[Federal Register Volume 86, Number 115 (Thursday, June 17, 2021)]
[Rules and Regulations]
[Pages 32194-32215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-12815]


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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: Interim final rule.

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SUMMARY: This interim final rule implements 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 (DoD) health care providers s 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 interim final rule is in effect July 19, 2021. Comments 
must be received by August 16, 2021.

ADDRESSES: You may submit comments, identified by docket number and/or 
Regulatory Information Number (RIN) number and title, by any of the 
following methods:
    <bullet> Federal Rulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
    <bullet> Mail: The DoD cannot receive written comments at this time 
due to the COVID-19 pandemic. Comments should be sent electronically to 
the docket listed above.
    Instructions: All submissions received must include the agency name 
and docket number or RIN for this Federal Register document. The 
general policy for comments and other submissions from members of the 
public is to make these submissions available for public viewing at 
http://www.regulations.gov as they are received without change,

[[Page 32195]]

including any personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT: Melissa D. Walters, (703) 681-6027, 
<a href="/cdn-cgi/l/email-protection#dfb2bab3b6acacbef1bbf1a8beb3abbaadacf1bcb6a99fb2beb6b3f1b2b6b3"><span class="__cf_email__" data-cfemail="b8d5ddd4d1cbcbd996dc96cfd9d4ccddcacb96dbd1cef8d5d9d1d496d5d1d4">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

I. 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. 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 under $100,000 will be paid directly to the 
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 members to file claims in 2020 for injuries that occurred in 
2017.

II. Legal Authority for This Rule

    Based on section 731 of the NDAA, this rule adds to 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)(2)(A)(ii) 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.

III. Summary of Provisions Contained in This Rule

    This rule discusses who may file a claim (generally, a member of a 
uniformed service allegedly harmed incident to service by malpractice); 
what DoD health care providers may be involved (DoD personnel and 
personal services contractors acting within the scope of their 
employment or duties; where the malpractice must have occurred (in a 
``military medical treatment facility'' (MTF) (10 U.S.C. 1073d); how to 
file (a written request mailed to a Military Department-specific 
address); records DoD will consider (submissions presented by claimant 
and any available relevant government records and information otherwise 
available to DoD); who has the burden of proof (claimant must 
substantiate the claim); how to substantiate a claim; deciding what 
caused the alleged harm (DoD liability proportionate to harm 
attributable to DoD health care providers); use of final DoD or VA 
disability determinations if applicable; calculating economic damages 
(principally actual and future health care costs, costs associated with 
long term care and disability, and loss of future earnings); 
determining non-economic damages (including pain and suffering, up to a 
capped amount); and initial decision and administrative appeal 
procedures (a single DoD appeals board decides appeals on the written 
record as a whole). More detailed information is below.

Section 45.1 Purpose

    Section 45.1 explains the purpose of this part. It establishes the 
administrative process for adjudication of claims under the new 10 
U.S.C. 2733a, which was added to 10 U.S.C. by section 731 of the 
National Defense Authorization Act for Fiscal Year 2020. The current 
comprehensive compensation system that currently exists for military 
members and their families, when members are injured or die incident to 
service, applies to all causes of death or disability, whether due to 
combat injuries, training mishaps, motor vehicle accidents, naturally 
occurring illnesses, 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). The new law provides for the 
possibility of additional compensation beyond that provided by this 
comprehensive compensation system for personal injury or death of a 
military member caused by medical malpractice by a DoD health care 
provider in certain circumstances.
    Section 45.1 also notes that the new medical malpractice claims 
process is separate from the Military Health System Healthcare 
Resolutions Program.\1\ This existing program is an independent, 
neutral, and confidential system that promotes full disclosure of 
factual clinical information involving adverse events and outcomes, and 
mediation of clinical conflicts. The program is part of the Military 
Health System's commitment to transparency, which also includes a 
patient's right to be heard as part of any quality assurance review. To 
the extent a military member (or any other health care beneficiary) 
seeks to obtain more information about an adverse clinical event, the 
Healthcare Resolutions Program continues to be a valuable resource 
independent of any legal process or claims system. However, the 
Healthcare Resolutions Program is not involved with claims or legal 
matters. Thus, when a patient files a malpractice claim, under Sec.  
45.1 Healthcare Resolutions Specialists disengage from further patient 
communications related to the events associated with the claim.
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    \1\ https://health.mil/Reference-Center/Policies/2019/06/18/Healthcare-Resolutions-Disclosure-Clinical-Conflict-Management-and-HCP.
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Section 45.2 Claims Payable and Not Payable in General

    Section 45.2 provides some of the terms rendering claims payable 
and not payable. This section also covers the time for filing claims, 
generally within two years after the claim accrues. For claims filed in 
calendar year 2020, the time for filing was expanded to three years. 
Because 10 U.S.C. 2733a(b)(4) prescribes the time period for filing 
claims, state statutes of limitation or repose are inapplicable. 
Consistent with 10 U.S.C. 2733a(g), there is a limitation on the amount 
of attorney's fees or expenses. The adjudication of claims under this 
authority is not an adversarial proceeding, there is no prevailing 
party to be awarded costs, and there is no judicial review. The 
settlement and adjudication of medical malpractice claims of members of 
the uniformed services is final and conclusive per 10 U.S.C. 2735.

[[Page 32196]]

    A claim under this regulation is payable only if it may not be 
settled or paid under any other law, including the FTCA per Title 10 
U.S.C. 2733a(b)(5). Claims are adjudicated based on generally accepted 
standards used in a majority of States in adjudicating claims under the 
FTCA without regard to the place where the service member received 
medical care per Title 10 U.S.C. 2733a(f)(2)(B). In adjudicating 
claims, DoD will make every effort to determine the applicable law 
adopted by the majority of States (at least 26 States).
    Certain exclusions that are part of FTCA law apply to claims under 
this new authority as well. These exclusions include the discretionary 
function exception, which generally bars any claim challenging a 
discretionary agency policy. Another FTCA exclusion that is applicable 
to claims under this part is the combatant activities exception, 
although only in extremely unusual circumstances such as an attack on a 
military hospital. It should be noted, however, that the FTCA exception 
regarding any claim arising in a foreign country is not applicable to 
claims under this part. Title 10 U.S.C. 2733a(f)(2)(B) refers to such 
claims as covered by the new authority.

Section 45.3 Authorized Claimants

    Section 45.3 discusses who may file a medical malpractice claim. As 
provided in the statute, the claim must be filed by the member of the 
uniformed services who is the subject of the medical malpractice claim, 
or by an authorized representative on behalf of a member who is 
deceased or otherwise unable to file the claim due to incapacitation 
per Title 10 U.S.C. 2733a(b)(1). A claim may be filed by or on behalf 
of a reserve component member if the claim is in connection with 
personal injury or death occurring while the member was in a Federal 
duty status. 10 U.S.C. 2733a(i)(3). The statute only authorizes claims 
by members of the uniformed services. Thus, the regulation does not 
permit derivative claims or other claims from third parties alleging a 
separate injury as a result of harm to a member of the uniformed 
services. Additionally, medical malpractice claims from members must be 
for an injury incident to service per 10 U.S.C. 2733a(a). For members 
on active duty, almost any injury or illness arising out of medical 
care received at a MTF by a DoD health care provider is considered 
incident to service. Medical care provided to a service member based on 
military status is incident to service.

