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TRICARE Contractor

TRICARE Contractor's Recoupment of Funds Not Barred by Voluntary Payment Doctrine

ERISA and Life Insurance News
(December 21, 2012)

Humana Military Healthcare Services, as a TRICARE contractor, and PGBA LLC, as a subcontractor, recouped claim overpayments that had been made to The Medical Center by offsetting the overpayments against future claim payments. The Medical Center sued and argued primarily that HMHS was barred from recovering the overpayments under a state law voluntary payment doctrine.

Under the Hospital Agreement between HMHS and the Medical Center, the hospital agreed to abide by all TRICARE policies and procedures. The Hospital Agreement authorized “HMHS to deduct monies that may otherwise be due and payable to [Medical Center] from any outstanding monies that [Medical Center] may, for any reason, owe to HMHS.”

The TRICARE Handbook requested that a provider “return any duplicate payments or overpayments made for a claim for a TRICARE beneficiary,” and it provided that if such overpayments were not returned “then PGBA may, after written notice, offset the amount of double payment against future claim payments.”

HMHS and PGBA moved for summary judgment on the grounds of federal preemption and that the voluntary payment doctrine did not apply in light of the contractual agreements between HMHS and The Medical Center.

The court agreed with the latter argument, concluding that “because a contractual agreement exists between Medical Center and HMHS providing for the offset of overpayments against future claims, the voluntary payment doctrine does not make the overpayments nonrefundable to HMHS.” In light of its ruling on state law grounds, the court found it unnecessary to reach the preemption issue.

Click here to view the full December 2012 Edition of the ERISA and Life Insurance News.

H. Sanders Carter
T (404) 962-1015
F (404) 962-1220
Kenton J. Coppage
T (404) 962-1065
F (404) 962-1256
Kip D. Nelson
T (336) 378-5206
F (336) 433-7443

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