Affirmative Claims Regulations, 53426-53430 [E7-18199]

Agencies

• DEPARTMENT OF DEFENSE
• Department of the Navy
• Navy Department

[Federal Register Volume 72, Number 181 (Wednesday, September 19, 2007)]
[Rules and Regulations]
[Pages 53426-53430]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-18199]


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DEPARTMENT OF DEFENSE

Department of the Navy

32 CFR Part 757

[USN-2006-0041]
RIN 0703-AA81


Affirmative Claims Regulations

AGENCY: Department of the Navy, DoD.

ACTION: Interim final rule.

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SUMMARY: This rule reflects administrative changes to the regulations 
concerning the administrative processing and consideration of claims on 
behalf of and against the United States. The revisions will ensure the 
proper administrative processing and consideration of claims on behalf 
of and against the United States. This rule is being published by the 
Department of the Navy for guidance and interest of the public in 
accordance with 5 U.S.C. 552(a)(1).

DATES: This rule is effective September 19, 2007. Comments must be 
received by November 19, 2007.

ADDRESSES: You may submit comments, identified by docket number and/or 
Regulatory Information Number (RIN) and title, by any of the following 
methods: Federal eRulemaking Portal: https://www.regulations.gov. Follow 
the instructions for submitting comments.
    Mail: Federal Docket Management System Office, 1160 Defense 
Pentagon, Washington, DC 20301-1160.
    Instructions: All submissions received must include the agency name 
and docket number or RIN for this Federal Register document. The 
general policy for comments and other submissions from members of the 
public is to make these submissions available for public viewing on the 
Internet at https://regulations.gov as they are received without change, 
including any personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT: Mr. Enrique Mendez, Head, Affirmative 
and Personnel Claims Branch, Claims and Tort Litigation Division (Code 
15), Office of the Judge Advocate General, 1322 Patterson, Avenue SE., 
Washington Navy Yard, DC 20374, telephone 202-685-4621.

SUPPLEMENTARY INFORMATION: Executive Order 12866, ``Regulatory Planning 
and

[[Page 53427]]

Review.'' It has been determined that the changes to 32 CFR part 757 
are not considered a ``significant regulatory action.'' The rule does 
not:
    (1) Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector in the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    (2) Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs, or the rights and obligations of the 
recipients thereof; or
    (4) Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
this Executive Order.
    Unfunded Mandates Reform Act (Sec. 202, Pub. L. 104-4). It has been 
certified that 32 CFR part 757 does not contain Federal Mandates that 
result in expenditures by State, local and tribal governments, in 
aggregate, or by the private sector, of $100 million or more in any one 
year.
    Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601). 
It has been determined that this rule is not subject to the Regulatory 
Flexibility Act (5 U.S.C. 601) because it would not, if promulgated, 
have a significant economic impact on a substantial number of small 
entities. This rule implements the processing of the proper 
administrative processing and consideration of claims on behalf of and 
against the United States, and does not economically impact the Federal 
government's relations with the private sector.
    Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 
35). This rule does not impose collection of information requirements 
for purposes of the Paperwork Reduction Act (44 U.S.C. Chapter 35, 5 
CFR part 1320).
    Executive Order 13132, ``Federalism.'' It has been certified that 
32 CFR part 757 does not have federalism implications as set forth in 
Executive Order 13132. This rule does not have substantial direct 
effects on:
    (1) The States;
    (2) The relationship between the National Government and the 
States; or
    (3) The distribution of power and responsibilities among the 
various levels of Government.

List of Subjects in 32 CFR Part 757

    Claims; Health care.

0
Accordingly, 32 CFR part 757 is amended to read as follows:

PART 757--AFFIRMATIVE CLAIMS REGULATIONS

Subpart A--Property Damage Claims

0
1. Section 757.2 is revised to read as follows:


Sec.  757.2  Statutory authority.

