Bill H.3634

HOUSE DOCKET, NO. 1841 FILED ON: 1/17/2013

HOUSE . . . . . . . . . . . . . . . No. 3634

By Mr. Walsh of Lynn, a petition (accompanied by bill, House, No. 3634) of Steven M. Walsh for legislation to establish a birth-related neurological injury trust fund in the Commonwealth. Health Care Financing.

The Commonwealth of Massachusetts

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In the Year Two Thousand Thirteen

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An Act establishing a birth-related neurological injury compensation program in the commonwealth.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. The General Laws are hereby amended by inserting after chapter 113A the following chapter:-

CHAPTER 113B. BIRTH-RELATED NEUROLOGICAL INJURY COMPENSATION PROGRAM

Section 1. As used in this chapter the following terms shall have the following meanings:

"Birth-related neurological injury", injury to the brain or spinal cord of an infant caused by the deprivation of oxygen or mechanical injury occurring in the course of labor, delivery or resuscitation necessitated by a deprivation of oxygen or mechanical injury that occurred in the course of labor or delivery, in a hospital which renders the infant permanently motorically disabled and (i) developmentally disabled or (ii) for infants sufficiently developed to be cognitively evaluated, cognitively disabled. In order to constitute a "birth-related neurological injury" within the meaning of this chapter, such disability shall cause the infant to be permanently in need of assistance in all activities of daily living. This definition shall apply to live births only and shall not include disability or death caused by genetic or congenital abnormality, degenerative neurological disease, or maternal substance abuse. The definition provided here shall apply retroactively to any child born on or after January 1, 2005.

“Board”, the board of directors of the commonwealth birth-related neurological injury compensation program established in section 19.

"Claimant", any person who files a claim pursuant to this chapter for compensation for a birth-related neurological injury to an infant. Such claims may be filed by any legal representative on behalf of an injured infant; and, in the case of a deceased infant, the claim may be filed by an administrator, executor, or other legal representative.

“Division”, the division of insurance.

“Fund”, the Birth-Related Neurological Injury Compensation Fund established in section 18.

"Participating hospital", a hospital licensed in the commonwealth by the department of public health to provide obstetrical care to patients. The term also includes employees of such hospitals, excluding physicians or nurse midwives who are eligible to qualify as participating physicians or nurse midwives, acting in the course of and in the scope of their employment.

"Participating physician or nurse midwife", a physician or nurse midwife licensed in the commonwealth to practice medicine, who practices obstetrics or performs obstetrical services either full or part time or, as authorized in the plan of operation, a licensed nurse midwife who performs obstetrical services, either full or part time, within the scope of such licensure and has, at the time of the injury, paid the participating physician assessment pursuant to subsection (a) of section 24 for the period of time in which the birth-related neurological injury occurred. The term "participating physician or nurse midwife" includes a partnership, corporation, professional corporation, professional limited liability company, physician or nurse midwife group practice or other entity through which the participating physician or nurse midwife practices.

"Program", the commonwealth birth-related neurological injury compensation program established in this chapter.

"Tribunal", the birth-related neurological injury assessment tribunal established in section 4.

Section 2. (a) There is hereby established a commonwealth birth-related neurological injury compensation program.

(b) Except as provided in subsection (d), the rights and remedies herein granted to an infant on account of a birth-related neurological injury shall exclude all other rights and remedies of such infant, his personal representative, parents, dependents or next of kin, at common law or otherwise arising out of or related to a medical malpractice claim with respect to such injury to the infant, including any claims by the infant's personal representative, parents, dependents or next of kin that are derivative of the medical malpractice claim with respect to the infant's injury, including but not limited to claims of emotional distress proximately related to the infant's injury. This subsection shall not be construed to exclude other rights and remedies available to the infant's mother arising out of or related to a physical injury, separate and distinct from an injury to the infant, suffered by the infant's mother during the course of the infant's delivery.

(c) Notwithstanding this section or any other general or special law to the contrary, a civil action shall not be foreclosed against a physician or nurse midwife or a hospital where there is clear and convincing evidence that such physician or nurse midwife or hospital intentionally or willfully caused or intended to cause a birth-related neurological injury, provided that such suit is filed prior to and in lieu of payment of an award under this chapter. Such suit shall be filed before the award of the tribunal becomes conclusive and binding as provided for in this act.

(d) Notwithstanding this section, a civil action arising out of or related to a birth-related neurological injury under this chapter, brought by an infant, the infant’s personal representative, parents, dependents or next of kin, shall not be foreclosed against a nonparticipating physician or nurse midwife or hospital; provided, that: (i) no participating physician or nurse midwife or hospital shall be made a party to any such action or related action, and (ii) the commencement of any such action, regardless of its outcome, shall constitute an election of remedies, to the exclusion of any claim under this chapter; and provided further, that if a claim is made, accepted and benefits are provided by the fund, the fund shall have the right, and be subrogated to all of the common law rights, based on negligence or malpractice, which the infant, the infant’s personal representative, parents, dependents or next of kin may have or may have had against the non-participating physician, nurse midwife or hospital.

