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Birth-injury fund bill resurfaces in Annapolis

Legislation that would create a special fund for the care of babies who suffer neurological injuries during birth has be reintroduced in the Maryland General Assembly, setting the stage for another showdown between hospitals and the state’s trial lawyers.

Delegate Dan K. Morhaim, a Baltimore County Democrat, has once again proposed creating a no-fault birth injury fund, which would allow families to be compensated without filing malpractice claims but also require them to give up their right to sue.

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Delegate Dan K. Morhaim, a Baltimore County Democrat and a medical doctor, has once again proposed creating a no-fault birth injury fund, which would allow families to be compensated without filing malpractice claims but also require them to give up their right to sue. (Maximilian Franz / The Daily Record)

Supporters, which include several hospital systems in the state, say the fund would help keep medical liability costs under control, keep obstetricians getting out of the delivery business and encourage hospitals not to close their maternity wards.

Opposition in past legislative sessions has come from the state’s trial lawyers, represented by the Maryland Association for Justice, who argue that the cost of malpractice insurance has decreased in recent years and that the infant-victims would be deprived of their right to sue later in life.

That opposition will continue this session, said Wayne M. Willoughby, an attorney and spokesman for the association. The birth-injury fund has been considered, without success, in eight of the past 12 legislative sessions, he said.

Morhaim’s bill has more co-sponsors this year than it did last year, but the delegate — a medical doctor — declined to speculate on whether the measure stood a better chance of passing this year.

“I never make predictions about the future of legislation, but clearly people are understanding that a fresh approach is needed to this problem,” Morhaim said. There’s also broad institutional support, including from the Maryland Hospital Association (MHA), he said.

The hospital association argues that the fund would end a so-called “litigation lottery,” which can require families seeking compensation to wait years for the resolution of court cases that they might end up losing.

“It’s more efficient,” Morhaim said of the proposed fund. “It saves money, [and] it gets care to babies that have poor outcomes sooner.”

Morhaim noted that he expected the same opposition to the measure as in previous years.

Similar birth-injury funds have been established in Virginia and Florida, but there is disagreement on how well they have been working.

Actuaries estimate that about seven babies per year would be eligible for the Maryland fund.

In the past two years, two work groups have examined access to obstetrical care in Maryland. One group, led by the MHA, explicitly recommended establishing the birth-injury fund in its December 2015 final report; the other, led by the state Department of Health and Mental Hygiene, called for “serious exploration” of a fund as “a potential solution to Maryland’s medical liability climate.”

The fund would be financed by annual premiums paid by hospitals; every year, state regulators would make an appropriate adjustment to hospital’s rates to pay those premiums, according to Morhaim’s bill.

Willoughby said that the funding mechanism amounted to a tax on health consumers, since the higher hospital rates would be passed on to insurers and, ultimately, patients.

This year’s bill also tasks the Maryland Patient Safety Center with reviewing birth-injury claims and developing best practices for delivery that can be shared with health care facilities in the state.