SSR 69-8: Section 1803, 1862(a)(3) and 1862(b).—Covered Hospital Services—Simultaneous Reimbursement Under Title XVIII of Social Security Act and as Part of Award Under Federal Tort Claims Act
Where an award under the Federal Tort Claims Act for damages suffered by a Part A beneficiary included amounts to reimburse him for hospital and medical expenses also covered under title XVIII of the Social Security Act, held, (1) payments under the Federal Tort Claims Act do not constitute payments by a "governmental entity" for purposes of the exclusion in section 1862(a)(3) of the Social Security Act; (2) the Social Security Administration is given no right to recover such amounts (i.e., the right of subrogation) or any other form of reimbursement from third- party tortfeasors by title XVIII of the Act; and (3) the beneficiary is permitted reimbursement under both title XVIII and the Federal Tort Claims Act, since there is nothing inconsistent with simultaneous reimbursement under the program and from other sources (with the sole exception of the priority of workmen's compensation payments), since title XVIII is in the nature of social insurance.
A beneficiary entitled to hospital insurance benefits under Part A of title XVIII of the Social Security Act was admitted to a hospital for the treatment of injuries received as the result of the negligence of a driver of a U.S. mail truck. The hospital and medical services were found covered under Part A, and reimbursement therefore was made to the provider-hospital pursuant to the provisions of title XVIII of the Social Security Act. Thereafter, an award for damages suffered by the beneficiary was approved by the Post Office Department under the terms of the Federal Tort Claims Act. This award included an amount to reimburse the beneficiary for hospital and medical expenses. However, the Post Office Department is withholding a portion of the award from the beneficiary, equal to the amount paid the hospital under title XVIII, pending advice as to its disposition.
Two questions are raised by the instant case: (1) whether the health care payments awarded under the Federal Tort Claims Act represent payment by a government entity and are therefore excluded from coverage under section 1862(a)(3) of the Social Security Act; and (2) whether title XVIII of the Social Security Act gives the health insurance program the right to recover from the third party tortfeasor (Post Office Department) that portion of the tort claim award intended to reimburse the beneficiary for hospital and medical expenses incurred.
Where payment has been made to an individual under the Federal Tort Claims Act for expenses incurred for medical and hospital services which are also covered under title XVIII of the Social Security Act, such services are not considered to have been "paid for directly or indirectly by a governmental entity" for purposes of the exclusion in section 1862(a)(3) of the Social Security Act. Rather, such payments constitute payment for damages by a third-party tortfeasor for which reimbursement may also be made under title XVIII.
The right of the United States to recover from third- party tortfeasors financial expenditures made by it pursuant to legal requirement in connection with the medical care of an injured individual must devolve from an act of Congress. (United States v. Standard Oil, 67 S. Ct. 1604 (1947)). As a consequence of the opinion of the Supreme Court in the Standard Oil case, there was enacted the Federal Medical Care Recovery Act, 42 U.S.C. 2651, et. seq., which establishes a right in the United States to seek recovery from third-person tortfeasors for the reasonable value of medical services furnished directly by the Federal Government to an individual who suffered injury as a result of the action of such third persons. However, there are no provisions in title XVIII of the Social Security Act establishing subrogation rights in the Secretary of Health, Education, and Welfare or otherwise authorizing him to accept reimbursement out of awards under the Federal Tort Claims Act for health insurance payments he made for services covered under Medicare.
In this regard, it may also be noted that only in respect to workmen's compensation does title XVIII of the Social Security Act recognize a priority of other insurance coverage by providing in section 1862(b) that:
Payment * * * may not be made with respect to any item or service to the extent that payment has been made, or can reasonably be expected to be made * * * with respect to such item or service, under a workmen's compensation law or plan or the United States or a State. Any payment under this title with respect to any item or service shall be conditioned on reimbursement to the appropriate Trust Fund established by this title when * * * payment for such item or service has been made under such a law or plan.
Furthermore, the nature of title XVIII reimbursement as social insurance—in contrast to those "government payments" specified by the Federal Medical Care Recovery Act—is emphasized by the provision of section 1803 of the Social Security Act that:
Nothing contained in this title shall be construed to preclude any State from providing or any individual from purchasing or otherwise securing, protection against the cost of any health services.
Thus, it is specifically recognized that there is nothing inconsistent with simultaneous reimbursement to the beneficiary from sources other than title XVIII—with the sole exception of the above-quoted provision excluding title XVIII payment in the event of workmen's compensation coverage.
Accordingly, it is held that payments under the Federal Tort Claims Act do not constitute payments by a "government entity" for purposes of the exclusion in section 1862(a)(3) of the Social Security Act; title XVIII of the Social Security Act provides no right of subrogation or any other form of reimbursement from third-party tortfeasors; and, with the sole exception of the priority of workmen's compensation payments, there is nothing inconsistent with simultaneous reimbursement under the Medicare program and from other sources since title XVIII is in the nature of social insurance.