No-Fault Birth Injury Fund Proposed By Maryland State Legislature Task Force

A task force created by the Maryland state legislature is recommending the creation of a birth injury compensation fund, which would prevent families from filing medical malpractice lawsuits when mistakes during delivery cause an injury to the child, while establishing a fund that would purportedly provide care for infants born with cerebral palsy, Erbs palsy and other birth injuries. 

The no-fault fund was recommended in a report issued on December 1, by the Maryland Work Group To Study Access to Obstetric Services, which is a group consisting of representatives from the health care, insurance and legal services industries.

The findings suggest that medical liability costs linked to birth injury malpractice lawsuits constitutes a threat to healthcare access. However, critics maintain that the system would fail to properly compensate children and families left with life-long disabilities that may have been caused by negligent medical treatment.

“The work group recommends the establishment of a No-Fault Birth Injury Fund to stabilize medical liability costs and provide a clear and critical incentive for hospitals to continue to provide this vital community service,” the report states. “Such a fund would provide direct, timely compensation, medical care and other services, without the uncertainty of protracted litigation, to children who suffer a devastating birth injury.”

However, the group acknowledges that neither the Medical Mutual Liability Insurance Society of Maryland, nor the Maryland Association For Justice (MAJ), both of whom had representatives on the task force, support that conclusion.

In its comments, also included in the report, MAJ called the fund a “rush to judgment,” and said the data does not support the need for such a fund at this time.

“A no-fault system would be more dangerous for patients,” MAJ stated in an October 30 letter to the workgroup. “When malpractice occurs, the civil justice system provides for accountability in a public forum. By eliminating public accountability, a no-fault birth injury fund removes an important incentive for health care providers to use appropriate care.”

This is the second time the no-fault birth injury fund has been recommended, and, as in previous years, skeptics have raised questions on who would pay for such a fund.

“A birth injury fund would cost many millions of dollars, without any clear solution for how to pay for it,” the MAJ stated. “Based on the most reliable estimates, a birth injury fund would cost hundreds of millions of dollars annually. The Workgroup failed to reach a consensus for how to pay for those costs, overwhelmingly rejecting a proposal that a birth injury fund should be paid for by hospitals.

MAJ also spoke out against an earlier funding proposal for paying for the fund through higher health insurance costs, which the group noted would be pushing the cost onto Maryland families and small businesses.