Section 45.4 Filing a Claim

    Rules for filing a claim are addressed in Sec.  45.4. A member of a 
uniformed service or, when applicable, an authorized representative, 
may file a claim. Any written claim will suffice provided that it 
includes the following: (a) The factual basis for the claim, which 
identifies the conduct allegedly constituting malpractice (e.g., theory 
of liability and/or breach of the applicable standard of care); (b) a 
demand for a specified dollar amount; (c) signed by the claimant or 
claimant's duly authorized agent or legal representative; (d) if the 
claim is filed by an attorney, an affidavit from the claimant affirming 
the attorney's authority to file the claim on behalf of the claimant; 
(e) if the claim is filed by an authorized representative, an affidavit 
from the representative affirming his/her authority to file on behalf 
of the claimant; and (f) 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 healthcare provider breached 
the standard of care that caused the alleged harm. This requirement for 
an affidavit at the time of filing the claim is consistent with the 
practice in a majority of States to require an expert report, expert 
affidavit, certification or affidavit of merit, or a similar 
requirement.
    While DoD is not requiring an expert opinion at the time of filing 
a claim, claimants may submit whatever information and documentation 
they believe necessary to support their claim, as claimants have the 
burden to substantiate their claims. As part of the investigation and 
evaluation of a claim, DoD will access pertinent DoD or other available 
government information systems and records regarding the member in 
order to consider fully all facts relevant to the claim. This may 
include information in personnel records, medical records, the Defense 
Eligibility and Enrollment System (DEERS), reports of investigation, 
medical quality assurance records, and other information. Upon DoD's 
request, a claimant must identify any pertinent health care providers 
outside of DoD and provide a copy of his or her medical records from 
each of the identified health care providers, including a statement 
that the records are complete. A claimant must provide a medical 
release or medical releases upon DoD's request, enabling DoD to obtain 
medical records from the identified health care providers.
    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. If DoD 
intends to deny a claim in which an expert opinion has not been 
submitted, prior to denying the claim, DoD will notify the claimant and 
provide the opportunity for submission of an expert opinion at the 
claimant's expense. DoD may determine an expert opinion is not required 
when allegations of medical malpractice are within the general 
knowledge and experience of ordinary laypersons, such as when a foreign 
object is improperly left in the body or an operation occurred on the 
wrong body part.
    There is no discovery process for adjudication of claims. However, 
claimants may obtain copies of records in DoD's possession that are 
part of their personnel and medical records in accordance with DoD 
Instruction 5400.11, ``DoD Privacy and Civil Liberties Programs''; \2\ 
and DoD Instruction 6025.18, ``Health Insurance Portability and 
Accountability Act (HIPAA) Privacy Rule Compliance in DoD Health Care 
Programs.'' \3\ Claimants are not entitled to attorney work product, 
attorney client privileged communications, material that are medical 
quality assurance records protected under 10 U.S.C. 1102, predecisional 
material, or other privileged information.
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    \2\ Available at https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/540011p.pdf?ver=gM7QU0FeRs8wMwzFXS8uSA%3d%3d.
    \3\ Available at https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/602518p.pdf?ver=2019-03-13-125803-017.
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Section 45.5 Elements of a Payable Claim; Facilities and Providers

    Section 45.5 covers one of the statutory elements of payable 
claims, stating that the health care involved occurred in a covered 
military medical treatment facility by a DoD health care provider 
acting within the scope of employment. As stated in the statute, the 
claimed act or omission constituting medical malpractice must have 
occurred in a DoD medical center, inpatient hospital, or ambulatory 
care center. A

[[Page 32197]]

claim may not be based on health care services provided by DoD health 
care providers in any other locations, such as in the field, battalion 
aid stations, ships, planes, deployed settings, or any other place that 
is not a covered MTF. With respect to covered DoD health care 
providers, they include members of the uniformed services, DoD civilian 
employees, and personal services contractors of the Department 
authorized by DoD to render health care services. A non-personal 
services contractor or a volunteer working in an MTF is not a DoD 
health care provider for purposes of a payable claim. Claims filed in 
court against non-personal services contractors and volunteers would be 
analyzed under the Feres doctrine. The DoD health care provider must be 
acting within the scope of employment, meaning that the provider was 
acting in furtherance of his or her duties in the MTF. For personal 
services contractors, ``scope of employment'' means the contractor was 
acting within the scope of his or her duties.

Section 45.6 Element of Payable Claim: Negligent or Wrongful Act or 
Omission

    Section 45.6 establishes rules for determining if a provider's act 
or omission was negligent or wrongful. In general, a claimant needs to 
prove by a preponderance of evidence that a DoD health care provider in 
a covered MTF acting within the scope of employment had a professional 
duty to the patient involved and by act or omission breached that duty 
in a manner that proximately caused the harm. The provider must 
exercise the same degree of skill, care, and knowledge ordinarily 
expected of providers in the same field or specialty in a comparable 
clinical setting. The standard of care is determined based on generally 
recognized national standards, not on the standards of a particular 
region, State or locality. A claimant may present evidence to support 
what the claimant believes is the standard of care. A claimant may 
present evidence to support the failure of the DoD health care provider 
to meet the standard of care based on the medical records of the 
patient and other documentary evidence of the acts or omissions of the 
health care provider.
    In addition to the information submitted by the claimant, DoD may 
consider all relevant information in DoD records and information 
systems or otherwise available to DoD, to include information prepared 
by or on behalf of DoD in connection with adjudication of the claim. 
DoD will consider medical quality assurance records relevant to the 
health care provided to the patient. 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.

Section 45.7 Element of Payable Claim: Proximate Cause

    Rules on determining whether the alleged malpractice was the 
proximate cause of the harm suffered by the member are the subject of 
Sec.  45.7. In general, a claimant must prove by a preponderance of 
evidence that a negligent or wrongful act or omission by a DoD health 
care provider was the proximate cause of the harm suffered by the 
member. DoD is liable for only the portion of harm that is attributable 
to the medical malpractice of a DoD health care provider per 10 U.S.C. 
2733a(c)(1). To the extent other causes contributed to the personal 
injury or death of the member, whether pre-existing, concurrent, or 
subsequent, the potential amount of compensation under this regulation 
will be reduced by that proportion of the alternative cause(s); 
however, if the claimant's own negligence constituted more than 50% of 
the fault, the claim is not payable.

Section 45.8 Calculation of Damages: Disability Rating

    Section 45.8 provides rules related to disability ratings and 
adjudication of these ratings under disability evaluation systems. DoD 
will use the disability rating established in the DoD Disability 
Evaluation System under DoD Instruction 1332.18 \4\ or otherwise 
established by the Department of Veterans Affairs (VA) to assess the 
extent of the harm alleged to have been caused by medical malpractice. 
A VASRD-based disability percentage represents the Government's 
estimate of the lost earning capacity attributable to an illness or 
injury incurred during military service.
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    \4\ Available at https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/133218p.pdf?ver=2018-05-24-133105-050.
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Section 45.9 Calculation of Damages: Economic Damages

    Calculation of economic damages, which are one component of a 
potential damages award, is the subject of Sec.  45.9. Elements of 
economic damages in personal injury claims are past expenses, including 
medical, hospital and related expenses actually incurred, and future 
medical expenses. Also covered are lost earnings, loss of earning 
capacity, and compensation paid to a person for essential household 
services and activities of daily living that the member can no longer 
provide for himself or herself.

Section 45.10 Calculation of Damages: Non-Economic Damages

    Non-economic damages are also covered as outlined in Sec.  45.10. 
Elements of non-economic damages in medical malpractice cases consist 
of past and future conscious pain and suffering, physical 
disfigurement, and loss of enjoyment of life. Consistent with the rule 
of law in a majority of States, total non-economic damages may not 
exceed a cap amount. Based on the current average cap amount in those 
States, the total cap amount for all non-economic damages arising from 
the malpractice is set at $500,000.

Section 45.11 Calculation of Damages: Offsets for DoD and VA 
Compensation

    Section 45.11 provides that in the calculation of damages there is 
a deduction for compensation paid or expected to be paid by DoD or VA 
to the service member for the same harm that is caused by the medical 
malpractice. Tort damage awards against the U.S. are generally offset 
by other compensation paid by the U.S. for the same harm that is the 
subject of a malpractice claim so that the U.S. does not pay more than 
once for the injury.
    This section lists categories of compensation that are included as 
offsets to potential malpractice damages awards when that compensation 
relates to harm caused by the act or omission involved, including: Pay 
and allowances while a member remains on active duty or in an active 
status; disability retired pay; disability severance pay; 
incapacitation pay; involuntary and voluntary separation pays and 
incentives; death gratuity; housing allowance continuation; Survivor 
Benefit Plan; VA disability compensation; VA Dependency and Indemnity 
Compensation; Special Survivor Indemnity Allowance; Special 
Compensation for Assistance with Activities of Daily Living; Program of 
Comprehensive Assistance for Family Caregivers; and the Fry 
Scholarship. Also included is an offset of the value of TRICARE 
coverage, including TRICARE-for-Life for a disability retiree, family, 
or survivors. Future TRICARE coverage is a major part of the 
Government's compensation package for a disability retiree or survivor. 
Potential malpractice awards are not offset by the present value of 
some payments and benefits for which Service members have made payments 
or contributions, which would be difficult to quantify,

[[Page 32198]]

including Servicemembers Group Life Insurance; Traumatic Servicemembers 
Group Life Insurance; Social Security disability benefits; Social 
Security survivor benefits; prior Government contributions to a Thrift 
Savings Plan that are inherited by a beneficiary; and commissary, 
exchange, and morale, welfare, and recreation facility access; the 
value of legal assistance and other services provided by DoD. Medical 
care provided while in active service or in an active status prior to 
death, retirement, or separation is also not offset.
    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, tables below in the 
section titled, ``Impact to the Government,'' provide notional examples 
of benefits available under the existing comprehensive compensation 
system during Fiscal Year 2020.
    DoD will estimate the present value of future payments and 
benefits. Many of such payments and benefits in cases of death and 
disability are lifetime benefits for members or survivors. With respect 
to future compensation and benefits that would change if a surviving 
spouse remarries, DoD will not assume remarriage.

