Rule2022-18314
Medical Malpractice Claims by Members of the Uniformed Services
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
August 26, 2022
Effective
September 26, 2022
Issuing agencies
Defense Department
Abstract
DoD is publishing this rule to finalize the implementation of requirements of the National Defense Authorization Act (NDAA) for Fiscal Year 2020 permitting members of the uniformed services or their authorized representatives to file claims for personal injury or death caused by a Department of Defense health care provider in certain military medical treatment facilities. Because Federal courts do not have jurisdiction to consider these claims, DoD is issuing this rule to provide uniform standards and procedures for considering and processing these actions.
Full Text
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<title>Federal Register, Volume 87 Issue 165 (Friday, August 26, 2022)</title>
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[Federal Register Volume 87, Number 165 (Friday, August 26, 2022)]
[Rules and Regulations]
[Pages 52446-52463]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-18314]
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DEPARTMENT OF DEFENSE
Office of the Secretary
32 CFR Part 45
[Docket ID: DOD-2021-OS-0047]
RIN 0790-AL22
Medical Malpractice Claims by Members of the Uniformed Services
AGENCY: Department of Defense (DoD) Office of General Counsel, DoD.
ACTION: Final rule.
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SUMMARY: DoD is publishing this rule to finalize the implementation of
requirements of the National Defense Authorization Act (NDAA) for
Fiscal Year 2020 permitting members of the uniformed services or their
authorized representatives to file claims for personal injury or death
caused by a Department of Defense health care provider in certain
military medical treatment facilities. Because Federal courts do not
have jurisdiction to consider these claims, DoD is issuing this rule to
provide uniform standards and procedures for considering and processing
these actions.
DATES: This final rule is in effect September 26, 2022.
FOR FURTHER INFORMATION CONTACT: Melissa D. Walters, (703) 681-6027,
<a href="/cdn-cgi/l/email-protection#cba6aea7a2b8b8aae5afe5bcaaa7bfaeb9b8e5a8a2bd8ba6aaa2a7e5a6a2a7"><span class="__cf_email__" data-cfemail="6b060e070218180a450f451c0a071f0e19184508021d2b060a020745060207">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Background
Signed into law on December 20, 2019, section 731 of the 2020 NDAA
allows members of the uniformed services or their authorized
representatives to file claims for personal injury or death caused by a
DoD health care provider in certain military medical treatment
facilities.
Historically, members of the armed forces have been unable to bring
suit against the government under the Feres doctrine, named for the
plaintiff in Feres v. United States, 340 U.S. 135 (1950). Based on this
1950 Supreme Court decision, Active Duty military personnel may not sue
the government for personal injuries suffered incident to service
(generally, while on active duty). The 2020 NDAA allows Service
members, with certain limitations, to bring administrative claims to
seek compensation for personal injury or death resulting from medical
malpractice that occurred in certain military medical treatment
facilities, in addition to compensation already received under the
comprehensive compensation system that currently exists for military
members and their families.
A substantiated claim of up to $100,000 will be paid directly to
the Service member or his/her estate by DoD. The Treasury Department
will review and pay claims that the Secretary of Defense values at more
than $100,000. Service members must present a claim that is received by
DoD within two years after the claim accrues. However, the statute
allowed Service
[[Page 52447]]
members to file claims in 2020 for injuries that occurred in 2017.
Legal Authority for This Rule
Based on section 731 of the NDAA, this rule finalizes in Title 32
of the Code of Federal Regulations a new part 45, Medical Malpractice
Claims by Members of the Uniformed Services. Title 10 U.S.C. 2733a(f)
sets forth the required contents of the rule. This rule describes the
claims process, which includes: the claimant's submission of
information to initiate a medical malpractice claim; the claimant's
response to an adjudicator's request for new information required to
substantiate the claim or to determine damages; an Initial
Determination issued by DoD; the opportunity for a claimant to seek
reconsideration of damage calculations in the case of clear error; and,
in most cases, the opportunity for a claimant to file an administrative
appeal.
Claims will be adjudicated based on uniform national standards
consistent with generally accepted standards used in a majority of
States in adjudicating claims under the Federal Tort Claims Act (FTCA),
28 U.S.C. 2671 et seq., without regard to the place where the Service
member received medical care.
Discussion of Comments and Changes
An interim final rule was published in the Federal Register (86 FR
32194-32215) on June 17, 2021. Comments were accepted for 60 days until
August 16, 2021. A total of 93 comments were received. Summaries of the
comments and the Department's responses are below. In the first
section, we address general or overarching comments. In the sections
that follow, we address comments related to specific portions of the
regulation. The Department's responses are based not just upon the
public comments but also upon the Department's experience with
processing claims under the interim final rule. DoD will engage in an
iterative regulatory process as it continues to receive and process
medical malpractice claims. DoD will review this rule on a periodic
three-year cycle in accordance with departmental retrospective review
requirements.
General
The Department received a number of comments that were outside of
the scope of the interim final rule.
Some comments included or consisted of personal narratives from
Service members or their family members about specific medical care
received from DoD. To the extent these individuals or their
representatives believe that malpractice occurred, they may follow
procedures in the final rule to submit a claim for adjudication.
A number of comments sought to have DoD establish an independent
review or appellate process by what was described as a disinterested
party or body or a third party, including review by a Federal court.
One commenter recommended review through a body similar to the
Independent Review Commission established by DoD to make
recommendations for addressing sexual assault. Some commenters linked
the lack of such a process with a lack of transparency. A law firm
recommended review of DoD's final decision by a court, such as the U.S.
Court of Appeals for Veterans Claims. Some commenters were concerned
DoD would not follow its own procedures or the law in the absence of
judicial review. Several commenters indicated that DoD would be able to
make unconstitutional decisions in the absence of court review.
Title 10 U.S.C. 2733a does not include a provision for third-party
or court review. Rather, the statute calls for the Secretary of Defense
to allow, settle, and pay covered medical malpractice claims. The
process established by the Department to implement Title 10 U.S.C.
2733a is intended to be non-adversarial. The Department has attempted
to minimize claimant costs by not requiring expensive expert reports up
front and affording claimants an opportunity to submit additional
evidence prior to denial of a claim and, if deemed meritorious, in
support of damages. The discussion below addresses adjustments made by
the Department in the final rule in response to comments to increase
the amount of information provided to claimants.
A few comments addressed DoD's Regulatory Analysis. One merely
described the analysis as bold without more. Another generally
described DoD's projections in unfavorable terms without making any
recommendations. Other comments recommended that the Government
Accountability Office investigate the number of deaths or disabilities
incurred in non-combat healthcare settings since the United States
Supreme Court decided Feres v. United States in 1950 in order to
accurately project the number of malpractice claims per year. A law
firm disputed DoD's estimate that seven claims a year would result in
payments, but provided no rationale. The same law firm also stated that
the estimated rates for attorneys and medical experts were ``grossly
underestimated'' and did not appear to be consistent with those
acknowledged in a majority of States, but again provided no information
that would inform revised estimates. Based on the comments received,
DoD is finalizing this section of the rule without changes.
A Member of Congress and some consumer advocacy groups requested
that DoD pause adjudication of medical malpractice claims until the
final rule has been issued. To have done so, however, would have been
contrary to 10 U.S.C. 2733a(f)(3), which required DoD to prescribe an
interim final rule.
Other comments outside the scope of the interim final rule were
comments about the adequacy of medical coverage and disability benefits
offered to the military through DoD and the Department of Veterans
Affairs (VA); a comment about VA forms; a comment about the cost of
life insurance; a comment about DoD's medical records system; a comment
about separations through the Disability Evaluation System that the
commenter believed were premature; a comment about the time taken by
DoD to issue the interim final rule; issues with the medical quality
assurance process and the Healthcare Resolutions Program; objections to
certain medical procedures performed by DoD; comments by a Service
members' organization regarding the development of the interim final
rule; timeliness of responses to requests under the Freedom of
Information Act; views about conditions contributing to malpractice
claims and the adequacy of funding appropriated by Congress to pay
claims; whether a rule about concurrent receipt of retirement and
disability pay was fair; and the DoD bureaucracy in general.
Some comments were general and therefore non-actionable, such as
one individual's general reference to bringing clarity to the interim
final rule without any specifics being provided. Other comments
referred generally to making changes to remove unspecified limits and
restrictions, non-specific concerns about transparency, and statements
that the interim final rule exceeded DoD's statutory authority without
specifics.
One comment included questions for DoD about the source of funds
used to pay claims and what statistics showed about the cost of
malpractice claims. Providing answers to these questions is not within
the scope of this regulatory process. We note that the sources of
funding are established by statute. A substantiated claim of up to
$100,000 will be paid directly to the claimant or the claimant's estate
by DoD. The Treasury Department will review and
[[Page 52448]]
pay claims that the Secretary of Defense values at more than $100,000.