Section 3. The following records of the program shall be confidential: (i) records subject to the attorney-client privilege; (ii) medical and mental health records of claimants obtained by the board of directors in the course of administering the program; (iii) records concerning deliberations of the board of directors in connection with specific claims; (iv) reports of expert witnesses retained by the board of directors that have not become part of the record before the tribunal; and (v) all records required to be kept confidential by federal law. Except as herein authorized, an officer, agent or employee of the program, and any person who has held any such position, shall not disclose, directly or indirectly, any such confidential record or information.

Section 4. (a) There shall be established within the office of patient protection and care established in section 16 of chapter 6D, but not subject to the control of said office, a tribunal be known as the birth-related neurological injury assessment tribunal. A trial court shall refer every civil action for malpractice, error or mistake, or actions of tort or contract to recover for personal injuries involving an injury alleged to be a birth related neurological injury, as defined in section 1, to the tribunal. The tribunal shall set the matter for hearing pursuant to section 8, at which hearing said tribunal shall determine if the action satisfies the requirements of this chapter. The tribunal shall have the functions, powers and duties established in this chapter.

(b) The tribunal shall consist of: (i) a justice of the superior court, who shall be appointed by the governor; (ii) a physician licensed to practice medicine in the commonwealth under the provisions of section 2 of chapter 12, who shall be selected by the office of patient protection and care from a list submitted by the Massachusetts Medical Society representing the fields of obstetrics, pediatrics, pediatric neurology, neonatology, physical medicine and rehabilitation, or any other specialty particularly appropriate to the facts of a particular claim; and (iii) an attorney authorized to practice law in the commonwealth, who shall be selected by the single justice from a list submitted by the Massachusetts Bar Association.

The tribunal may appoint such attorneys, clerks and other attorneys and agents as it may deem necessary, fix their compensation within the limitations provided by law, and prescribe their duties.

Section 5. (a)(1)In all claims filed under this chapter, the claimant shall file with the tribunal a petition, setting forth the following information:

(A) The name and address of the legal representative and the basis for his representation of the injured infant;

(B) The name and address of the injured infant;

(C) The name and address of any physician or nurse midwife providing obstetrical services who was present at the birth and the name and address of the hospital at which the birth occurred;

(D) A description of the disability for which the claim is made;

(E) The time and place where the birth-related neurological injury occurred;

(F) A brief statement of the facts and circumstances surrounding the birth-related neurological injury and giving rise to the claim;

(G) All available relevant medical records relating to the person who allegedly suffered a birth-related neurological injury and an identification of any unavailable records known to the claimant and the reasons for their unavailability;

(H) Appropriate assessments, evaluations, and prognoses and such other records and documents as are reasonably necessary for the determination of the amount of compensation to be paid to, or on behalf of, the injured infant on account of a birth-related neurological injury;

(I) Documentation of expenses and services incurred to date, which indicates whether such expenses and services have been paid for, and if so, by whom; and

(J) Documentation of any applicable private or governmental source of services or reimbursement relative to the alleged impairments.

(2) The claimant shall furnish the tribunal with as many copies of the petition as required for service upon the program, any physician, nurse midwife or hospital named in the petition, the board of registration in medicine, the board of registration in nursing and the department of public health, along with a $15 filing fee. Upon receipt of the petition the tribunal shall immediately serve the program by service upon the agent designated to accept service on behalf of the program in the plan of operation by registered or certified mail, and shall mail copies of the petition to any physician, nurse midwife or hospital named in the petition, the board of registration in medicine and the department of public health.

(b) Upon receipt of the petition or the filing of a claim relating to the conduct of a participating physician or nurse midwife, the board of registration in medicine or board of registration in nursing shall, consistent with the authority granted to said boards, investigate the petition or claim and take action as necessary . If a notice or order is issued by the board of registration in medicine or board of registration in nursing, a copy shall be mailed to the petitioner or claimant. The board of registration in medicine and the board of registration in nursing may promulgate rules and regulations for the investigation of claims relating to the conduct of participating physicians and nurse midwives arising pursuant to this chapter.

(c) Upon receipt of the petition or the filing of a claim relating to the conduct of a participating hospital, the department of public health shall investigate the petition or claim. If the department of public health determines that there is reason to believe that the alleged injury resulted from, or was aggravated by, substandard care on the part of the hospital at which the birth occurred, it shall take any appropriate action consistent with the authority granted to it. The department may promulgate rules and regulations for the investigation of claims relating to the conduct of participating hospitals arising pursuant to this chapter.

