Medical Malpractice Liability Insurer Question

Question
I am pursuing a medical malpractice claim against a California nursing home and a VA hospital, both of whom were partly responsible for a single injury. The VA provided all care to fix the injury, on its own dime; it is now asserting a lien regarding this care. Am I reading 38 USC 1729 too narrowly if I argue that a medical malpractice liability insurer is not among the third-parties to whom this section applies?

California Attorney

Answer
You raise an interesting argument, but one that is not likely to be agreed upon by a court. Technically, the term third party is defined under 38 U.S.C. §1729(i)(3)(D) to include a “person obligated to provide, or to pay the expenses of health services under a health-plan contract.”

The definition of a health plan contract under 38 U.S.C. §1729(i)(1)(A) includes a contract, medical or hospital service agreement (under which services are provided). Depending on the long-term care agreement that had your client receiving treatment at the nursing home, the nursing home is likely to be considered a third party within the meaning of the statute.

Even if you could argue that the statute is intended to be read to exclude the nursing home, arguably, the statute itself is going to be broadly construed as a statute providing recovery by the United States of cost of care and services furnished to a veteran for non-service-related injuries as part of Congress’ power to raise and support armies. A state’s argument that the statute violated the U.S. Constitution (Tenth Amendment) failed based on this very same rationale adopted by the federal court (U.S. v. State of Md., 914 F.2d 551 (1990)).

A more intriguing challenge is the argument that the United States remains partially to blame for the injuries for which it now claims to be able to be reimbursed. Clearly, the United States is not a third party within the meaning of the statute. If, for example, the United States wishes to recover against the nursing home for the nursing home’s share of medical expenses the United States incurred, it might do so by intervening in a separate cause of action, depending on whether the statute of limitations remains open for it to do so. However, the United States should not be able to recover for any medical expenses it incurred for which responsibility lies at the feet of the United States, through its representatives.

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Sylvius von Saucken