# United States **Court of Appeals**  **for the Federal Circuit**

______________________ PRESTON A. MCCORD, Plaintiff

- Appellant

v.

UNITED STATES, Defendant

- Appellee

______________________

2018

- 2243

______________________ Appeal from the United States Court of Federal Claims in No. 1:16

- cv

- 00310

- EDK, Judge Elaine Kaplan.

______________________
Decided: December 4, 2019

______________________

J ASON M ANNE , Pitt Law Veterans Pra ctic um, Pittsburgh, PA, argued for plaintiff

- appellant.

S TEVEN J OHN G ILLINGHAM , Commercial LitigationBranch, Civil Division, United States Department of Justice, Washington, DC, argued for defendant

- appellee. Also represented by M IKKI C OTTET , J OSE PH H. H UNT , D EBORAH A NN B YNUM , R OBERT E DWARD K IRSCHMAN , J R

.

______________________
Before N EWMAN , D YK , and R EYNA , Circuit Judges.MCCORD v. UNITED STATES 2

D YK , Circuit Judge

. Preston A. McCord (“McCord”) appeals f rom a decision of the Court of Federal Claims (“Claims Court”)

, which held that (1) t he government properly calculated his entitlement to military retirement back pay ; (2) the issue of government recoupment of his severance pay was not ripe; and (3) he failed to exhaust administrative remedies necessary to secure a n award of out

- of

- pocket medical expenses. We affirm the Claims Court’s judgment except as to out

- of

pocket medical expenses

. On that issue, we reverse and remand for entry of judgment awa rding the claimed costs.

B ACKGROUND

I
This case involves the interp lay between two statutes providing disability benefits for retired military personnel. Section 1201 of Title 10 provides that military personnel who bec ome disabled in service with at leas t 20 years of service or at least a 30% disability rating are entitled to receive military retire ment pay f rom the Department of Defense (“DOD”) (hereinafter “military retirement pay”)

. Under Section 1110 of T itle 38, v eterans are also e ntitled
to receive veterans benefits i f they can establish the existence of a service

- connected disability (hereinafter “VA benefits”)

. But

, as discussed below

, Congress has provided
t hat

, in general

, veteran s cannot simultaneously receive military retirement pay an d VA benefits

. There is also a statutory anomaly. Upon separation from service, a disabled veteran may be entitled to receive

severance pay if he served less than 20 years and generally has less than a 30% disability rating or a disability that

was not incurred in time of war o r national emergency

. 10 U.S.C. § 12 03

. I f the veteran receives military retirement

p ay, he is not entitled to sever ance , and the s everance pay

m ust be recouped f rom the military retire ment pay unless the government waives its r ight to recoupment
, see 10MCCORD v. UNITED STATES 3

U.S.C. § 2774. On the other hand, a veteran who receives VA benefits can retain his severance pay if the “ disability [was] incurred in line of duty in a combat zone or incurred during performance of [a designated] duty in combat

- related operations.” 10 U.S.C. § 1212(d) (2)

. Thus, a veteran receiving VA b enefits may face a disadvantage if he also

secures an award of military retire ment pay because he would no t be entitled to severance pay. However, one advantage of securing eligibility for military retirement pay under such circumstances is TRICARE coverage ( discussed below )

. II
McCord injured his back wh ile he served in the United St ates Army

. He was referred to a disability evaluation

program conducted jointly by the DOD and Department of Veterans Affairs (“VA”)

. T he VA proposed a 20% rating

, which was accepted by the Army’s Physical Evaluation Board

. On May 28, 2012, McCord was discharged with a 20% disability rating. Because his rating was below 30% and he served for less than 20 years , McCord received severance pay instead of ongoing military retirement pay. Also, starting June 2012, McCord received monthly payments for VA benefits

. After his discharge, McCord applied to the Army Board for Correction of Military Records (“ABCMR”) to correct his record to have a t lea st a 30% disability rating. The ABCMR de nied his application, and McCord sought review with t he Claims Court

. The Claims Court reversed and directed the A BCMR to correct his record t o reflect “a combined disability rating of thirty percent . . . and,

. . . that [he] was retired with medical retirement pay, rather than discharged with severance pay.” J.A. 29

. The ABCMR then corrected his record.MCCORD v. UNITED STATES 4

In March 2018, McCord in his Claims Co urt action challeng ed the government’s calculation of his entitlement
to military retirement back pay and the government’s claimed right to recover the severance pay

. He also requested damages for medical expenses that he incurred as a result of hi s not being afforded TRICARE coverage before the correction

. The Claims Court rejected “McCord’s approach [to calculate back pay] .

. . [as] it would provide him with a windfall by permitting the very ‘double

- dipping’ that the statute forbids” and denied his “relief regarding the recoupment of severance pay .

