In 1987, the Virginia legislature passed the Birth-Related Neurological Injury Compensation Act (Va. Code Ann. §§ 38.2-5000 to 38.2- 5021). It was created as a no-fault compensation programs for children with permanent brain or spinal cord injuries sustained during birth, in lieu of malpractice litigation. The fund provides for lifetime medical expenses as well as one-half of the Virginia average weekly wage after the child reaches age eighteen. The Virginia Workers' Compensation Commission administers the fund, which generates its assets through fees imposed against doctors, hospitals and insurers. Virginia and Florida are the only two states with this type of program. The Virginia program was created "by the Virginia General Assembly to help relieve a crisis in malpractice coverage throughout the Commonwealth. Many physicians, primarily obstetricians, were threatened with an inability to obtain malpractice coverage due to insurers leaving the state. Utilizing a no-fault approach, children severely injured at birth and whose situation meets legislative requirement are placed into the Program in lieu of utilizing a tort remedy."

Unlike traditional no-fault compensation systems, such as Workers Compensation, there is no certainty of receiving compensation yet it imposes no right of action on parents of children severely injured at birth. It is a system of social insurance that:

• benefits only one class of society (obstetricians) at the expense of another (all physicians)
• allows the state government to make medical and legal decisions, by determining whose situation meets legislative requirements to enter the Program

• The program, created to provide lifelong, medically necessary care to injured children and their families, has been used to award money to families of infants that die at birth (Richmond Times Dispatch "Brain Injury Law Distorted?" March 24, 2002). Richmond Circuit Judge Randall G. Johnson, in the March 2001 case of Lawanda Whitfield vs the Worker's Compensation Commission, stated he "finds nothing in the act to exempt wrongful death claims". The program was never intended to support wrongful death claims and in doing so, diminishes funding available to families who need to support children rightfully entered into the program.




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• The fund was designed to take the cases of neurologically damaged infants out of the tort system but it has failed in this endeavor. Instead, it has shifted the litigation and limited the right of parents to seek legal channels of compensation for their injured child. (see Coffey vs Virginia Birth-Related Neurological Injury Compensation Program, and Birth-Related Neurological Injury Compensation Program vs Young). The program was created in response to a medical malpractice crisis in the state. Malpractice insurance companies were threatening to no longer provide medical malpractice to obstetric physicians, who have seen exorbitant premiums for their malpractice coverage. By avoiding the tort system and sparing obstetric physicians from lawsuits, malpractice insurance companies were enticed to continue to provide coverage. Yet because of the fund, the Board of Directors of Doctors Insurance Reciprocal (DIR), Risk Retention Group has voted to only insure physicians who participate in the fund. Physicians' insured by DIR who elect not to participate in the fund will not be rewritten or renewed. (Obstetric physicians are not required to be participating members of the program).




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• Since its inception in 1987, there have been approximately 109 claims filed. There are currently 70 children admitted to the program. Approximately $30 million has been spent on these children since the fund's inception. Studies estimate each child will need payments averaging $1.7 million, but children who live into adulthood would require payments into the tens of millions of dollars. This would make the program fiscally unsound, and is one of the reasons the privately operated program has remained secretive, and the majority of families with neurologically injured children have never heard of the program. Currently, there is only $80 million in assets to supply lifetime support for the admitted children.




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• A Virginia State Corporation Commission press release on October 5, 2001 stated the fund faces a $72 million deficit based on its funding. Therefore, a non-participating physician tax was reinstated, which forces all physicians to pay into the fund without the benefit of malpractice insurance cost reduction or protection from malpractice litigation. According to the State Corporation Commission (SCC) order (case # INS010258) "the fund cannot be maintained on an actuarially sound basis subject to the maximum assessments set forth". In the SCC order (case # INS010257) "in the matter of determining to reinstate the $250 annual non-participating physician assessment, the Bureau of Insurance recommended the $250 assessment be reinstated until further order." The SCC reinstated this fee for the fund program year 2002 and subsequent years until further order. These mandatory physician assessments provide about 20% of the program's revenue. This order becomes a tax on physicians by a private, non-public program (According to the Virginia deputy attorney general, the program is not a public agency).




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• Florida physicians recently challenged the Florida Birth-Related Neurological Injury Compensation Plan's similar action to tax all physicians to raise funds. The case was heard in the Florida Supreme Court: Justice Kogan, joined by Justice Barkett and Chief Justice Shaw, observed: "[T]he state has enacted a program designed in principle to benefit the public as a whole, but that effectively benefits only obstetricians who elect to join the plan and those persons who suffer losses caused by certain birth related injuries attributable to the member obstetricians. While this is a laudable purpose, I can find no rational basis for imposing much of the burden of this program primarily on physicians as a class....I think this particularly is true in light of the fact that obstetricians are not obliged to join the plan, and many have exercised this option." They also were troubled by the imposition of a "status tax"' on physicians to pay for insurance against certain birth related injuries. Such a tax is no different, in their opinion, from "taxing only schoolteachers to pay for new educational facilities, or taxing only licensed psychologists to pay for public mental health care, or taxing only policemen to pay for victims' compensation programs." The implications of this "status tax" is to encourage society to shift its most onerous tax burdens exclusively onto those minorities or groups that lack a sufficient voice in the state capital. (From the Association of American Physicians and Surgeons newsletter Vol. 48, #4, April 1992: In the Florida Supreme Court case, Coy v. Florida Birth-Related Neurological Injury Compensation Plan).




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