(d) The program shall file a response to the petition and submit relevant written information relating to the issue of whether the injury alleged is a birth-related neurological injury within the meaning of this chapter within 10 days after the date the panel report required by section 10 is filed with the tribunal.

(e) Any hospital at which a birth occurred, upon receipt of written notice from the legal representative of an injured infant that he intends to file a petition under this chapter, shall promptly deliver to such person all available medical records relating to the infant who allegedly suffered a birth-related neurological injury. For the purposes of this chapter, fetal monitoring strips, whether printed or in electronic format, shall be considered part of the medical records relating to an infant who allegedly suffered a birth-related neurological injury.

Section 6. (a) Each physician, nurse midwife or hospital shall disclose in writing to their obstetrical patients, at such time or times and in such detail as the board shall determine to be appropriate, whether such physician, nurse midwife or hospital is or is not a participating provider under the program.

(b) In addition to any other postpartum materials provided to the mother or other appropriate person, every hospital shall provide for each infant who was hospitalized in a neonatal intensive care unit an informational brochure prepared or approved by the board. The brochure shall describe the rights and limitations under the program, including the program's exclusive remedy provision under subsection (b) of section 2.

(c) When a claim is made to an insurance company, as described in this chapter, licensed to do business in the commonwealth or to any self-insurer, alleging that a possible birth-related neurological injury or a severe adverse outcome related to a birth has occurred, such insurance company or self-insurer shall report such claim to the program on a form provided by the program. Upon receipt of such report, the program shall inform the parent or parents or guardians of the child on whose behalf such claim has been made of the program's existence and eligibility requirements.

(d) No liability or inference of liability or eligibility shall attach to the making of a report pursuant to subsection (c). Evidence of the making of such report shall not be admissible in any court.

Section 7. The statute of limitations with respect to any civil action that may be brought by or on behalf of an injured infant allegedly arising out of or related to a birth-related neurological injury shall be tolled by the filing of a claim in accordance with this chapter, and the time such claim is pending shall not be computed as part of the period within which such civil action may be brought.

Section 8. (a) Immediately after the program's response is filed pursuant to subsection (d) of section 5 the tribunal shall set the date for a hearing, which shall be held no sooner than 15 days and no later than 90 days after the filing of the program's response, and shall notify the parties to the hearing of the time and place of such hearing. The hearing shall be held in the city or county where the birth-related neurological injury occurred, or in a contiguous city or county, unless otherwise agreed to by the parties and authorized by the tribunal.

(b) The parties to the hearing required under this section shall include the claimant and the program.

(c) The tribunal may subpoena witnesses, compel their attendance, administer oaths, take the testimony of any person under oath, and in connection therewith, require the production for examination of any evidence relating to any issue in question before the tribunal. Admissible evidence shall include, but not be limited to: hospital and medical records, nurses' notes, x-rays and other records kept in the usual course of the practice of a health care provider without the necessity for other identification or authentication, statements of fact or opinion on a subject contained in a published treatise, periodical, book or pamphlet or statements by experts without the necessity of such experts appearing at said hearing. The tribunal may, upon the application of either party or upon its own decision summon or subpoena any records or individuals necessary to substantiate or clarify any evidence which has been presented before it.

Section 9. Any party to a proceeding under this chapter may, upon application to the tribunal setting forth the materiality of the information requested, serve interrogatories or cause the depositions of witnesses residing within or without the commonwealth to be taken, the costs to be taxed as expenses incurred in connection with the filing of a claim, in accordance with section 12. Such depositions shall be taken after notice and in the manner prescribed by law for depositions in actions at law; provided, however, that they shall be directed to the tribunal before whom the proceedings may be pending.

Section 10. (a) The tribunal shall determine, on the basis of the evidence presented to it, the following issues:

(1) Whether the injury claimed is a birth-related neurological injury as defined in this chapter.

(A) A rebuttable presumption shall arise that the injury alleged is a birth-related neurological injury where it has been demonstrated, to the satisfaction of the tribunal, that the infant has sustained a brain or spinal cord injury caused by oxygen deprivation or mechanical injury, and that the infant was thereby rendered permanently motorically disabled and (i) developmentally disabled or (ii) for infants sufficiently developed to be cognitively evaluated, cognitively disabled.

If either party disagrees with such presumption, that party shall have the burden of proving that the injuries alleged are not birth-related neurological injuries within the meaning of this chapter.

(B) A rebuttable presumption of fetal distress, an element of a birth-related neurological injury, shall arise if the hospital fails to provide the fetal heart monitor tape to the claimant, as required by subsection (e) of section 5.

(2) Whether obstetrical services were delivered by a participating physician or nurse midwife at the birth.

