In the world of personal injury litigation, where settlements can make or break a client’s future well-being, coordination of benefits is no longer a side issue, it’s central to protecting your client’s recovery. For veterans, military retirees, and their families, that complexity multiplies when Medicare, TRICARE, or VA benefits overlap. Once you add a client’s injury recovery to the mix, personal injury firms must be careful to avoid compliance pitfalls, reimbursement demands, and potential denial of care.
So how do these benefit systems interact and why does it matter for your client?
The Basics:
TRICARE, TRICARE for Life, and benefits under the Department of Veterans Affairs (VA) provide essential health care coverage to military service members, veterans, and their families, but they serve different populations and have distinct features. TRICARE primarily offers health care to active-duty service members and their dependents under the age of 65. It provides a range of services including medical, dental, and mental health care through various plans like TRICARE Prime and TRICARE Select. In contrast, TRICARE for Life is a premium-free health care program specifically for Medicare-eligible military retirees and their dependents, which acts as a secondary payer to Medicare and enhances benefits by covering additional services not fully addressed by Medicare. On the other hand, benefits under the VA focus on providing comprehensive health care to veterans with a variety of services, including specialized care for service-connected injuries and conditions. While TRICARE emphasizes readiness and access for currently active military personnel, TRICARE for Life reinforces support for older veterans with Medicare coverage, and VA benefits cater primarily to those who have discharged from military service. Each program is tailored to meet the unique needs of its respective beneficiaries, highlighting the complexities of health care available to those who have served in the U.S. Armed Forces.
Who Pays First?
Understanding the payer hierarchy is critical. Medicare, Tricare, and the VA all have distinct rules about who pays when:
- TRICARE acts as a secondary payer to Medicare. If your client has both, Medicare pays first, and TRICARE picks up what’s left, as long as the service is covered under TRICARE.
- VA benefits, however, are not health insurance. The VA provides care for service-connected conditions, often outside the coordination rules that apply to Medicare or TRICARE.
- Medicare is always the primary payer when used with TRICARE, unless the medical condition is service-connected, in which case the VA may take priority.
When a PI settlement enters the equation, things get trickier. Now Medicare’s rights under the Medicare Secondary Payer Act (MSP) come into play, potentially triggering obligations, even if other programs are involved.
Why This Matters in the Personal Injury Context
When a veteran or military retiree is injured and receives a settlement, failing to coordinate correctly between these programs can lead to:
- Duplicate payment recovery demands from Medicare, VA, or TRICARE
- Denial of future Medicare-covered care
- Compromised client recoveries
- Malpractice exposure to the trial attorney
Even more critical, Medicare may conditionally pay for treatment related to the injury, expecting reimbursement once the settlement is finalized. But if TRICARE also pays or the VA is involved, lawyers must untangle the web of who owes what and when.
Practical Example
Let’s say your client is a 68-year-old military retiree with TRICARE and Medicare. They were injured in a motor vehicle accident and treated at a civilian hospital. Medicare pays first; TRICARE covers the balance. The VA is uninvolved unless the injury is tied to military service.
When a settlement is reached, Medicare will seek reimbursement for conditional payments made for injury-related care. But here’s the catch: if TRICARE also paid, there may be a duplicate demand, or worse, a confusing mismatch in what each program believes is owed.
Without a coordinated lien resolution process, your client could be stuck repaying more than required or face future coverage denials.
What About VA?
If care was rendered at a VA facility for a service-connected condition, VA is usually primary, and Medicare/TRICARE may not be involved. But if the injury is not service-connected, Medicare steps in, and the VA may bill the client directly.
The VA also asserts its own lien rights under 38 U.S.C. § 1729, meaning it may demand reimbursement from the PI settlement. These claims are governed by different rules than Medicare and must be negotiated separately—something many lien resolution vendors miss.
Why This is Important to Trial Lawyers
Ignoring or making mistakes regarding these coordination rules can:
- Jeopardize the client’s future care
- Delay disbursement of settlement funds
- Invite government recovery actions
- Create financial exposure for your firm
Worse, failure to account for the VA, TRICARE, or Medicare’s role in paying for care can result in missed reimbursement demands or post-settlement denial of care, problems that could have been avoided with proper coordination.
How We Help
At Synergy, we’ve seen too many cases where failure to understand TRICARE, VA & Medicare benefit coordination has been costly and exposed firms to unnecessary risk. Our team handles the nuanced resolution of VA liens, TRICARE liens, and conditional Medicare payments to protect everyone involved. We believe trial lawyers and their teams should be focused on getting justice, not deciphering overlapping federal benefits. That’s where our expertise comes in.
Final Thought
If your client has any combination of Medicare, TRICARE, or VA benefits, don’t assume that standard Medicare coordination applies. Each program has its own rules, and they don’t always play nicely together. Engage an expert early. Know who paid what. And protect your client’s recovery by engaging experts before funds are disbursed.
Contact Synergy today. Our team of MSP compliance experts can resolve even the most complicated scenarios, so you don’t have to worry.
Written by: Rasa Fumagalli JD, MSCC, CMSP-F | Director of MSP Compliance at Synergy.