    (a) General. All affirmative claims for damage to or loss of 
Government property in favor of the United States are processed in 
accordance with the Federal Collections Claims Act (31 U.S.C. 3711), as 
amended by the Debt Collection Act of 1982, PL 97-365, 96 Stat. 1749 
(25 October 1982), PL 101-552, 104 Stat. 2736 (15 November 1990) and 
the Debt Collection Improvement Act of 1996, PL 104-134, 110 Stat. 
1321, 1358 (26 April 1996). Department of Defense Directive designees, 
the authority granted to the Secretary of Defense under the Federal 
Claims Collection Act.
    (b) Statute of limitations. Subject to specific provisions in other 
statutes, there is a general 3-year statute of limitations on 
affirmative Government tort claims pursuant to 28 U.S.C. 2415(b).


Sec.  757.3  [Amended]

0
2. Section 757.3 is amended by removing the citation ``4 CFR chapter 
II'' wherever it appears and replacing it with ``31 CFR Chapter IX.''

0
3. Section 757.4 is revised to read as follows:


Sec.  757.4  Claims that may be collected.

    (a) Against responsible third parties for damage to Government 
property, or the property of non-appropriated fund activities. It 
should be noted, however, that as a general rule, the Government does 
not seek payment from service members and Government employees for 
damages caused by their simple negligence while acting within the scope 
of their employment. Exceptions to this general policy will be made 
when the incident involves aggravating circumstances.
    (b) For money paid or reimbursed by the government for damage to a 
rental car in accordance with the Joint Federal Travel regulations 
(volume 1, paragraph U 3415-C and volume 2, paragraph C 2101-2). 
Collection action shall be taken against third parties liable in tort. 
Collection action shall not be taken against Government personnel who 
rented the vehicle.
    (c) Other claims. Any other claim for money or property in favor of 
the United States cognizable under the Federal Claims Collections Act 
not specifically listed above.

0
4. Section 757.5 is amended by revising paragraphs (a), (b), (c), 
(e)(1)(iii), (e)(1)(iv), (e)(2), (f), first sentence in paragraph (g), 
and paragraph (k), to read as follows:


Sec.  757.5  Assertion of claims and collection procedures.

    (a) General. The controlling procedures for administrative 
collection of claims are established in 31 CFR part 901.
    (b) Officials authorized to pursue claims. The Judge Advocate 
General; the Deputy Judge Advocate General; any Assistant Judge 
Advocate General; the Deputy Assistant Judge Advocate General (Claims 
and Tort Litigation) are authorized to pursue and collect all 
affirmative claims in favor of the United States, except in countries 
where another service has single service responsibility in accordance 
with DoD Directive 5515.8.
    (c) Dollar limitations. All of the officers listed in Sec.  
757.5(b) are authorized to compromise and terminate collection action 
on affirmative claims of $100,000.00 or less.
* * * * *
    (e) * * *
    (1) * * *
    (iii) A description of damage and estimate of repair;
    (iv) A description of the incident, including date and place; and
* * * * *
    (2) See also 31 CFR part 901.
    (f) Full payment. When a responsible party or insurer tenders full 
payment or a compromise settlement on a claim, the payment should be in 
the form of a check or money order made payable to ``United States 
Treasury.'' The check or money order shall then be forwarded to the 
disbursing officer serving the collecting activity for deposit in 
accordance with the provisions of the Navy Comptroller Manual. For 
collections for damages to real property, the collection is credited to 
the account available for the repair or replacement of the real 
property at the time of recovery. (10 U.S.C. 2782.) For damages to 
personal property, the money is returned to the general treasury.
    (g) Installment payments. See 31 CFR 901.8 for specific procedures. 
* * *
* * * * *
    (k) Release. The Supervisory Attorney, Tort Claims Unit, Norfolk is 
authorized to execute a release of the claim when all repairs have been 
completed to the Government's satisfaction, and when all repair bills 
have been paid. No prior approval from the Judge Advocate General is 
required

[[Page 53428]]

for this procedure. If repair or replacement is made, a notation shall 
be made in any investigation or claims file.