. . as not ripe.” J.A. 6, 8. It also held that McCord “failed to exhaust the applicable administrative procedures for securing benefits under TRICARE” and denied relief. J.A. 9

– 10.
McCord appeals to this court. We have jurisdiction under 28 U.S.C. § 1295(a)(3). This court conducts “a plenary review of the legal conclusions of the [Claims Court] while reviewing its factual conclusions for clear error.” Stearns Co. v. United States , 396 F.3d 1354, 1357 (Fed. Cir. 2005).

D ISCUSSION

I. Military Retirement Back Pay

McCord first a rgues that the government improperly reduced his military retire ment payments by the amount of his VA benefits. McCord became eligible for military retire ment pay from his discharge date because his disability rating was corrected to be at least 30%. See 10 U.S.C. § 1201. The DOD found that he was entitled to military

r etire ment pay of $37.60 for May 29

– 31, 2012 and $37,646.00 for June 2012

– October 2017. 1 However, t he DOD determined that McCord could not be paid the military retire ment pay for the period after June 2012 because he received VA benefits that exceeded the eligible military

1 We assume that the claimed back pay period ends i n October 2017.MCCORD v. UNITED STATES 5

retire ment pay for each month. The Claims Court upheld the DOD’s calculation. McCord a rgues that it was improper for the DOD to reduce his military retirement pay by the amount of t he VA benefits

. We disagree

. Section 530 4 of Title 38 provides that a veteran generally cannot be awarded both military retirement pay and VA benefits

. Specifically, it prescribes a “[p]rohibition against duplic ation of benefits”:
(a)(1) Except .

. . to the extent that [military] retirement pay is waived under other provisions of law, not more than one award of . . . [VA] compensation,

. . . regular, or reserve [military] retirement pay,

. . . shall be made concu rrently to any person based on such person’s own service . . . .
38 U.S.C. § 5304. See generally Absher v. United States

, 805 F.2d 1025, 1027 (Fed. Cir. 1986) (discussing 38 U.S.C. § 3104 (1982), which is the predecessor to § 5304 ). This prohibition is inapplicable if a veteran waives his “ [military] retirement pay as is equal in amount to

. . . [his VA] compensation

. ” 2 38 U.S.C. § 5305. Specifically, § 5305 provides : [A] ny person who is receiving [military retirement] pay pursuant to a ny provision of law providing retired or retirement pay . . . and who would be eligible to receive . . . [VA] compensation . . . if suchperson were not receiving such retired or retirement pay, shall be entitled to receive such

. . . [VA] compensation upo n the filing

. . . of a waiver of so much of such person’s [military] retirement pay as

2 Another exception to § 5304(a)(1) is that a veteran with a disability rating of at least 50% can receive both benefits. 10 U.S.C. § 1414. This exception is not applicable here.MCCORD v. UNITED STATES 6

is equal in amount to such . . . [VA] compensation

. . . . 38 U.S.C. § 5305 ( emphas e s added). Thus, § 5304(a)(1) bars a veteran from receiving both military retirement pay and VA benefits absent a waiver under § 5305.
Here, on September 28, 2011, McCord filed a waiver as to military retirement pay by “choosing to receive VA compensation instead of military retire [ment] pay” in a disability evaluation board claim (the “2011 waiver form”)

. J.A. 620

. He agreed that if he is “awarded military retire [ment] pay prior to compensation, [ the government ] will reduce [his] retired pay by the amount of any [VA] compensation . . . awarded.” 3 Id. Because McCord executed
t his waiver, it appears that he cannot receive the claimed military retirement back pay for the period June 2012

– October 2017 as h is military retirement pay during that period is less than the VA benefits

. But McCord argues that the 2011 waiver form does not constitute a waiver of his

3 The 2011 waiver form states that:
Unless you check the box in Item 13 below, you aretelling us that you are choosing to receive VA compensation instead of military retired pay, if it is determined you are entitled to both benefits. If you are awarded military ret ired pay prior to compensation, we will reduce your retired pay by the amount of any compensation that you are awarded. VA will notify the Military Retired Pay Center ofall benefit changes. If you receive both military retired pay and VA compensation, som e of the amount you get may be recouped by VA, or in the case of Voluntary Separation Incentive (VSI), by the [DOD].

J.A. 620. McCord did not check the box in item 13 and thus chose VA benefits over military retirement pay.MCCORD v. UNITED STATES 7

military retirement back pay. E ven if McCord were correct ( an issue we do not decide), he still would confront the statut ory bar of § 5304(a)(1).
As to that provision

, McCord contends that § 530 4 (a)(1) does not bar his recovery

. In his view, the word “concurrently” in that section means that it applies only if the military retire ment pay and VA benefits are paid at the same time. He reasons that he is not receiving both benefits at the same time because the military retire ment back pay will be paid in the future whereas the VA benefits

were paid in the past. This argument lacks merit because § 530 4 (a)(1) refers to award s of benefits made “concurrently” meaning for concurrent periods

. 38 U.S.C. § 5304(a)(1). The timing of the pay ment is irrelevant.