Section 45.2 Claims Payable and Not Payable in General
Comment: One individual generally expressed concerns regarding the
inclusion of defenses available to the United States under the FTCA, 28
U.S.C. Chapter 171, in Section 45 .2. Several commenters suggested that
DoD could deny a claim by classifying a health care provider's decision
as ``discretionary.''
DoD Response: DoD made no changes. Certain exclusions from the FTCA
are included in Section 45.2 because they apply to claims under this
new authority as well. This includes the discretionary function
exemption, which generally bars claims challenging a discretionary
agency policy but would not bar claims under 10 U.S.C. 2733a involving
health care providers' choices that breach their professional duty of
care under Section 45.6. Section 45.2(f)(iii) lists examples of DoD
policy decisions to which the discretionary function exception applies,
including patient triage, disease prevention, and fitness for duty.
Comment: One individual sought a 50-year period in which to file
claims instead of the current two-year period and other individuals
sought to allow claims going back to 1950, the date of the U.S. Supreme
Court decision in Feres v. United States. One commenter proposed
allowing claims back to September 11, 2001.
DoD Response: Title 10 U.S.C. 2733a(b)(2) requires claims to be
presented to the Department in writing within two years after the claim
accrues. A claim accrues as of the latter of the date of the act or
omission by a DoD health care provider that is the basis of the
malpractice claim; or the date on which the claimant knew, or with the
exercise of reasonable diligence should have known, of the injury and
that malpractice was its possible cause.
Section 45.3 Authorized Claimants
Comment: A number of commenters sought to expand authorized
claimants to include derivative claims by family members or other third
parties, such as claims for loss of consortium. These comments
generally indicated that excluding derivative claims was contrary to
congressional intent. One individual expressed the view that the
interim final rule discriminated against these potential claimants,
thereby dis-incentivizing service in the Armed Forces. Consumer groups
and a lawyers' association commented that wrongful death claims by
family members are allowed in most, if not all, States. A lawyers'
association commented that the FTCA and non-Service member claims under
the Military Claims Act (MCA) allowed for derivative claims. A law firm
commented that Section 45.3 appeared to preclude claims by deceased
Service members as well as those Service members' families.
DoD Response: Title 10 U.S.C. 2733a(b)(1) only authorizes claims by
members of the uniformed services, including claims by the
representative of a deceased member of the uniformed services.
Members of the uniformed services and their representatives are
subject to the requirements of Title 10 U.S.C. 2733a(b)(1). Thus, the
final regulation does not permit derivative claims by family members or
other claims from third parties alleging a separate injury such as loss
of consortium as a result of harm to a member of the uniformed
services. Family members of uniformed service members who believe they
have been subjected to malpractice themselves may bring malpractice
claims under different statutory provisions--either the FTCA or, if
outside the United States, under the MCA.
Comment: Individuals, a law firm, and Service members'
organizations indicated that trainees and participants in the Delayed
Entry Program should be allowed to bring claims.
DoD Response: Title 10 U.S.C. 2733a(i)(3) requires the personal
injury or death to have occurred in Federal status for the claim to be
allowed under this provision. It does not include applicants or
recruits who have not yet been accessed into active duty.
Section 45.4 Filing a Claim
Comment: Multiple commenters, including individuals, Service
members' organizations, a law firm, a Veterans' organization, and
Members of Congress commented that DoD should allow discovery to allow
claimants to learn about their care and treatment. A Member of Congress
requested that DoD authorize limited discovery, including the
opportunity for claimants to interview or depose medical providers and
sought explicit authorization in this section for claims adjudicators
to conduct investigations in addition to accessing pertinent DoD
records. This Member of Congress indicated alternatively that claimants
be provided with the results of any interviews with health care
providers conducted by DoD. Two Members of Congress indicated the rule
should add a means by which claimants may submit questions they believe
a claims examiner should ask a health care provider in the course of
reviewing a claim and, to the extent possible, address those questions
in the explanation that is provided back to the claimant. An individual
made a comment to the effect that discovery promoted accountability.
Two commenters indicated that it was unfair that claimants' lawyers
could not obtain access to all of DoD's records regarding claimants'
medical treatment. A law firm commented that limiting claimants to
their own medical records and records obtained via public records
requests prevented claimants from discovering material evidence. An
individual made a comment suggesting that DoD limited an individual's
right to use counsel to obtain medical records and expressed concern
about the time to obtain those records. Some commenters sought access
to medical quality assurance records related to the healthcare provided
to the claimant. One individual commented that the process lacked
transparency because claimants would lack access to material that was
protected by privilege, such as information protected by attorney-
client privilege or medical quality assurance information.
DoD Response: Individuals, or their authorized representatives,
already m/ay obtain copies of records in DoD's possession that are part
of their personnel and medical records in accordance with the Privacy
Act of 1974, 5 U.S.C. 552a; DoD's Privacy Act regulation at 32 CFR part
310; and DoD Manual 6025.18, ``Health Insurance Portability and
Accountability Act (HIPAA) Privacy Rule in DoD Health Care Programs.''
\1\ Individuals may obtain copies of these records regardless of
whether they file a claim. Once a claim is filed, the rule allows
claimants to seek extensions of time for good cause shown if they are
having difficulty obtaining medical records to submit in support of
their claims. DoD modified the references in Section 45.4(e) to better
assist individuals in understanding their rights of access to and
amendment of their records.
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\1\ Available at <a href="https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodm/602518m.pdf?ver=2019-03-13-123513-717">https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodm/602518m.pdf?ver=2019-03-13-123513-717</a>.
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The administrative adjudication of claims under this authority was
intended to be non-adversarial. It is also consistent with the
administrative adjudication of claims under the MCA, 10 U.S.C. 2733.
Court-like discovery such as depositions and written interrogatories,
and even ``discovery-like'' processes such as informal interviews, are
contrary to that intent
[[Page 52449]]
and would cause the claims process to become adversarial and
protracted. DoD does not provide claimants with copies of expert
reports and interview summaries in MCA claims, but instead provides
claimants with the basis for the denial of a claim.
DoD agrees that claimants should be informed of the basis for an
offer of settlement or informed why their claim is denied. As discussed
more fully under Section 45.12: Initial and Final Determinations, in
response to comments about access to information, DoD has modified
Sections 45.12 and 45.13. DoD has added language to Sections 45.12 and
45.13 to ensure that claimants are provided with a meaningful basis for
an offer of settlement or are provided a meaningful explanation for the
denial of a claim that includes the specific basis for the denial.
DoD added language to paragraph 45.4(d) to include additional
actions that may be taken by DoD in connection with substantiating a
claim, such as interviews of health care providers.
DoD made no changes in response to the comment seeking medical
quality assurance information, as DoD may not lawfully disclose this
information in this context under 10 U.S.C. 1102.
Comment: A Veterans' organization commented that the administrative
process in the interim final rule may be difficult to navigate, with
different requirements depending on the type of injury. The Veterans'
organization suggested simplifying the process and suggested making
claims forms available online and allowing electronic filing.
DoD Response: DoD did not make any changes in the rule in response
to this comment, although DoD supports making the process as easy to
navigate for Service members as possible and can make changes that
would be helpful as DoD gains experience in processing claims.
Comment: A Veterans' organization indicated that the provision in
Section 45.4(d) that may require claimants to submit an expert opinion
in support of their claims placed an unnecessary and expensive burden
on Service members. The organization commented that if DoD needed
additional information, it should obtain an independent medical
opinion.
DoD Response: No changes were made in response to this comment.
Section 45.4(d) applies when DoD already believes it has all the
information necessary (which may include an expert opinion obtained by
DoD) and intends to deny the claim. This provision was intended to
spare claimants the expense of providing an expert report up front.
Instead, DoD will issue an Initial Determination explaining that DoD
intends to deny the claim and providing the claimant with the
opportunity to submit an expert report. DoD administratively removed
language in Section 45.4 referring to the interim final rule.
Section 45.5 Elements of a Payable Claim: Facilities and Providers
Comment: Several commenters believed that care that was outside of
a military medical treatment facility should be covered. Some indicated
that the limitation to care provided in military medical treatment
facilities overlooked care provided to Service members in other
contexts and that all situations in which medical care was provided
should be covered. A law firm indicated that malpractice claims should
be afforded to Service members in DoD confinement facilities.
DoD Response: No changes were made in response to these comments.
Title 10 U.S.C. 2733a(b)(3) requires the act or omission constituting
malpractice to have occurred in a covered military medical treatment
facility. Title 10 U.S.C. 2733a(i)(1) defines ``covered military
medical treatment facility'' as a facility described in 10 U.S.C.
1073d. These facilities are medical centers, hospitals, and ambulatory
care centers. DoD must limit claims to those covered under the
statutory definition.
