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No-fault birth program being sued

By Christine Jordan Sexton
9/3/2009 © Health News Florida

A program designed to reduce lawsuits against obstetricians by providing lifelong care to brain-damaged children injured at birth is at the center of a class action lawsuit.

Despite attempts by the Florida Neurological Injury Compensation Association to get the suit dismissed, a judge has allowed it to move forward. The suit alleges that NICA has underpaid upward of 100 families who have provided custodial care to the children.

“They are trying to nickel and dime these people as much as they can instead of taking care of them,” said attorney David Caldevilla, who filed the suit in Hillsborough County Circuit Court in 2006.  “They act like a bunch of insurance adjusters.”

NICA was set up more than 20 years ago to make medical malpractice insurance more affordable for physicians and compensate families with severely brain-damaged children.  The no-fault program limits lawsuits in exchange for providing medically necessary continued care for children who fall under its parameters.

The lawsuit hinges on whether NICA retroactively applied a 2002 law that caps payments to parents and whether the association is violating laws that prevent unfair and deceptive trade practices.

NICA Executive Director Kenney Shipley said the association “tries very hard to make sure the children get the benefits they need and the parents get the support they need.”

“Every child in the program currently is getting all the care that is recommended by their physician,” she said. Shipley and NICA maintain that the case should be dismissed because a state administrative court, not a trial court, is where disputes involving NICA should be resolved.

“This whole thing could have been resolved had they just gone to an administrative law judge a long time ago,” she said.

NICA provides lifetime benefits for medically necessary hospital, medical, rehabilitation, therapy, training and custodial care of a child who was born brain damaged or with neurological damage as a result of labor and delivery.

Whether a child is covered by the no-fault program depends on whether the obstetrician or midwife and hospital participated in the program. Additionally, a judge in the state Division of Administrative Hearings must determine that a child is eligible for the program.  DOAH judges make that determination and issue final orders.

The case was brought by Joseph and Lisa Basey, whose daughter Samantha has been covered by NICA since 1999, and single mother Magdalena Rodriquez, whose daughter, Noemi, has been in the program since 1995.

 The Baseys declined a request by Health News Florida to be interviewed. Caldevilla, a partner with the Tampa law firm de la Parte &Gilbert, declined to facilitate an interview between Health News Florida and Rodriquez, saying he is protective of her.

Concerned that a trio of administrative decisions that entitled parents to custodial compensation would “substantially deplete” its available funds, NICA in 2002 lobbied the Legislature to change the law, court records allege. The lawsuit contends that NICA retroactively applied the new caps to upward of 100 families whose children were born before the new caps took effect.

The difference in potential compensation between the initial law and the 2002 rewrite is substantial.  Caldevilla said before the change in law, a family caregiver of a severely brain-damaged or neurologically impaired child could have been eligible for as much as $131,400 annually if the care provided was provided around the clock and reimbursed at  a wage of $15 per hour.

Assuming the same hourly wage, the amended law cuts that salary by more than half, to just $54,600 annually.  It also limits who can receive the reimbursement, allowing only a parent or legal guardian to be paid, eliminating grandparents and adult sibling children from the potential list of caregivers eligible for reimbursement.

While the initial law also was silent on the amount of hours that could be reimbursed for familial custodial care, the 2002 rewrite limits the number of hours per week to 70.  The class-action suit alleges that NICA went even further in its application of the 2002 law, though, and limited the number of compensable hours to just 40.

The class-action lawsuit doesn’t seek financial damages for the entire class.  Instead, it seeks a declaratory relief that the 2002 law cannot be retroactively applied and also asks a judge to find that the organization has violated a state law banning unfair and deceptive trade practices.

NICA was funded through an initial $20 million appropriation as well as assessments on physicians and hospitals, and participation fees.  If the fund becomes insolvent, an insurance company could face an assessment of up to 0.25 percent of its prior year net direct premium written.

Every doctor in the state pays a $250 assessment, and obstetricians who want to participate in the program are required to pay an additional $4,750.  Hospitals also pay $50 per each live birth. About 1,000 obstetricians participate in the no-fault program, Shipley said.

NICA cases are not compensable through any other traditional litigation, meaning the parents cannot pursue a medical malpractice case.