0
5. Amend 757.6 by revising paragraph (d) to read as follows:


Sec.  757.6  Waiver, compromise, and referral of claims.

* * * * *
    (d) Litigation reports. Litigation reports prepared in accordance 
with 31 CFR part 904 shall be forwarded through the Judge Advocate 
General (Claims and Tort Litigation) to the Department of Justice along 
with any case file for further collection action or litigation as 
required by the Federal Claims Collections Standards.

0
6. The heading of subpart B is revised to read as follows:

Subpart B--Medical Care Recovery Act (MCRA) Claims and Claims 
Asserted Pursuant to 10 U.S.C. 1095

0
7. Section 757.11 is revised to read as follows:


Sec.  757.11  Scope of Subpart B.

    Subpart B describes the assertion and collection of claims for 
medical care under the MCRA and 10 U.S.C. 1095. The MCRA states that 
when the Federal government provides treatment or pays for treatment of 
an individual who is injured or suffers a disease, the Government is 
authorized to recover the reasonable value of that treatment from any 
third party who is legally liable for the injury or disease. Title 10 
U.S.C. 1095 provides for the collection from third-party payers for the 
value of health care services incurred by the Government on behalf of 
covered beneficiaries.

0
8. Section 757.12 is revised to read as follows:


Sec.  757.12  Statutory authorities.

    (a) Medical Care Recovery Act, 42 U.S.C. 2651-2653 (2005).
    (b) Title 10 U.S.C. 1095 (Health Care Services Incurred on Behalf 
of Covered Beneficiaries: Collection from Third-Party Payers).
    (c) Title 10 U.S.C. 1079a (CHAMPUS: Treatment of Refunds and Other 
Amounts Collected).

0
9. Section 757.13 is revised to read as follows:


Sec.  757.13  Responsibility for MCRA actions.

    (a) JAG designees. (1) Primary responsibility for investigating, 
asserting, and collecting Department of the Navy (DON) MCRA claims and 
properly forwarding MCRA claims to other Federal departments or 
agencies rests with the following personnel:
    (i) Deputy Assistant Judge Advocate General (Claims and Tort 
Litigation Division) (Code 15); and the
    (ii) Commanding Officer, Naval Legal Service Command Europe and 
Southwest Asia (NLSC EURSWA), Naples, Italy, in its area of geographic 
responsibility.
    (2) JAG designee may assert and receive full payment on any MCRA 
claim. Code 15 may agree to compromise or waive claims for $100,000 or 
less. NLSC EURSWA may agree to compromise or waive claims for 
$40,000.00 or less. NLSC EURSWA claims in excess of $40,000.00 may be 
compromised or waived only with Code 15 approval. See Sec. 757.19 for 
further discussion of waiver and compromise.
    (b) Navy Medical Treatment Facility (MTF). (1) Naval MTFs are 
responsible for ensuring potential MCRA/10 U.S.C. 1095 claims are 
brought to the attention of the appropriate JAG designee.
    (2) The MTF reports all potential MCRA/10 U.S.C. 1095 cases by 
forwarding a copy of the daily injury log entries and admission records 
to the cognizant JAG designee within 7 days of treatment for which a 
third party may be liable. The JAG designee makes the determination of 
liability. Recovery for the costs of MTF care is based on Diagnostic 
Related Group rates or a Relative Value Unit. Rates are established by 
the Office of Management and Budget and/or the DoD, and published 
annually in the Federal Register.
    (c) TRICARE Fiscal Intermediary. The TRICARE fiscal intermediary is 
required to identify and promptly mail claims involving certain 
diagnostic codes to the cognizant JAG designee. Claims are asserted for 
the actual amount that TRICARE paid.
    (d) Department of Justice (DoJ). Only the DoJ may authorize 
compromise or waiver of an MCRA/10 U.S.C. 1095 claim in excess of 
$100,000.00 or settle an MCRA/10 U.S.C. 1095 claim in which the third 
party has filed a suit against the United States as a result of the 
incident which caused the injury and upon which the claim is based.

