A Florida Fund for Injured Kids Raided Medicaid. Now It’s Repaying $51 Million.
by Carol Marbin Miller, Miami Herald
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Florida’s long-troubled compensation fund for infants born with catastrophic brain injuries has resolved one of its thorniest disputes: the claim that it avoided hundreds of millions in health care costs by raiding the safety net for impoverished Floridians.
The Birth-Related Neurological Injury Compensation Association, or NICA, settled a three-year-old whistleblower complaint that alleged the program grew assets of nearly $1.7 billion partly by dumping health care and caregiving costs onto Medicaid, the state-federal insurer for poverty-stricken and disabled Floridians.
Under the settlement, announced Monday by the U.S. Justice Department, NICA agreed to pay $51 million to resolve allegations that it violated the federal False Claims Act. NICA’s board of directors, ushered in last year as part of a far-reaching reform, already had voted to cease the program’s reliance on Medicaid.
Beginning in April 2021, the Miami Herald, in partnership with ProPublica, published a series of stories showing NICA withheld and delayed care to many families, focusing on stockpiling assets instead.
Administrators reduced costs, the Herald reported, partly by funneling families into Medicaid — a program already so poorly funded that a federal judge in late 2014 accused the state of rationing care and maintaining an unconstitutionally inadequate system of care for children in poverty.
Monday’s settlement amount is more than twice what was paid by the administrators of a Virginia compensation program to resolve a similar lawsuit — but also far less than the $140 million that Florida health administrators estimated was diverted by NICA from the state’s chronically underfunded Medicaid program.
“The Medicaid program provides a safety net for our most vulnerable populations that do not have access to traditional healthcare coverage,” U.S. Attorney Juan Antonio Gonzalez, who heads the DOJ’s Southern District of Florida, said in a prepared statement.
He added: “The misuse of Medicaid funds will not be tolerated.”
NICA denied wrongdoing in the settlement agreement.
Florida lawmakers created NICA in 1988, responding to dire warnings — critics called them exaggerated — that obstetricians would flee the state to avoid rising medical malpractice premiums. Under the law, the parents of children born with a certain type of brain injury were precluded from filing malpractice suits. In return, NICA was to provide medical care, therapy, medication and in-home caregiving for the life of the injured child.
Most children accepted into NICA either were deprived of oxygen at birth — sometimes as the result of a constricted umbilical cord — or suffered other brain damage or spinal injury. The program is no-fault, meaning parents need not prove their doctor or hospital acted recklessly.
This year, the state Agency for Health Care Administration, or AHCA, which oversees Florida’s Medicaid program, estimated in a report that it had spent more than $140 million over the previous 33 years to cover hospital stays, in-home nursing and other medical needs for children covered by NICA.
NICA’s reliance on Medicaid dollars frustrated and, at times, infuriated parents who depended on the program. Parents complained bitterly that they were forced to exhaust all efforts and appeals for Medicaid reimbursement — a process that could take months, if not years — before NICA would consider paying, even for such necessary items as wheelchairs and medications.
The Herald series led to sweeping changes: NICA’s long-standing executive director stepped down. The program’s board of directors resigned en masse. And the Florida Legislature approved a massive overhaul, including increased payments to parents and fewer restrictions on benefits. Lawmakers also required the program to include a NICA parent and an advocate for children with disabilities on the board.
Jim DeBeaugrine, a former head of the state’s disabilities agency, gained oversight of NICA as board chairman following the previous board’s resignation. He said Monday the settlement helps the program sustain its ongoing reform.
“I think we are all glad to have this behind us,” DeBeaugrine said. “We will focus on continuing to do what we were all appointed to do. That’s improve the way this program serves the families. … It’s important to get this behind us.”
“My main disappointment,” he added, “is that the money we are paying comes from dollars that otherwise would serve our families.”
The path to reforming NICA’s dependence on Medicaid was cleared by a Virginia couple who filed a whistleblower suit in July 2015 challenging the legality of that state’s compensation program for infants born with profound brain damage. Florida NICA was modeled after the Virginia Birth-Related Neurological Injury Compensation Program.
The Virginia program settled that lawsuit by paying $20.7 million to the U.S. government and agreeing to stop shifting costs to Medicaid. The parents of Cody Arven, a severely disabled boy on whose behalf the suit was filed, received $4.1 million of that settlement.
Veronica and Theodore Arven, the latter now deceased, also filed a whistleblower complaint against Florida NICA. Though the DOJ chose not to intervene in the Florida case, the department’s attorneys investigated the claims and helped negotiate the settlement.
The settlement set aside $12.7 million for Veronica Arven and the estate of Theodore Arven for their role in spearheading the litigation. “We are pleased that this whistleblower lawsuit has resulted in a resolution that ultimately benefits all NICA families and provides relief to a long-overburdened Florida Medicaid program,” said Scott Austin, a Virginia attorney who acted as lead counsel in the litigation.