(3) Whether the birth occurred in a participating hospital.

(4) How much compensation, if any, is awardable pursuant to this chapter.

(b) If the Tribunal determines (i) that the injury alleged is not a birth-related neurological injury as defined in this chapter or (ii) that obstetrical services were not delivered by a participating physician or nurse midwife at the birth and that the birth did not occur in a participating hospital, it shall dismiss the petition and cause a copy of its order of dismissal, together with a statement of the findings of fact, rulings of law, and other matters pertinent to the questions at issue to be sent immediately to the parties by registered or certified mail and filed with the record of the proceedings.

(c) All parties are bound for all purposes, including any suit at law against a participating physician or nurse midwife or participating hospital, by the finding of the tribunal, with respect to whether such injury is a birth-related neurological injury.

(d) The dean of the University of Massachusetts Medical School shall: (i) develop a plan whereby each claim filed with the tribunal under this chapter is reviewed by a panel of three qualified and impartial physicians or nurse midwives drawn from the fields of obstetrics, pediatrics, pediatric neurology, neonatology, physical medicine and rehabilitation, or any other specialty particularly appropriate to the facts of a particular case; (ii) appoint the panel; and (iii) designate a chairperson. In no event shall the panel contain more than 1 member from the field of obstetrics. The tribunal shall direct the program to pay to the University of Massachusetts Medical School the sum of $3,000 per claim reviewed.

(e) The panel created pursuant to subsection (d) shall prepare a report that provides a detailed statement of the opinion of the panel's members regarding whether the infant's injury does or does not satisfy each of the criteria of a birth-related neurological injury enumerated in such term's definition in this chapter. The report shall include the panel's basis for its determination of whether each such criteria was or was not satisfied. In addition, the report shall include such supporting documentation as the board of directors of the program may reasonably request. The panel shall file its report with the tribunal 60 days from the date the petition was filed with the tribunal. At the same time that the panel files its report with the tribunal, the panel shall send copies thereof to the program and all parties to the proceeding. At the request of the tribunal, at least 1 member of the panel shall be available to testify at the hearing. The tribunal shall consider, but shall not be bound by, the recommendation of the panel.

Section 11. Upon a timely motion, all parties to a claim under this chapter shall have the right to confront and cross-examine witnesses. In pursuing that right, a party shall not be precluded from conducting depositions by oral examination or cross-examination at a hearing of any witnesses from whom evidence is elicited.

Section 12. (a) Upon determining (i) that an infant has sustained a birth-related neurological injury and (ii) that obstetrical services were delivered by a participating physician or nurse midwife at the birth or that the birth occurred in a participating hospital, the tribunal shall make an award providing compensation for the following items relative to such injury:

(1) Actual medically necessary and reasonable expenses of medical and hospital, rehabilitative, therapeutic, nursing, attendant, residential and custodial care and service, medications, supplies, special equipment or facilities and related travel, such expenses to be paid as they are incurred. Reimbursement may be provided for nursing and attendant care that is provided by a relative or legal guardian of a program beneficiary so long as that care is beyond the scope of child care duties and services normally and gratuitously provided by family members to uninjured children. However, such expenses shall not include:

(A) Expenses for items or services that the infant has received, or is entitled to receive, under the laws of any state or the federal government except to the extent prohibited by federal law;

(B) Expenses for items or services that the infant has received, or is contractually entitled to receive, from any prepaid health plan, health maintenance organization, or other private insuring entity;

(C) Expenses for which the infant has received reimbursement, or for which the infant is entitled to receive reimbursement, under the laws of any state or federal government except to the extent prohibited by federal law; or

(D) Expenses for which the infant has received reimbursement, or for which the infant is contractually entitled to receive reimbursement, pursuant to the provisions of any health or sickness insurance policy or other private insurance program.

Expenses of medical and hospital services under this subdivision shall be limited to such charges as prevail in the same community for similar treatment of injured persons of a like standard of living when such treatment is paid for by the injured person.

In order to provide coverage for expenses of medical and hospital services under this subdivision, the tribunal, in all cases where a comparative analysis of the costs, including the effects on the infant's family's health insurance coverage, and benefits indicates that such action is more cost-effective than awarding payment of medical and hospital expenses, shall (i) require the claimant to purchase private health insurance providing coverage for such expenses, provided, that the premium or other costs of such coverage shall be paid by the fund; (ii) require the claimant to participate in health coverage programs under Title XIX or XXI of the Social Security Act, or any other state or federal health insurance program for which the infant is eligible; or (iii) if the tribunal determines that it would be unreasonably burdensome to require the claimant to purchase private health insurance and that the infant is ineligible for any health insurance program pursuant to clause (ii), to make an award providing compensation for the cost of private accident and sickness insurance for the infant.

