New York’s Medical Indemnity Fund: Medical Malpractice “Reform”


It is no secret that the sheer numbers of medical malpractice lawsuits, in combinations with the payouts, have put New York in the national spotlight as the ideal state for tort reform. The American Medical Association (AMA) even labeled New York a “crisis state.” As a result, New York physicians are paying higher medical malpractice insurance rates, are practicing “defensive medicine” which leads to lower quality and higher costs of care.

In particular, suits against OB/GYN account for 35-50% of medical malpractice costs for hospitals. This is due to the fact that the settlements are usually very large—many times still not enough—for children born with neurological birth injuries that will affect them for a lifetime.

In response, Governor Cuomo created the Medical Indemnity Fund (Fund) to pay for future medical costs of neurologically impaired infants. The experts predict that this Fund will reduce hospitals costs by 20%!

So how does the Fund work? Newborns who are found by a jury to have sustained neurological injury or that have settled a lawsuit would be eligible to have all future medical paid by the Fund. Families will still be able to sue the responsible physician, however, the settlement will not account for future medical expenses because those costs will be paid by the Fund. The Fund will be funded by Health Care Reform Act dollars.

The Fund hopes to reduce costs in two ways. First, proponents of the Fund think that patients will no longer be “over-paid” for future medical costs in settlement proceedings, which often guesstimate what those costs would actually be. Second, the Fund would save Medicaid dollars from paying for patients who have received a settlement and who now have future medical costs paid for by the Fund.

So the physicians being sued will be responsible for all non-future medical expenses and supposedly will also be responsible for the patient’s attorney fees. This would be a huge change, as usually the patient’s attorney is paid from the settlement.

But what do you think? I would love to hear from you! I welcome your phone call on my toll-free cell at 1-866-889-6882 or you can drop me an e-mail at . You are always welcome to request my FREE book, The Seven Deadly Mistakes of Malpractice Victims, at the home page of my website at