Virginia Subrogation Statute

Subject of the Subrogation Statute

One of the few codified mentions of subrogation in Virginia deals with medical services rendered arising out of negligence.  VA Code § 8.01-66.4 allows for subrogation where “any person, firm or corporation who may pay the charges for which a lien is provided in §8.01-66.2 shall be subrogated to such lien.”  The lien in question is one automatically created by Virginia law.  The lien arises when one receives medical care arising from a negligent act.  The provider of the services has a lien on the injured person’s claim against the negligent person or entity.

Covered Entities

VA Code § 8.01-66.2 includes the following:

  • hospital, public or private
  • nursing home
  • physician
  • registered nurse
  • registered physical therapist in this Commonwealth
  • receives medicine from a pharmacy
  • ambulance service

Limitations on Recovery

Covered entities are limited to the ” just and reasonable charge for the service rendered, but not exceeding $2,500 in the case of a hospital or nursing home, $750 for each physician, nurse, physical therapist, or pharmacy, and $200 for each ambulance service.”

Chaplin & Gonet Sets Sail for the Bahamas

virginia subrogation
In celebration of meeting their collection goals for the year, staff at the law firm of Chaplin & Gonet have been rewarded by setting sail to the Bahamas!  The firm broke all historical collection records and demonstrates the determination of Chaplin & Gonet to collect on behalf of subrogation and collection clients.
As a result the office will be closed May 24 through May 29.  All voice mails and emails will be answered promptly upon re-opening.  If you would like to put Virginia’s premier subrogation and collection firm to work for your company contact us today.

Contractual vs. Equitable Subrogation in Virginia

virginia subrogation attorneysEquitable Subrogation in Virginia

Subrogation is the legal process in which an insurer can step into the shoes of their policyholder to recover damages from the third party responsible for the loss.  Equitable subrogation is based on equity, or fairness, as defined by the Virginia Supreme Court in Xl Specialty Ins. Co. v. Dept. of Transp., 611 S.E.2d 356, 269 Va. 362 (Va, 2005):

Equitable subrogation is subrogation that arises by operation of law. It is not based on contract or privity of parties, but is “purely equitable in nature, dependent on the facts and circumstances of each particular case.” Centreville Car Care, Inc. v. North Am. Mortgage, 263 Va. 339, 345, 559 S.E.2d 870, 872 (2002) (quoting Federal Land Bank of Baltimore v. Joynes,179 Va. 394, 402, 18 S.E.2d 917, 920 (1942)). When a principal defaults on a contract guaranteed by a performance or payment bond and the surety performs on the bond, principles of surety law and the doctrine of equitable subrogation impose certain rights and duties running between the surety, principal, and obligor, and allow the surety to enforce such rights and duties. See Dickenson v. Charles, 173 Va. 393, 400, 4 S.E.2d 351, 353 (1939) (quoting Kendrick v. Forney, 63 Va. (22 Gratt.) 748, 749-50 (1872)); Fulkerson v. Taylor, 100 Va. 426, 432,41 S.E. 863, 865 (1902); Restatement (Third) of Suretyship and Guaranty § 27 (1996).

Equitable subrogation arises from the common law and can work against the insurer conducting business in Virginia.  For instance, where the Virginia policyholder has uninsured losses and recovers a judgment against the tortfeasor that does not equal the amount of total loss suffered by the insured, then the insurer cannot recover against the third party.

Contractual Subrogation in Virginia

The key difference in Virginia between equitable subrogation and contractual subrogation is that judges ultimately decide the outcome of an equitable subrogation action, while the language and intent of the parties control the outcome in a contractual subrogation case.  It is imperative for the parties to a subrogation case to understand the language of the insurance contract and how it affects subrogation rights.  For instance, insurance contracts can be written to give the insurer first right of subrogation, which cuts off most equitable subrogation worries.  Virginia subrogation attorneys would be wise to discuss contract provisions with clients operating in Virginia.
Editor:
Justin McLeod, Esq.
Associate
Chaplin & Gonet

Virginia Healthcare Subrogation

virginia subrogation attorneysVirginia subrogation attorneys need to familiarize themselves with the ways HIPAA compliance and General District Court discovery, namely the subpoena duces tecum, interact and ultimately impact healthcare subrogation practices in Virginia.  By addressing whether a subpoena duces tecum request is both served properly and is HIPAA compliant, the Virginia healthcare subrogator can avoid any ethical or procedural pitfalls.

Is There Proper Service?

It is imperative that Virginia healthcare subrogation counsel ensure that service of the subpoena duces tecum conforms to the rules of their state, the federal rules, and that of the state it was served from.  If a request is received from another jurisdiction then the Virginia healthcare subrogation attorney need only Google search the jurisdiction’s rules to pull them up.  Upon determination that the subpoena duces tecum does not conform to the applicable rules, then the Virginia subrogation attorney cannot legally respond to them.
Is the Subpoena HIPAA Compliant?
The Virginia subrogation attorney would be wise to double and triple check that the subpoena duces tecum conforms to HIPAA regulations.  Violation of HIPAA carries stiff penalties, namely civil penalties up to $1.5 million in annual fines and criminal penalties of up to ten years imprisonment for “covered entities.”  This leads to the next issue:
Are You a Covered Entity Under HIPAA?
45 CFR 160.103 defines covered entities as a “health plan, health care clearing house, or a health care provider who transmits any health care information in electronic form.”  If you are a Virginia healthcare subrogation attorney you are likely considered a covered entity or an agent for a covered entity under HIPAA regulations.
Is There a Valid Authorization For Disclosure?
Under HIPPA, a “valid authorization” is one that contains expressed written consent signed by the patient or their legal guardian for a specified purpose.  This consent must include a detailed description of what records are referred to and what purpose they are to be used.
Conclusions for the Virginia Healthcare Subrogation Attorney
Upon receipt of any subpoena duces tecum for health records the Virginia healthcare subrogation attorney need only remember two things: process and HIPAA.  If both are complied with then it is safe to respond, if however, one or both are not complied with then the Virginia subrogation attorney cannot respond to the subpoena duces tecum.
Editor:
Justin McLeod, Esq.
Associate
Chaplin & Gonet