MCB Appellate Alert: Medical Indemnity Fund Reopens to Enrollment

MCB Appellate Alert: Medical Indemnity Fund Reopens to Enrollment

Effective June 5, 2024, the Medical Indemnity Fund (MIF) reopened to prospective enrollees. The announcement on the Department of Health’s MIF website provides that applications for enrollment will remain subject to the eligibility requirements of Public Health Law (PHL) §§ 2999-h(4) and 2999-j(7), which define “qualified plaintiff” and outline the procedure for enrollment of “qualified plaintiffs” who have sustained “birth-related neurological injuries.” 

Enrollment in the MIF was suspended on May 2, 2024, pursuant to PHL § 2999-i(6), which provides for the cessation of enrollment when the MIF’s liabilities reach or exceed 80% of its assets. This, of course, cast into doubt and negatively impacted numerous potential settlements which were contingent upon an infant plaintiff’s enrollment in the MIF, as well as settlements that had otherwise been finalized, but in relation to which an Infant’s Compromise Order had not yet been signed or an application for enrollment had not yet been submitted. 

The reopening of the MIF was made possible by an appropriation of approximately $58 million in State treasury funds by Governor Kathy Hochul. This allocation of funds is intended to allow for new enrollments through March 31, 2025, the end of the State’s fiscal year. 

While the reopening of the MIF will allow pending settlements to be finalized, it is essential that signed Infant’s Compromise Orders be obtained and applications for enrollment be submitted as soon as possible. Applications will be processed in the order in which they are received. In addition, if the MIF’s liabilities again reach the threshold where its liabilities are equal to or exceed 80% of its assets, it will once again be closed to new enrollments. Therefore, it is in the best interests of all concerned that applications for new enrollments be submitted and processed as expeditiously as possible. 

The New York State Academy of Trial Lawyers (Academy), one of the numerous groups to announce the reopening of the MIF, has suggested that in cases where a settlement has been reached, but an Infant’s Compromise Order has not yet been signed, the parties immediately reach out to the Court to expedite the signing of the Order. In cases where an Order has been signed, but the infant plaintiff has not yet been accepted into the MIF, the application should be submitted immediately.

According to a prior news release by the Academy, the MIF has approximately 948 current enrollees, and approximately 80-100 new enrollees have been added each year. At the same time, according to the Academy, the MIF has been funded by a “stagnant” appropriation of approximately $52 million per year since its inception. The Academy predicted that if the MIF were to continue to receive the same appropriation over the next two years and received no new enrollees, by 2026 it would only be able to fund 50% of its current obligations. While the current shortfall has been temporarily alleviated by the infusion of the State treasury funds, these numbers underscore the need to act promptly regarding new enrollments in the Fund. A further suspension of enrollment is entirely possible if enrollment continues at the current rate.