Section 45.6 Element of Payable Claim: Negligent or Wrongful Act or
Omission
Comment: Individuals commented that DoD should have the burden of
proof when determining malpractice claims. These individuals also
commented that claims should be immediately paid in cases in which the
injury was determined to be a sentinel event by a regulatory agency,
the care was not administered according to evidence-based practice
guidelines, and where health care providers were practicing outside the
scope of the state in which they are licensed.
DoD Response: DoD made no changes in response to this comment.
Placing the burden of proof with DoD would be inconsistent with the
requirement in 10 U.S.C. 2733a(f)(2)(B) for DoD to adopt uniform
standards consistent with generally accepted standards used in a
majority of States. The rule generally addresses the standard of care
and indicates claimants may present evidence in support of their belief
that the standard of care was not met.
If DoD has already determined that the standard of care was not met
in a particular circumstance before a claim is filed, DoD would be able
to engage with the claimant to determine an appropriate amount to offer
in settlement without requiring any additional information to
substantiate the claim.
DoD would determine whether health care providers were acting in
furtherance of their duties in the military medical treatment facility.
Title 10 U.S.C. Section 1094(d) mandates that, notwithstanding any
State law regarding the licensure of health care providers, designated
licensed individual providers may practice their profession in any
location in any jurisdiction of the United States, regardless of where
the provider or patient is located, so long as the practice is within
the scope of the provider's authorized federal duties. This includes
telemedicine providers.
Comment: A Veterans' organization suggested clarifying the
reference to the preponderance of the evidence standard to advise
claimants that ``preponderance of the evidence'' requires providing
only that something is more likely than not. The Veterans' organization
cited several court cases with varying formulations of the law.
DoD Response: DoD did not make any changes in response to this
comment. Although ``preponderance of the evidence'' is a commonly-used
legal standard, as the comment itself illustrates, it is subject to
various descriptions and DoD does not believe it advisable to include
one particular formulation over another. After more experience in
adjudicating claims under this final rule, if it appears that a
definition is needed, DoD will revisit this.
Section 45.7 Element of Payable Claim: Proximate Cause
Comment: Individuals, Service members' organizations, a law firm,
and unions commented that DoD did not specify how it will calculate
damages based upon loss of chance or failure to diagnose claims and
what steps it will take to review claims in this regard.
DoD Response: DoD did not make any changes based on this comment.
The rule sets out general legal standards that must be applied in light
of the specific facts of each individual claim. The rule states that
the portion of harm attributable to the breach of duty will be the
percentage of chance lost in proportion to the overall clinical outcome
and that damages will be calculated based on this portion of harm.
Including more detail would be neither feasible nor appropriate.
DoD administratively modified the first sentence of Section
45.7(d)(2) to
[[Page 52450]]
read that ``DoD may consider medical quality assurance records''
instead of ``will consider'' for consistency with the second sentence
of Section 45.7(d)(2) which states that results of medical quality
assurance records ``may'' be considered.
Section 45.8 Calculation of Damages: Disability Rating
Comment: Individuals, a Service members' organization, a law firm,
and unions did not believe DoD should use disability ratings
established through the DoD Disability Evaluation System or by the VA
in calculating damages for medical malpractice claims on the grounds
that these are different systems. The law firm indicated that DoD did
not have authority to hold a claim in abeyance pending DoD or VA
disability determinations. An individual was concerned that disability
ratings may be inaccurate.
DoD Response: DoD did not make changes due to this comment. The
purposes for which these disability ratings and compensation will be
used is explained in the text of the rule. In short, disability ratings
and compensation are useful for purposes of assessing the extent of the
harm caused by the medical malpractice and in determining lost earning
capacity. DoD will only use these ratings if they are useful and
pertinent to the element of damages at issue. After more experience in
adjudicating claims under this final rule, if it appears that
disability ratings are not useful in assessing the extent of harm
caused by the medical malpractice and in determining lost earning
capacity, DoD will revisit this. DoD will review this rule on a
periodic three-year cycle in accordance with departmental retrospective
review. Congress gave DoD broad authority to issue regulations to
implement the claims process and, if a disability rating and
compensation are needed for purposes of assessing damages, holding the
claim in abeyance ensures these damages are calculated accurately.
Section 45.10 Calculation of Damages: Non-Economic Damages
Comment: A number of comments, including comments from individuals,
a law firm, unions, consumer groups, a Veterans' organization, and
Members of Congress, sought elimination of the cap on non-economic
damages. A number of individuals proposed an increase to $1,000,000 and
one individual proposed an increase to $3,000,000.
Commenters, including some Members of Congress, consumer groups,
and a lawyers' association commented that while a majority of States
capped non-economic damages in medical malpractice cases, an average of
the caps in these States did not account for the fact that other States
did not cap non-economic damages. Two Members of Congress commented
that some States had tiered or categorized caps that allowed higher
caps in cases involving severe injury or death and that DoD should
consider the higher limit in these systems. One Member of Congress
estimated that this would result in a limit of at least $800,000.
Members of Congress indicated the Department should factor in inflation
and should retroactively reopen and adjust those claims settled before
issuance of the final rule.
Several commenters interpreted the rule to mean that 26 states had
non-economic damage caps of $500,000 and indicated this was incorrect
based on their own research. One individual indicated the cap of
$500,000 was too low based on a description of an incident caused by
what the individual believes to have been medical malpractice. A law
firm and a lawyers' association indicated that the FTCA had no limit on
damages. The lawyers' association indicated that caps on non-economic
damages placed Service members at a disadvantage compared to those
whose damages were not capped under the FTCA or the MCA, are unfair to
Service members living in States with no cap, and did not adequately
compensate those with the most severe injuries. Consumer groups stated
that only 23 States have laws expressly capping non-economic damages in
medical malpractice cases and some States provide exceptions for
serious injury or death.
Consumer groups commented that caps on non-economic damages have a
disproportionate impact on women because of the types of injuries women
are likely to experience such as sexual or reproductive harm or
pregnancy loss.
DoD Response: After considering these comments, DoD increased the
cap on non-economic damages to $600,000. Title 10 U.S.C. 2733a(f)(2)(B)
requires the regulations prescribed by DoD to adjudicate claims based
on uniform national standards consistent with generally accepted
standards used in a majority of States in adjudicating claims under the
FTCA, 28 U.S.C. 2671 et seq., without regard to the place where the
Service member received medical care. This is a different standard from
the FTCA. Under the FTCA, 28 U.S.C. 2672 and 28 U.S.C. 1346(b)(1), the
law applied is the law of the place where the medical care was
provided. A majority of States, 29, have caps on non-economic damages
applicable in medical malpractice claims. The median of these caps is
approximately $500,000.
The cap of $600,000 represents DoD's best approximation of the
current average of the caps on non-economic damages in medical
malpractice cases in those States having caps and it is consistent with
the median amount. States have varying formulas for determining caps on
non-economic damages and the $600,000 cap takes into account current
state law in this regard. Some States periodically increase their non-
economic damage caps to account for inflation, and the final rule takes
these increases into account and retains the requirement for periodic
updates to the cap to account for inflationary increases.
Where a State had a higher cap for more serious injuries or death,
DoD used that cap, in an effort for balance with those States that
appeared to allow a higher, unspecified amount in cases involving more
serious injuries or death. Three States appear to have caps on
noneconomic damages that combine economic and non-economic damages
together under one cap. For these States, DoD used one-half the total
cap in the calculation of the average on the assumption that cases
involving more serious injuries or death likely would have greater
economic damages, eroding the amount available for non-economic
damages. Commenters did not provide a basis for calculating the
proposed $1,000,000 or $3,000,000 caps. DoD cannot arbitrarily adopt a
proposed cap unsupported by an articulable legal basis for doing so
and, in any event, must apply generally accepted standards used in a
majority of States.
DoD did not modify the interim final rule to allow reopening and
adjustment of claims settled before publication of the final rule to
apply the higher damages cap. Congress required the interim final rule
in 10 U.S.C. 2733a(f)(3) ``in order to implement expeditiously'' the
provisions of that section and was aware claims might be settled before
the final rule was issued. There is no basis for reopening settled
claims under 10 U.S.C. 2733a, which does not permit DoD to pay claims
unless the amount tendered is accepted by the claimant in full
satisfaction.
Comment: Two Members of Congress and a Veterans' organization
commented that the current elements of non-economic damages should be
expanded beyond the listed elements to a wider range of non-economic
categories recognized elsewhere in tort law, such as for emotional
distress and loss of consortium. The Veterans' organization commented
that it was unclear if ``physical disfigurement''
[[Page 52451]]
extends to all forms of physical impairment and recommended a catchall
phrase to incorporate ``other non-financial losses'' it stated were
recoverable in a majority of States.