0
10. Section 757.14 is amended by revising paragraphs (a), (c), (d)(1), 
(e) introductory text, and (e)(1), to read as follows:


Sec.  757.14  Claims asserted.

    (a) General. The DoN asserts MCRA and 10 U.S.C. 1095 claims when 
medical care is furnished to Navy and Marine Corps active duty 
personnel, retirees, or their dependents, or any other person when 
appropriate, and third-party tort or contract liability exists for 
payment of medical expenses resulting from an injury or disease. Claims 
are asserted when the injured party is treated in a MTF or when the DoN 
is responsible for reimbursing a non-Federal care provider.
* * * * *
    (c) Liable parties. MCRA and 10 U.S.C 1095 claims may be asserted 
against individuals, corporations, associations and non-Federal 
Government agencies subject to the limitation described in Sec.  
757.15.
    (d) * * *
    (1) By using the rate set as described in Sec.  757.13 (b)(2) in 
bills issued by the MTF; or
    (2) * * *
    (e) Alternate theories of recovery. (1) Often, recovery under the 
MCRA is not possible because no third-party tort liability exists. For 
example, if a member, retiree, or dependent is driving a vehicle and is 
injured in single-car accident, there is no tortfeasor. Title 10 U.S.C. 
1095 provides the Government alternate means for recovery as a third-
party beneficiary of an insurance contract of the injured party.
* * * * *

0
11. Section 757.15 is amended by revising the introductory text and 
revising paragraphs (b) and (d) to read as follows:


Sec.  757.15  Claims not asserted.

    In some cases, public policy considerations limit the DoN's 
assertion of claims against apparent third-party tortfeasors or a 
contract where the Government would be a third party beneficiary. 
Claims are not asserted against:
* * * * *
    (b) Injured service members, dependents, and employees of the 
United States. Claims are not asserted directly against a 
servicemember, the dependent of a servicemember, or an employee of the 
United States who is injured as a result of his own willful or 
negligent acts. The United States does assert, however, against 
policies that cover the injury.
* * * * *
    (d) Department of Veterans' Affairs care for service-connected 
disability. Claims are not asserted for care provided to a veteran by 
the Department of Veterans' Affairs when the care is for a service-
connected disability. The United States will, however, claim for the 
reasonable value of care provided an individual before he is 
transferred to a Department of Veterans' Affairs hospital. This policy 
does not apply in cases where the MTF referred the patient to the 
Veterans' Affairs hospital and then paid for the care.

[[Page 53429]]


0
12. Section 757.16 is revised to read as follows:


Sec.  757.16  Claims asserted only with OJAG approval.

    (a) Certain Government contractors. JAG approval is required before 
asserting a claim against a Federal government contractor when the 
contract provides that the contractor will be indemnified or held 
harmless by the Federal government for tort liability.
    (b) U.S. personnel. JAG approval is required before asserting MCRA 
claims directly against servicemembers, their dependents and federal 
employees and their dependents for injury to another person. No 
approval is necessary to assert claims against their insurance 
policies, however, except for injuries caused by servicemembers and 
federal employees acting ``within the scope of their employment.'' 
Intra-familial tort immunity would not preclude the Government from 
asserting any claims for care furnished to a tortfeasor's family 
members.

0
13. Section 757.17 is revised to read as follows:


Sec.  757.17  Statute of limitations.

    (a) Federal. Claims asserted under the MCRA or against an 
automobile liability insurer through 10 U.S.C. 1095 are founded in tort 
and must be brought within 3 years after the action ``first accrues'' 
(28 U.S.C. 2415b). Normally, a medical care claim ``first accrues'' on 
the initial date of treatment.
    (b) Claims Asserted under 10 U.S.C. 1095. Although legal arguments 
can be made that claims asserted under 10 U.S.C. 1095 against a no-
fault or personal injury protection insurer are founded in contract and 
can be brought within 6 years (28 U.S.C. 2415a), all claims should be 
asserted within 3 years of the date when the claim accrued. However, 
some states require notice of such claims to be filed within a shorter 
period of time.

