER SECTION 941, SUPRA, BUT FAILED TO OBTAIN REIMBURSEMENT OF EXPENSES TO WHICH THEY MAY HAVE BEEN ENTITLED. THE FILE SHOWS THAT THE INSURANCE PAYMENTS TO WHICH MR. ROGERS MAY HAVE BEEN ENTITLED WERE NOT PAID BY HIS INSURANCE CARRIER BECAUSE HE FAILED TO MAKE A TIMELY CLAIM FOR REIMBURSEMENT AS REQUIRED BY THE CARRIER BROCHURE SUPPLIED IN ACCORDANCE WITH THE FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM.

THE ISSUE YOU PRESENT FOR OUR DECISION IS WHETHER A MEMBER OF THE FOREIGN SERVICE WHO RECEIVES MEDICAL SERVICES UNDER THE DEPARTMENT OF STATE MEDICAL AND HEALTH PROGRAM IS INDEBTED TO THE GOVERNMENT FOR AMOUNTS - NOT IN EXCESS OF THE COST OF SUCH SERVICES - HE WOULD HAVE BEEN ENTITLED TO RECEIVE UNDER A PRIVATE INSURANCE POLICY HAD HE FILED A TIMELY CLAIM THEREFOR WITH THE PRIVATE INSURANCE CARRIER. A MEMORANDUM FROM THE GENERAL COUNSEL OF ACTION IS, IN PERTINENT PART, AS FOLLOWS:

IT IS OUR OPINION, HOWEVER, THAT THE FOREIGN SERVICE ACT OF 1946 AND 4 FAM 437.9-2 DO NOT REQUIRE THAT WE RECOVER THE COST OF THIS TREATMENT FROM MR. ROGERS IN THIS CASE. IT IS OUR CONCLUSION THAT THE FAM REGULATIONS REQUIRE RECOVERY FROM AN EMPLOYEE WHEN HE HAS BEEN REIMBURSED FOR THE COST OF MEDICAL CARE BY HIS INSURANCE CARRIER. WHERE THE EMPLOYEE NEGLIGENTLY FAILS TO FILE A TIMELY CLAIM WITH HIS INSURANCE CARRIER, AND THUS FORFEITS ANY RIGHTS HE MIGHT HAVE HAD TO REIMBURSEMENT, THE GOVERNMENT IS NOT COMPELLED TO HOLD THE EMPLOYEE PERSONALLY LIABLE FOR THE COST OF TREATMENT, IF THERE ARE FACTORS WHICH WOULD MITIGATE AGAINST SUCH A CONCLUSION. OBVIOUSLY EMPLOYEES WHO HAVE NO INSURANCE COVERAGE ARE GIVEN FULL MEDICAL TREATMENT AT GOVERNMENT EXPENSE. WE CAN SEE NO LEGITIMATE REASON TO PENALIZE THOSE EMPLOYEES WHO HAVE PRIVATE MEDICAL INSURANCE BUT WHO FAIL THROUGH EXCUSABLE NEGLECT TO MAKE A TIMELY CLAIM FOR REIMBURSEMENT.

IN COMMENTING ON OUR DECISION B-82658, SUPRA, THE GENERAL COUNSEL CONTINUES:

IF THE EMPLOYEE RECOVERS NO MONIES FROM HIS INSURANCE CARRIER, EVEN THOUGH THE FAILURE TO RECOVER WAS BASED ON HIS OWN NEGLIGENCE IN NOT APPLYING FOR REIMBURSEMENT WITHIN THE TIME LIMITS PRESCRIBED BY THE POLICY, WE FAIL TO SEE WHY THE GOVERNMENT IS ANY WORSE OFF THAN IT WOULD HAVE BEEN HAD THE EMPLOYEE NOT HAD INSURANCE. IN OUR OPINION, THE ONLY EMPLOYEES WHO SHOULD BE COMPELLED TO REIMBURSE THE GOVERNMENT FOR THE COST OF MEDICAL TREATMENT ARE THOSE EMPLOYEES WHO RECEIVE REIMBURSEMENT FROM THEIR INSURANCE CARRIER BUT REFUSE TO RETURN THOSE MONIES TO THE GOVERNMENT. ADDED TO THIS CATEGORY ARE THOSE EMPLOYEES WHO WILLFULLY AND DELIBERATELY REFUSE TO COOPERATE WITH THE GOVERNMENT IN OBTAINING REIMBURSEMENT FROM A PRIVATE INSURANCE CARRIER.

