RONEY, Circuit Judge:
This case presents the sole question of whether the United States can recover the cost of medical services provided through a Veterans Administration hospital to an injured veteran-employee covered by the Texas Workmen's Compensation Act, Texas Rev.Civ.Stat.Ann. arts. 8306-8309 (Vernon 1967). The legal issue is a variation of that decided in favor of the Government in United States v. Bender Welding & Machine Co., ___ F.2d ___, Docket Nos. 76-1770 and 76-1916, with which this case was consolidated. In those cases the employees were covered by the federal Longshoremen's compensation act, here by a state compensation act. The result, rationale, and holding of cases are the same. We treat this case separately only to more easily discuss the issue in the state compensation act context. Here the state board directed the compensation carrier to pay the cost of medical care provided by the V.A. hospital. The district court set aside that part of the award. We reverse the district court.
Adams, a veteran, was injured in the course of his employment with Affiliated Foods, Inc., a company subject to the Texas Workmen's Compensation Act. He was admitted to the Veterans Administration hospital, but transferred immediately to a private hospital for surgery. A few days later he returned to the V.A. hospital where he remained until his discharge two weeks later.
Adams had been admitted to the V.A. hospital only after the Veterans Administration had determined, in accordance with 38 U.S.C.A. § 610(a)(1)(B), that he was a veteran with a non-service-connected disability, and was "unable to defray the expenses of necessary hospital or nursing home care."
The Texas Industrial Accident Board approved a "compromise settlement" between Adams and Texas Employers' Insurance Association, which included "all accrued hospital and medical expenses resulting from [Adams'] injury — no exception." The carrier paid the private hospital bill but refused to pay the Veterans Administration's claim. The Board then ordered payment. On the carrier's petition for review, removed by the Government from the state court, the district court entered judgment for the carrier. The Government's appeal to this Court ensued.
The only questions presented here are whether the employee can recover the cost of medical care that would have been furnished free by the V.A. hospital, but for the compensation coverage; and, if so, whether the Government is entitled to subrogation to the employee's rights, having taken an assignment pursuant to 38 C.F.R. § 17.48(d) (1976).
Motivating the enactment of the Texas Workmen's Compensation Act was the broad economic theory that industrial accident costs should be chargeable to the industries as part of their overhead expenses. Southern Surety Co. v. Inabnit, 1 S.W.2d 412 (Tex.Civ.App. — Eastland 1927, no writ); Employers Mutual Liability Insurance Co. v. Konvicka, 197 F.2d 691 (5th Cir. 1952). The Texas courts have consistently held that the compensation laws should be liberally construed to further the remedial purposes for which they were enacted. Travelers Insurance Co. v. Adams, 407 S.W.2d 282 (Tex.Civ.App.-Texarkana 1966, writ ref'd n. r. e.).
The Veterans' Benefits Act, on the other hand, was intended to authorize free hospital care for non-service-connected injuries only to those veterans unable to defray the necessary medical costs. The Act was not intended to relieve an employer of his
Effectuation of the purposes of both statutes requires a holding that the injured employee should be able to recover from the compensation carrier the costs of medical care furnished by the Veterans Administration. A contrary holding would be a windfall to the insurance carrier merely because the employee was a veteran able to obtain care at a V.A. hospital, and would be inconsistent with the right of recovery afforded a private hospital. No valid reason appears for drawing a distinction between the two, where the employee has been billed. Nor does a valid reason appear for burdening the Government with the costs of a job-related injury, which should more appropriately be borne by the employer.
(a) The Administrator, within the limits of Veterans' Administration facilities, may furnish hospital care or nursing home care which he determines is needed to —
Veterans' Benefits Act of 1957, P.L. 85-56, § 510, 71 Stat. 111, as amended P.L. 85-857, 72 Stat. 1141 (1958); P.L. 87-583, 76 Stat. 381 (1962); P.L. 89-358, § 8, 80 Stat. 27 (1966); P.L. 93-82, § 102, 87 Stat. 180 (1973). See also 38 C.F.R. § 17.47 (1976). Congress in 1976 eliminated the male pronouns and substituted gender-neutral terms. 38 U.S.C.A. § 610 (Supp.1977).
(d) Persons hospitalized pursuant to paragraph . . . (d) . . . of § 17.47, who it is believed may be entitled to hospital care or medical or surgical treatment or to reimbursement for all or part of the cost thereof by reason of any one or more of the following: