Birth-injury fund debate continues before Md. House committees

ANNAPOLIS — The battle over whether Maryland should create a special fund to compensate the families of babies injured during birth heated up again during a legislative hearing Friday, as supporters urged lawmakers to look across the Potomac River for guidance.

Similar birth-injury funds are in place in Virginia as well as Florida, but there is disagreement between supporters and opponents over how well each system works.

Robert Walling, an actuary who has worked with the Virginia fund, told lawmakers that despite funding trouble in previous years, a 2013 analysis found that the state’s fund was on strong footing and capable of paying benefits for decades.

The recurring Maryland proposal, which has died in committee in past General Assembly sessions, has prompted a multi-year clash between medical professionals and the state’s trial lawyers.

This year’s bill, once again introduced by Del. Dan K. Morhaim, D-Baltimore County, has earned the support of the Maryland Hospital Association, MedChi, and several hospitals and health systems.

Proponents say the fund – which wouldn’t require families to prove a doctor was at fault but would require them to give up the right to sue – will keep down the cost of malpractice insurance and prevent OB-GYN’s from getting out of the baby-delivering business.

The problem has been exacerbated by several recent birth-related malpractice claims that resulted in large payouts, Carmela Coyle, president and CEO of the hospital association told members of the House Judiciary and Health and Government Operations committees at a joint hearing.

Morhaim has argued that doctors who are negligent can still face administrative penalties, and that his bill will allow families to get the compensation they need quickly, rather than awaiting the uncertain outcome of a potentially lengthy court case.

The trial lawyers, led by the Maryland Association for Justice, argue that the impending crisis touted by some supporters is a myth, and that the fund would unfairly deprive infant-victims of their constitutional right to sue later in life.

Morhaim noted is his testimony that, if there were a real problem with the Florida and Virginia funds, those states would have repealed them.

Actuaries estimate about seven births per year would be eligible for compensation from the Maryland fund.

Lorenzo Bellamy, an attorney representing the Maryland Association for Justice, told lawmakers that number didn’t rise to the level of the looming crisis described by some supporters of the fund.

Morhaim, anticipating such arguments in his own testimony, said he didn’t want to wait for a crisis.

The bill calls for hospitals to support the fund by paying annual premiums, and directs state regulators to incorporate take those premiums into account when setting hospital rates each year.

Trial lawyers argue the premiums amounts to a tax on health care because the cost is passed on to insurers and patients, and argument that has been echoed by some insurers.

In written testimony submitted to the committees, the League of Life and Health Insurers of Maryland stated it didn’t oppose the fund conceptually but objected to the funding mechanism, which it argued would have an even greater adverse impact on health insurance premiums.

Del. Herbert H. McMillan, R-Anne Arundel, expressed concern that the proposal would shift the cost for birth injuries to those who weren’t actually responsible.

Coyle responded the fund would bring down the cost of malpractice insurance, which would ultimately lower costs for both hospitals and insurance companies, which would lower the cost of healthcare overall.

Several hospitals and health systems, led by Mercy Health Services, have sought to challenge the powerful lobbying efforts of the trial lawyers by backing an advocacy group known as the Maryland Maternity Access Coalition. The coalition offered only written testimony at the hearing, which lasted late into Friday afternoon.