DoD Response: DoD did not change the interim final rule as a result
of these comments. The rule already defines ``past and future conscious
pain and suffering'' broadly to include ``mental and emotional trauma
or distress'' and ``loss of enjoyment of life.'' The definition of
``physical impairment'' likewise mirrors a definition used for MCA
claims, set forth at 32 CFR 536.77. As derivative claims are not
permitted under 10 U.S.C. 2733a(b)(1), damages for loss of consortium
are inapplicable. DoD did not add a catchall phrase. A catchall phrase
in this context could lead to confusion or improper awards of damages
given the requirement in 10 U.S.C. 2733a for uniform standards
consistent with generally accepted standards used in a majority of
States.
Section 45.11 Calculation of Damages: Offsets for DoD and VA
Compensation
Comment: A number of commenters, including individuals, law firms,
a union, Service members' organizations, consumer groups, a lawyers'
association, a Veterans' organization, and some of the Members of
Congress who submitted comments sought to limit or eliminate offsets
from potential malpractice damage awards for other compensation paid by
the United States for the same harm. Some made comments to the effect
that offsets for military benefits such as TRICARE and disability could
leave Service members with little compensation for the injuries they
have suffered and may discourage claims. Some commenters questioned
DoD's authority to make offsets and noted that 10 U.S.C. 2733a does not
explicitly reference offsets. A law firm indicated that the offsets
removed incentives for improvement and accountability. Another law firm
noted that the process under this rule was a non-adversarial
administrative claim process involving DoD, and not a tort claim
against the United States under the FTCA, so offsets should not be
applied. Multiple commenters mentioned the collateral source rule in
connection with offsets. A law firm commented that several of the
offsets, such as Active Duty pay, housing allowance, and TRICARE, did
not appear related to malpractice and including them was unfair. An
individual made a similar comment.
Individuals, Service members' organizations, and unions,
referencing the collateral source rule, indicated that DoD should award
the cost of health care services provided or paid for by DoD or the VA
as part of economic damages. The Service members' organization believed
not doing so would discourage Service members from filing claims. A
lawyers' association stated that courts had found the amounts of future
medical payment. such as from TRICARE indeterminable. An individual and
a lawyers' association indicated that individuals might not want to
receive care from government health care providers for the injuries
they sustained. One commenter was concerned about TRICARE's solvency
and ability to cover a Service member's lifetime medical needs. Another
commenter was concerned that Service members would have issues with
obtaining needed care through TRICARE or the VA and that the VA might
not approve needed benefits or might not approve benefits in a timely
fashion. A commenter believed it would eliminate work for DoD if DoD
eliminated offsets versus periodically conducting a review of offsets
for purposes of making changes.
Several commenters erroneously questioned the inclusion of
Servicemembers Group Life Insurance (SGLI) payments as an offset.
Several commenters believed that offsets could limit a Service member
from getting benefits to which that Service member was entitled and
another believed that the compensation system would involve
``recouping'' benefits paid by the VA. A commenter incorrectly seemed
to suggest that DoD would assume remarriage for purposes of determining
offsets.
One commenter questioned whether the fact that the non-exhaustive
listings of programs that did or did not offset potential malpractice
damage awards would allow claimants to know what was included and
thought this might be difficult to ascertain.
A lawyers' association commented that the government should bear
the burden of proof with respect to offsets.
DoD Response: DoD did not make changes to this section, other than
adding that the government is responsible for determining offsets, with
claimants required to provide information not available to DoD but
requested by DoD for this purpose. Both the interim and final rule
provide for offsets from potential malpractice damage awards from
compensation paid or expected to be paid by DoD or the VA for the same
harm that was caused by the medical malpractice. These offsets are
necessary so that the United States does not pay more than once for the
same injury. Given that there is no third party involved in providing
benefits other than the United States, the collateral source rule is
not applicable.
Moreover, as explained in the preamble to the interim final rule,
Federal law provides a comprehensive system of compensation for
military members and their families in cases of death or disability
incurred in military service. This system applies to all causes of
death or disability incurred in service, whether due to combat
injuries, training mishaps, motor vehicle accidents, naturally
occurring illnesses, household events, or malpractice with limited
exceptions (e.g., when the member is absent without leave or the injury
is due to the member's intentional misconduct or willful negligence). A
medical malpractice claim under this part will have no effect on any
other compensation the member or family is entitled to under this
comprehensive compensation system. A chart in the Regulatory Analysis
provides examples of benefits to which Service members are entitled
under this system.
Nothing in the rule precludes Service members in any way from
receiving benefits to which they are entitled. SGLI is listed
specifically in Section 45.11(g) as a payment and benefit that is not
an offset from economic and non-economic damages. It was not included
as an offset because it is a benefit for which Service members have
paid premiums. Nothing in the rule would permit ``recoupment'' of
benefits already provided to Service members. The rule also states that
DoD will not assume remarriage with respect to any lifetime payments or
benefits that may terminate upon the remarriage of a surviving spouse.
Finally, but most importantly, DoD has a robust Clinical Quality
Management Program which operates independently of medical malpractice
claims by Service members or others (under DoD Instruction (DoDI)
6025.13 \2\ and Defense Health Agency Procedural Manual 6025.13 \3\) to
assess the quality of health care services, identify areas where
improvements can be made, and ensure appropriate accountability.
---------------------------------------------------------------------------
\2\ DoDI 6025.13, ``Medical Quality Assurance (MQA) and Clinical
Quality Management in the Military Health System (MHS),'' February
17, 2011, Incorporating Change 2 on April 1, 2020, is available at
<a href="https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/602513p.pdf?ver=2019-03-11-081734-313">https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/602513p.pdf?ver=2019-03-11-081734-313</a>.
\3\ Defense Health Agency Procedural Manual, ``Clinical Quality
Management in the Military Health System,'' June 27, 2022, is
available at <a href="https://health.mil/Reference-Center/Policies?query=6025.13&isDateRange=0&broadVector=000&newsVector=0000000&refVector=000000000100000&refSrc=1">https://health.mil/Reference-Center/Policies?query=6025.13&isDateRange=0&broadVector=000&newsVector=0000000&refVector=000000000100000&refSrc=1</a>.
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[[Page 52452]]
With regard to the comment that the listings of programs that did
or did not offset potential malpractice damage awards was not all-
inclusive, an illustrative list was included in the rule because
benefit programs are numerous and are subject to frequent changes by
law or regulation. The rule allows for a process. DoD contemplates a
process for determining damages that involves exchanges of information
to ensure accuracy, so claimants would be informed about those damages
during that time or through Initial or Final Determinations.
Section 45.12 Initial and Final Determinations
Comment: In connection with a comment about discovery, a law firm
commented that the government should be required to produce all
evidence that it relied upon in making its decision, as well as any
evidence that supports claimant's allegations of negligence. The law
firm also commented that a ``meaningful explanation,'' supported by
findings of fact and conclusions of law should be provided for any
claim that is denied versus a ``brief explanation for the denial of the
claim to the extent practicable.'' A Veterans' organization requested
removing ``to the extent practicable'' and instead requiring a brief
statement of the basis for any denial. Individuals commented that there
was no mechanism to ascertain whether DoD reviewed the records it
should have reviewed. A number of commenters sought more information in
initial and final determinations and appeals for purposes of
transparency.
DoD Response: DoD agrees that claimants should be informed of the
basis for an offer of settlement or informed why their claim is denied.
In response to comments about discovery and access to information
generally, DoD has modified Sections 45.12 and 45.13. DoD modified
Sections 45.12 and 45.13 to change ``brief'' to ``meaningful,'' so that
a meaningful explanation of the basis for an Initial Determination
denying a claim will be provided, including the specific basis for the
denial. Although this was implied in the interim final rule, DoD also
added language requiring that a meaningful basis for an offer of
settlement be provided. Explanations will be subject to laws pertaining
to disclosure of information, as discussed in the Supplementary
Information related to Section 45.4.
Comment: A law firm recommended adjusting the amount of time to
cure a deficiency following receipt of an initial determination to 90
days instead of 30 days. Similarly, the law firm recommended affording
Service members 90 days instead of 60 days to request reconsideration
and to appeal. The law firm further recommended a provision requiring
DoD to confirm Service member receipt of Initial Determinations.
DoD Response: The final rule provides 90 days to cure a deficiency
instead of 30 days and allows 90 days instead of 60 days to request
reconsideration and to appeal. Extending the time to cure a deficiency
is consistent with DoD's intent for a claimant-friendly process that
provides ample opportunity for Service members or their representatives
to provide information in support of their claims and reduces the need
for DoD to process requests for extension.