0
14. Section 757.18 is revised to read as follows:


Sec.  757.18  Asserting the claim.

    (a) Initial action by the JAG designee. When advised of a potential 
claim, the JAG designee will determine the Federal agency or department 
responsible for investigating and asserting the claim.
    (1) When DoN has reimbursed a non-Federal provider for health care, 
or when TRICARE has made payment for a Navy health care beneficiary, 
the JAG designee will assert any resulting claim.
    (2) When care is provided in a Federal treatment facility, the 
status of the injured person will determine the agency that will assert 
a resulting claim. Cost of treatment provided or paid for by an MTF is 
deposited in that MTF's account, regardless of which service is making 
the collection.
    (i) Where DoN members, retirees, or their dependents receive 
medical treatment from another Federal agency or department, the DoN 
will assert any claim on behalf of the United States based on 
information provided by the treating agency or department.
    (ii) Similarly, where a DoN MTF provides care to personnel of 
another Federal agency or department, that other agency or department 
will assert any claim on behalf of the United States.
    (3) If the claim is one which the DoN should assert, the JAG 
designee will forward all available information to the appropriate 
department or agency.
    (4) If the claim is one which the DoN should assert, the JAG 
designee will ensure an appropriate investigation into the 
circumstances underlying the claim is initiated and will provide notice 
to the injured party and all third parties who may be liable to the 
injured person and the United States under the MCRA or 10 U.S.C. 1095.
    (b) Investigating the claim. While there is no prescribed form or 
content for investigating these claims, the claims file will contain 
sufficient information on which to base valuation, assertion, 
settlement, waiver, and/or compromise decisions.
    (c) Notice of claim. (1) The JAG designee will assert claims by 
mailing a notice of claim to identified third-party tortfeasors and 
their insurers or insurers for third-party beneficiary coverage. Many 
insured tortfeasors fail to notify their insurance companies of 
incidents. This failure may be a breach of the cooperation clause in 
the policy and may be grounds for the insurer to refuse to defend the 
insured or be responsible for any liability. The United States, as a 
claimant, may preclude such an invocation by giving the requisite 
notification itself. The purpose of the insurance clause is satisfied 
if the insurer receives actual notice of the incident, regardless of 
the informant. This notice should be mailed as soon as it appears an 
identified third party may be liable for the injuries. The prompt 
assertion of the claim will ensure that the government is named on the 
settlement draft. If the United States is not so named, and the claim 
has been asserted, the insurer settles at its own risk.
    (2) The JAG designee will also notify the injured person or his 
legal representative of the Government's interest in the value of the 
medical care provided by the United States. This notice will advise 
that:
    (i) The United States may be entitled to recover the reasonable 
value of medical care furnished or paid by the Federal government;
    (ii) The injured person is required to cooperate in the efforts of 
the United States to recover the reasonable value of medical care 
furnished or paid for by the Federal government;
    (d) Administering the claim. (1) After investigating and asserting 
the claim, the JAG designee will maintain contact with all parties, 
their legal representatives, and insurers.
    (2) An effort should be made to coordinate collection of the 
Federal government's interest with the injured person's action to 
collect on a claim for damages.
    (i) Attorneys representing an injured person may be authorized to 
include the Federal government's claim as an item of special damages 
with the injured person's claim or suit.
    (ii) An agreement that the Government's claim will be made a party 
of the injured person's action should be in writing and state the 
counsel fees will not be paid by the Government or computed on the 
basis of the Government's portion of recovery.
    (3) If the injured person is not bringing an action for damages or 
is refusing to include the Federal Government's interest, the JAG 
designee will pursue independent collection. The United States is 
specifically allowed to intervene or join in any action at law brought 
by or through the injured person against the liable third person or 
brings an original suit in its own name or in the name of the injured 
person. The JAG designee will ensure all parties are aware that the 
United States must be a party to all subsequent collection negotiation.
    (4) When the Government's interests are not being represented by 
the injured person or his/her attorney, and independent collection 
efforts have failed, the JAG designee will refer the claims to the DoJ 
for possible suit.
    (e) Access to DoN records and information. (1) Copies of medical 
records in cases that have potential claims will be sent by the MTFs to 
the cognizant JAG designee. It is considered a routine use of the 
records for the JAG designee to release them to an insurance company, 
if requested, in order to substantiate the claim. However, only the MTF 
as ``keepers of the records'' has the authority to make official 
releases of medical records to anyone else. Records will be protected 
in accordance with the provisions of the Privacy Act, 5 U.S.C. 552a, 
and confidentiality of quality assurance medical records, 10 U.S.C. 
1102. Non-routine release requires the