Section 45.12 Initial and Final Determinations

    Section 45.12 provides rules for provision to claimants of an 
Initial Determination regarding the claim. The Initial Determination 
may take the form of a grant of a claim and an offer of settlement or 
denial of the claim.
    If a claim does not contain the information required by Sec.  
45.4(b), DoD will issue an Initial Determination stating that DoD will 
issue a Final Determination denying the claim unless the deficiency is 
cured. DoD will provide the claimant 30 calendar days following receipt 
of the Initial Determination to cure the deficiency, unless an 
extension of time is granted for good cause. If the claimant does not 
timely cure the deficiency, DoD will issue a Final Determination 
denying the claim for failure to cure the deficiency. A Final 
Determination issued under Sec.  45.12(a) may not be appealed.
    If a claim does not, based upon the information provided, state a 
claim cognizable under 10 U.S.C. 2733a or this interim final rule, DoD 
will issue an Initial Determination denying the claim. An Initial 
Determination on these grounds may be appealed under the procedures in 
Sec.  45.13.
    If the claimant initially does not submit an expert report in 
support of his or her claim, where applicable, and DoD intends to deny 
the claim, DoD will issue an Initial Determination stating, without 
more, that DoD will issue a Final Determination denying the claim in 
the absence of an expert report. DoD will provide the claimant 90 
calendar days following receipt of the Initial Determination to submit 
an expert report, unless an extension of time is granted for good 
cause. If the claimant does not timely submit an expert report, DoD 
will issue a Final Determination denying the claim, which may not be 
appealed, and will provide a brief explanation of the basis for the 
denial of the claim to the extent practicable.
    Except as provided above, DoD will endeavor to provide a brief 
explanation of the basis for an Initial Determination to the extent 
practicable. However, as required by 10 U.S.C. 1102, medical quality 
assurance records may not be disclosed to anyone outside DoD, to 
include the claimant, other Federal agencies, or the judiciary. This 
prohibition applies to any information derived from a peer review 
obtained under DoD's Clinical Quality Management (CQM) Program to 
assess the quality of medical care provided by a DoD health care 
provider. DoD has a very extensive CQM Program (under DoD Instruction 
6025.13 \5\ and Defense Health Agency Procedural Manual 6025.13) \6\ to 
assess the quality of health care services, identify areas where 
improvements can be made, and ensure appropriate accountability. The 
CQM Program includes a peer review of every potentially compensable 
event. DoD considers records of these reviews in determining whether 
there was a negligent or wrongful act or omission by a DoD health care 
provider in relation to the claim but may not lawfully disclose this 
information. Therefore, while DoD will attempt to explain the basis for 
the Initial Determination, DoD cannot disclose any information covered 
by 10 U.S.C. 1102.
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    \5\ 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 (whs.mil).
    \6\ https://health.mil/Reference-Center/Policies?query=6025.13&isDateRange=0&broadVector=000&newsVector=0000000&refVector=000000000100000&refSrc=1.
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    The Initial Determination will include information on the 
claimant's right to file an administrative appeal. The claimant may 
request reconsideration of the damages contained in an Initial 
Determination if, within the time otherwise allowed to file an 
administrative appeal, the claimant identifies an alleged clear error 
in the damages calculation. DoD 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.

Section 45.13 Appeals

    The issue of appeals from Initial Determinations is addressed in 
Sec.  45.13. In any case, other than a claim that is denied for failure 
to provide an expert report, in which the claimant disagrees with the 
Initial Determination, the claimant has a right to file an 
administrative appeal. A 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 filed within 60 calendar days of the date of the 
Initial Determination, unless an extension of time is granted for good 
cause. If no timely appeal is filed, DoD will issue a Final 
Determination.
    Under the new rule, appeals will be decided by an Appeals Board 
administratively supported by the Defense Health Agency. The Appeals 
Board will consist of not fewer than three and no more than five DoD 
officials designated by the Defense Health Agency from the Defense 
Health 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. 
Appeals are decided on the written record and decisions will be 
approved by a majority of the members. There is no adversarial 
proceeding and no hearing. The Appeals Board may obtain or request 
information or assessments from appropriate sources, including from the 
claimant, to assist in deciding appeals. The claimant has the burden of 
proof by a preponderance of evidence that the claim is substantiated in 
the written record considered as a whole. Every claimant will be 
provided a written Final Determination on the claimant's appeal, which 
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 brief explanation of the 
basis for the revisions to the extent practicable. Appeals Board 
decisions are final and conclusive. The Appeals Board may reverse the 
Initial Determination to

[[Page 32199]]

grant or deny a claim and may adjust the settlement amount contained in 
the Initial Determination either upwards or downwards, as appropriate.

Section 45.14 Final and Conclusive Resolution

    Section 45.14 states that, as provided in the statute, the 
adjudication and settlement of a claim is final and conclusive. Unlike 
the FTCA, the Military Claims Act, 10 U.S.C. chapter 163, which 
provides the authority for this regulation, does not give Federal 
courts jurisdiction over claims. Thus, the administrative adjudication 
process for all claims under the Military Claims Act, including medical 
malpractice claims under this part, is final and not subject to 
judicial review in any court. No claim may be paid unless the amount 
tendered is accepted by the claimant in full satisfaction. Settlement 
agreements will incorporate the statutory requirements regarding 
limitations on attorneys' fees, as well as a bar to any other claim 
against the United States or DoD health care providers arising from the 
same set of facts.

Section 45.15 Other Claims Procedures and Administrative Matters

    Finally, Sec.  45.15 sets out other claims procedures and 
administrative matters.
    If the claimant is represented by counsel, all communications will 
be through the claimant's counsel.
    Laws applicable to false claims and false statements to the 
Government are applicable to claims and information relating to claims 
under this new authority.
    This section also notes the requirement of 10 U.S.C. 2733a(e) that 
not later than 30 calendar days after a determination of medical 
malpractice or the payment of a claim, a report is sent to the 
Director, Defense Health Agency to be used for all necessary and 
appropriate purposes, including medical quality assurance. This means 
that DoD Final Determinations made under this new claims system--even 
if, due to offsets for compensation under the comprehensive system 
discussed above, no money is paid--will be reviewed under the Military 
Health System Clinical Quality Management Program, in accordance with 
DoD Instruction 6025.13 \7\ and Defense Health Agency Procedural Manual 
6025.13.\8\ That program features comprehensive activities to monitor 
the quality of health care in MTFs, identify opportunities for 
improvement, and maintain appropriate accountability for health care 
providers. That system includes procedures to grant and take specified 
adverse actions on clinical privileges and report certain events to the 
National Practitioner Data Bank (NPDB) maintained by the Department of 
Health and Human Services as a data repository available to health care 
systems throughout the United States.\9\ 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. 
Therefore, in addition to providing an additional potential 
compensation remedy, 10 U.S.C. 2733a reinforces DoD Clinical Quality 
Management Program procedures for appropriate accountability of DoD 
health care providers.
---------------------------------------------------------------------------

    \7\ Available at https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/602513p.pdf?ver=2019-03-11-081734-313.
    \8\ Available at https://health.mil/About-MHS/OASDHA/Defense-Health-Agency/Resources-and-Management/DHA-Publications.
    \9\ Available at https://www.npdb.hrsa.gov/.
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IV. What To Expect in the Claims Process

    a. Who may File a Claim. Service members or former/retired Service 
members (``you'') may file a claim. Your authorized representative may 
file a claim on your behalf if you are deceased or incapacitated. DoD 
will acknowledge receipt of your claim via mail and/or email using the 
contact information you provided in your claim.
    b. What to Include with a Claim. Your claim must provide, in 
writing, the reason why you believe a DoD health care provider 
committed malpractice and the amount of money you believe you should 
receive. No specific form or format is required.
    If you have an attorney, you need to include in your claim filing 
an affidavit confirming that you have authorized the attorney to 
represent you.
    You usually will need to provide an affidavit with your claim 
filing that you consulted with a health care professional who opined 
that a DoD health care provider breached the medical standard of care 
and caused harm to you. You do not need to provide this affidavit if 
the malpractice is obvious, such as an operation on the wrong body 
part.
    Because all claims differ, nothing else is required at the time you 
file your claim. DoD may find during the review of your claim that 
additional information is needed. DoD will ask you for this information 
at that time. You may, but are not required to, submit any other 
information that you believe supports your claim at the time you file 
it.
    c. Where to File a Claim. You should submit the claim to your 
Military Department.
    Army: Claims should be presented to the nearest Office of the Staff 
Judge Advocate, to the Center Judge Advocate of the Medical Center in 
question, or with US Army Claims Service, 4411 Llewellyn Avenue, Fort 
Meade, Maryland 20755, ATTN: Tort Claims Division.
    Navy: Information, directions and forms for filing a claim may be 
found at https://www.jag.navy.mil/. Claims should be mailed to the 
Office of the Judge Advocate General, Tort Claims Unit, 9620 Maryland 
Avenue, Suite 205, Norfolk, Virginia 23511-2949.
    Air Force: Claims should be presented either at the Office of the 
Staff Judge Advocate at the nearest Air Force Base, or sent by mail to 
AFLOA/JACC, 1500 W Perimeter Road, Suite 1700, Joint Base Andrews, MD 
20762. POC: Medical Law Branch, AFLOA/JACC 240-612-4620 or DSN 612-
4620.
    d. Time for Filing a Claim. Generally, you must file your claim by 
the later of (1) two years from the date of the injury or death; or (2) 
the date you knew, or with the exercise of reasonable diligence should 
have known, of the injury or death and that the possible cause of the 
injury or death was malpractice. A special rule existed in 2020 that 
allowed claims from 2017 to be filed in 2020, but that rule has 
expired.
    e. Initial Determination on Your Claim. Once you have filed your 
claim, DoD will locate medical records held by DoD and VA and review 
your claim to determine whether malpractice occurred.
    DoD may ask you for additional information about your medical care 
as part of this review. If DoD concludes that medical malpractice 
occurred, DoD may ask you for information about the harm to you as a 
result of malpractice to determine the amount of money you will be 
offered as a settlement. This amount of money is also called 
``damages.''
    If DoD intends to deny your claim and you have not yet submitted an 
expert report in support of your claim, DoD will provide you with an 
opportunity to submit one before denying your claim. You usually will 
have 90 days to provide an expert report.
    Once DoD has completed its review of your claim, you will be issued 
an Initial Determination. This Initial

