NICA Update

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NICA Update

Dear FOGS Members,

I frequently get questions from Obstetricians about why they should participate in the NICA program. It costs $5,000 per year, and only the very worst babies, babies with permanent and significant mental and physical impairment qualify for the program. When asked this question, I think the better question is why not?

If you look at the recent headline story about a $63 million verdict for a brain damaged child in Boynton Beach Florida, I think the story speaks for itself. That verdict was rendered in March 2004, and it was against a non-participating doctor. Failure of the doctor to participate exposed not only the doctor but the hospital, the anesthesiologist and all of the other individuals involved in the labor and delivery to this horrendous verdict.

NICA is an exclusive remedy. We have been 100% successful in the last few years in getting suits that have been filed in circuit court abated until a determination is made by NICA as to whether the child should be covered. If it is a child whose condition falls within the statutory framework, and the doctor and hospital have given notice, we have been successful in having the lawsuit dismissed. Even if one has not given notice and the other has given the brochure, the one giving the brochure has been dismissed from the lawsuit. Unfortunately, if notice has not been properly given by the doctor or the hospital, the family has the option to accept NICA or pursue a lawsuit. Failure to hand out the brochure has been the single greatest reason we have not been able to pay claims that should have been covered.

I worked with the Office of Insurance Regulation and they have established a policy that every malpractice insurer in Florida is required to answer a question now on their rate filings as to what the discount is they are offering for participation, and if for some reason they don't offer a discount they have to justify that actuarially. As a result of this requirement, all insurers that file their rates with OIR have indicated that they offer a discount. In most cases it is a discount of $5,000 off of the base rate or final rate. With all other individual factors included, this may only translate to somewhat less that $5,000 on the final bill each doctor receives, but it is a substantial discount and pays all or the majority of the fee to participate.

According to a report by the Physician Insurers Association of America, since 1985, brain damaged infants have been the most frequently reported claims, and the most expensive. They represent 41% of all filed claims, and the average cost per claim was $577,596. Most insurers only offer $250,000 or $500,000 limits now, so this figure is pretty alarming when you consider that it is what the insurers have paid, not what the real financial exposure is to the doctor and hospital.

When you ask for statistics which might be of interest, keep in mind that the statute defines a NICA child as:

Having a substantial physical and mental impairment
Over 2500 grams, 2000 grams for a multiple gestation
Injured in the course of labor, delivery or the immediate post resuscitative period
Caused by oxygen deprivation or mechanical injury

Over the years there have been 529 claims filed with NICA. Of those 200 have been accepted and paid, 287 have been ruled non-compensable by the Administrative Law Judge, and there are 42 currently awaiting determination. In most cases that were ruled non-compensable the child was under the birth weight, not deemed to be permanently and substantially injured, there was not a participating physician involved or notice had not been properly given by the doctor or hospital. We currently have 94 open ongoing claims that we will continue to pay as long as the child is alive.

Keep in mind that the cost we pay is actual cost, not inflated projected life care, and we don't pay for pain and suffering or a percentage in attorney's fees. Attorneys' fees represent less than 1% of our total expected payout. Compare that to 40% of a verdict.

It is still costly to pay for actual costs for life care for a child, but it is far less than is typically testified to by "experts" in a jury trial. Even with 24 hour nursing care and many costly therapies, life care cost averages around $3 million per child for NICA. In the case of a death claim, we pay $110,000, not the millions in pain and suffering and lost productivity that families typically seek and receive.

At $5,000 per year, offset by malpractice insurance discounts, it is the best buy around. While we only take the worst of the worst cases, and it is a small number in relation to all medical injuries, one injury of this kind is all it takes to wipe out a doctor financially. Is it worth it? You judge.

I would be happy to visit your doctors and make a more detailed presentation and answer questions if you would like. You are the people I work for, and I would love to share some of the ideas for possible expansion and other things that are happening now.

Sincerely,

Kenney Shipley
NICA Executive Director