SECTION 941 OF THE FOREIGN SERVICE ACT OF 1946, SUPRA, AUTHORIZES THE SECRETARY OF STATE TO PAY THE COST OF TREATMENT FOR ILLNESS OR INJURY OF OFFICERS AND EMPLOYEES OF THE FOREIGN SERVICE AND THEIR DEPENDENTS (SUBJECT IN THE CASE OF DEPENDENTS TO A $35 DEDUCTION TO BE PAID BY THE MEMBER) "IN ACCORDANCE WITH SUCH REGULATIONS AS HE MAY PRESCRIBE." PURSUANT TO THIS STATUTORY AUTHORIZATION SUBSECTION 681.5-3 OF VOLUME 3, FOREIGN AFFAIRS MANUAL (FAM), PROVIDES AS FOLLOWS:

681.5-3 INSURANCE COVERAGE

EMPLOYEES ARE REQUIRED TO COMPLETE THE INSURANCE STATEMENT ON FORM FS 569, AND PRINCIPAL AND ADMINISTRATIVE OFFICERS ARE RESPONSIBLE FOR INSURING THAT CERTAIN MEDICAL INSURANCE BENEFITS PAYABLE TO AMERICAN EMPLOYEES AND THEIR DEPENDENTS FOR MEDICAL SERVICES AT GOVERNMENT EXPENSE ARE RECOVERED AS REPAYMENTS TO THE RESPECTIVE APPROPRIATED FUNDS. PROCEDURES FOR RECOVERY OF MEDICAL INSURANCE BENEFITS ARE CONTAINED IN 4 FAM 437.9.

THE INSURANCE STATEMENT CONTAINED IN FORM FS-569 IS AS FOLLOWS (SEE 3 FAM 685.4):

I CERTIFY THAT IF EITHER MYSELF OR MY DEPENDENT HAVE MEDICAL INSURANCE, WE WILL FILE A CLAIM FOR SUCH BENEFITS AS MAY BE PAYABLE UNDER THE PLAN, WHEN INSTRUCTED TO DO SO. UPON RECEIPT OF THE CHECK IN PAYMENT OF SUCH BENEFITS, IT WILL BE ENDORSED FOR PAYMENT TO OUR AGENCY AND FORWARDED TO THE AGENCY COLLECTION OFFICE AS DIRECTED.

WE NOTE FROM THE RECORD THAT MR. ROGERS SUBMITTED SUCH A FORM ON DECEMBER 19, 1968. ALTHOUGH THE FILE COPY DOES NOT SHOW A SIGNATURE ON THE FORM, WE ASSUME THE ABOVE CERTIFICATE WAS PROPERLY EXECUTED. IN ANY EVENT, IN ACCORDANCE WITH THE PROCEDURES REQUIRED BY SUBSECTION 437.9 OF THE FAM, HE WAS REPEATEDLY INSTRUCTED TO SUBMIT A TIMELY CLAIM FOR REIMBURSEMENT TO HIS INSURANCE CARRIER.

SPECIFICALLY, IN HIS LETTER TO MR. ROGERS OF MAY 16, 1973, THE DIRECTOR OF THE ACTION ACCOUNTING DIVISION STATED:

ACTION IS NOT BEING PREMATURE IN ITS REQUEST THAT YOU NOW SETTLE YOUR OBLIGATION IN THE AMOUNT OF $596.53 SINCE YOU FAILED TO ADHERE TO THOSE PROCEDURES FOR RECOVERY OF, YOURS AND THAT OF YOUR DEPENDENT'S, MEDICAL INSURANCE BENEFITS.

UNDER THE AUTHORITY OF THE FOREIGN SERVICE ACT OF 1946, AS AMEMDED, THE BUDGET AND FISCAL OFFICE/AMEMBASSY NEW DELHI REQUESTED YOUR COOPERATION IN RESOLVING RECOUPMENT OF THOSE EXPENDITURES ON THOSE VARIOUS DATES; TO WHICH, THEY RECEIVED NO RESPONSES:

FOR YOUR EXPENSES: AMOUNT: $198.24

JUNE 26, 1969

OCTOBER 27, 1969

DECEMBER 3, 1969

JANUARY 20, 1970

MARCH 20, 1970

OCTOBER 21, 1970

FOR YOUR DEPENDENT AMOUNT: $398.29

(CONSTANCE ROGERS):

JULY 15, 1970

AUGUST 19, 1970

SEPTEMBER 16, 1970

OCTOBER 21, 1970

DECEMBER 16, 1970

THE UNDERLYING INTENT OF THE REGULATIONS REQUIRING RECOVERY BY THE GOVERNMENT OF HEALTH INSURANCE PAYMENTS TO WHICH AN EMPLOYEE MAY BE ENTITLED FOR MEDICAL SERVICES PROVIDED AT GOVERNMENT EXPENSE IS APPARENTLY (1) TO MINIMIZE COSTS OF THE MEDICAL AND HEALTH PROGRAM AND (2) TO PREVENT UNJUST ENRICHMENT OF EMPLOYEES WHO MIGHT OTHERWISE RECEIVE THE BENEFITS OF BOTH GOVERNMENT SUBSIDY OF THEIR MEDICAL EXPENSES AND HEALTH INSURANCE BENEFITS FOR THE SAME INCIDENT OF ILLNESS OR INJURY.