[[Page 32200]]

Determination will either state that your claim is granted and offer 
you an amount of money in settlement of your claim or will state that 
your claim is denied.
    A settlement does not entitle you to any new benefits from DoD or 
the VA. A settlement will not cause you to lose any DoD or VA benefits, 
whether at the time of the settlement or in the future.
    f. Reconsideration. If DoD has made a clear error in the 
calculation of the amount of money you are offered to settle your 
claim, you may request reconsideration. A clear error is an obvious or 
typographical error, such as a reference to $10 when it is clear $100 
was intended. The reconsideration process was intended to fix minor 
issues without requiring you to file an appeal. You must file your 
request for reconsideration within 60 days of receipt of an Initial 
Determination. DoD will assume that you received the Initial 
Determination within five calendar days after the date the Initial 
Determination was mailed or emailed.
    g. Appeals. If you disagree with an Initial Determination, you 
generally may file an administrative appeal. Your appeal should explain 
why you disagree with the Initial Determination. You must file your 
appeal within 60 days of receipt of an Initial Determination. DoD will 
assume that you received the Initial Determination within five calendar 
days after the date the Initial Determination was mailed or emailed.
    You may not appeal a Final Determination issued because of 
deficiencies in your claim filing such as a missing affidavit or 
because DoD has determined you need to submit an expert report. You 
will have been given an opportunity to fix deficiencies or submit an 
expert report before the Final Determination is issued.
    Your appeal will be decided by an Appeals Board of three to five 
DoD officials who have experience with medical malpractice claims and 
have no prior connection to your claim.
    You may not submit additional information in support of your claim 
on appeal. DoD will ask you for additional information if it is needed.
    The Appeals Board will issue a Final Determination on your claim. 
The Appeals Board may reverse the Initial Determination to grant or 
deny a claim. The Appeals Board may adjust the damages amount in the 
Initial Determination either upwards or downwards. A Final 
Determination is not subject to review in any court.
    If you do not file an appeal, DoD will issue a Final Determination.
    h. Settlement Agreement. You will be paid the damages amount 
offered in a Final Determination after you sign a settlement agreement 
provided to you by DoD.
    i. Claims Process is Final. This claims process is the only process 
for Service members to bring medical malpractice claims related to 
their service. You may not challenge a Final Determination or the 
amount of any damages calculation contained in a Final Determination in 
court.
    j. Attorneys. You may have an attorney assist you with your claim. 
If you have an attorney, DoD will communicate with your attorney 
instead of with you regarding your claim. Your attorney may not charge 
you attorney fees of more than 20 percent of the amount paid to you 
under this process.

V. Regulatory Analysis

a. Executive Order 12866, ``Regulatory Planning and Review'' and 
Executive Order 13563, ``Improving Regulation and Regulatory Review''

    Executive Orders 13556 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. Accordingly, this interim final rule has been 
reviewed by the Office of Management and Budget under the requirements 
of these Executive Orders. It has been determined to be a significant 
regulatory action, although not economically significant. Accordingly, 
this regulatory impact analysis presents the costs and benefits of the 
rulemaking.

b. Summary

    This interim final rule implements 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 (DoD) health care providers 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 <SUP>10</SUP>
---------------------------------------------------------------------------

    \10\ Data are from the ``Evaluation of the TRICARE Program: 
Fiscal Year 2020 Report to Congress--Access, Cost and Quality Data 
through Fiscal Year 2019.'' which can be found at https://health.mil/Reference-Center/Reports/2020/06/29/Evaluation-of-the-TRICARE-Program-Fiscal-Year-2020-Report-to-Congress.
---------------------------------------------------------------------------

    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.\11\ 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.
---------------------------------------------------------------------------

    \11\ Active Duty include members of the Army, Navy, Air Force, 
Marines. The other uniformed services are the Coast Guard, Public 
Health Service, and the National Oceanic and Atmospheric 
Administration. The Space Force was established December 20, 2019, 
and was not included in this Fiscal Year 2019 data.
---------------------------------------------------------------------------

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),\12\ the cost of this 
activity is $135.
---------------------------------------------------------------------------

    \12\ According to the Bureau of Labor Statistics, the median 
weekly earnings for full-time wage and salary workers in 2020 was 
$984.00, for an hourly rate based on a 40-hour workweek of $24.60. 
See https://www/bls.gov/cps/cpsaat39.htm.
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    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

[[Page 32201]]

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 \13\ 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 \14\ 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, and $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.
---------------------------------------------------------------------------

    \13\ Joanna Shepherd, Uncovering the Silent Victims of the 
American Medical Liability System, 67 Vanderbilt Law Review 151, 162 
(2019) Available at: https://scholarship.law.vanderbilt.edu/vlr/vol67/iss1/2.
    \14\ See https://www.bls.gov/oes/2020/may/oes_nat.htm. Note that 
we use wages for family medical physicians as a proxy for 
physicians.
---------------------------------------------------------------------------

    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,\15\ 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 
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. DoD requests public comment on costs 
faced by claimants.
---------------------------------------------------------------------------

    \15\ See https://www.bls.gov/oes/2020/may/oes_nat.htm.
---------------------------------------------------------------------------

    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.\16\ 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.\17\ As a result, we 
estimate that 500 claims will be considered, and that 50 claims will be 
filed by Service members per year.
---------------------------------------------------------------------------

    \16\ These are the total number of claims, prior to any analysis 
of the merits of the claims, or analysis of whether the claims were 
properly filed (e.g., whether the claims were timely). The 
Congressional Budget Office (CBO), when scoring section 731, assumed 
an additional 50 claims per year would be paid at cost of $600,000 
per claim, for a total of $30,000,000 per year or $300,000,000 over 
10 years. These estimates did not appear to take into account 
offsets so the number of paid claims will be less.
    \17\ Joanna Shepherd, Uncovering the Silent Victims of the 
American Medical Liability System, 67 Vanderbilt Law Review 151 
(2019) Available at: https://scholarship.law.vanderbilt.edu/vlr/vol67/iss1/2.
---------------------------------------------------------------------------

    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 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.

[[Page 32202]]

    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.\18\ 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.
---------------------------------------------------------------------------

    \18\ The Congressional Budget Office (CBO), when scoring section 
731, assumed an additional 50 claims per year would be paid at cost 
of $600,000 per claim, for a total of $30,000,000 per year or 
$300,000,000 over 10 years. These estimates did not appear to take 
into account offsets so the number of paid claims will be less.
---------------------------------------------------------------------------

    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 32203]]

[GRAPHIC] [TIFF OMITTED] TR17JN21.000


[[Page 32204]]


[GRAPHIC] [TIFF OMITTED] TR17JN21.001


[[Page 32205]]


[GRAPHIC] [TIFF OMITTED] TR17JN21.002

[GRAPHIC] [TIFF OMITTED] TR17JN21.003


[[Page 32206]]


[GRAPHIC] [TIFF OMITTED] TR17JN21.004


[[Page 32207]]


[GRAPHIC] [TIFF OMITTED] TR17JN21.005

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.
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    \19\ In these tables, ``O-5'' refers to an officer grade; ``E-
4'' to an enlisted grade.
    \20\ 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).
    \21\ 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.
    \22\ 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.
    \23\ 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.
    \24\ 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.
    \25\ 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.
    \26\ Rates for veteran + spouse + child + additional child at 
https://www.benefits.va.gov/COMPENSATION/resources_comp01.asp#BM05.
---------------------------------------------------------------------------

    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.

