REGINA D. WALKER,		)
				)
Employee,			)	DECISION AND ORDER
Applicant,			)	AWCB Case No. 8419533
				)	AWCB Decision No. 90-0073
v.				)
				)	Filed with AWCB Anchorage
ANCHORAGE SCHOOL DISTRICT,	)	April 13, 1990
(Self-insured)			)
				)
Employer,			)
Defendant.			)
				)

We heard this claim for reimbursement of health care costs in Anchorage, Alaska on April 5, 1990. Attorney Michael J. Jensen represented the employee. Attorney Phillip J. Eide represented the employer. The record closed at the end of the hearing.

On September 16, 1988 we issued a decision and order¹addressing the employee's claim for compensation and medical benefits. In it, we found the need for some (but not all) of the employee's medical care arose from a compensable injury. Consequently, we entered an order which stated in part: "The employer shall pay for the employee's medical treatment including reimbursement of the costs of surgery performed on her right arm in August 1987. The employee's request for reimbursement of the costs of surgery on her left arm performed in November 1987 is denied and dismissed."

Due to her status as the spouse of a retired Army noncommissioned officer, the employee apparently qualified for treatment at the United States Air Force hospital at Elmendorf Air Force Base. The surgery, however, was performed by a civilian surgeon, Dr. Vasileff, after a referral from an Air Force physician. To date, we have not been made aware of a dispute concerning payment of the costs of the right arm surgery.

At issue here is the employee's request that we order the employer to reimburse the United States Army for $2,373.00 it paid the Air Force for fees attributed to the treatment of the employee at the Elmendorf Air Force Base hospital. The employee's attorney also seeks fees if reimbursement is ordered. The employer contends it may not be legally ordered to reimburse the Army and that a stipulation to reimburse is either unenforceable or should not be enforced.

1. Should the employer's stipulation to pay the employees attorney $500.00 and reimburse the Army $2,373.00 in exchange for cancellation of a scheduled hearing be enforced?

2. May we order reimbursement of the $2,373.00 paid by the Army for the employee's treatment at the Air Force hospital?

Phillip E. Santerre testified he is an attorney and claims supervisor for the Army at Fort Richardson, Alaska. Cost statements, detailing $2,373.00 in costs paid by the Army for the employee's medical care, had been prepared by his office. He admitted during cross-examination that the cost statements did not indicate that only costs attributable to the employee's right arm treatment had been included. He had no personal knowledge of that limitation having been applied. No documents in his claim file indicated the limitation had been applied but the need to do so could have been conveyed telephonically to the Air Force in his office's normal course of business.

He stated his opinion that the employee was not legally bound to pay the Army for the health care provided. He also stated that the employee had not assigned the Army any rights she might have to recover treatment costs from the employer.

1. Stipulation

The parties' representatives signed a document, titled "stipulation," on January 20, 1989. It stated:

The employer paid the attorney's fees (which it now seeks to recover) but did not pay the Array.

Our regulations recognize only Stipulations of fact. 8 AAC 45.050(f) provides in part:

. . . .

We find the document the employee now seeks to enforce was not a stipulation of fact. It clearly represents an attempt to direct a course of conduct in order to resolve by agreement the entire issue of reimbursement of the Army. We find the document would more properly have been titled a partial compromise and release, since it dealt definitively with one issue (reimbursement) of the overall claim. Considering the document a compromise and release, we find the employee's reliance on 8 AAC 45.050(f)(3) misplaced. Brown v. Alaska Airlines, AWCB No. Unassigned (March 81 1990).

AS 23.30.012 controls agreements to settle claims. it states in pertinent part:

Our regulations recognize the necessity of board approval. "Agreed settlements between the employer and the employee or other persons claiming benefits under the Act are not final until approved by the board."

We find the document in question here was never approved by us. We conclude, under AS 23.30.012, that the agreement is unenforceable. Adamson v. University of Alaska, AWCB No. 88- 0066 (March 31, 1988); Munson v. Anchorage School District, AWCB No. 87-0340 (December 31, 1987); Cessna V. Delta Greely Regional Schools, AWCB No. 82-0049 (March 8, 1982).