[[Page 53430]]

authorization from the injured individual or legal representative or an 
order from a court of competent jurisdiction. A clerk or attorney 
signed subpoena is not ``an order from a court of competent 
jurisdiction.'' Subpoenas are processed in accordance with 32 CFR part 
725.
    (2) Requests for testimony of any Navy employees will be processed 
in accordance with DoD Directive 5405.2, 32 CFR part 725, and 
SECNAVINST 5820.8A. If the injured person, or his or her attorney has 
signed an agreement to protect the Government's interest and is 
requesting the testimony of a locally available physician who treated 
the injured person, however, this request falls within an exception to 
the regulations. See 32 CFR 725.5(g)(3). In this situation, the injured 
person or the attorney need only ask the JAG designee for assistance in 
scheduling the testimony of the treating physician and the JAG designee 
will coordinate with the physician's command to determine availability. 
Such testimony is limited to factual issues. The definition of factual 
issues is slightly different under the regulations than it is in civil 
litigation. Opinions that are formed prior to, or contemporaneously 
with, the treatment at issue and are routinely required in the course 
of the proper performance of professional duties constitute essentially 
factual matters. For example, the physician will have opined at the 
time of treatment if further treatment will be necessary. The physician 
may testify to that as factual, not opinion, testimony. Opinions that 
are formed after treatment and are not required for continuing 
treatment, especially those that respond to hypothetical questions, are 
not factual and are considered to be expert testimony. This expert 
testimony, regardless of who requests it, will be processed in 
accordance with 32 CFR part 725, and must be forwarded to OJAG Code 14, 
General Litigation Division. Requests for expert testimony are rarely 
granted.

0
15. Section 757.19 is amended by revising paragraphs (a), (b) 
introductory text, (b)(6), and removing paragraph (c) to read as 
follows:


Sec.  757.19  Waiver and compromise.

    (a) General. OJAG Code 15 (Claims and Tort Litigation) may 
authorize waiver or compromise of any claim that does not exceed 
$100,000.00. NLSO EURSWA may agree to compromise or waive claims for 
$40,000.00 or less. NLSO EURSWA claims in excess of $40,000.00 may be 
compromised or waived only with Code 15 approval.
    (b) Waiver and compromise. The JAG designee may waive the Federal 
government's MCRA interest when a responsible third-party tortfeasor 
cannot be located, is judgment proof, or has refused to pay and 
litigation is not feasible. Waiver or compromise is also appropriate 
when, upon written request by the injured person or legal 
representative, it is determined that collection of the full amount of 
the claim would result in undue hardship to the injured person. In 
assessing undue hardship, the following should be considered:
* * * * *
    (6) Amount of settlement or award from third-party tortfeasor or 
contract insurer; and
* * * * *

0
16. Section 757.20 is revised to read as follows:


Sec.  757.20  Receipt and release.

    The JAG designee will execute and deliver appropriate releases to 
third parties who have made full or agreed upon compromised payments. A 
copy of the release will be kept in the claims file.

    Dated: September 10, 2007.
T.M. Cruz,
Lieutenant, Judge Advocate General's Corps, U.S. Navy, Federal Register 
Liaison Officer.
 [FR Doc. E7-18199 Filed 9-18-07; 8:45 am]
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