[[Page 32208]]

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. because of section 731are 
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. 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 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.

g. Interim Final Rule Justification

    This rule is being issued as an interim final rule based on 
explicit statutory authorization and clear Congressional intent. 
Specifically, 10 U.S.C. 2733a(f)(3) provides that in order ``to 
implement expeditiously'' the new law DoD may issue the regulations the 
statute requires ``by prescribing an interim final rule.'' The law also 
requires DoD to consider public comments and issue a final rule within 
one year after issuing an interim final rule. The new law became 
effective January 1, 2020, and Congress desired expeditious 
adjudication of claims arising from alleged instances of medical 
malpractice dating back to 2017. For this reason, there is good cause 
for finding, consistent with 5 U.S.C. 553(b)(B), that prior notice and 
public comment are impracticable, unnecessary, or contrary to the 
public interest.

h. Public Law 96-354, ``Regulatory Flexibility Act'' (5 U.S.C. 601)

    This interim 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).

i. Assistance for Small Entities

    This interim final rule does not impose requirements on small 
entities.

j. 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 
interim final rule as not a major rule, as defined by 5 U.S.C. 804(2).

k. Sec. 202, Public Law 104-4, ``Unfunded Mandates Reform Act''

    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) (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 interim final rule will not mandate any requirements 
for State, local, or tribal governments, nor affect private sector 
costs.

l. Public Law 96-511, ``Paperwork Reduction Act'' (44 U.S.C. Chapter 
35)

    It has been determined that 32 CFR part 45 does not impose new 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act of 1995.

m. 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 interim final rule will not have a substantial 
effect on State and local governments.

List of Subjects in 32 CFR Part 45

    Medical, Malpractice, Claims, Uniformed Services.

0
Accordingly 32 CFR part 45 is added to read as follows:

PART 45--MEDICAL MALPRACTICE CLAIMS BY MEMBERS OF THE UNIFORMED 
SERVICES

Sec.
45.1 Purpose of this part.
45.2 Claims payable and not payable in general.
45.3 Authorized claimants.
45.4 Filing a claim.
45.5 Elements of payable claim: facilities and providers.
45.6 Element of payable claim: negligent or wrongful act or 
omission.
45.7 Element of payable claim: proximate cause.
45.8 Calculation of damages: disability rating.
45.9 Calculation of damages: economic damages.
45.10 Calculation of damages: non-economic damages.
45.11 Calculation of damages: offsets for DoD and VA Government 
compensation.
45.12 Initial and Final Determinations.
45.13 Appeals.
45.14 Final and conclusive resolution.
45.15 Other claims procedures and administrative matters.

    Authority:  10 U.S.C. 2733a.


Sec.  45.1  Purpose of this part.

    (a) In general. The purpose of this part is to establish the rules 
and procedures for members of the uniformed services or their 
representatives to file claims for compensation for personal injury or 
death caused by the medical malpractice of a Department of Defense 
(DoD) health care provider. Claims under this part may be settled and 
paid by DoD under the Military Claims Act, Title 10, United States 
Code, Chapter 163, specifically section 2733a of Title 10 (hereinafter 
10 U.S.C. 2733a, section 2733a, or the statute), as added to the 
Military Claims Act by section 731 of the National Defense 
Authorization Act for Fiscal Year 2020 (Pub. L. 116-92; 133 Stat. 
1457). Claims are adjudicated under an administrative process. This 
administrative process follows a set of rules and procedures set forth 
in this part. These rules and procedures are based primarily on a 
number of detailed provisions in the statute.
    (b) Relationship to military and veterans' compensation programs. 
Federal law provides a comprehensive system of compensation for 
military members and their families in cases of

[[Page 32209]]

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, 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). 
This comprehensive compensation system applies to cases of personal 
injury or death caused by medical malpractice incurred in service as it 
does to all other causes. This part provides for the possibility of 
separate compensation in certain cases of medical malpractice but in no 
other type of case. A medical malpractice claim under this part will 
have no effect on any other compensation the member or family is 
entitled to under the comprehensive compensation system applicable to 
all members. However, a claimant under this part does not receive 
duplicate compensation for the same harm. Thus, with some limited 
exceptions, a potential malpractice damages award under this part is 
reduced or offset by the total value of the compensation the claimant 
is expected to receive under the comprehensive compensation system, 
whether or not the claimant ultimately receives such compensation, and 
the ultimate amount of a settlement under this part will be the amount, 
if any, that a potential malpractice damages award determined under the 
terms and conditions of this part exceeds the value of all the 
compensation and benefits the claimant is otherwise expected to receive 
from DoD or the Department of Veterans Affairs (VA).
    (c) Relationship to Healthcare Resolutions Program. The medical 
malpractice claims process under this part is separate from the 
Military Health System Healthcare Resolutions Program. The Healthcare 
Resolutions Program, under Defense Health Agency Procedural Instruction 
6025.17, is an independent, neutral, and confidential system that 
promotes full disclosure of factual information--including information 
involving adverse events and outcomes--and mediation of clinical 
conflicts. The program is part of the Military Health System's 
commitment to transparency, which also includes a patient's right to be 
heard as part of any quality assurance review of care provided. The 
Healthcare Resolutions Program is not involved in legal proceedings, 
compensation matters, or the adjudication of claims under this part. 
However, any member of the uniformed services may engage the Healthcare 
Resolutions Program to address non-monetary aspects of his or her 
belief that he or she has been harmed by medical malpractice by a DoD 
health care provider. Because it is not involved in claims or legal 
proceedings, the Healthcare Resolutions Program disengages when a claim 
is filed by a service member or his or her representative.


Sec.  45.2  Claims payable and not payable in general.

    (a) In general. This section sets forth a number of terms and 
conditions included in the statute (10 U.S.C. 2733a) that describe 
claims that are payable and not payable. Some of these terms and 
conditions are discussed in more detail in later sections of this part.
    (b) Claim not otherwise payable. As required by the statute 
(section 2733a(b)(5)), a claim under this Part may only be paid if it 
is not allowed to be settled and paid under any other provision of law. 
This limitation provides that it cannot be a claim allowed under the 
Federal Tort Claims Act (FTCA), 28 U.S.C. 1346 and Chapter 171. Claims 
against the United States filed by members of the uniformed services or 
their representatives for personal injury or death incident to service 
are not allowed under the FTCA. These claims may be allowed under this 
Part if they meet the other applicable terms and conditions.
    (c) Time period for filing claims. (1) The statute (section 
2733a(b)(4)) requires that a claim must be received by DoD in writing 
within two years after the claim accrues. For mailed claims, timeliness 
of receipt will be determined by the postmark.
    (2) There is a special rule for claims filed during calendar year 
2020. Such claims must be presented to DoD in writing within three 
years after the claim accrues. The tolling provisions under the 
Servicemembers Civil Relief Act, 50 U.S.C. 3901-4043, are not 
applicable under this section.
    (3) For purposes of applying the time limit for filing a claim, a 
claim accrues as of the latter of:
    (i) The date of the act or omission by a DoD health care provider 
that is the basis of the malpractice claim; or
    (ii) 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.
    (4) State statutes of limitation or repose are inapplicable.
    (d) No claim for attorney's fees or expenses in addition to 
statutorily allowed amount. In calculating the amount that may be paid 
under this part, consistent with section 2733a(c)(2), there is no 
additional amount permitted for attorneys' fees or expenses associated 
with filing a claim or participating in any process relating to the 
adjudication of the claim. The adjudication of claims under this part 
is not an adversarial proceeding and there is no prevailing party to be 
awarded costs.
    (e) Claims adjudication based on national standards. As required by 
the statute (section 2733a(f)(2)(B)), claims are adjudicated based on 
national standards consistent with generally accepted standards used in 
a majority of States in adjudicating claims under the FTCA. The 
determination of the applicable law is without regard to the place of 
occurrence of the alleged medical malpractice giving rise to the claim 
or the military or executive department or service of the member of the 
uniformed services. Foreign law has no role in the case of claims 
arising in foreign countries. The legal standards set forth in other 
sections of this part apply to determinations with respect to:
    (1) Whether an act or omission by a DoD health care provider in the 
context of performing medical, dental, or related health care functions 
was negligent or wrongful, considering the specific facts and 
circumstances;
    (2) Whether the personal injury or death of the member was 
proximately caused by a negligent or wrongful act or omission of a DoD 
health care provider in the context of performing medical, dental, or 
related health care functions, considering the specific facts and 
circumstances;
    (3) Requirements relating to proof of duty, breach of duty, and 
causation resulting in compensable injury or loss, subject to such 
exclusions as may be established by this Part; and
    (4) Calculation of damages that may be paid.
    (f) Certain other claims not payable. The generally accepted legal 
standards under FTCA that are required to be reflected in the 
adjudication of claims under this Part include certain exclusions that 
are part of FTCA law.
    (1) The due care and discretionary function exceptions apply to 
claims under this part.
    (i) The due care and discretionary function exceptions, 28 U.S.C. 
2680(a), bar any claim based upon an act or omission of a DoD health 
care provider, exercising due care, in the execution of a statute or 
regulation or based upon the exercise or performance of any 
discretionary function or duty on the part of DoD or a DoD health care 
provider.

