Questions remain as work group renews call for Md. birth-injury fund

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For the second time in two years, a state work group is recommending that Maryland establish a special fund so the families of babies injured during birth can be compensated without filing malpractice claims.

But questions linger about how best to pay for the plan, which is likely to face stiff opposition from the state’s trial lawyers.

A group created by the General Assembly and led by the Maryland Hospital Association submitted its final report to the governor and legislative leaders Tuesday, arguing that the fund would help keep medical liability costs under control and give hospitals an incentive to stay in the birthing business.

Claims could be filed against the fund to pay for the long-term care of injured babies if the families give up their right to sue. Actuaries estimate that about seven babies per year would be eligible.

Supporters of the plan — modeled on similar funds in Florida and Virginia — include several Baltimore-area hospitals and health systems that worry the rising cost of malpractice insurance is causing obstetricians to stop delivering babies and is leading to a looming crisis in access to obstetrical care. The fund would also allow families to avoid long, risky court battles and high legal fees, advocates say.

Maryland trial lawyers have fought against the proposal in the past two legislative sessions, arguing that malpractice insurance rates have actually dropped in recent years and that the fund would deprive infant-victims of medical errors of their right to sue later in life.

A previous work group was led by the state Department of Health and Mental Hygiene; that group’s external members recommended that the state “conduct serious exploration of a No-Fault Birth Injury Fund” in a December 2014 report, but DHMH made no recommendations.

Who pays?

As in past years, the best way to pay for a Maryland birth-injury fund remains unclear: The recommendation submitted by the work group Tuesday includes no discussion of how the plan would be financed.

The 2014 legislation pushed about two-thirds of the cost onto physicians, leading Mutual Liability Insurance Society of Maryland, which insures doctors in the state, to drop its support for the bill despite backing the concept of the fund, General Counsel Cheryl F. Mattriciani wrote in a letter accompanying this year’s work group report.

The version considered by lawmakers in the 2015 session shifted the cost to hospitals and earned the support of Medical Mutual as well as the Maryland Hospital Association.

But without a proposal for a funding mechanism, Medical Mutual had “real concerns” about the proposal and abstained from voting on that recommendation because it left “a known large and controversial issue unaddressed,” Matricciani wrote.

An earlier draft of the latest report included language indicating that hospitals would pay for the birth-injury fund, but it was voted out, George S. Tolley III, a trial lawyer and a member of the work group, said in an interview.

“The question of funding is a moving target,” said Tolley, of Dugan, Babij & Tolley, LLC in Timonium.

Tolley is a member of the Maryland Association for Justice, which represents trial lawyers. The organization renewed its objections to the birth-injury fund in a letter accompanying the work group’s report.

Bill reintroduced

The fund would likely cost hundreds of millions of dollars per year, and under previous proposals that cost would ultimately have been passed down to small businesses and working-class families in the form of higher health insurance costs, Tolley wrote in the letter.

The Maryland Hospital Association, citing an actuarial report submitted to lawmakers earlier this year, says the trial lawyers’ cost estimate is wrong: The real cost would be closer to $20 million to $25 million per year, it maintains.

The report didn’t address questions of how to pay for the fund because that was beyond the scope of the work group’s charge; MHA is confident that funding won’t be an issue when the proposal is discussed in the forthcoming legislative session and the “precise mechanism will be similar to what MHA has supported in the past,” the organization said in a statement.

Legislation creating the fund has previously been sponsored by Democrats Sen. Catherine E. Pugh of Baltimore and Del. Dan K. Morhaim. Pugh said Wednesday she still needed to read the report before deciding whether she would sponsor the bill again; Morhaim, who has called for the creation of such a fund for a decade, told The Daily Record last month that he expected to sponsor the bill again.