New York state’s Medical Indemnity Fund is running out of money. CBS New York investigates the impact on children injured by medical malpractice.

By Mahsa Saeidi, Walter Smith Randolph

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    NEW YORK (WCBS) — New York state’s Medical Indemnity Fund, which helps children injured by medical malpractice, is running out of money. It has enough to keep enrollment open until next spring, but after that, it will need additional funding.

Typically, patients who sue for malpractice and win get a substantial award, but in New York, the hospital or doctor found to be negligent is only on the hook for part of the damages. Instead of paying for future costs, New York enrolls these kids into the fund with the promise of a lifetime of care.

Sen. Liz Krueger, chair of the Senate Finance Committee, told CBS New York investigative reporter Mahsa Saeidi when the deal was conceived during budget negotiations in 2011, the plan was to have hospitals largely finance the fund. The state won’t reveal how much hospitals are putting in, but it’s not enough. State records show the fund is facing a projected shortfall of at least $3 billion, and that shortfall is impacting the children.

The New York Department of Health oversees the fund. During a state budget hearing in January, Krueger asked DOH about the fund’s future.

“We have a legal obligation to the children that are in the fund for the rest of their lives. What’s happening?” she asked.

“We have not stopped enrollment and if we did, we would be, we would notify you, as well as others,” said Amir Bassiri, Medicaid director for the state health department.

But four months later, DOH quietly stopped enrolling new applicants. Families tell CBS New York they found out by reading a notice on the state’s website.

“Why wasn’t anyone told?” Krueger said.

Gov. Kathy Hochul’s office said in May, she put $58 million into the fund to reopen it to new enrollments until March 2025 and provide “necessary support to impacted families.”

According to Krueger, in 2011, hospitals lobbied and agreed to largely pay for this fund as a way to curb skyrocketing insurance costs, but the $58 million just transferred didn’t come from hospitals; it came from taxpayers.

“We still desperately need malpractice cost reform,” said Laura Alfredo, with the Greater New York Hospital Association.

Records show, in 2012, hospitals began contributing at least $30 million into the fund.

“It’s not a dedicated funding stream,” Alfredo said.

“Should it be?” Saeidi asked.

“We’ve been very clear since this all happened in May that we are open to talking about alternate ways of funding the MIF,” Alfredo said.

In 2017, lawmakers increased reimbursement rates to providers, placing extra financial stress on the fund.

Now, the fund needs more money, as additional children are injured by malpractice.

CBS New York asked DOH for statistics on birth-related injuries: are babies safer now than before? The state pointed to initiatives to create safer birth experiences, but shared no data.

“Are hospitals doing enough to crack down on doctors who make mistakes?” Saeidi asked.

“There’s certainly more to be done, but there are lots of reasons for bad outcomes,” Alfredo said.

Krueger says it’s time for stakeholders to discuss the fund’s future. She’s proposing a public roundtable.

“I would really love to see a commitment from the governor that her agencies will be there,” she said.

CBS New York has been told the governor wants to work with stakeholders, but her office would not commit to a public roundtable.

Kids currently enrolled in the fund are still able to go to appointments with doctors, therapists and other health care providers, but with no much unknown right now, they’re feeling anxious.

At birth, Chase Sadowski suffered a neurological injury, severely impairing his motor skills. Now 17, for Chase to get from one level of the house to the other, two aides have to carry him up and down the stairs.

Their wheelchair lift, paid for by the Medical Indemnity Fund, is broken.

Chase said he feels trapped, and he blames the fund.

“It’s hard to put into words the emotions that I feel besides straight anger because of how much was taken from me,” he said.

“I just feel we were lied to,” said Chase’s dad, Walter Sadowski.

Walter Sadowski said long before the lift broke, in 2020, the fund approved an elevator, stating it’s “medically necessary.” But the project stalled, as did modifications to Chase’s car.

“Where’s these environmental modifications? Where’s these vehicular modifications?” Walter Sadowski said. “I don’t get to spend that much quality time with my son because I’m too busy fighting for the things that he needs.”

“It hurts to see what is happening to these kids that can’t even speak for themselves,” Chase said.

Other families complain about reimbursements.

David Diaz said services, like transportation, are being denied for his daughter Jhudelisse.

“Every year it gets tougher and tougher to get the same services we’re getting now,” Diaz said.

The state says it can’t comment on specific cases due to patient privacy.

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