DoD did not adopt a requirement for DoD to confirm receipt of
Initial Determinations. The interim final rule adopted a presumption of
receipt for the convenience of both the Service member and DoD and to
provide flexibility with respect to delivery methods. The interim final
rule adopted a lenient standard for overcoming the presumption: the
date of receipt is presumed to be five calendar days after mailing or
emailing unless there is evidence to the contrary.
Although DoD may elect to use a delivery method confirming receipt,
email ``return receipts'' are not always reliable and certified mail
may be inconvenient for Service members who are not at home when
delivery is attempted. A presumption of receipt establishes a clear and
fixed date for calculating time and reduces administrative burden. A
presumption of receipt is consistent with practices in some other
judicial and administrative bodies, such as the Federal courts \4\ and
the Merit Systems Protection Board.\5\
---------------------------------------------------------------------------
\4\ Rule 5(b) of the Federal Rules of Civil Procedure provides
that service is complete upon mailing or by emailing (unless the
email does not reach the person to be served). <a href="https://www.uscourts.gov/rules-policies/current-rules-practice-procedure/federal-rules-civil-procedure">https://www.uscourts.gov/rules-policies/current-rules-practice-procedure/federal-rules-civil-procedure</a>.
\5\ Under 5 CFR 1201.22(b)(3), correspondence that is properly
addressed and sent to the appellant's address via postal or
commercial delivery is presumed to have been duly delivered to the
addressee. The presumption may be overcome by the circumstances of a
particular case.
---------------------------------------------------------------------------
Even though DoD is not adopting a requirement to confirm receipt of
delivery, in response to the comment, DoD revisited the length of time
for presumption of delivery. The United States Postal Service is
changing its target for first class mail delivery from 1-3 days to 1-5
days.\6\ DoD accordingly increased the time for presumption of receipt
from five to seven calendar days after an Initial Determination was
mailed or emailed. DoD also clarified in Sections 45.12(c)(1) and
45.13(a) that the time period for action begins to run upon receipt by
the claimant or the claimant's representative.
---------------------------------------------------------------------------
\6\ <a href="https://crsreports.congress.gov/product/pdf/IN/IN11776">https://crsreports.congress.gov/product/pdf/IN/IN11776</a>.
---------------------------------------------------------------------------
DoD administratively added language in Section 45.12(a)(1) to
clarify that it is the DoD Component that issued the Initial
Determination that acts on requests for extension of time relating to
deficient filings. DoD also administratively added language to Section
45.12(d)(4) to clarify that the DoD Component that issued the Initial
Determination will review alleged clear error in connection with
requests for reconsideration. These changes make it clear that these
processes are not conducted by the Appeals Board.
Comment: A law firm sought the opportunity for claimants to have a
virtual hearing, noting that Boards for Correction of Military Records
rarely afford a hearing and, in the law firm's view, lacked due process
as a result. A Member of Congress also commented that claimants should
be afforded a hearing, whether in person or virtual, to better capture
the claimants' full experiences, particularly with respect to pain and
suffering.
DoD Response: The claims process was intended to be easy to
navigate and non-adversarial. A hearing would unduly increase manpower,
cost, and administrative burdens on the Department and would cause
undue disruption in the delivery of health care and medical readiness.
It would also cause the proceedings to become adversarial in nature and
increase the decision time and expense for both the Service member and
the Department. Service members may submit any evidence in any form
they wish and, particularly with respect to damages, back-and-forth
engagement is contemplated to ensure the Department has full and
accurate information from which to make a determination.
DoD administratively clarified in Section 45.12(c)(1) that it is
the DoD Component which issued the Initial Determination that grants an
extension of time for good cause.
45.13 Appeals
Comment: One individual commented that DoD should allow for an
appellate process and another commented there was no right of appeal.
DoD Response: No changes were made as a result of this comment. The
rule at Section 45.13 establishes an appeals process. To the extent
these comments were seeking an appellate process outside of DoD, this
is
[[Page 52453]]
addressed in the section titled ``General,'' above.
Comment: Individuals, Service members' organizations, a Veterans'
organization, and unions sought the opportunity to submit additional
evidence in support of a claim on appeal. Some stated that the
inability to submit additional evidence on appeal affected the
opportunity for a fair assessment of the claim. The Veterans'
organization indicated additional information might become available or
that claimants' medical conditions may change, noting that the VA's and
the Social Security Administration's administrative processes allow for
new evidence on appeal. The Veterans' organization linked this comment
to a lack of a discovery mechanism in the rule. A Member of Congress
commented that claimants should be afforded a hearing on appeal to
provide an actual opportunity to be heard if they are dissatisfied with
the earlier disposition of their claims. Another Member of Congress
indicated that a hearing on appeal imparted more information than could
be captured in written statements and allowed traumatic experiences to
be heard and acknowledged. A law firm stated that the opportunity for
an oral presentation was used in what it characterized as almost every
other non-adversarial claims process used by the Federal government.
DoD Response: DoD did not change the rule to permit additional
evidence to be submitted on appeal. DoD modified Sections 45.12 and
45.13, adding language to ensure that claimants are provided with a
meaningful basis for an offer of settlement or with a meaningful
explanation for the denial of a claim that includes the specific basis
for the denial. Claimants have ample opportunity to provide any
information they wish at the Initial Determination stage. When a
claimant initially does not submit an expert report in support of his
or her claim and DoD intends to deny the claim, DoD will provide a
meaningful explanation for the intent to deny the claim that includes
the specific basis for the denial and provides the claimant with an
opportunity to submit an expert report. Appellate review limited to the
record below is consistent with procedures in many other appellate
bodies, such as the Federal courts of appeal.
Comment: Some commenters stated that there was no transparency on
who is going to sit on the Appeals Board, such as whether members are
medical experts, legal experts, or Commanding Officers, and were
concerned that Appeals Board members would not fully consider the
record in an unbiased manner.
DoD Response: In response to the comments, DoD modified the rule to
indicate that the Appeals Board is comprised of attorneys, in addition
to the current language indicating that Appeals Board members are
comprised of DoD officials who are ``experienced in medical malpractice
claims adjudication'' and who ``have not had any previous role in the
claims adjudication under appeal.'' In part in response to concerns
about timeliness, and in part as an administrative matter, DoD adjusted
the final rule to increase the number of Appeals Board members and
allow for panels of members. This will permit more appeals to be
considered simultaneously in light of the requirement that an Appeals
Board member considering a claim not have had a previous role in
adjudicating the claim.
DoD administratively clarified in Section 45.13(a) that it is the
DoD Component which issued the Initial Determination that grants an
extension of time for good cause and not the Appeals Board.
45.15 Other Claims Procedures and Administrative Matters
Comment: A law firm and two Members of Congress commented that the
rule should include a timeline for DoD to process claims, in part so
claimants would have some sense of how long they would need to wait and
to give DoD a benchmark for progress.
DoD Response: This comment was not adopted. Unlike other statutes,
10 U.S.C. 2733a does not provide a right to go to court after a certain
period of time. Similar to other adjudicative processes, too many
variables preclude a reliable estimate. DoD has structured a process
designed to allow claimants the time necessary to present information,
including seeking extensions of time for good cause shown. DoD has
expanded some time frames in the final rule in a manner favorable to
claimants in response to comments. Exchanges of information,
particularly with respect to damages, will take time in complex cases.
DoD believes putting estimates in the final rule that turn out to be
unrealistic for any number of reasons will only lead to claimant
frustration. DoD is committed to adjudicating claims in a timely manner
and will continue to endeavor to do so.
Comment: A Veterans' organization sought to include a requirement
for DoD to respond to records requests within 45 days because claims
must be presented within two years of accrual and because records may
be needed to submit a viable claim.
DoD Response: This comment was not adopted. Responses to records
requests are governed by processes outside of this rule. Moreover, DoD
has established a process which requires very little information to be
submitted at the time a claim is filed, with opportunities to submit
additional evidence during the Initial Determination phase.
Comment: A Member of Congress requested that the rule be clarified
to ensure that those issuing Initial Determinations and the attorneys
advising them have expertise in medical malpractice and receive
specialized training related to the military medical system.
DoD Response: DoD did not include language in the final rule on
this topic, as these are matters internal to DoD and related to the
regulation of the practice of law within DoD. Nonetheless, DoD shares
the Member of Congress' interest in ensuring quality decisions are made
by persons with appropriate training and expertise.
Comment: One commenter suggested that there be dedicated points of
contact for Service members and their representatives to contact about
their claims. DoD did not make changes to the rule based on this
comment, as this can be addressed outside the rule, such as by
including points of contact on communications about the claim.
DoD Response: DoD administratively modified Section 45.15(f) to
state that the phrase ``DoD Components'' may include, but is not
limited to, Military Departments.