[[Page 32210]]

    (ii) The due care exception applies to any DoD health care 
provider's act, if carried out with due care, or omission, if omitted 
with due care, in the execution of a statute or regulation. The due 
care exception applies whether or not the statute or regulation is 
valid.
    (iii) The discretionary function exception applies to the exercise 
or performance or the failure to exercise or perform any discretionary 
function. The discretionary function exception applies whether or not 
the discretion involved was abused. It applies to any DoD health care 
provider's act or omission that is a permissible exercise of discretion 
under the applicable statutes, regulations, or directive and, by its 
nature, is susceptible to policy analysis. The discretionary function 
exception applies to DoD policy decisions regarding clinical practice, 
patient triage, force health protection, medical readiness, health 
promotion, disease prevention, medical screening, health assessment, 
resource management, hiring and retaining employees, selection of 
contractors, military standards, fitness for duty, duty limitations, 
and health information management, among other matters affecting or 
involving the provision of health care services.
    (2) The quarantine exception applies to claims under this part. 
This exception, consistent with 28 U.S.C. 2680(f), bars any claim for 
damages caused by the imposition or establishment of a quarantine by 
any agency of the U.S. Government.
    (3) The combatant activities exception applies to claims under this 
part. This exception, consistent with 28 U.S.C. 2680(j), bars any claim 
arising out of the combatant activities of the military or naval 
forces, or the Coast Guard, in time of war.
    (4) The FTCA's exclusions under 28 U.S.C. 2674 of interest prior to 
judgment and punitive damages apply to any claim under this part.
    (5) Claims based on intentional or negligent infliction of 
emotional distress, other intentional torts, wrongful death/life, 
strict liability, products liability, informed consent, negligent 
credentialing, or joint and severable liability theories are not 
payable under this part.
    (6) Breach of medical confidentiality is not actionable under this 
part.


Sec.  45.3   Authorized claimants.

    (a) In general. This section describes who may file a claim under 
this part. A claim may be filed only by a member of a uniformed service 
or an authorized representative on behalf of a member who is deceased 
or otherwise unable to file the claim due to incapacitation. A member 
of the uniformed services includes a cadet or midshipman from the 
military academies. It does not include an applicant to join a 
uniformed service or a delayed entry program recruit who has not been 
accessed into active duty.
    (1) As provided in section 2733a(b)(1), the claim must be filed by 
the member of the uniformed services who is the subject of the medical 
malpractice claim or by an authorized representative on behalf of such 
member who is deceased or otherwise unable to file the claim due to 
incapacitation.
    (2) In some circumstances, a claim otherwise payable under this 
part may be filed by or on behalf of a reserve component member. As 
provided in section 2733a(i)(3), those circumstances are that the claim 
is in connection with personal injury or death that occurred while the 
member was in a Federal duty status. This circumstance includes 
personal injury, death, or negligent diagnosis resulting from a 
negligent or wrongful act or omission that occurred while the member 
was in a Federal duty status. In the case of a member of the National 
Guard of the United States, a period of Federal duty status may be 
under Title 10, U.S. Code, or, based on 10 U.S.C. 12602, duty under 
title 32, U.S. Code. Other duty under State control is not covered.
    (b) Third party claims not allowed. The statute only authorizes 
claims by members of the uniformed services. Thus, the regulation does 
not permit derivative claims or other claims from third parties 
alleging a separate injury as a result of harm to a member of the 
uniformed services. This prohibition includes claims by family members 
or survivors arising out of the circumstances of personal injury or 
death of a member.
    (c) Incident to service requirement. Under section 2733a(a), the 
member's personal injury or death must be incident to service. An 
injury or death is incident to service if the medical care provided is 
based on the member's status under this section.


Sec.  45.4  Filing a claim.

    (a) In general. A member of a uniformed service or, when 
applicable, an authorized representative may file a claim in writing. 
Any written claim will suffice as long as it is meets the requirements 
below and is signed by the claimant or authorized representative.
    (b) Contents of the claim. The filed claim must include the 
following:
    (1) The factual basis for the claim, including identification of 
the conduct allegedly constituting malpractice (e.g., the theory of 
liability and/or breach of the applicable standard of care);
    (2) A demand for a specified dollar amount;
    (3) If the claim is filed by an attorney, an affidavit from the 
claimant affirming the attorney's authority to file the claim on behalf 
of the claimant;
    (4) If the claim is filed by an authorized representative, an 
affidavit from the representative affirming his/her authority to file 
on behalf of the claimant;
    (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 
claimant must submit 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. The requirement in this paragraph does not apply to 
claims filed prior to the publication of this Interim Final Rule.
    (c) Additional information to file in support of claim. In the 
investigation and adjudication of a claim, DoD will access pertinent 
DoD records and information systems regarding the member in order to 
consider fully all facts that have a bearing on the claim. This 
collection may include information in personnel and medical records, 
the Defense Eligibility and Enrollment System (DEERS), reports of 
investigation, medical quality assurance records, and other 
information. Upon DoD's request, a claimant must identify any pertinent 
health care providers outside of DoD, and provide a copy of his or her 
medical records from each of the identified health care providers, 
including a statement that the records are complete. A claimant must 
provide medical release(s) upon DoD's request, enabling DoD to obtain 
medical records from these health care providers. Claimants may submit 
any other relevant information they believe supports their claim, such 
as information regarding the medical care involved, the acts or 
omissions the claimant believes constitute malpractice, medical 
opinions from

[[Page 32211]]

non-DoD providers, and evidence of pain and suffering or other 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.
    (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 DoD Instruction 5400.11, ``DoD Privacy and 
Civil Liberties Programs''; DoD Instruction 6025.18, ``Health Insurance 
Portability and Accountability Act (HIPAA) Privacy Rule Compliance in 
DoD Health Care Programs,'' and supplemental DoD issuances to those 
Instructions. 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, 
predecisional material, or other privileged information.


Sec.  45.5   Elements of payable claim: facilities and providers.

    (a) In general. This section describes some of the necessary 
elements of a payable claim. The health care involved must occur in a 
covered military medical treatment facility (MTF) and be provided by a 
DoD health care provider acting within the scope of employment.
    (b) Covered MTF. (1) As provided in section 2733a(b)(3) and (i)(1), 
the alleged act or omission constituting medical malpractice must have 
occurred in a covered MTF. For the purposes of this regulation, an MTF 
is a medical center, inpatient hospital, or ambulatory care center, as 
those facilities are described in 10 U.S.C. 1073d. Fixed dental clinics 
are also included.
    (2) A claim may not be based on health care services provided by 
DoD health care providers in any other location, such as in the field, 
battalion aid stations, ships, planes, deployed settings, or in any 
other place that is not a covered MTF.
    (c) DoD health care provider. As provided in section 2733a(i)(2), a 
DoD health care provider is a member of the uniformed services, DoD 
civilian employee, or personal services contractor of the Department 
(under 10 U.S.C. 1091) authorized by DoD to provide health care 
services. A non-personal services contractor or a volunteer working in 
an MTF is not a DoD health care provider for purposes of a payable 
claim under this part.
    (d) Scope of employment. As provided in section 2733a(b)(2), for a 
claim to be payable under this part, the DoD health care provider whose 
negligent or wrongful act or omission is the basis of a claim must be 
acting within the scope of employment, meaning that the provider was 
acting in furtherance of his or her duties in the MTF. For personal 
services contractors, ``scope of employment'' means the contractor was 
acting within the scope of his or her duties.


Sec.  45.6  Element of payable claim: negligent or wrongful act or 
omission.