2. Reimbursement

The Army has not: sought to intervene in the employee's claim.² Nor has the employee sought payment to herself of the amounts paid by the Army on her behalf.³Instead, the employee seeks an order requiring the employer to reimburse the Army.

Based on Santerre's testimony, we find the employee has no legal obligation to repay the Army. We also find she has riot expressly assigned her rights against the employer under our Act to the Army. Consequently, we believe the Army's right to obtain reimbursement from the employer (in the absence of any statutory right under our Act, third party beneficiary status under an insurance contract) or an express assignment of the employee's statutory rights) must turn on an implied assignment.

In Newman v. Knik Bar, AWCB No. 88-0337 (December 9, 1988), we allowed the employee to come before us, and seek reimbursement payable to the Veterans Administration, despite the absence of a written assignment of rights. We did so by finding the employee's request for such reimbursement an implied assignment of his rights to medical benefits under AS 23.30.010, 045(a) and 095. We cited our court's opinion in Searfus v. Northern Gas Company, Inc., 472 P.2d 966, 969 (Alaska 1970), which noted, "Professor Larson states that the theory of compensation legislation is that the costs of all industrial accidents should be borne by the consumer as a part of the cost of the product."

We agree with the Newman panel's emphasis in putting the costs of work-related injuries where they belong. However, our power to do so is not unlimited. The cases cited to us by the employer make clear that federal courts, up to and including the United States Supreme Court, have limited federal agencies' attempts to obtain reimbursement to those authorized by Congress.

In United States v. Standard Oil Co. of California, 67 S. Ct. 1604 (1947), the Court held the costs of medical care given all injured soldier could not be recovered by the government from a tortfeasor. It noted that the question of liability to make whole the federal treasury "is chiefly one of federal fiscal policy, not of special or peculiar concern to the states or their citizens." 67 S. Ct. at 1610. The Court stated: "When Congress has thought it necessary to take steps to prevent interference with federal funds, property or relations, it has taken positive action to that end. We think it would have done so here, if that had been its desire. This it still may do, if or when it so wishes." 67 S. Ct. at 1612.

In Pennsylvania National Mutual Cas. Ins. Co. v. Barnett, 445 F.2d 573 (5th Cir. 1971), the court denied reimbursement to the Veterans Administration. The court first noted that the 1962 Medical Care Recovery Act: (42 U.S.C.A. §2651) applied to tort cases but not workers' compensation. It then held that the Veterans Administration could not recover from a workers' compensation insurer the costs of treatment given a veteran injured in a work-related accident. It noted the entitlement to free care from the Veterans Administration was predicated upon a lack of means to pay However, the Veterans Administration's regulations conditioned the right to recover (from workers' compensation insurers) upon procurement of an assignment from the injured veteran. Since no assignment had been obtained, the court held the Veterans Administration could not recover its costs of care.

We note, though, that in later cases, the fifth circuit has found in favor of the Veterans Administration. In United States v. Bender Welding & Machine Co., 558 F.2d 761 (5th Cir. 1977), the court held Congress had limited free care to veterans unable to pay for medical care and the Veterans Administration's regulations properly allowed voluntary assignments of claims under the Longshoremen's and Harbor Workers' Compensation Act. Since an assignment had been obtained, the court held the Veterans Administration entitled to reimbursement by subrogation. in a companion case the court held reimbursement proper in the context of Texas' workers' compensation law. Texas Employers' Insurance Assoc. v. United States, 558 F.2d 766 (5th Cir. 1977). Upon rehearing, the court found the express authority of the Veterans Administration's assignment regulation prevailed over the Texas workers' compensation statute's anti-assignment provision. Texas Employer’s Insurance Assoc. v. United States, 569 F.2d 874 (5th Cir. 1978). Our circuit court has recognized these cases. United States v. Metropolitan Life Ins. Co. 683 F.2d 1250 9th Cir. 1982).