(2) Loss of earnings from the age of 18 are to be paid in regular installments beginning on the eighteenth birthday of the infant. An infant found to have sustained a birth-related neurological injury shall be conclusively presumed to have been able to earn income from work from the age of 18 through the age of 65, if he had not been injured, in the amount of 50 per cent of the average weekly wage in the commonwealth of workers in the private sector. Payments shall be calculated based on the commonwealth's reporting period immediately preceding the eighteenth birthday of the claimant child, and subsequently adjusted based upon the succeeding annual reports of the commonwealth.

(3) Reasonable expenses incurred by the claimant in connection with the filing of a claim under this chapter, including reasonable attorneys' fees of the claimant's attorney, but excluding attorney fees incurred in opposing a claimant's admission. Any award for expenses, including attorneys’ fees, incurred by the claimant in connection with the filing of a claim under this chapter shall be subject to the approval and award of the tribunal.

A copy of the award, together with a statement of the findings of fact, rulings of law and other matters pertinent to the questions at issue, shall be sent immediately by registered or certified mail to the parties and shall be filed with the record of the proceedings.

(b) The tribunal shall not award compensation in connection with a claim for attorneys’ fees or other expenses incurred by any participating physician, nurse midwife or hospital that is party to a proceeding under this chapter or by a medical malpractice liability insurer of such party.

Section 13. (a) For births occurring on or after the effective date of this act, if the tribunal determines that an infant has sustained a birth-related neurological injury and that obstetrical services were delivered by a participating physician or nurse midwife at the birth or that the birth occurred in a participating hospital, and the infant dies within 180 days of birth, the tribunal, in its discretion, may make an award in an amount not exceeding $100,000 to the infant's family, which award shall be in addition to and not in lieu of any other award providing compensation.

(b) Prior to making an award pursuant to this section, the tribunal shall conduct a hearing for the purpose of determining whether such award is appropriate and, if so, the proper amount of such an award and how it should be paid, after receiving evidence pertaining to sorrow, mental anguish, solace, grief associated with the death of the infant, and all other material factors that are relevant.

(c) As used in this section, an infant's family means the infant's father, mother, or both, or if neither is a party to the proceeding, the infant's legal guardian.

Section 14. (a) Any party aggrieved by a determination or award of the tribunal pursuant to this chapter may obtain judicial review thereof, and the tribunal may obtain an order of court for enforcement thereof within 30 days from the date of such determination or award; provided, however, that the tribunal’s determination as to whether an alleged injury is a birth-related neurological injury shall not be reviewable.

(b) A proceeding for judicial review shall be brought in the superior court of the commonwealth within the county wherein the tribunal hearing was held. Such proceeding shall be initiated by the filing of a petition in said court, together with a written transcript of the record of the hearing before the tribunal, and the issuance and service of an order of notice as in proceedings in equity. No objection that has not been urged before the tribunal shall be considered by the court, unless the failure or neglect or urge such objection shall be excused because of extraordinary circumstances. The determination or award of the tribunal shall be reviewed in accordance with the standards for review provided in paragraph (7) of section 14 of chapter 30A. All such proceedings shall be heard and determined by the court as expeditiously as possible and shall take precedence over all other matters before it, except matters of like nature. The jurisdiction of the superior court shall be exclusive and its final order or decree shall be subject to review by the supreme judicial court in the same manner and form and with the same effect as in appeals from a final order or decree in proceedings in equity.

(c) A copy of a petition for judicial review shall be filed with the clerk of the tribunal. The filing of a petition for judicial review shall operate as a suspension of any award by the tribunal, and the program shall not be required to make payment of the award involved in the review until the questions at issue therein have been fully determined in accordance with the provisions of this chapter.

Section 15. A determination or award of the tribunal pursuant to this chapter, if not reviewed within the time prescribed by section 14 shall be conclusive and binding upon the parties.

Section 16. The tribunal has full authority to enforce its orders and punish for disobedience of said orders.

Section 17. Notwithstanding section 60D of chapter 231, section 7 of chapter 260, or any other general or special law to the contrary, a claim under this chapter may be brought within 10 years of the birth of an infant alleged to have a birth-related neurological injury.

Section 18. (a) There is hereby established and set up on the books of the commonwealth a separate fund to be known as the Birth-Related Neurological Injury Compensation Fund to finance the commonwealth birth-related neurological injury compensation program created by this chapter. The assets of the fund administered by the board are trust funds and shall be used solely in the interest of the recipients of awards pursuant to this chapter and to administer the program.

(b) An independent certified public accountant selected by the board shall annually audit the accounts of the fund, and the cost of such audit services shall be borne by the program and be paid from moneys designated for such purposes in the fund. The audit shall be performed at least each fiscal year, in accordance with generally accepted auditing standards and, accordingly, include such tests of the accounting records and such auditing procedures as considered necessary under the circumstances. The board shall furnish copies of the audit to the same persons who are entitled to receive copies of the board's report on investment of the fund's assets.