Regulatory Analysis
The public comments received were not relevant to the RIA;
therefore, DoD is finalizing the RIA with no further revisions.
a. Executive Order 12866, ``Regulatory Planning and Review,'' and
Executive Order 13563, ``Improving Regulation and Regulatory Review''
Executive Orders 13563 and 12866 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health. and safety effects; distribution of impacts; and equity).
Executive Order 13563 emphasizes the importance of quantifying both
costs and benefits, of reducing costs, of harmonizing rules, and of
promoting flexibility. This final rule has been determined to be a
significant regulatory action, although
[[Page 52454]]
not economically significant. Accordingly, it has been reviewed by the
Office of Management and Budget as required by these Executive Orders.
b. Summary
This interim final rule implements requirements of the NDAA for
Fiscal Year 2020 permitting members of the uniformed services or their
authorized representatives to file claims for personal injury or death
caused by a DoD health care provider in certain military medical
treatment facilities. Because Federal courts do not have jurisdiction
to consider these claims, DoD is issuing this rule to provide uniform
standards and procedures for considering and processing these actions
administratively.
c. Affected Population
At the end of Fiscal Year 2019, there were approximately 1,400,000
Active Duty, 390,000 Reserve and National Guard, and 250,000 other
uniformed Service members eligible for DoD healthcare benefits or
around 19% of the total eligible beneficiary population. These
uniformed Service members will be able to file claims with DoD alleging
malpractice. There were approximately 8,140,000 other eligible
beneficiaries to include retirees, retiree family members, and family
members of Active Duty Service members. These other eligible
beneficiaries currently may file claims with DoD alleging malpractice.
d. Costs
As a result of the rule, individuals who believe they were
subjected to malpractice may consider filing a claim. In determining
whether to file a claim, individuals may consult with medical
professionals and attorneys and we assume that most claimants will have
attorneys. We estimate that this will require 5 hours for individuals
to locate an attorney, view and download pertinent medical records, and
discuss the case with an attorney (or a medical professional for
claimants without attorneys). At a mean hourly rate of $27.07 based on
data from the Bureau of Labor Statistics (BLS), the cost of this
activity is $135.
The cost for a consultation with a medical professional, whether
directly by the claimant or through an attorney varies by the type of
professional. Based upon information available from consultations and
reports obtained in malpractice claims against the government and
estimates of time spent by DoD in similar activity when handling those
claims, we estimate a typical review of records would take about 3 to 5
hours (and include reviewing journals in support of the professional's
opinion), with an additional 2 to 4 hours to write a report (if such a
report is submitted with a claim, which is not required). The
Department will assume for purposes of this analysis that the same type
of professional would be consulted as the professional against whom the
malpractice is alleged (e.g., a doctor providing an opinion about the
standard of care if a doctor is alleged to have committed malpractice).
Most medical malpractice claims are brought on a contingent fee basis
so there is no initial cost to the claimant. Based on similar claim
analysis activity in handing malpractice claims, we estimate an
attorney might spend 17-26 hours analyzing a claim before filing. We
use BLS data to value time spent by these individuals, and we adjust
mean wage rates upward by 100 percent to account for overhead and
benefits. This implies hourly rates of $206.12 for physicians, $76.94
for nurses, $111.62 for physician assistants, and $143.18 for lawyers.
As a result, the estimated cost for medical review would be
approximately $231 to $1,855, and the estimated cost for attorney time
would be approximately $2,434 to $3,723.
The cost to a Service member or an authorized representative for
the filing itself will vary based on the amount of information the
Service member includes with his or her filing. A basic letter stating
the factual basis for the claim and including a demand for a specified
dollar amount would cost the claimant postage ($0.55 per claim, or
$27.50 for an estimated 50 claims) and possibly minimal photocopying.
Claimants will likely choose to use certified mail, requiring
additional postage of $3.35 per claim (or $167.50 for an estimated 50
claims per year). Two affidavits are likely required, one containing a
statement from the claimant indicating he or she consulted with a
health care professional and obtained an opinion from that health care
professional that the medical standard of care was breached and one
affirming that a representative is authorized to represent the
claimant. Those entitled to legal assistance under 10 U.S.C. 1044 (such
as Active Duty Service members, retired Service members, and survivors)
would be able to obtain notarial services at no cost. Most likely,
those filing claims would fall into one of these categories and so
could obtain notarial services at no cost. However, this rule results
in societal costs associated with these notarial services. We estimate
that notarial services will require the equivalent of 20 minutes of
paralegal time. Using BLS data, and adjusting upward by 100 percent to
account for overhead and benefits to arrive at an hourly rate of $54.44
implies $18.14 in costs per claim. Finally, although not required, a
claimant could submit any other information he or she chooses, which
would result in a variable cost. DoD assumes that pertinent medical
records outside its system would be fairly recent and could be accessed
via web portals, resulting in a cost to the claimant of only the cost
of printing and postage. If the claimant elects to submit receipts, the
claimant would need to pay the cost of printing or photocopying, as
well as postage.
In 2020, DoD received 149 malpractice claims filed by Active Duty
beneficiaries under the process in this part and 173 malpractice claims
filed by other beneficiaries under either the FTCA or MCA. Section
2733a(b)(4) requires claims to be presented to DoD within two years
after the claim accrues, although section 731 of the Fiscal Year 2020
NDAA allowed claims accruing in 2017 to be filed in 2020. In future
years, when three years' worth of claim filings are not compressed in
the same year and the requirement for consultation with a health care
professional in certain circumstances in advance of filing takes
effect, DoD would anticipate around 50 claims per year. Based on
information related to malpractice claims not filed after
consideration, we estimate that 90% of the claims considered by
individuals and their attorneys will not be filed. As a result, we
estimate that 500 claims will be considered, and that 50 claims will be
filed by Service members per year.
The categories of costs for considered claims are described above.
In sum, we estimate costs of $2,822 to $5,735 per claim. This implies
total costs of $1,401,102 to $2,857,602 each year for considered
claims.
Next, we estimate costs associated with processing claims. Many
steps in processing a claim will be the same for DoD whether or not the
claim has merit. Based on activity in non-medical malpractice claims,
we anticipate 3 hours of paralegal time for activities such as logging
in claims, sending acknowledgment letters, mailing certified letters
containing the outcome of a claim, drafting vouchers for payment, and
filing/data entry. Assuming a GS-11 paralegal at the step 5 salary rate
of $81,634 based on the 2020 Washington, DC, locality pay table (an
hourly rate of $39.12) and the total value of labor including wages,
benefits, and overhead being equal to 200 percent of the wage rate, the
cost for this
[[Page 52455]]
paralegal activity per claim is $234.72. We estimate that the
approximately same amount of time that a claimant's attorney would
spend analyzing a claim (17-26 hours of attorney time) would be spent
by DoD attorneys to analyze the claim, conduct legal research, consult
with experts, and draft a determination. Assuming a GS 13/14 at an
average GS 13/14 salary of $127,788 based on the 2020 Washington, DC,
locality pay table (an hourly rate of $61.23) and the total value of
labor including wages, benefits, and overhead being equal to 200
percent of the wage rate, this attorney activity would cost $2,081 to
$3,184 per claim.
Of these 50 claims, for purposes of this analysis, based on
historical malpractice claims data involving non-Service members, we
assume 27% of claimants will have claims for which DoD determines
malpractice occurred, or 14 claims. For these claims, based on time
spent by DoD on the damages portion of current malpractice claims
against the government, DoD estimates claimants' attorneys and DoD
attorneys will spend 6-8 hours respectively on matters pertaining to
damages. This results in a cost per claim of $859 to $1,145 for
claimants' attorneys and $748 to $997 for DoD attorneys.
Of submitted claims, DoD estimates that claimants will appeal all
claims that do not result in a payment of damages, resulting in 36
appeals annually. Note that this is described in more detail in the
transfers section. We estimate it will take around the same amount of
time spent on initial determination activities for appeal activities,
or 17-26 hours per claim for both claimants' attorneys (at a cost of
$2,434 to $3,723) and DoD attorneys (at a cost of $2,081 to $3,184) and
3 hours per claim by DoD paralegals (at a cost of $235). This implies
total annual costs of $171,000 to $257,112 for appeals.
As a result, we estimate total annual processing costs for these 50
claims to be $309,284 to $458,036.
In summary, total estimated annual costs of this interim final rule
are $1,710,386 to $3,315,638.
e. Transfers
Regardless of the number of claims in which malpractice occurred,
the only claims in which damages will be awarded are those which exceed
the offsets for any payment to be made. Subject to some exceptions such
as insurance benefits for which Service members have paid premiums,
benefits received through the DoD and VA comprehensive compensation
system applicable to all injuries and deaths will be applied as an
offset in calculating malpractice damages to prevent a double recovery.
Because of these offsets, regardless of the number of claims filed, the
only claims pertinent for purposes of payments made by the government
are those that would exceed applicable offsets.