    (a) In general. To establish the element of a negligent or wrongful 
act or omission, a member of a uniformed service (``claimant'') 
allegedly harmed incident to service by medical malpractice must prove 
by a preponderance of the evidence that one or more DoD health care 
providers in a covered MTF acting within the scope of employment had a 
professional duty to the patient involved and by act or omission 
breached that duty which proximately caused the injury or death.
    (b) Standard of care. The professional duty referred to in 
paragraph (a) of this section is a duty to exercise the same degree of 
skill, care, and knowledge ordinarily expected of providers in the same 
field or specialty in a comparable clinical setting. The standard of 
care is determined based on generally recognized national standards, 
not on the standards of a particular region, State or locality. 
However, standard of care in the military context may be impacted by 
the particular setting and the availability of resources in that 
setting.
    (c) Breach of the standard of care. A breach referred to in 
paragraph (a) occurs if the health care provider or providers by act or 
omission did not meet the standard of care.
    (d) Presenting evidence of the standard of care. A claimant may 
present evidence to support what the claimant believes is the standard 
of care relevant to the care involved in the claim.
    (e) Presenting evidence of a failure to meet the standard of care. 
(1) A claimant may present evidence to support what the claimant 
believes demonstrates the failure of one or more DoD health care 
providers to meet the standard of care. That evidence may be based on 
the medical records of the patient involved and other documentary 
evidence of the acts or omissions of health care providers involved, 
including expert reports.
    (2) Evidence of an apology by a health care provider or any other 
DoD or Military Department personnel, such as hospital directors or 
commanders, to or regarding a patient will not be considered evidence 
of medical malpractice. Providers often apologize for unexpected or 
adverse outcomes independent of whether the provider's acts or 
omissions met the standard of care.
    (f) Information DoD will consider in assessing whether there was a 
negligent or wrongful act or omission. (1) In addition to the 
information submitted by the claimant, DoD may consider all relevant 
information in DoD records and information systems or otherwise 
available to DoD, including information prepared by or on behalf of DoD 
in connection with adjudication of the claim.
    (2) DoD will 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.


Sec.  45.7  Element of payable claim: proximate cause.

    (a) In general. (1) In a case otherwise payable under this part, a 
claimant must prove by a preponderance of evidence that a negligent or 
wrongful act or omission by one or more DoD health care providers was 
the proximate cause of the harm suffered by the member.
    (2) Under section 2733a(c)(1), DoD is liable for only the portion 
of compensable injury, loss, or damages attributable to the medical 
malpractice of a DoD health care provider. To the extent other causes 
contributed to the personal injury or death of the member, whether pre-
existing, concurrent, or subsequent, the potential amount of 
compensation under this regulation will

[[Page 32212]]

be reduced by that proportion of the alternative cause(s).
    (b) Comparative negligence. A rule of modified comparative 
negligence will apply to claims under this part. If a claimant was 
contributorily negligent in relation to the health care provided, 
damages will be reduced by the proportion of fault assigned to the 
Service member. If the claimant's own negligence constituted more than 
50% of the fault, the claim is not payable.
    (c) Loss of chance or failure to diagnose. A claimant may recover 
for loss of chance for a more favorable clinical outcome in the 
diagnosis and treatment of his or her illness or injury. The claimant 
must prove by a preponderance of the evidence that one or more DoD 
health care providers in a covered MTF acting within the scope of 
employment had a professional duty to the claimant and by act or 
omission breached that duty and proximately caused harm. In proving 
that the claimant suffered harm, the claimant must prove that the lost 
chance for a better outcome or the failure to diagnose a condition is 
attributable to the provider or providers. The claimant must prove a 
substantial loss as opposed to a theoretical or de minimis loss. The 
portion of harm attributable to the breach of duty will be the 
percentage of chance lost in proportion to the overall clinical 
outcome. Damages will be calculated based on this portion of harm.
    (d) Information DoD will consider in assessing proximate cause. (1) 
In addition to the information submitted by the claimant, DoD may 
consider all relevant information in DoD records or information systems 
or otherwise available to DoD, including information prepared by or on 
behalf of DoD in connection with adjudication of the claim.
    (2) DoD will 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.


Sec.  45.8  Calculation of damages: disability rating.

    (a) In general. For certain purposes relating to calculating 
damages for a member in a claim under this part, DoD will use the 
disability rating established in the DoD Disability Evaluation System 
under DoD Instruction 1332.18 \1\ or otherwise established by the 
Department of Veterans Affairs (VA) to assess the extent of the harm 
alleged to have been caused by medical malpractice. This rating is 
stated as a disability percentage under the VA Schedule for Rating 
Disabilities (VASRD) under 38 CFR part 4 or a successor provision. 
Under 10 U.S.C. 1216a, DoD is required to use the VASRD for assessing 
the degree of disability of a member under the Disability Evaluation 
System. DoD will use it for purposes of this part as well. A VASRD-
based disability percentage represents the Government's estimate of the 
lost earning capacity attributable to an illness or injury incurred 
during military service. A Service member medically separated or 
retired through the Disability Evaluation System may receive distinct 
DoD and VA disability ratings. DoD will consider disability ratings, to 
the extent DoD deems pertinent, for other purposes relating to 
calculating damages, such as calculating loss of earning capacity and 
non-economic damages.
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    \1\ Available at https://www.esd.whs.mil/Portals/54/Documents/DD/issuances/dodi/133218p.pdf?ver=2018-05-24-133105-050.
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    (b) Disability rating procedures. (1) If a claimant disagrees with 
the disability rating received in the DoD or VA disability evaluation 
or claims processes, the member must pursue the appeal opportunities 
available within the DoD and/or VA to change the member's disability 
rating.
    (2) In any case in which a member has filed a claim under this part 
and also has a disability determination pending under DoD or VA 
disability evaluation or claims processes applicable to determinations 
or appeals, DoD may, in its discretion, hold in abeyance the claim 
under this part pending the outcome of the disability evaluation or 
claims process. DoD will notify the claimant that his or her claim is 
being held in abeyance.
    (3) In any case in which a member has not yet received a DoD or VA 
disability evaluation because the member is retained on active duty, 
DoD will use the VASRD as the standard for assessing the degree of 
disability of the member relevant to the member's claim under this 
part.


Sec.  45.9   Calculation of damages: economic damages.

    (a) In general. Economic damages are one component of a potential 
damages award. The claimant has the burden to prove the amount of 
economic damages by a preponderance of evidence. Estimates of future 
losses must be discounted to present value.
    (b) Elements of economic damages in personal injury cases. Elements 
of economic damage are limited to the following:
    (1) Past expenses, including medical, hospital, and related 
expenses actually incurred. These expenses do not include health care 
services provided or paid for by DoD or VA.
    (2) Future medical, hospital, and related expenses. These expenses 
do not include health care goods and services for which the member is 
entitled to receive from, or be reimbursed for by, DoD (including 
TRICARE) or VA. Goods and services provided or paid for by DoD or VA 
are deemed sufficient to meet the claimant's needs for that particular 
type of good or service.
    (3) Past lost earnings unrelated to compensation as a member of the 
uniformed services. Appropriate documentation is required.
    (4) Loss of earning capacity, after deducting for the claimant's 
personal consumption from the date of injury causing death until 
expiration of the claimant's work-life expectancy, as substantiated by 
appropriate documentation. In addition, loss of retirement benefits is 
compensable and similarly discounted after appropriate deductions. 
Estimates must be discounted to present value.
    (5) Compensation when the claimant can no longer perform essential 
household services on his or her own behalf, including activities of 
daily living. This compensation does not include goods and services the 
member is entitled to receive from, or be reimbursed for by, DoD or VA. 
Goods and services provided or paid for by DoD or VA are deemed 
sufficient to meet the claimant's needs for that particular type of 
good or service.
    (c) Information DoD will consider in calculating economic damages. 
In addition to the information submitted by the claimant, DoD may 
consider all relevant information in DoD records or information systems 
or otherwise available to DoD, including assessments from appropriate 
documentary sources and experts available to DoD.


Sec.  45.10   Calculation of damages: non-economic damages.

    (a) In general. Non-economic damages are one component of a 
potential damages award. The claimant has the burden of proof on the 
amount of non-economic damages by a preponderance of evidence.

[[Page 32213]]

    (b) Elements of non-economic damages. Elements of non-economic 
damage are limited to the following:
    (1) Past and future conscious pain and suffering by the claimant. 
This element is physical discomfort as well as mental and emotional 
trauma or distress. Loss of enjoyment of life is compensable. The 
inability to perform daily activities that one performed prior to 
injury, such as recreational activities, is included in this element. 
DoD may request an interview of or statement from the member or other 
person with primary knowledge of the claimant.
    (2) Physical disfigurement. This element is impairment resulting 
from an injury to a member that causes diminishment of beauty or 
symmetry of appearance rendering the member unsightly, misshapen, 
imperfect, or deformed. DoD may require a medical statement and 
photographs, documenting the claimant's condition.
    (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 $500,000. 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.
    (d) Information DoD will consider in calculating non-economic 
damages. In addition to the information submitted by the claimant, DoD 
may consider all relevant information in DoD records or otherwise 
available to DoD, including assessments from appropriate documentary 
sources and experts available to DoD.