Section 19. (a) The birth-related neurological injury compensation program shall be governed by a board of 11 directors.

(b) Except as provided in subsection (c), directors shall be appointed for a term of 3 years or until their successors are appointed and have qualified.

(c)(1) The directors shall be appointed by the governor as follows:

(A) Seven citizen representatives: 1 of whom shall have a minimum of 5 years of professional investment experience; 1 of whom shall have a minimum of 5 years of professional experience in finance and be licensed as a certified public accountant or hold a similar professional designation; 1 of whom shall have professional experience working with the disabled community; 1 of whom shall be the relative of a disabled child experienced in the care of the disabled child; 1 of whom shall be an attorney with a minimum of 3 years of experience in the practice of law representing clients with physical personal injuries; and 2 of whom shall be at large representatives deemed qualified to serve by knowledge, education, training, interest or experience. The initial term of the members appointed in the year of the effective date of this act shall commence when appointed and shall be for 2 years;

(B) One physician and 1 nurse midwife. The initial term of the members appointed in the year of the effective date of this act shall commence when appointed and shall be for 1 year;

(C) One representative of participating hospitals. The initial term of the member appointed in the year of the effective date of this act shall commence when appointed and shall be for 2 years; and

(D) One representative of liability insurers. The initial term of the member appointed in the year of the effective date of this act shall commence when appointed and shall be for 3 years.

(2) The governor shall select: the physician and nurse midwife from a list of at least 3 names to be recommended by the Massachusetts Chapter of the American Congress of Obstetricians and Gynecologists and the Massachusetts Association of Professional Nurse Midwives, respectfully; the representative of participating hospitals from a list of at least 3 names to be recommended by the Massachusetts Hospital Association; the representative of liability insurers from a list of at least 3 names, 1 of whom is recommended by the American Insurance Association and 2 of whom are recommended by the Property Casualty Insurers Association of America; the attorney member from a list of at least 4 names to be recommended by the Massachusetts Bar Association; and the professional investment member, professional finance member, the 2 at large members and the parent of a disabled child member from applications duly submitted. Nothing contained herein shall preclude qualified applicants for any position on the board from submitting an application to the governor to serve as a member of the board. In no case shall the governor be bound to make any appointment from among the nominees of the respective associations.

(d) The governor shall promptly notify the appropriate association, which may make nominations, of any vacancy other than by expiration among the members of the board representing a particular interest and like nominations may be made for the filling of the vacancy.

(e) The directors shall act by majority vote with 5 directors constituting a quorum for the transaction of any business or the exercise of any power of the program. The directors shall serve without salary, but each director shall be reimbursed for actual and necessary expenses incurred in the performance of his official duties as a director of the program. The directors shall not be subject to any personal liability with respect to the administration of the program or the payment of any award.

(f) The board shall have the power to (i) administer the program, (ii) administer the fund, which shall include the authority to purchase, hold, sell or transfer real or personal property and the authority to place any such property in trust for the benefit of claimants who have received awards; (iii) appoint a service company or companies to administer the payment of claims on behalf of the program, (iv) direct the investment and reinvestment of any surplus in the fund over losses and expenses, provided any investment income generated thereby remains in the fund, (v) reinsure the risks of the fund in whole or in part, and (vi) obtain and maintain directors' and officers' liability insurance. The board shall discharge its duties with respect to the fund solely in the interest of the recipients of awards and shall invest the assets of the fund with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. Any decisions regarding the investment of the assets of the fund shall be based on the advice of 1 or more investment advisors retained by the board, provided that any investment advisor retained by the board shall be registered pursuant to chapter 110A or shall be a federal covered advisor who has filed such documents and paid such fees as may be necessary to transact business in the commonwealth pursuant to said chapter 110A. The board shall report annually to the governor and to the clerks of the house of representatives and the senate regarding the investment of the Fund's assets. The board shall establish a procedure in the plan of operation for notice to be given to obstetrical patients concerning the no-fault alternative for birth-related neurological injuries provided in this chapter, such notice to include a clear and concise explanation of a patient's rights and limitations under the program.

(g) The board shall establish a procedure in the plan of operation for maintaining a list of program claimants. Each claimant may consent to have his name, address, phone number, and other personal information included on such list, for distribution to other program claimants. The board shall distribute the list to program claimants who have given consent to be included on such list, and to no other person.

(h) In the event that initial awards to claimants exceed 80 per cent of the funds on hand and the funds that will become available to the fund within the next 12 months from all sources, the board may establish a protocol to pay initial awards to claimants in installments. Within 30 days of determining that initial awards to claimants exceed 80 per cent of the funds on hand and the funds that will become available to the fund within the next 12 months from all sources, the board shall notify the chairs of the house and senate committees on ways and means and the chairs of the joint committee on health care financing.

