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Maryland bill would create birth injury fund

Prompted by recent multimillion-dollar medical malpractice judgments, Maryland lawmakers are pushing to create a fund to help pay for treating babies who suffer neurological injuries during birth.

Proposed legislation calls for hospitals and doctors with obstetrics and gynecological practices, as well as malpractice insurers, to pay annual fees to the birth injury fund, which families could tap to pay medical bills, recoup lost earnings potential and cover other costs. Virginia, Florida and New York are the only states with such funds.


Sponsors of the bill — supported by Johns Hopkins Hospital and the University of Maryland Medical System, among others — said the fund is needed to ease the financial pressure doctors and hospitals face from high malpractice costs. They worry that if the problem persists it could lead to some practices closing, reducing access to care.

"We can provide the care these children need for far less money," said Del. Dan K. Morhaim, the Baltimore County Democrat who sponsored the bill in the House.


But critics say the measure, introduced in both chambers of the General Assembly, would let doctors and hospitals off the hook for negligent medical practices. Trial lawyers and patient advocates say hospitals and doctors could cut their malpractice costs by improving care and preventing injuries.

"The best way for hospitals to reduce their financial burden is to prevent negligence," said Michael Bennett, founder of the Coalition for Patients' Rights in Maryland. "A birth injury fund will only serve to remove accountability and thereby increase likelihood of negligence."

Doctors and hospitals with obstetrics and gynecological practices have long complained about the high costs of malpractice insurance, but recent court verdicts have brought the issue to the forefront again.

In May 2012, Rebecca Fielding and Enso Martinez won a $55 million judgment against Hopkins after their son was diagnosed with hypoxic ischemic encephalopathy, a condition that causes permanent cognitive delays.

The birth had started at home, overseen by a midwife, but the mother was rushed to Hopkins after complications developed. The couple said the hospital was liable because the baby was deprived of oxygen to the brain while the mother awaited a cesarean section there.

The judgment, one of the largest ever in Maryland, was reduced to $28.3 million by a trial court, and later thrown out by the Maryland Court of Special Appeals and sent back for a retrial. The case is pending.

In the same year, a jury awarded $21 million to a Glen Burnie couple whose son was born prematurely with cerebral palsy at MedStar Harbor Hospital in 2002. In the lawsuit, the family claimed Jaylan Norfleet became oxygen-deprived while in his mother's womb and that hospital staff should have performed a cesarean section instead of allowing a prolonged vaginal birth. That case was appealed, according to online court records.

Mercy Medical Center said the recent lawsuits contributed to a doubling of the hospital's malpractice insurance costs in the 2013 fiscal year. A few months ago, Mercy cited high costs from a "worsening litigation environment in Maryland" when it parted ways with a midwife practice that had worked out of the hospital for years.


Officials at Mercy worry that if costs keep rising it might one day have to cut services, said Sister Helen Amos, board chairwoman of the Catholic hospital. "We don't really want our mission of caring for mothers and babies of Baltimore City to be threatened by this unsustainable situation," she said.

Mercy is among the hospitals lining up behind the proposed legislation, which they say would help reduce the number of injury cases that end up in costly court proceedings.

LifeBridge Health said the organization supports the concept of the Maryland Injured Baby Fund. "We are actively participating in discussions with our colleagues from other Maryland hospitals and state lawmakers to find ways to successfully implement and support this model, which will benefit patients and families in the long run," the hospital system said in a statement.

"What we would like is a fair shake in cost containment," said Andrew Satin, director of gynecology and obstetrics at Johns Hopkins Medicine. "I think people who have injuries that are due to mistakes should be compensated, but I think it's gotten out of control."

Doctors said complications can occur in childbirth even under the best of circumstances. As mothers deliver later in life and pregnant women have more problems, such as diabetes and obesity, the risks are even higher, Satin said. Most bad outcomes aren't attributable to negligence, he said.

Under the proposed legislation, people would apply directly to the fund and would have to provide proof of the injury. An administrative law judge would decide whether a child is eligible for compensation.


Money for the fund would come from fees paid by doctors, hospitals and insurers. Physicians who perform at least five deliveries would pay $7,500 into the fund annually. Insurers would pay a surcharge equal to 2.5 percent of any medical liability premiums collected. Hospitals would pay $175 per birth, with minimums based on whether it's a rural or metropolitan hospital.

Parents could still sue a hospital or doctor in court, instead of applying to the fund, if they thought a doctor or hospital "maliciously" caused the injuries, according to the proposed legislation. But a judge could order the case filed with the fund if that could not be proved.

Malpractice attorney Wayne Willoughby said the medical community's claims of financial hardship because of malpractice lawsuits are overblown. Willoughby, past president of the Maryland Association for Justice Inc., which represents the state's trial lawyers, said creating the fund is simply another attempt at tort reform.

"Rather than making bills to evade responsibility for committing malpractice, hospitals should instead be working to improve the quality of care," he said.

Not all hospitals are sold on the plan, which is scheduled for a hearing later this month. They are not yet sure that a fund is the answer to what they say is a medical malpractice problem that threatens to drive OB/GYN practices out of business.

MedStar Health and two hospitals with some of the largest number of births — Greater Baltimore Medical Center and Anne Arundel Medical Center — said they need more time to review the bill and its potential impact. So does the Maryland Hospital Association.


"MedStar Health supports finding a better way to compensate individuals and families who are injured during the birthing process," the hospital system said in a statement. "We also support exploring the most effective measures to reduce medical liability costs, as recent verdicts in birth injury cases are unsustainable and, if unaddressed, could jeopardize access to care."

The legislation proposed in the General Assembly is modeled after programs in Virginia and Florida. Gil Siegal, a law professor at the University of Virginia who studied both programs, said they were successful at reducing malpractice premiums and easing the financial burden on the families of injured babies. The Maryland Department of Health and Mental Hygiene is reviewing the bill and has not taken a position on it.

"More kids are being helped, and in that sense it's a huge social success," Siegal said.

Still, some people are concerned that doctors wouldn't be held liable for true negligence when a fund is used in place of the legal system, Siegal said.

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Morhaim, who is a doctor, said the Board of Physicians and the department of health will investigate cases that show evidence of negligence, just as they do now. "If there is real neglect, there are ways to deal with that," he said.

The fund would be overseen by an executive director and a board of trustees that includes an obstetrician, a pediatric neurologist, an attorney, a hospital representative and a citizen.


MedStar said it wants to make sure the fund would be "actuarially" sound and actually reduce medical liability costs before throwing in its support.

The University of Maryland Medical System said it believes the fund will help more families.

"We support such a fund as it would also enable all babies who suffer injuries during childbirth due to natural or medical accidents to be covered by the fund and receive access to the care they need, not just the babies whose families believe their infant was the victim of malpractice," said Mary Lynn Carver, a medical system spokeswoman.