We estimate 7 claims per year will result in additional payments
made to individuals, which is the number of claims anticipated to
involve additional payments after offsets are applied. To help explain
how we reached this estimate, we prepared the following tables as
notional examples to illustrate what benefits are available under the
existing comprehensive compensation system, both those that are offset
and those that are not, and the value of these benefits in Fiscal Year
2020. In addition to the benefits in the above tables, disability
retirees and survivors receive healthcare for life through TRICARE. In
Fiscal Year 2020, based on information from the Office of the Assistant
Secretary of Defense for Health Affairs, the average value of the
TRICARE benefit for an under-65 retiree family of three was $14,600 per
year. Benefits provided through the Social Security Administration,
such as Social Security disability benefits and Social Security
survivor benefits, are also in addition to the above tables.
Calculations in the tables were provided by the Office of Military
Compensation Policy, within the Office of the Under Secretary of
Defense for Personnel and Readiness.
BILLING CODE 5001-06-P
[[Page 52456]]
[GRAPHIC] [TIFF OMITTED] TR26AU22.001
[[Page 52457]]
[GRAPHIC] [TIFF OMITTED] TR26AU22.002
[[Page 52458]]
[GRAPHIC] [TIFF OMITTED] TR26AU22.003
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\7\ In these tables, ``O-5'' refers to an officer grade; ``E-4''
to an enlisted grade.
\8\ Amount shown is annual. The spouse SBP annuity is 55% of
what retired pay would have been had the member retired with a full
disability retirement on the date of his or her death. SBP is
adjusted annually for cost-of-living. The amount reflected is for
2020 and assumes the spouse receives the full amount of SBP. SBP is
subject to offset if the spouse also receives DIC (only for the
portion of DIC payable to the spouse. If SBP is paid to the children
instead of the spouse, there is no offset but the annuity ends when
all children reach the age of majority).
\9\ Basic Monthly Rate for 2020 is $1,340.14 plus $332.00 per
child age 18 or younger. $16,081 is payable as DIC for the spouse
which is offset against SBP.
\10\ SSIA is only received if SBP is reduced by the amount of
DIC. If children receive SBP in full while the spouse receives DIC,
no SSIA is paid.
\11\ The total payout for the spouse of the E-4 is higher than
that for the E-6 because the spouse is 7 years younger, but both
live until age 87.
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[[Page 52459]]
[GRAPHIC] [TIFF OMITTED] TR26AU22.004
[[Page 52460]]
[GRAPHIC] [TIFF OMITTED] TR26AU22.005
[[Page 52461]]
[GRAPHIC] [TIFF OMITTED] TR26AU22.006
BILLING CODE 5001-06-C
We estimate that 7 claims per year would have damages that would
exceed the offset amount of $1.1 million. We used the notional example
in Table 2(d), the lowest of the estimates in the notional examples, as
the basis for the $1.1 million offset. For the Table 2(b) example of
the married enlisted member with two children in the grade of E-6 who
is medically retired with a 50 percent disability rating, the current
value of her lifetime compensation would be $1,142,430. In addition to
the $1,142,430 paid, benefits include medical care for the retired
Service member and her family. All these amounts would offset any
damages award.
---------------------------------------------------------------------------
\12\ For simplicity of calculation, each member is assumed to
have 12 months of service ``over 8 years'' and 24 months of service
``over 6 years'' in the same paygrade they currently hold, with a
retirement date of December 31, 2019. Prior to retirement, each
member was covered under the High-3 retirement program.
\13\ For members who entered service prior to January 1, 2018,
the applicable multiplier is 2.5 percent unless the member elected
to opt into the Blended Retirement System or elected the Career
Status Bonus and converted to the REDUX retirement program. For
these examples, all members are assumed to have remained under the
legacy ``High-3'' retirement program with a 2.5 percent multiplier.
\14\ Rates for veteran + spouse + child + additional child at
<a href="https://www.benefits.va.gov/COMPENSATION/resources_comp01.asp#BM05">https://www.benefits.va.gov/COMPENSATION/resources_comp01.asp#BM05</a>.
---------------------------------------------------------------------------
We then estimated the number of claims likely to exceed $1.1
million using claims data from non-Service member claims under the FTCA
or MCA. In 2019 and 2020, the Military Departments had 14 claims from
retirees or dependents under the FTCA or MCA with damages that exceeded
$1.1 million, whether through settlement or an adverse court judgment.
The average amount payable for these 14 claims over 2 years was
approximately $2.7 million. In one year, therefore, we estimate that 7
claims by Service members would go forward that exceed the $1.1 million
threshold for payable damages. Assuming 7 claims per year going forward
exceeding $1.1 million, and average damages of $1.6 million (the
difference between the average amount of $2.7 million paid per claim in
the non-Active Duty claims and the estimated $1.1 million in offsets
per Service member claim), the additional payments made by the U.S.
Government because of section 731 are estimated to be $11.2 million per
year. Of this, the first $100,000 for each claim would be paid by DoD
and the remainder paid by the Treasury Department, for an estimated
total of $0.7 million to be paid by DoD based on 7 claims and $1.05
million to be paid by the Treasury Department.
As the tables above illustrate, Government paid benefits would not
be a factor, as this claims process would have no impact on what the
benefits Service member is already receiving, has received, or is
entitled to receive in the future based on his or her injuries.
Total transfers from the U.S. government to claimants are estimated
to be $11.2 million per year.
f. Benefits
Absent the claims process established by section 731, Service
members would not have the opportunity for potential monetary payments
above the amounts they currently receive through current DoD and VA
benefits. In addition to providing an additional potential compensation
remedy, the claims process reinforces DoD Clinical Quality Management
Program procedures for appropriate accountability of DoD health care
providers. National Practitioner Data Bank (NPDB) reporting includes
cases where DoD compensation is paid through the Disability Evaluation
System or survivor benefits attributable to medical malpractice by a
DoD health care provider and now, under this part, paid malpractice
claims. Reports to the NPDB are accompanied by reports to State
licensing boards and certifying agencies of the health care providers
involved. The claims process further provides an opportunity for DoD to
identify opportunities for improvement in the delivery of healthcare,
potentially preventing harm to others based upon measures taken by DoD
as a result of a claim even if the claim does not result in the payment
of monetary damages. Finally, this process is only applicable in
certain cases of medical malpractice.
[[Page 52462]]
Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this final
rule as not a major rule, as defined by 5 U.S.C. 804(2).
Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)
This final rule is not subject to the Regulatory Flexibility Act (5
U.S.C. 601) because it is not a notice of proposed rulemaking under 5
U.S.C. 601(2).
Assistance for Small Entities
This final rule does not impose requirements on small entities.
Section 202, Public Law 104-4, ``Unfunded Mandates Reform Act''
Section 202 of the Unfunded Mandates Reform Act of 1995 (2 U.S.C.
1532) requires agencies to assess anticipated costs and benefits before
issuing any rule whose mandates require non-Federal spending in any one
year of $100 million in 1995 dollars, updated annually for inflation.
This final rule does not mandate any requirements for State, local, or
tribal governments, nor affect private sector costs.
Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 35)
It has been determined that this final rule does not impose new
reporting or recordkeeping requirements under the Paperwork Reduction
Act of 1995.
Executive Order 13132, ``Federalism''
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. This final rule does not have a substantial effect on
State and local governments.
List of Subjects in 32 CFR Part 45
Medical, Malpractice, Claims, Uniformed Services.
Accordingly, the interim final rule adding 32 CFR part 45 which was
published at 86 FR 32194-32215 on June 17, 2021 is adopted as a final
rule with the following changes:
PART 45--MEDICAL MALPRACTICE CLAIMS BY MEMBERS OF THE UNIFORMED
SERVICES [AMENDED]
0
1. The Authority for part 45 continues to read as follows:
Authority: 10 U.S.C. 2733a.
0
2. Amend Sec. 45.4 by revising paragraphs (b)(5), (d), and (e) to read
as follows:
Sec. 45.4 Filing a claim.
* * * * *
(b) * * *
(5) If the claimant is not represented by an attorney, unless the
alleged medical malpractice is within the general knowledge and
experience of ordinary laypersons, an affidavit from the claimant
affirming that the claimant consulted with a health care professional
who opined that a DoD health care provider breached the standard of
care that caused the alleged harm. Alternatively, if the claimant is
represented by an attorney, unless the alleged medical malpractice is
within the general knowledge and experience of ordinary laypersons, the
claim must include an affidavit from the attorney affirming that the
attorney consulted with a health care professional who opined that a
DoD health care provider breached the standard of care that caused the
alleged harm.