Section 20. The investment advisor or advisors retained by the board pursuant to subsection (f) of section 19 shall provide the board with annual statements explaining the expected returns on its equities and fixed income portfolios.

Section 21. (a) Within 30 days of the effective date of this act, the board shall submit to the division for review a proposed plan of operation consistent with this chapter.

(b) The plan of operation shall provide for the efficient administration of the program and for the prompt processing of claims made against the fund pursuant to an award under this chapter. The plan shall contain other provisions including:

(1) Establishment of necessary facilities;

(2) Management of the fund;

(3) Appointment of servicing carriers or other servicing arrangements to administer the processing of claims against the fund;

(4) Initial and annual assessment of the persons and entities listed in this chapter to pay awards and expenses, which assessments shall be on an actuarially sound basis subject to the limits set forth herein; and

(5) Any other matters necessary for the efficient operation of the program.

(c) The plan of operation shall be subject to approval by the division after consultation with representatives of interested individuals and organizations. If the division disapproves all or any part of the proposed plan of operation, the board shall, within 30 days, submit for review an appropriate revised plan of operation. If the board fails to do so, the division shall promulgate a plan of operation. The plan of operation approved or promulgated by the division shall become effective and operational upon order of the division.

(d) Amendments to the plan of operation may be made by the board, subject to the approval of the division.

Section 22. All assessments paid pursuant to the plan of operation shall be held in a separate restricted cash account under the sole control of an independent fund manager to be selected by the directors. The fund, and any income from it, shall be disbursed for the payment of awards as provided in this chapter and for the payment of the expenses of administration of the fund and the program, including the reasonable expenses of the tribunal.

Section 23. (a) The division shall undertake an actuarial investigation of the requirements of the fund based on the fund's experience in the first year of operation, including without limitation the assets and liabilities of the fund. Pursuant to such investigation, the division shall establish the rate of contribution of the entities listed in subsection (e) of section 24 for the tax year beginning January 1, 2013.

Following the initial valuation, the division shall cause an actuarial valuation to be made of the assets and liabilities of the fund no less frequently than biennially. Pursuant to the results of such valuations, the division shall prepare a statement as to the contribution rate applicable to contributors listed in said subsection (e) of said section 24. However, at no time shall the rate be greater than one quarter of 1 per cent of net direct premiums written.

In conducting the actuarial evaluation, a loss reserving methodology consistent with the methodology employed by the Florida Birth-Related Neurological Injury Compensation Association as of July 1, 2007, may be employed in order to account for individual participant costs and injury characteristics to the extent that the data are available to perform such methodology and the division's actuary determines that such methodology is actuarially appropriate.

(b) In the event that the division of insurance finds that the fund cannot be maintained on an actuarially sound basis subject to the maximum assessments listed in this chapter, the division shall promptly notify the board and the house and senate committees on ways & means.

Section 24. (a) A physician or nurse midwife who otherwise qualifies as a participating physician or nurse midwife pursuant to this chapter may become a participating physician or nurse midwife in the program for a particular calendar year by paying an annual participating physician or nurse midwife assessment to the program in the amount of $5,000 on or before December 1 of the previous year, in the manner required by the plan of operation. Effective January 1, 2015, the total annual assessment shall be $5,600, and shall increase by $300 for the 2016 assessment and by $100 each year thereafter, to a maximum of $6,200 per year. The board may authorize a prorated participating physician or nurse midwife or participating hospital assessment for a particular year in its plan of operation, but such prorated assessment shall not become effective until the physician or nurse midwife or hospital has given at least 30 days' notice to the program of the request for a prorated assessment.

(b) Notwithstanding the provisions of subsection (a), a participating hospital with a residency training program accredited to the American Council for Graduate Medical Education may pay an annual participating physician or nurse midwife assessment to the program for residency positions in the hospital's residency training program, in the manner provided by the plan of operation. However, any resident in a duly accredited family practice or obstetrics residency training program at a participating hospital shall be considered a participating physician or nurse midwife in the program and neither the resident nor the hospital shall be required to pay any assessment for such participation. No resident shall become a participating physician or nurse midwife in the program, however, until 30 days following notification by the hospital to the program of the name of the resident or residents filling the particular position for which the annual participating physician or nurse midwife assessment payment, if required, has been made.

