Military Fails to Collect From AIG for Care to Injured Contractors

by T. Christian Miller, ProPublica – May 7, 2009

WASHINGTON—The Pentagon has failed to bill American Insurance Group and other major insurance carriers for millions of dollars in medical care provided to private contractors injured in Iraq and Afghanistan, according to a new federal report [1] (PDF).

The United States hired hundreds of thousands of civilians to work in the two war zones. When injured on the job, their medical care is supposed to be paid for by private insurance companies, primarily AIG.

The audit by the Pentagon’s Inspector General [1] concludes that the military frequently failed to demand reimbursement when it treated injured contractors and the increased costs burdened front-line hospitals, cutting into resources that would otherwise be used to care for injured soldiers.

In one example, the main military hospital in Afghanistan at Bagram Air Base reported that one-third of all patients treated by military doctors were civilian contractors. This created an overwhelming burden for staff dedicated to delivering emergency care to wounded soldiers, the report said.

The auditors found that no single Defense Department agency is responsible for keeping track of costs, despite regulations requiring contractors to reimburse the government when their employees are treated at military installations.

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