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After $229 million verdict, Maryland hospitals seek new way to pay for injured babies

A record $229 million awarded last year to a baby born with brain damage at Johns Hopkins Bayview Medical Center is refueling an effort by the state’s hospitals to change how birthing centers pay when they are found liable for injuries.

For years, the hospitals have sought to create a birth injury fund, but the push has gained little traction in the state legislature.

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This year the hospitals are proposing a new kind of fund that still involves the court system. The fund would pay for a lifetime of care for those who win legal judgments or settlements but eliminate giant lump sum payments by paying out on an as-needed basis, a cost control that hospitals say would preserve obstetrical care for the more than 71,000 born annually in the state.

“This still allows families their day in court,” said Kevin Sowers, president of the Johns Hopkins Health System. “If we make a mistake we should be held in account.”

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Sowers said the cost of jury verdicts and settlements in Maryland exceeds the national average and is driving up the cost of reinsurance, the coverage the self-insured hospitals buy to cover very large claims. Hopkins’ costs are rising to $150 million this year from $110 million and the hospital now has to cover millions more before the benefit kicks in, he said.

He said the fear is that some hospitals will stop offering obstetrical services and doctors will leave the state.

Sen. Delores G. Kelley, a Baltimore County Democrat, introduced the bill Monday in the General Assembly, where the prospects may be no more certain than in year’s past as lawyers already are lining up to oppose it. Kelley did not respond to requests for comment.

Sister Helen Amos, the board chair at Mercy Medical Center, the city’s biggest birthing hospital, said the only relief the hospitals can get is legislative. But the fund also would benefit the families of injured infants, she said.

“This will be positive change,” she said, “providing lifetime care as directed by the injured party’s own physician.”

Under the hospitals’ proposal, families and their lawyers still would sue through the legal system, but the size of the verdicts or settlements awarding damages wouldn’t matter as much. A fund, managed by a state agency, would pay for the injured babies’ care as determined by the babies’ doctors.

Some families would end up using less money than their award, and some would use more depending on lifetime needs. Lawyers, who have opposed such funds in the past, would be paid based on the size of the verdict or settlement as negotiated with their clients.

Such verdicts usually contain economic and non-economic damages. Economic damages include cost of care and lost wages, while non-economic damages, known as pain and suffering, are capped already at $860,000 in Maryland and that would not change.

Instead of paying economic damages in lump sums with each decision, hospitals would pay for the fund through an assessment based on their obstetrical department’s revenue, collectively amounting to about $30 million a year. The costs would require increases to rates charged patients for all services, from having a baby to heart surgery and emergency visits. These rates are set by the state in Maryland.

The idea, based on a model implemented in New York, is that hospitals get predictability and families get a steady means of paying for expensive lifetime care.

Sowers said the hospitals expect about seven babies a year — about one out of every 10,000 births in the state — to be able tap the fund. Normally, the number of birth injury cases is unknown. Few cases make it to a jury, while settlements are not disclosed.

Past proposals for a fund would have eliminated the court proceedings and sent families directly to the fund.

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In a statement, the Maryland Hospital Association said the state’s current medical liability system can’t always deliver long-term medical care for babies.

“Maryland’s hospitals want to ensure these children and their families receive the support they need,” the statement said. “That is why hospitals propose the establishment of an Infant Lifetime Care Trust. The trust, funded by birthing hospitals in our state, would ensure the children’s future health care needs will always be covered.”

The new premise, however, did not sit well with Keith Forman, a malpractice attorney involved in two large injury cases in the state in 2012 and the 2019 case that is considered a record medical malpractice judgement in the country.

In that case, a 16-year-old Prince George’s County teenager named Erica Byrom was suffering pregnancy complications and taken to Johns Hopkins Bayview Medical Center for high-risk care.

Doctors told Erica there wasn’t much that could be done to save her baby or spare her from extreme damages so she opted against a recommended emergency C-section, lawyers said. The baby was born with severe brain damage, but her lawyers argued that records showed doctors were mistaken and the delay made matters far worse.

The baby, who lives with a foster mother, likely won’t ever walk and relies on a feeding tube.

Hopkins, which is appealing the award, argues there was nothing improper about Erica’s care.

Under the hospitals’ proposal, Forman said, she would not get the award from Hopkins but would seek payment from a consumer-funded pot for each medical need, which could mean the child doesn’t get top-of-the-line care or care is rationed.

He also said the fund could run low on money, which has been the case in other states with similar programs.

“This takes a bleak view of legal system; what juries decide doesn’t matter,” Forman said. “The cost of treating these kids is extraordinary. Maybe they should work on improving maternal care instead of saying this is a problem with the legal system.”

George Tolley, legislative chair of the Maryland Association For Justice, representing trial lawyers, echoed many of the criticisms.

“Once again, Maryland’s hospitals want other people to pay for their errors," he said.

“As in previous years, this bill shifts the cost of a hospital’s fault onto other payers — health insurers, Medicare and Medicaid,” he said pointing to the rate increases needed to pay for the fund. Patients and taxpayers will pay tens of millions of dollars every year, Tolley said, "not the hospitals and doctors who commit these errors and jeopardize the life and health of their patients.”

He also said the bill "interferes with the civil justice system by supplanting a jury’s verdict determining a victim’s future medical needs with care approved by a bureaucratic panel.”

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