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Court Discusses Use of Specific Fund Created to Compensate Infant Related Malpractice Claims

Under the statute the Fund pays for the following: “future medical, hospital, surgical, nursing, dental, rehabilitation, custodial, durable medical equipment, home modifications, assistive technology, vehicle modifications, prescription and non-prescription medications, and other health care costs actually incurred for services rendered to and supplies utilized by qualified plaintiffs, which are necessary to meet their health care needs as determined by their treating physicians, physician assistants, or nurse practitioners….”

For actions covered by the statute, payments of future medical expenses by the Fund are obligatory and courts are required to amend “settlement agreements” or judgments to comply with its terms. The Fund, which is capitalized by deposits from the State and assessments on obstetrical revenues of New York hospitals, became operational on October 1, 2011. Rules and regulations have been promulgated (and recently published) to implement and amplify the statute’s legislative purpose.

The Fund, which is to be administered by the Department of Financial Services, defines a birth related neurological injury as follows: “an injury to the brain or spinal cord of a live infant caused by the deprivation of oxygen or mechanical injury occurring in the course of labor, delivery or resuscitation or by other medical services provided or not provided during delivery admission that rendered the infant with a permanent and substantial motor impairment or with a developmental disability … or both. This definition shall apply to live births only”.

As will be explained infra, the amount of non-Fund damages (i.e. the damages to be paid in cash) is determined by an allocation of the lump sum settlement. The allocation also determines how much of the attorney’s fee is paid by defendant. Under the statute, defendant pays that portion of the fee allocable to Fund damages and plaintiff is responsible for the remainder. In this action, the parties agreed, with the approval of the court, to allocate the settlement on a 50/50 basis-50% non-Fund damages, 50% Fund damages.

The Fund is antithetical to the notion that judges, jurors and lawyers are soothsayers who can predict, at the time of trial or settlement, the actual lifetime cost of the child’s future medical needs. Once a child is enrolled, the Fund pays for all covered future medical expenses, even if medical circumstances change requiring more extensive care than was estimated at the time of settlement. Simply said, if a portion of the settlement is allocable to future medical expenses, the child qualifies for the Fund, which in no way limits or places a monetary ceiling on the amount of care to which the child is entitled over his or her lifetime.

Generally speaking, the most compelling reason for a substantial offer in an obstetrical case is the “devastating nature of the infant plaintiff’s injuries” Indeed, a review of relevant appellate authorities in this area supports the conclusion that, in the case of a profoundly damaged child, future medical care and treatment, especially custodial care or round the clock home assistance is, by far, the most costly element of damages. Several cases illustrate the point. Each involved a profoundly damaged child, requiring custodial care, which resulted in substantial jury verdicts modified on appeal.

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