* * * * *
(d) Substantiating the claim. Under section 2733a(b)(6), DoD is
allowed to pay a claim only if it is substantiated. The claimant has
the burden to substantiate the claim by a preponderance of the
evidence. Upon receipt of a claim, DoD may require that the claimant
provide additional information DoD believes is necessary for
adjudication of the claim, including the submission of an expert
opinion at the claimant's expense. DoD may determine an expert opinion
is not necessary when negligence is within the general knowledge and
experience of ordinary laypersons, such as when a foreign object is
unintentionally left in the body or an operation occurred on the wrong
body part. DoD may take other steps necessary to adjudicate the claim
accurately, including conducting interviews of health care providers.
(e) No discovery. There is no discovery process for adjudication of
claims under this part. However, claimants may obtain copies of records
in DoD's possession that are part of their personnel and medical
records in accordance with the Privacy Act of 1974, 5 U.S.C. 552a;
DoD's Privacy Act regulation at 32 CFR part 310; and DoD Manual
6025.18, ``Health Insurance Portability and Accountability Act (HIPAA)
Privacy Rule in DoD Health Care Programs.'' Claimants are not entitled
to attorney work product, attorney-client privileged communications,
material that is part of a DoD Quality Assurance Program protected
under 10 U.S.C. 1102, pre-decisional material, or other privileged
information.
0
3. Amend Sec. 45.7 by revising paragraph (d)(2) to read as follows:
Sec. 45.7 Element of payable claim: proximate cause.
* * * * *
(d) * * *
(2) DoD may consider medical quality assurance records relevant to
the health care provided to the patient. DoD's Clinical Quality
Management Program features reviews of many circumstances of clinical
care. Results of any such reviews of the care involved in the claim
that occurred before or after the claim was filed may be considered by
DoD in the adjudication of the claim. As required by 10 U.S.C. 1102,
DoD medical quality assurance records are confidential. While such
records may be used by DoD, any information contained in or derived
from such records may not be disclosed to the claimant.
0
4. Amend Sec. 45.10 by revising paragraph (c) to read as follows:
Sec. 45.10 Calculation of damages: non-economic damages.
* * * * *
(c) Cap on non-economic damages. In any claim under this part,
total non-economic damages may not exceed a cap amount. The current cap
amount is $600,000. Updates to cap amounts in subsequent years will be
published periodically, consistent with changes in prevailing amounts
in the majority of the States with non-economic damages caps.
* * * * *
0
4. Amend Sec. 45.11 by revising paragraph (a) to read as follows:
Sec. 45.11 Calculation of damages: offsets for DoD and VA Government
compensation.
(a) In general. Total potential damages calculated under this part,
both economic and non-economic, are reduced by offsetting most of the
compensation otherwise provided or expected to be provided by DoD or VA
for the same harm that is the subject of the medical malpractice claim.
The general rule is that prospective medical malpractice damage awards
are offset by DoD or VA payments and benefits that are primarily funded
by Government appropriations. However, there is no offset for U.S.
Government payments and benefits that are substantially funded by the
military member. DoD is responsible for determining offsets, but
claimants must provide information not available to DoD, but requested
by DoD for the purpose of determining offsets.
* * * * *
[[Page 52463]]
0
5. Amend Sec. 45.12 by revising paragraphs (a)(1), (c), (d)(2), and
(d)(4) to read as follows:
Sec. 45.12 Initial and Final Determinations.
* * * * *
(a) * * *
(1) DoD will provide the claimant 90 calendar days following
receipt of the Initial Determination to cure the deficiency, unless an
extension of time is granted for good cause by the DoD Component which
issued the Initial Determination. The date of receipt of the Initial
Determination will be presumed to be seven calendar days after the date
the Initial Determination was mailed or emailed, unless there is
evidence to the contrary.
* * * * *
(c) Denial of claim--absence of an expert report. Where applicable,
if the claimant initially does not submit an expert report in support
of his or her claim and DoD intends to deny the claim, DoD will issue
an Initial Determination stating that DoD will issue a Final
Determination denying the claim in the absence of an expert report or
manifest negligence. DoD will provide a meaningful explanation for the
intent to deny the claim that includes the specific basis for the
denial.
(1) DoD will provide the claimant 90 calendar days following
receipt of the Initial Determination by the claimant or, if the
claimant is represented, by the claimant's representative, to submit an
expert report, unless an extension of time is granted for good cause.
The date of receipt of the Initial Determination will be presumed to be
seven calendar days after the date the Initial Determination was mailed
or emailed, unless there is evidence to the contrary.
(2) If the claimant does not timely submit an expert report, DoD
will issue a Final Determination denying the claim. A Final
Determination issued under this paragraph (c) may not be appealed.
(d) * * *
(2) The Initial Determination may be in the form of a certified
letter and/or an email. The Initial Determination may take the form of
a grant of a claim and an offer of settlement or a denial of the claim.
Subject to applicable confidentiality requirements, such as 10 U.S.C.
1102, privileged information, and paragraph (a) of this section, DoD
will provide a meaningful basis for an offer of settlement or will
provide a meaningful explanation for the denial of a claim that
includes the specific basis for the denial.
* * * * *
(4) The claimant may request reconsideration of the damages
calculation contained in an Initial Determination if, within the time
otherwise allowed to file an administrative appeal, the claimant
identifies an alleged clear error--a definite and firm conviction that
a mistake has been committed--in the damages calculation. The DoD
Component that issued the Initial Determination will review the alleged
clear error and will issue an Initial Determination on Reconsideration
either granting or denying reconsideration of the Initial Determination
and adjusting the damages calculation, if appropriate. The Initial
Determination on Reconsideration will include information on the
claimant's right to appeal under the procedures in Sec. 45.13.
0
6. Amend Sec. 45.13 by revising paragraphs (a), (b), and (d)(1) to
read as follows:
Sec. 45.13 Appeals.
(a) In general. This section describes the appeals process
applicable to Initial Determinations under this part, which include
Initial Determinations on Reconsideration. With the exception of
Initial Determinations issued under Sec. 45.12(a), in any case in
which the claimant disagrees with an Initial Determination, the
claimant has a right to file an administrative appeal. The claimant
should explain why he or she disagrees with the Initial Determination,
but may not submit additional information in support of the claim
unless requested to do so by DoD. An appeal must be received within 90
calendar days of the date of receipt of the Initial Determination by
the claimant or, if the claimant is represented, the claimant's
representative, unless an extension of time is granted for good cause
by the DoD Component that issued the Initial Determination. The date of
receipt of the Initial Determination will be presumed to be seven
calendar days after the date the Initial Determination was mailed or
emailed, unless there is evidence to the contrary. If no timely appeal
is received, DoD will issue a Final Determination.
(b) Appeals Board. Appeals will be decided by an Appeals Board
administratively supported by the Office of the General Counsel,
Defense Health Agency. Although there may be, in DoD's discretion,
multiple offices that initially adjudicate claims under this part (such
as offices in the Military Departments), there is a single DoD Appeals
Board. The Appeals Board will consist of DoD attorneys designated by
the Defense Health Agency from that agency and/or the Military
Departments who are experienced in medical malpractice claims
adjudication. Appeals Board members must not have had any previous role
in the claims adjudication under appeal. The Appeals Board will
consider cases in panels designated by the General Counsel of the
Defense Health Agency of not fewer than three and no more than five
Appeals Board members. Appeals are decided on a written record and
decisions will be approved by a majority of the members. There is no
adversarial proceeding and no hearing. There is no opposing party. The
Appeals Board may obtain information or assessments from appropriate
sources, including from the claimant, to assist in deciding the appeal.
The Appeals Board is bound by the provisions of this part and will not
consider challenges to them.
* * * * *
(d) * * * (1) Every claimant will be provided a written Final
Determination on the claimant's appeal. The Final Determination may
adopt by reference the Initial Determination or revise the Initial
Determination, as appropriate. If the Final Determination revises the
Initial Determination, DoD will provide a meaningful explanation of the
basis for the revisions.
* * * * *
0
7. Amend Sec. 45.15 by revising paragraph (f) to read as follows:
Sec. 45.15 Other claims procedures and administrative matters.
* * * * *
(f) Authority for actions under this part. To ensure consistency
and compliance with statutory requirements, supplementation of the
procedures in this part is not permitted without approval in writing by
the General Counsel of the Department of Defense. The General Counsel
of the Department of Defense, under DoD Directive 5145.01, ``General
Counsel of the Department of Defense,'' may delegate in writing
authority for making Initial and Final Determinations, and other
actions by DoD officials under this part. As used in this part, and at
DoD's discretion, ``DoD'' or ``DoD Components'' may include, but is not
limited to, Military Departments.
Dated: August 22, 2022.
Patricia L. Toppings
OSD Federal Register Liaison, Department of Defense.
[FR Doc. 2022-18314 Filed 8-25-22; 8:45 am]
BILLING CODE 5001-06-P
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This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.