[Code of Federal Regulations]
[Title 32, Volume 2]
[Revised as of July 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 32CFR220.13]

[Page 438-439]
 
                       TITLE 32--NATIONAL DEFENSE
 
        CHAPTER I--OFFICE OF THE SECRETARY OF DEFENSE (CONTINUED)
 
PART 220_COLLECTION FROM THIRD PARTY PAYERS OF REASONABLE CHARGES FOR 
 
Sec. 220.13  Special rules for workers' compensation programs.

    (a) Basic rule. Pursuant to the general duty of third party payers 
under 10 U.S.C. 1095(a)(1) and the definitions of 10 U.S.C. 1095(h), a 
workers' compensation program or plan generally has an obligation to pay 
the United States the reasonable charges for healthcare services 
provided in or through any facility of the Uniformed Services to a 
Uniformed Services beneficiary who is also a beneficiary under a 
workers' compensation program due to an employment related injury, 
illness, or disease. Except to the extent modified or supplemented by 
this section, all provisions of this part are applicable to any workers' 
compensation program or plan in the same manner as they are applicable 
to any other third party payer.
    (b) Special rules for lump-sum settlements. In cases in which a 
lump-sum workers' compensation settlement is made, the special rules 
established in this paragraph (b) shall apply for purposes of compliance 
with this section.
    (1) Lump-sum commutation of future benefits. If a lump-sum worker's 
compensation award stipulates that the amount paid is intended to 
compensate the individual for all future medical expenses required 
because of the work-related injury, illness, or disease, the Uniformed 
Service health care facility is entitled to reimbursement for injury, 
illness, or disease related, future health care services or items 
rendered or provided to the individual up to the amount of the lump-sum 
payment.
    (2) Lump-sum compromise settlement. (i) A lump sum compromise 
settlement, unless otherwise stipulated by an official authorized to 
take action under 10 U.S.C. 1095 and this part, is deemed to be a 
workers' compensation payment for the purpose of reimbursement to the 
facility of the Uniformed Services for services and items provided, even 
if the settlement agreement stipulates that there is no liability under 
the workers' compensation law, program, or plan.
    (ii) If a settlement appears to represent an attempt to shift to the 
facility of the Uniformed Services the responsibility of providing 
uncompensated services or items for the treatment of the work-related 
condition, the settlement will not be recognized and reimbursement to 
the uniformed health care facility will be required. For example, if the 
parties to a settlement attempt to maximize the amount of disability 
benefits paid under workers' compensation by releasing the employer or 
workers' compensation carrier from liability for medical expenses for a 
particular condition even though the facts show that the condition is 
work-related, the facility of the Uniformed Services must be reimbursed.
    (iii) Except as specified in paragraph (b)(2)(iv) of this section, 
if a lump-sum compromise settlement forecloses the possibility of future 
payment or workers' compensation benefits, medical expenses incurred by 
a facility of the Uniformed Services after the date of the settlement 
are not reimbursable under this section.
    (iv) As an exception to the rule of paragraph (b)(2)(iii) of this 
section, if the settlement agreement allocates certain amounts for 
specific future medical services, the facility of the Uniformed Services 
is entitled to reimbursement for those specific services and items 
provided resulting from the work-related injury, illness, or disease up 
to the amount of the lump-sum settlement allocated to future expenses.
    (3) Apportionment of a lump-sum compromise settlement of a workers' 
compensation claim. If a compromise settlement allocates a portion of 
the payment for medical expenses and also gives reasonable recognition 
to the income replacement element, that apportionment may be accepted as 
a basis for determining the payment obligation of a workers' 
compensation program or plan under this section to a facility of the 
Uniformed Services. If the settlement does not give reasonable

[[Page 439]]

recognition to both elements of a workers' compensation award or does 
not apportion the sum granted, the portion to be considered as payment 
for medical expenses is computed as follows: determine the ratio of the 
amount awarded (less the reasonable and necessary costs incurred in 
procuring the settlement) to the total amount that would have been 
payable under workers' compensation if the claim had not been 
compromised; multiply that ratio by the total medical expenses incurred 
as a result of the injury or disease up to the date of settlement. The 
product is the amount of workers' compensation settlement to be 
considered as payment or reimbursement for medical expenses.

[65 FR 7730, Feb. 16, 2000, as amended at 67 FR 57742, Sept. 12, 2002]