Sunday, June 25, 2006

How does the health insurer for federal employees get its money back

A while back, we had a case where a fellow who worked at the federal prison in Lee County was injured in an accident, and we filed an uninsured motorist claim in state court in Tennessee. One issue we had to unravel was the extent to which the fellow's health insurer had the right to get back what it had paid out for his injuries.

From what little I had gained on this issue, I would have bet money that the Supreme Court's decision in Empire Healthchoice Assurance, Inc. v. McVeigh would have come out the other way. In the Empire case, the Court in a 5-4 decision concluded that the Blue Cross outfit charged with administering some of the federal employee health benefits could not sue in federal court to recover from the proceeds of a wrongful death case what it paid out in medical benefits for the decedent. But for federal law, the carrier would not even have such a claim, in some states. See, e.g., Va. Code § 38.2-3405. I suppose that in such a case in Virginia, as in the Kircher case noted below, the Supreme Court is counting on the state court judges to apply federal law.

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