
VA can pay compensation for an additional disability caused by VA care, in the same way as if it were service connected. It is a different claim from ordinary service connection.
38 U.S.C. 1151(a) says compensation shall be awarded for a qualifying additional disability or death of a Veteran in the same manner as if it were service connected. VA says the added disability, or the disability that got worse, must not have been a reasonably expected result or complication of the treatment. It can come from VA medical or surgical treatment, a health exam, VA Vocational Rehabilitation (chapter 31) or compensated work therapy.
Under 38 CFR 3.361(e), the care must have been furnished by a VA employee or in a VA facility, and 3.361(f) excludes some services, such as care under contract. Training programs under VA Vocational Rehabilitation (chapter 31) and compensated work therapy also qualify.
A bad outcome alone is not enough. Under 38 CFR 3.361(c), a disability caused by not following medical instructions is not attributed to the care, and an illness that simply ran its natural course does not count unless VA's failure to diagnose and treat it in time caused it to continue or get worse.
VA's own example is a Veteran training as a mechanic under Vocational Rehabilitation (chapter 31) whose foot was crushed when a jack slipped from a car. Because the injury happened in a VA-sponsored program, it can be considered under 1151.
Under 38 U.S.C. 1151(b), if you are awarded a judgment against the United States in a civil action under 28 U.S.C. 1346(b), or enter into a settlement or compromise under 28 U.S.C. 2672 or 2677, for the same disability, VA benefits for it are not paid until the amount you would have been paid equals the judgment or settlement.
VA says you can file online, by mail, in person, or with the help of an accredited representative. See VA's page on how to file a disability claim.
Use VA's page to find an accredited representative. VA says Veterans Service Organization representatives provide help at no charge.