Despite fierce criticism from parents, advocates, lawmakers and insurance regulators, Florida’s compensation program for children born with severe brain injuries opened a bank account three years ago and has improved the lives of some of the state’s most disabled children.
But the improved care came at a significantly higher price. And the Birth-Related Neurological Injury Compensation Association now has another problem: It spends significantly more than it takes in and could face financial trouble without an injection of new money.
NICA, as it is known, was created by the Legislature in 1988 in response to dire warnings that midwives were fleeing the state without a reduction in their professional liability insurance. The law prohibits families from suing their doctors when a child is born with severe brain damage, often due to a lack of oxygen. In return, NICA would have to provide medical care, supplies, therapy and nursing care for the rest of the child’s life.
Parents complained that NICA administrators kept a tight rein on spending for most of its existence, refusing to pay for small items, such as nutritional supplements, and large items, such as wheelchair-accessible vans.
But in 2021, in response to a series of stories in the Miami Herald and the investigative outlet ProPublica, the Legislature unanimously passed a sweeping reform that prioritized the well-being of children and adults in the program — not the interests of doctors and insurers.
The state insurance administrators also cleaned house at the Tallahassee program, firing its board of directors and forcing its 20-year director to resign. For most of NICA’s tenure, they had sought to protect the interests of insurers and medical professionals while ripping off struggling families.
At a NICA board of directors meeting on Thursday, a handful of parents expressed gratitude for the program’s new leadership. “There’s been an incredible amount of positive change,” said one parent, Dan Bookout. “We’re very, very happy about that.”
Another parent, Jackie Amorim, said: “You hear so much about how much that last law cost us.” But, she added: “This is a gentle reminder that the previous administration was quite insulting. “It’s not that we’re suddenly more demanding. It’s not the parents’ fault, or that we’re getting way too many benefits… The program didn’t pay well.”
NICA is not in danger of collapse. Far from it. The program still has reserves of $1.4 billion. But program actuaries calculate liabilities of $1.6 billion, based on what it will cost to serve families for the expected lifetimes of participants.
NICA supports itself from two primary sources: physician and hospital ratings and by investing the money it already has. Midwives who participate in the program pay $5,000 in annual fees. Other physicians licensed in the state must pay $250 each year to maintain the program. Hospitals pay $50 for each child born in their maternity wards. Insurers, who have a seat on NICA’s board, contribute nothing.
The assessments haven’t changed since NICA was founded, even though medical costs—and now benefits as a whole—have risen dramatically. The program receives $36.8 million a year in assessments but spends $72 million, Executive Director Melissa Jaacks said at the board meeting Thursday.
“We’re sitting on a lot of money,” Jaacks told the Herald Friday morning. “We could live off that money for a long time. But at some point in the future, we’re going to run out of money.” It could be decades before that happens, Jaacks said, but added, “that’s a big hole to get out of.”
To complicate matters further, if NICA’s liabilities reach a certain threshold, a state law could close the program to all new claims. “We’re very, very close to crossing the threshold,” Jaacks told board members.
Jim DeBeaugrine, chairman of the NICA board, said the gap between spending and assessments was foreseeable. “Some of this is simply due to the program 1725356770 “It works the way the legislature always intended,” he said.
At Thursday’s board meeting, neither Jaacks nor the board proposed cutting new benefits lawmakers approved for families, some of whom must provide around-the-clock care for children who need ventilators and feeding tubes to survive.
Jaacks proposed a range of potential new revenue sources, including small increases in what doctors and hospitals are paid in annual assessments. But NICA leaders and the families they serve all agreed that convincing doctors and hospital administrators — and the lawmakers they lobby — to approve such an increase will be a challenge.
Jaacks told the board that the Legislature could also reconsider a provision that exempts teaching hospitals, community hospitals and charity births from annual assessments. Such exemptions result in about $7.2 million in annual revenue losses, Jaacks told the board. Just over 20 percent of the 1,451 claims filed during NICA’s lifetime arose from births at seven hospitals across Florida that are exempt, including Jackson Memorial, UF Health Shands and Tampa General.
“I’ve never seen a doctor approve of higher rates,” said Jay Parrish, the father of one of NICA’s oldest participants, whose family founded a hospital in Brevard County. “There’s going to be a backlash.”
