On Thursday, May 2, 2024, the New York State Department of Health (DOH) suspended enrollment of new applicants in the Medical Indemnity Fund (MIF) until further notice. The DOH also advised that pending applications would be rejected if they had not received an affirmative response as of the date of suspension.
The pertinent provisions of the Public Health Law require that the DOH suspend new enrollments in the MIF if the MIF’s estimated liabilities exceed 80% of its assets. After that threshold is no longer exceeded, the MIF will reopen for new applicants. New applications for enrollment will then be processed in the order in which they are submitted. See Public Health Law (PHL) § 2999-i (5). In order for the threshold for new enrollments to be reached, the Superintendent of Financial Services must authorize a new deposit to the MIF. Once that occurs, notice should be promptly posted on the DOH website.
Obviously, the suspension of enrollment in the MIF will have a significant impact on defendants’ ability to settle cases involving “birth related neurological injuries” as defined in the MIF legislation. These, of course, include hypoxic-ischemic injuries suffered during labor and/or delivery which result in impairments such as cerebral palsy, spastic quadriplegia or diplegia, developmental disabilities, etc. In such cases, the costs of future care can be substantial, often accounting for the largest single component of a plaintiff’s recovery, as was noted in the first reported case to address the application of the MIF legislation. See Miles Mendez v. The New York and Presbyterian Hospital, 34 Misc.3d 735(Sup. Ct., Bronx County 2011). Notably, according to the January 2023 report on the MIF prepared by Pinnacle Actuarial Services, “[p]articipants with injury types of Cerebral Palsy, Encephalopathy or Spastic Quadriplegia comprise[d] approximately 50%” of all participants in the MIF, but accounted for 73% of total payments.
Given the enormous costs of future care in such cases, together with the stated intent and purpose of the MIF legislation to “provide a funding source for future health care costs associated with birth related neurological injuries, in order to reduce premium costs for medical malpractice insurance,” see PHL § 2999-g, we are hopeful that the period of suspension of enrollment will be relatively brief. For now, we recommend that cases involving birth related neurological injuries be worked up and evaluated for settlement purposes on the assumption that the MIF will be applicable. Cases that have already been settled but pending an Infant Compromise Order or enrollment into the MIF will have to be evaluated on a case-by-case basis, as many settlements in neurologically impaired infant cases were made contingent upon acceptance into the MIF. Assuming a court found that an infant was a “qualified plaintiff” who had suffered a birth-related neurological injury and issued an order to that effect prior to May 2, 2024,there may be a legitimate argument that the infant should still be enrolled, since the MIF administrator no longer has the authority to challenge a court’s determination that an infant is eligible for enrollment. This remains to be seen.
We will continue to follow for all future updates regarding the timing of reopening of enrollment in the MIF.