(c) A hospital that otherwise qualifies as a participating hospital pursuant to this chapter may become a participating hospital in the program for a particular year by paying an annual participating hospital assessment to the program, on or before December 1 of the previous year, amounting to $50 per live birth for the prior year, as reported to the department of public health in the annual survey of hospitals. Effective January 1, 2020, the annual participating hospital assessment shall increase by $2.50 per live birth for the prior year, as reported to the department of public health, and shall be increased at that rate each year thereafter to a maximum of $55 per live birth so reported for the prior year. The participating hospital assessment shall not exceed $150,000 for any participating hospital in any 12-month period until January 1, 2020. Effective January 1, 2020, the maximum total annual assessment shall be $160,000, and shall increase by $10,000 each year thereafter, to a maximum of $200,000 in any 12-month period.

(d) All licensed physicians or nurse midwives practicing in the commonwealth on September 30 of a particular year, other than participating physicians or nurse midwives, shall pay to the program an annual assessment of $250 for the following year, in the manner required by the plan of operation until January 1, 2020. Effective January 1, 2020, the total annual assessment shall be $260, and shall increase by $10 each year thereafter to a maximum of $300 per year.

Upon proper certification to the program, the following physicians or nurse midwives shall be exempt from the payment of the annual assessment under this subsection:

(1) A physician or nurse midwife who is employed by the commonwealth or federal government and whose income from professional fees is less than an amount equal to 10 per cent of the annual salary of the physician or nurse midwife.

(2) A physician or nurse midwife who is enrolled in a full-time graduate medical education program accredited by the American Council for Graduate Medical Education.

(3) A physician or nurse midwife who has retired from active clinical practice.

(e) Taking into account the assessments collected pursuant to subsections (a) to (d), inclusive, of this section, if required to maintain the fund on an actuarially sound basis, all insurance carriers licensed to write and engaged in writing liability insurance in the commonwealth for a particular year, shall pay into the fund an assessment for the following year, in an amount determined by the division pursuant to subsection (a) of section 23in the manner required by the plan of operation

(1) All annual assessments against liability insurance carriers shall be made on the basis of net direct premiums written for the business activity which forms the basis for each such entity's inclusion as a funding source for the program in the commonwealth during the prior year ending December 31, as reported to the division, and shall be in the proportion that the net direct premiums written by each on account of the business activity forming the basis for their inclusion in the program bears to the aggregate net direct premiums for all such business activity written in the commonwealth by all such entities. For purposes of this chapter "net direct premiums written" means gross direct premiums written in the commonwealth on all policies of liability insurance less (i) all return premiums on the policy, (ii) dividends paid or credited to policyholders, and (iii) the unused or unabsorbed portions of premium deposits on liability insurance.

(2) The entities listed in this subsection shall not be individually liable for an annual assessment in excess of 1-quarter of 1 per cent of that entity's net direct premiums written.

(3) Liability insurance carriers shall be entitled to recover their initial and annual assessments through (i) a surcharge on future policies, (ii) a rate increase applicable prospectively, or (iii) a combination of the 2, at the discretion of the division.

(f) On and after January 1, 2015, a participating physician or nurse midwife covered under the provisions of this section who has paid an annual assessment for a particular calendar year to the program and who retires from the practice of medicine during that particular calendar year shall be entitled to a refund of a prorated share of his or her annual assessment for the calendar year that corresponds to the portion of the calendar year remaining following his or her retirement.

(g) Whenever the division determines the fund is actuarially sound in conjunction with actuarial investigations conducted pursuant to this chapter, it shall enter an order suspending the assessment required under subsection (d). The annual assessment shall be reinstated whenever the division determines that such assessment is required to maintain the fund's actuarial soundness.

Section 25. (a) Each insurer issuing or issuing for delivery in the commonwealth any personal injury liability policy which provides medical malpractice liability coverage for the obstetrical practice of any participating physician or nurse midwife under this chapter shall provide a credit on such physician or nurse midwife's annual medical malpractice liability insurance premium in an amount that will produce premiums that are neither inadequate, excessive nor unfairly discriminatory, as required by this chapter and as determined by the tribunal.

(b) Each insurer issuing or issuing for delivery in the commonwealth any personal injury liability policy which provides medical malpractice liability coverage for the obstetrical services of any participating hospital under this chapter shall provide a credit on such hospital's annual medical malpractice liability insurance premium in an amount that will produce premiums that are neither inadequate, excessive nor unfairly discriminatory, as required by this chapter and as determined by the tribunal.

SECTION 2. Section 22 of chapter 113B of the General Laws is hereby amended by striking out subsection (h).

SECTION 3. Section 231 of chapter 60B of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by inserting after the word “care”, in line 2, the following words:-

, excluding an action brought pursuant to chapter 113B,

SECTION 4. This act shall apply to all claims for birth-related neurological injuries occurring in the commonwealth on and after January 1, 2005.

SECTION 5. Section 2 shall take effect on January 1, 2020.

Name:	District/Address:	Date Added:
Steven M. Walsh	11th Essex