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.
    (b) Eligibility for payments and benefits. In determining the 
offsets that are applied to a medical malpractice damages award under 
this part, DoD presumes that a claimant will receive all the payments 
and benefits for which the claimant is expected to be eligible, whether 
or not the claimant has taken steps to obtain the payment or benefit or 
ultimately receives such payment or benefit. A claimant may present 
evidence that he or she is not eligible for a payment or benefit to 
rebut the presumption.
    (c) Information considered. In determining offsets under this 
section, DoD will consider all data available in DoD records or 
information systems, other U.S. Government records systems, and other 
information available to DoD. This data may include information on 
military pay and allowances, Disability Evaluation System outcomes, VA 
disability claims, marital status, number and ages of dependents, 
survivor benefits, and other information. Access to all such 
information will be in accordance with the Privacy Act, 5 U.S.C. 552a, 
and applicable implementing regulations.
    (d) Present value of future payments and benefits. In determining 
offsets under this section, DoD will estimate the present value of 
future payments and benefits. Many such payments and benefits in cases 
of disability or death are lifetime benefits for members or survivors. 
With respect to any lifetime payments or benefits that may terminate 
upon the remarriage of a surviving spouse, DoD will not assume a 
remarriage. Estimates will be based on actuarial information provided 
by the Chief Actuary, DoD Office of the Actuary, taking into 
consideration methods and assumptions approved by the DoD Board of 
Actuaries and DoD Medicare-Eligible Retiree Health Care Board of 
Actuaries, respectively, as of the recent actuarial valuation date.
    (e) Payment and benefit programs. The listings in this section of 
certain programs that offset and do not offset potential medical 
malpractice damages awards are not all-inclusive and are subject to 
adjustment as necessary to account for compensation otherwise provided 
by DoD or VA for the same harm that resulted from the medical 
malpractice. Because compensation programs are often changed by 
Congress, Federal agencies, or judicial decisions, DoD will annually 
review relevant programs and take account of any such changes for 
purposes of applying the rules of this section to the adjudication of 
claims under this part.
    (f) Payments and benefits that are offsets. Potential damage awards 
under this part are offset by the present value of the following 
payments and benefits:
    (1) Pay and allowances while a member remains on active duty or in 
an active status.
    (2) Disability retired pay in the case of retirement due to the 
disability caused by the alleged medical malpractice.
    (3) Disability severance pay in the case of non-retirement 
disability separation caused by the alleged medical malpractice.
    (4) Incapacitation pay.
    (5) Involuntary and voluntary separation pays and incentives.
    (6) Death gratuity.
    (7) Housing allowance continuation.
    (8) Survivor Benefit Plan.
    (9) VA disability compensation, to include Special Monthly 
Compensation, attributable to the disability resulting from the 
malpractice.
    (10) VA Dependency and Indemnity Compensation, attributable to the 
disability resulting from the malpractice.
    (11) Special Survivor Indemnity Allowance.
    (12) Special Compensation for Assistance with Activities of Daily 
Living.
    (13) Program of Comprehensive Assistance for Family Caregivers.
    (14) Fry Scholarship.
    (15) TRICARE coverage, including TRICARE-for-Life, for a disability 
retiree, family, or survivors. Future TRICARE coverage is part of the 
Government's compensation package for a disability retiree or survivor.
    (g) Payments and benefits that are not offsets. Potential awards 
under this Part are not offset by the present value of the following 
payments and benefits.
    (1) Servicemembers Group Life Insurance.
    (2) Traumatic Servicemembers Group Life Insurance.
    (3) Social Security disability benefits.
    (4) Social Security survivor benefits.
    (5) Prior Government contributions to a Thrift Savings Plan.
    (5) Commissary, exchange, and morale, welfare, and recreation 
facility access.
    (6) Value of legal assistance and other services provided by DoD.
    (7) Medical care provided while in active service or in an active 
status prior to death, retirement, or separation.


Sec.  45.12   Initial and Final Determinations.

    (a) Denial of claim--deficient filing. If a claim does not contain 
the information required by Sec.  45.4(b), DoD will issue an Initial 
Determination stating that DoD will issue a Final Determination denying 
the claim unless the deficiency is cured.
    (1) DoD will provide the claimant 30 calendar days following 
receipt of the Initial Determination to cure the deficiency, unless an 
extension of time is granted for good cause. The date of receipt of the 
Initial Determination will

[[Page 32214]]

be presumed to be five 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 cure the deficiency, DoD will 
issue a Final Determination denying the claim for failure to cure the 
deficiency. A Final Determination issued under paragraph (a) of this 
section may not be appealed.
    (b) Denial of claim--failure to state a claim. If a claim does not, 
based upon the information provided, state a claim cognizable under 10 
U.S.C. 2733a or this interim final rule, DoD will issue an Initial 
Determination denying the claim. Such an Initial Determination may be 
appealed under the procedures in Sec.  45.13.
    (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, without more, that DoD will issue a 
Final Determination denying the claim in the absence of an expert 
report or manifest negligence.
    (1) DoD will provide the claimant 90 calendar days following 
receipt of the Initial Determination 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 five 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 and will provide a 
brief explanation of the basis for the denial to the extent 
practicable. A Final Determination issued under this paragraph (c) may 
not be appealed.
    (d) Initial Determination. (1) Upon consideration of the 
information provided by the claimant and relevant information available 
to DoD, DoD will issue the claimant a written Initial Determination.
    (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 a 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 brief explanation of the basis for the Initial 
Determination to the extent practicable.
    (3) The Initial Determination will include information on the 
claimant's right to appeal if the claimant does not agree with the 
Initial Determination.
    (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. DoD 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.


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 60 
calendar days of the date of receipt by the claimant/counsel of the 
Initial Determination, unless an extension of time is granted for good 
cause. The date of receipt of the Initial Determination will be 
presumed to be five 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 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 
not fewer than three and no more than five DoD officials 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. 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.
    (c) Burden of proof. The claimant on appeal has the burden of proof 
by a preponderance of evidence that the claim is substantiated in the 
written record considered as a whole.
    (d) Appeals Board decisions. (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 
brief explanation of the basis for the revisions to the extent 
practicable.
    (2) An Appeals Board decision is final and conclusive. 10 U.S.C. 
2735.
    (3) The Appeals Board may reverse the Initial Determination to 
grant or deny a claim and may adjust the settlement amount contained in 
the Initial Determination either upwards or downwards as appropriate.


Sec.  45.14   Final and conclusive resolution.

    (a) Administrative adjudication final. As provided in 10 U.S.C. 
2735, the adjudication and settlement of a claim under this part is 
final and conclusive and not subject to review in any court. Unlike the 
FTCA, the Military Claims Act, 10 U.S.C. chapter 163, which provides 
the authority for this part, does not give Federal courts jurisdiction 
over claims. Further, no claim under this Part may be paid unless the 
amount tendered is accepted by the claimant in full satisfaction.
    (b) Additional terms of settlement agreement. (1) Settlement 
agreements under this part will incorporate the requirement of section 
2733a(g)(1) that no attorney may charge, demand, receive, or collect 
for services rendered, fees in excess of 20 percent of any claim 
payment amount under this part.
    (2) Because settlement and payment of a claim under this part is 
under section 2733a(b)(5) conditional on the claim not being allowed to 
be settled and paid under any other provision of law, a settlement 
agreement under this part will include a provision that it bars any 
other claim against the United States or DoD health care providers 
arising from the same set of facts.

[[Page 32215]]

Sec.  45.15  Other claims procedures and administrative matters.

    (a) Payment of damages. In the event damages are awarded, the 
claimant or the claimant's estate is entitled to payment of those 
damages.
    (b) Communication through counsel. If the claimant is represented 
by counsel, all communications will be through the claimant's counsel.
    (c) Remedies for filing false claims or making false statements. 
Remedies available to the United States for filing false claims with 
Federal agencies or making false statements to Federal agencies and 
officials are applicable to claims and statements made in connection 
with claims under this part. Applicable authorities include 31 U.S.C. 
3729 and 18 U.S.C. 1001. False claims and claims supported by false 
statements will be denied.
    (d) Reports to the Defense Health Agency. As provided in section 
2733a(e), not later than 30 calendar days after a Final Determination 
of medical malpractice or the payment of all or a portion of a claim 
under this part, a report documenting that determination is sent to the 
Director, Defense Health Agency to be used for all necessary and 
appropriate purposes, including those actions undertaken as part of 
DoD's Clinical Quality Management Program.
    (e) Monitoring claims adjudications under this part. The General 
Counsel of the Defense Health Agency will monitor the performance of 
the claims adjudications structures and procedures under this part, 
including accounting for the number of claims processed under this part 
and the resolution of each claim and identifying means to enhance the 
effectiveness of the claims adjudication process.
    (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'' may include, but is not limited to, Military 
Departments.

    Dated: June 14, 2021.
Patricia L. Toppings,
OSD Federal Register Liaison, Department of Defense.
[FR Doc. 2021-12815 Filed 6-16-21; 8:45 am]
BILLING CODE 5001-06-P


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