New York’s “Death Panel Lottery” for Children Injured by Medical Malpractice at Birth

Governor Cuomo’s proposal to limit the recovery of damages for pain and suffering to victims of medical negligence to $250,000 was, thankfully, defeated in the New York State Legislature Shamefully, however, something with a far devastating impact on the health of children injured by obstetrical negligence was passed and is now the law in New York. Buried in the $132.5 Billion Budget was the creation of the “New York Medical Indemnity Fund.” Here’s the way the fund works and why its consequences are so dangerous to children injured by malpractice at birth:

The family of a catastrophically injured child has to hire a lawyer and go through all the steps and expense to prove the malpractice that caused his injury, and, among other things the nature and cost of his or her future care needs. These include medical services, but more important, the cost of nursing or care aides when his or her parents can no longer take care of the child. The defendant doctor and/or hospital also puts in their proof, and if there is any disagreement as to the cost of future care, the defendant tries to convince the Court of what they assert to be the proper amount to pay for such care. After hearing all the facts, the Court makes a determination, based on the evidence, as to the types and cost of care required, and how long it will be needed. Even then, this finding-based on evidence from expert physicians and rehabilitation specialists is subject to reduction on appeal. Once that process is completed, the amount determined for future care is reduced by payments for health care that can be recovered from other sources. Even then there are numerous safeguards to assure that the doctors or hospital and their insurance carrier will not pay more than is required for care. For example, the amount is not paid in a lump sum–but rather is converted future annual payments as determined by the Court and approved as reasonable on appeal if necessary. To make sure that there is no “windfall” the annual payments for care determined by the Court stop at the death of the child, since they are no longer needed.

It would seem that this system-though not without faults-is pretty fair in determining the nature and cost of the future care. It assures that the care necessary to maximize the brain injured child’s quality of life is available and can be paid for, and, as described, there are numerous safeguards in place to protect the negligent doctor or hospital from “overpaying.”

Under the new statute, the child’s family still has to go through all of the steps described above. But now, instead of requiring the wrongdoer who caused the harm (or its insurance carrier) to pay the actual cost of providing care Governor Cuomo and the Legislature has transferred the obligation to pay for future care to the State, at a first year cost of $30 million-minus administrative costs. (So much for any budget savings!) But, if all they did was to transfer the cost to the State, there would be no harm done to the child. But that’s not what happens.

Even though the cost of care and need for it has already been established in Court, now, in addition, the child and his family has to apply (beg) the State to pay for the care that has already been vetted and determined by the Court to be essential. So some bureaucrat, without access to the expert testimony, and without the safeguards of inherent in the fact finding role of the Court will get to decide anew whether the previously determined essential care will be provided. And if such care is not approved, the family has to go through another round of administrative hearings in the hope to get the care that they need and which the Court already said was appropriate! If their request for care is denied, it will require yet another trip to Court-to get what they already won previously. And what does the family do about getting treatment in the meantime? Does this system make sense to anyone? Exactly what “problem” does this Byzantine system solve?

And guess what? Even if the State Fund agrees that the care previously determined by the Court is required, most services are reimbursed-not at their actual cost–but at Medicaid rates, which may be far below the actual cost of obtaining services. I have had clients who have been approved by Medicaid for extensive nursing services, only to learn that nurses will not work for Medicaid rates-or will not go through the hassle of getting paid by the County or the State.

So the State has taken health care decisions and the means to pay for them out of the hands of patients and their families-even after they were proven and accepted by a Court–and placed these critical life altering decisions at the whim of a state bureaucrat-who, because the fund is inadequate to pay anticipated claims-has every motivation to deny or reduce payment. It is inevitable that innocent children will die because of this legislation, which essentially creates the very “death panel” or “health care rationing,” that conservative critics of “ObamaCare” are so fond of criticizing.

But that’s not all. The situation gets worse. It was well recognized-even by its proponents– that the $30 million appropriation for the Fund would not be adequate to pay all of the necessary claims. So the legislation provides that when 80% of the fund is exhausted, no new child’s claim will be accepted for payment. So in addition to creating “death panels,” the State has also created a lottery. Purely by dint of timing, some children’s claims will be paid at Medicaid rates, and will be subject to bureaucratic determination, and other children-with the exact same injuries and needs–will get paid the full amount of their future medical expenses by the insurer of the wrongdoer. And does anyone seriously think that in an era of budgetary limitations for the foreseeable future that this situation will improve. To the contrary, under this law, some children-the “lucky” victims of obstetric malpractice–will get the care that they need, and the rest, in the exact same situation-the “double victim lottery losers,” will not! This hardly seems reasonable or fair by any definition.

Lest there be no misunderstanding, this Fund has nothing to do with weeding out “frivolous” or un-meritorious lawsuits. To the contrary, it only applies to those cases where the aggrieved family has already proven malpractice, the severity of the injury, and the need and cost of future care. What the statute does, however is take those proven needs, and-at best–arbitrarily reduces them and the cost of deprived care to these children. At its worst, it denies them the care that they so critically need.

After representing dozens of parents in this situation, I can assure you that the last thing they think about before going to sleep at night, and the first thing that they think about in the morning, is “how is my child going to be cared for, when I no longer can do so.” At least when parents can make health care decisions about their disabled children, and they receive the amount compensation that the Courts have determined is necessary provide such care, they were able to rest a bit easier at night. Not only has Governor Cuomo and the Legislature taken that piece of mind away, but this benignly named Medical Indemnity Fund will have devastating consequences to the children of New York who have already been victimized by irresponsible medical care. New Yorkers should be outraged by what has been done to these children and their families.

Michael W. Kessler