IN ORDER TO ATTAIN THE OBJECTIVE OF MINIMIZING COST IT IS ESSENTIAL THAT EMPLOYEES WHO ARE COVERED BY PRIVATE HEALTH INSURANCE PLANS TAKE THE ACTION NECESSARY TO RECOVER THE INSURANCE BENEFITS TO WHICH THEY ARE ENTITLED. UNDER THE APPLICABLE REGULATIONS WE BELIEVE SUCH EMPLOYEES MAY BE REGARDED AS HAVING A DUTY TO COMPLY WITH RULES OF THE CARRIER INVOLVED AND SECURE THE REIMBURSEMENT OF MEDICAL EXPENSES PROVIDED BY THE INSURANCE PLAN FOR THE PURPOSE OF MITIGATING, TO THE EXTENT PROVIDED BY INSURANCE PAYMENTS, THE COST TO THE GOVERNMENT OF HEALTH SERVICES.

IT IS OUR VIEW THAT THE REGULATORY AUTHORITY PROVIDED THE SECRETARY OF STATE IN SECTION 941, SUPRA, IS SUFFICIENTLY BROAD TO PERMIT HIM TO REQUIRE EMPLOYEES HAVING PRIVATE HEALTH INSURANCE COVERAGE TO ACT PRUDENTLY BY FILING CLAIMS IN ACCORDANCE WITH CARRIER RULES FOR RECOVERY OF EXPENDITURES INCURRED AS A RESULT OF INCIDENTS OF ILLNESS AND INJURY FOR WHICH THE GOVERNMENT HAS PAID FOR MEDICAL CARE. IT IS NOTED FURTHER THAT IN THE DECISION OF FEBRUARY 9, 1949, SUPRA, WE SAID THAT AN EMPLOYEE WAS NOT ENTITLED TO BE REIMBURSED COSTS COVERED BY HEALTH INSURANCE. THAT DECISION DID NOT LIMIT THE OBLIGATION OF THE MEMBER TO AMOUNTS HE ACTUALLY RECOVERED FROM THE PRIVATE INSURANCE CARRIER. IT FOLLOWS THEN THAT FAILURE OF AN EMPLOYEE TO RECOVER INSURANCE PAYMENTS, UNLESS SUCH FAILURE IS FOR REASONS BEYOND HIS CONTROL, DEFEATS HIS RIGHT TO HEALTH SERVICES AT GOVERNMENT EXPENSE. WE DO NOT BELIEVE THAT THE REASONS GIVEN FOR MR. ROGERS' FAILURE TO FILE A TIMELY CLAIM WITH THE INSURANCE CARRIER - THE PRESS OF OTHER WORK AND INCORRECT ADVICE FROM FELLOW EMPLOYEES - CAN BE USED TO ESTABLISH THAT HE ACTED AS A PRUDENT MAN IN THE CIRCUMSTANCES OR THAT HIS FAILURE TO OBTAIN PAYMENT FROM THE INSURER WAS FOR REASONS BEYOND HIS CONTROL.

FOR THE REASONS STATED THE EMPLOYEE IN THIS AND OTHER SIMILAR CASES SHOULD BE HELD TO BE INDEBTED TO THE GOVERNMENT FOR THE AMOUNT OF THE INSURANCE PAYMENT TO WHICH HE WOULD HAVE BEEN ENTITLED HAD HE FILED A CLAIM IN ACCORDANCE WITH THE RULES OF THE INSURANCE CARRIER. IN THE CASE OF MR. ROGERS FOR TREATMENT HE AND MRS. ROGERS RECEIVED WE UNDERSTAND THIS WOULD BE 75 PERCENT OF THE EXPENSE INCURRED, LESS THE $50 DEDUCTIBLE REQUIREMENT OF THE CARRIER. FURTHER, IN THE CASE OF MRS. ROGERS' TREATMENT, THE $35 DEDUCTION FROM PAYMENTS OTHERWISE AUTHORIZED AS REQUIRED BY SUBSECTION (B) OF SECTION 941, SUPRA, WOULD ALSO BE FOR PAYMENT BY MR. ROGERS.