Download a PDF of the Current Issue 2015 Volume 12 Number 3 July- September
As over 61,000 bills were sent out to licensed physicians recently I had the opportunity to field many phone calls, some supportive, some inquiring, and a few outright hostile about paying $250 a year to help fund the
Florida Birth-Related Neurological Injury Compensation Association (NICA). Each year, I look at what NICA has done over time and the recent year so that I can honestly answer any concerns or criticism, and respond to these callers with assurance that we are on a course that fulfills the legislative missions of: 1) encouraging physicians to practice obstetrics and provide obstetrical services in Florida, 2) stabilizing malpractice costs to assure availability of insurance to physicians, and 3) providing essential care to injured children. As the New Year begins, what kind of program has NICA been and what can we make of another opportunity ahead?
NICA was established in 1988 to provide lifetime care for a specific category of “birth-related neurological injuries” which are defined as injuries to the brain or spinal cord of a live infant (of 5.5 lbs for single births or 4.4 lbs for multiple births) caused by the deprivation of oxygen or mechanical injury occurring during the course of labor, delivery, or resuscitation in the immediate post-delivery period in a hospital resulting in permanent and substantial mental and physical impairment.
While uncommon, these injuries are very significant in terms of cost and impact as they represent outliers and “uninsurable” injuries. From both a dollar cost and social cost perspective, these are devastating events.
The potential cost of just one of these injuries is huge, varying widely in the multi-million dollar range. Settlements and jury verdicts typically range from a low in the single digit millions to as much as $117 million in a recent case in Florida. Although the ultimate payment is presumably far less than the verdict, the effect on malpractice rates is to defeat the predictability necessary to set rates in an affordable range and assure that insurance coverage will be high enough to cover the most unpredictable situation. To cover this kind of “outlier” physicians and hospitals pay much more.
Very few cases meet the above definition. Genetic or congenital abnormalities are excluded, and there must be a participating physician involved in some way in the labor or delivery or resuscitation to be covered by NICA. This is a small number of children and families affected, but how they are affected is life changing (not to mention the emotional toll on the physicians involved!).
Without NICA, it may take 10 or more years of litigation for a child or family to receive any compensation, if ever, and in the meantime both plaintiff’s counsel and defense counsel are racking up fees and costs. Services may or may not be available to the child depending on whether or not they have health insurance or are eligible for some government or private program, and there are staggering costs that no health insurance covers.
So what has NICA done that is a game changer?
In 2009 and 2010 NICA accepted 18 claims each. Typically, if the family is not trying to avoid NICA and seek a recovery through the courts, the time from filing the claim to acceptance averages about 145 days. This may be somewhat longer if records are not available or the family has conflicts with scheduling an independent examination. But even if there are delays, it is vastly shorter than the years of litigation faced in a court case involving this kind of injury. NICA means that there is an immediate remedy, services available, financial support and security for the family, without the additional cost of litigation.
Virtually all of the dollars go to the family. Plaintiff attorney fees for acceptance into the program are less than 1% of the total cost to NICA. No attorney is required, but if an attorney is representing a family, the fee is based on hours needed to pursue the NICA claim, not on hours expended to pursue a court case. The average is about
$10,000 per claim. (This is not popular with many plaintiff attorneys!)
Think about the low end of the range for a court verdict and then think about the high end. 18 claims per year, $90 million to $750 million or more added annually to the rate base with a multiplier to cover administration, legal fees, contingencies and profit margin. This is an over simplification of what is included in the insurance rate development process, but it gives a general demonstration of what is included in the real ultimate price that is paid by hospitals and insurers.
Once accepted into NICA, the following benefits offered as compensation to the families are manifold:
-A one time family benefit of $100,000 (lump sum or periodic payments)
-Lifetime care. Including payment of all co-pays and deductibles)
-“Medically Necessary and Reasonable”: Physician costs, Private Duty Nursing care at home, Equipment, Therapy Hospitalization, Other facilities charges
-Related travel expenses which includes mileage reimbursement for every appointment or provision of a van with all maintenance and associated costs paid by NICA.
-A death benefit of $10,000
-Reasonable expenses for filing the claim, including attorney’s fees
These are just the clear statutory benefits. NICA also has five nurse case managers who work with families every day and answer questions, coordinate appointments, order equipment and work with providers to assure the needs of the children are met. The experience developed by these case managers with the broad range of needs and the individual attention to each child is measureless. We are currently serving 147 families. Average life expectancy is 35 years and is increasing because of the level of care available. We are also serving the 61,000 licensed physicians and every hospital that offers obstetric services. According to the 2010 Medical Malpractice Financial Information Closed Claim Database and Rate Filings Report from the Florida Office of Insurance Regulation (OIR), malpractice rates have decreased in the time that NICA has existed and continue to decrease. Although NICA cannot take full credit for the decreases in rates identified by the OIR, there were findings made by the Legislature in the 2003 Medical Malpractice Task Force Report, and in 2007 by the Florida Obstetric and Gynecological Society in their President’s Task Force Report on NICA, that specifically state that NICA’s three statutory missions, defined by the Legislature and described above, are being met. What I like better are the notes from families telling me how NICA has changed their lives and given them stability and security. Game on!
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