MCCORD v. United States, 1:16-cv-00310

Background

Preston A. McCord served in the Army (2008–2012), was discharged with severance pay, and later received VA disability compensation (20% rating initially; he sought correction to 30% and medical retirement).
McCord applied to the Army Board for Correction of Military Records (ABCMR); after administrative denial he sued in the Court of Federal Claims and the Court remanded, directing correction to a 30% combined rating and medical retirement with back pay.
On remand the ABCMR and the Secretary approved correction and asked DFAS to compute benefits; McCord elected to waive military retirement pay to retain full VA benefits under 38 U.S.C. § 5304.
DFAS calculated McCord’s reconstructed military retirement entitlement at only $37.60 (pro rata), and proposed to establish a debt to recoup the 2012 severance pay (~$25,877.60).
McCord sought (1) additional back pay, (2) relief about severance recoupment, and (3) reimbursement for differences in health insurance premiums and out-of-pocket medical expenses related to not having TRICARE.
The Court: denied extra back pay beyond DFAS methodology; held recoupment issues not ripe (noting potential DoD waiver); awarded $7,111.47 for excess insurance premiums (difference between employer premiums paid and TRICARE rates) and denied direct recovery of out-of-pocket medical expenses pending TRICARE administrative claims.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Back pay calculation	McCord: court should award lump-sum back pay without applying concurrent‑receipt offsets because he never actually received retirement pay previously	Gov: DFAS correctly reconstructed retirement pay and applied §5304 offset given McCord waived retirement to keep VA benefits; standard DoD methodology applies	Denied; DFAS methodology and §5304 apply; only $37.60 in reconstructed retirement pay was due
Recoupment of severance pay	McCord: §1174(h)(1) limits recoupment to deductions from future retirement pay, but he waived retirement pay so recoupment would be improper	Gov: intends to establish a debt but has discretion to pursue collection; recoupment procedures available	Denied as not ripe; DoD may establish debt and has discretionary waiver authority—court anticipates strong waiver arguments for McCord
Reimbursement for excess insurance premiums	McCord: entitled to difference between employer insurance premiums he paid (2015–2017) and TRICARE enrollment fees he would have paid as a retiree	Gov: opposes reimbursement citing Lord (2 Cl. Ct. 749)	Granted in part: Court awards $7,073.87 (plus $37.60 pension = $7,111.47 total judgment) for premiums above TRICARE costs
Recovery of co‑pays/out‑of‑pocket medical expenses	McCord: seeks direct reimbursement from Army/Court for medical expenses he would have covered under TRICARE	Gov: TRICARE administrative process controls reimbursement; claims may be untimely	Denied: Court requires exhaustion of TRICARE administrative remedies; government urged to help prevent timeliness denials

Key Cases Cited

Martinez v. United States, 333 F.3d 1295 (Fed. Cir.) (plaintiff in military pay cases entitled to pay plaintiff would have received but for the error)
Absher v. United States, 9 Cl. Ct. 223 (Ct. Cl.) (concurrent receipt prohibition bars full concurrent receipt of VA and military retirement pay)
Lord v. United States, 2 Cl. Ct. 749 (Ct. Cl.) (remedy limited to payments plaintiff would have received had record been correct)
Dolan v. United States, 91 Fed. Cl. 111 (Fed. Cl.) (corrections place servicemember in position they would have occupied absent error)
Barnick v. United States, 80 Fed. Cl. 545 (Fed. Cl.) (AFBCMR correction restores servicemember to position absent error)
Adams v. United States, 126 Fed. Cl. 645 (Fed. Cl.) (DFAS/TRICARE reimbursement for retroactive retirement corrections may include premium differences)