Not only is the statute clear, but also it would make no sense for Congress to make a veteran whose disability record was la ter corrected better off than another whose record ha d no error in the first place

. Congress cannot have intended to give the former a windfall of both military retire ment pay and VA benefits just because h is record contained a mistake. S uch a result would be contrary to the very purpose of the Military Pay Act which only en titles a plaintiff to recover “ money in the form of the pay that the plaintiff would have received but for the unlawful [action].” Martin ez v. United States , 333 F.3d 1295, 130 3 (Fed. Cir. 2003)

. W e conclude that McCord is not entitled to receive additional military retirement back pay for the period June 2012

– October 2017

. II. Severance Pay
McCord argues that the government claims entitlement to recoup his severance pay but that 10 U.S.C. § 1174(h)(1) only allows recoupment from reduction of hisMCCORD v. UNITED STATES 8

military retirement pay

. 4 Since he will not r eceive military retirement pay (except in the amount of $37.60) , re coupment , in McCord’s view, is improper

. But McCord concedes that the severance “overpayment issue is not ripe

, ” Reply Br. 1 , because a debt has not yet been established by the government and he has request ed that the government waive reco upment and t his request has not been yet acted

on. The Claims Court properly declined to reach the severance pay recoupment issue.

I I I. Out

- of

- Pocket Medical Expenses

Due to the correction of his disability rating, McCord became retroactively eligible for retirement benefits including TRICARE coverage

. McCord seeks damages in the amount of $4,760.97 for medical expenses that he incurred prior to his being enrolled in TRICARE

. The Claims Court held that he could not recover because he “failed to exhaustthe applicable administrative procedures for securing benefits under TRICARE.” J.A. 9

. The government first argues that the Claims Court has

no jurisdiction over McCord’s claim

. This argument is without merit. The Tucker Act provides jurisdiction over a claim based on “ money

- mandating ” statute s or regulation s

. Martinez v. United States , 333 F.3d 1295, 1302 (Fed. Cir. 2003)

. Here, the “Secretary concerned may pay[] . . . a claim for

. . . pecuniary benefits, . . . if, as a result of cor-

4 Section 1174(h)(1) provides t hat “[a] member who has received

. . . severance pay .

. . and who later qualifies for [military retirement] pay

. . . shall have deducted from each payment of such [military retirement] pay an amount, in such schedule of monthly installments as the Secret ary of Defense shall specify,

. . . until the total amount deducted is equal to the total amount of

. . . severance pay

. . . . ”MCCORD v. UNITED STATES 9

recting a record

. . . the amount is found to be due the claimant on account of his .

. . service.” 10 U.S.C § 1552 (c)(1)

. Although § 1552 itself is not a “ money

- mandating ” statute, it becomes “money

- mandating” if a claimant was improperly denied benefits but became entitled to them under other provisions of law. See Martinez , 333 F.3d at 1314

– 15. Here, the benefit McCord seeks

— TRICARE coverage

— is a pecuniary benefit that McCord was entitled to receive as a military retiree under the regulation

. See 32 C.F.R. § 199.17 (implementing the TRICARE program and stating that “[r]etirees and their family members” are beneficiaries of th is program). This regulation is th e source of McCord’s entitlement to incurred medical expenses during the period of time he should have been receiving TRICARE coverage as a military retiree. The Claims Court has jurisdiction over that claim under the Tucker Act.
The government also contends that th e Claims Court correctly ruled that McCord was required to first apply for

a n award under the TRICARE system

. This ruling was erroneous

. McCord ’s request is not for a benefit under TRICARE procedures but rather for the monetary loss that he suffered due to the government’s failure to provide TRICARE coverage

. T he government conceded during oral argument that McCord is seeking damages for f a ilure to

re cognize his eligibility for TRICARE coverage

. The TRICARE reimbursement procedure only cove r s medical claims for services “authorized under the TRICARE Program , ” C laims Processing Procedure

, TRICARE Operations Manual 6010.59

- M, Ch . 8, Sec. 1 (revised Oct. 20, 2017)

, https://manuals.health.mil/pages/DisplayManualHtmlFile /TO15/59/AsOf/TO15/c8s1.html#FM69153

, and it thus does not provide a remedy for damages flowing from improper exclusion from the TRICARE program. E xhaustion of TRICARE proced ures is not required for McCord’s claim

. The fact that McCord was retroactively given TRICARE entitlement does not change this result.MCCORD v. UNITED STATES 10

McCord claims d amages in the amount of $4,760.97, which is the total sum of his out

- of

- pocket expenses that he incurred due to the fact that he was excluded from TRICARE coverage

. T he government did not dispute t he damages amount before the Claims Court or in its briefing in this appeal

. Under the circumstances, we conclude that McCord has shown his dama ges and is entitled to an award of $4,760.97

. C ONCLUSION

We reverse the Claims Court’s judgment with respect
to McCord’s claim for o ut

- of

- pocket medical expenses

, and direct entry of an award for $4,760.97

. We affirm the Claims Court’s judgment in other respects.

AFFIRMED

- IN

- PART, REVERSED

- IN

- PART, AND REMANDED

C OSTS

No costs

.