GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

H	1 

HOUSE BILL 2296

Short Title:  Birth Impairment Fund.	(Public)
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Sponsors: Representatives Miller; and Warner.
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Referred to:  Appropriations.
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June 4, 1990

A BILL TO BE ENTITLED
AN ACT TO ESTABLISH THE NORTH CAROLINA BIRTH-RELATED NEUROLOGICAL IMPAIRMENT PROGRAM AND THE NORTH CAROLINA BIRTH-RELATED NEUROLOGICAL IMPAIRMENT TRUST FUND.
The General Assembly of North Carolina enacts:
Section 1.  Chapter 130A of the General Statutes is amended by adding a new Article 20 to read:
“ARTICLE 20.
"North Carolina Birth-Related Neurological Impairment Program.
"§ 130A-460.  Statement of purpose.
In order to provide for the general welfare and to protect the lives and the health of the people of the State, to provide a stable environment, to promote prenatal and obstetrical care so as to reduce infant mortality, and to provide funds and services for the care of all persons born in North Carolina with birth-related neurological impairments, a no-fault compensation system for birth-related neurological impairments is appropriate and necessary.
"§ 130A-461.  Definitions.
The following definitions apply throughout this Article, unless the context clearly implies otherwise:
(a)	‘Applicant' means any person who files an application under this Article claiming to have a birth-related neurological impairment.  An application may be filed on behalf of a minor or incompetent by a parent, guardian, guardian ad litem, or other legal representative.  In the case of a decedent, the application may be filed by an administrator, executor, or other legal representative.
(b)	‘Birth-related neurological impairment' means an impairment of the brain function of a person which could have occurred through deprivation of oxygen to the brain during a delivery or in the immediate resuscitative period after a delivery, and must have occurred before or during a delivery or in the immediate resuscitative period after a delivery, and which results in a nonprogressive inability to control motor function and renders the person chronically impaired. A birth-related neurological impairment may be accompanied by one or more associated symptoms, including (i) vision, speech, hearing or learning difficulties, (ii) seizures, or (iii) behavioral and psychological problems.  This definition shall not include disability caused by genetic abnormality.
(c)	‘Delivery' means live birth in North Carolina.
(d)	‘Department' means the Department of Environment, Health, and Natural Resources.
(e)	‘Director' means the Director of the North Carolina Birth-Related Neurological Impairment Compensation Program.
(f)	‘Fund' means the North Carolina Birth-Related Neurological Impairment Trust Fund.
(g)	‘Impaired person' means an applicant who has established entitlement to benefits under this Article by obtaining a determination of having a birth-related neurological impairment.
(h)	‘Program' means the North Carolina Birth-Related Neurological Impairment Program.
(i)	‘Provider' means (i) a health care provider as defined in G.S. 90-21.11 who performs or assists in the prenatal care, delivery, or resuscitative care immediately thereafter of the applicant; (ii) a hospital facility as defined in G.S. 131E-6; or (iii) a birthing facility licensed under Chapter 131E of the General Statutes in which such care is performed.
(j)	‘Secretary' means the Secretary of the Department of Environment, Health, and Natural Resources.
"§ 130A-462.  North Carolina Birth-Related Neurological Impairment Program; exclusive remedy; exception.
(a)	There is created the North Carolina Birth-Related Neurological Impairment Program.  The Department shall establish and administer the Program, and the Secretary shall appoint a Director employed within the Division of Maternal and Child Health, Section of Children and Youth, to carry out its obligations under the Program pursuant to this Article.  The Department shall adopt rules to implement the Program, including provisions for a citizens' advisory committee to the Program, the membership of which shall include representatives of children disabled by chronic inability to control motor function.
(b)	The rights and remedies granted a person with a birth-related neurological impairment hereunder shall exclude all other rights and remedies of the person, the person's parents, guardian, guardian ad litem, personal representative and all others against any provider, as defined in this Article, at common law or otherwise, for any damages arising out of such birth-related neurological impairment.  If an action for the rights and remedies excluded by this Article is filed, it shall be dismissed on the motion of any party under law.  If a civil action is filed involving an impairment alleged by any party to be a birth-related neurological impairment, but no determination has been made by the Department, upon motion of any party, the action shall be stayed pending a determination and dismissed if the impairment is determined to be a birth-related neurological impairment.
(c)	For every injury giving rise to an application under this Article, there shall be an investigation of the provider performing the delivery by the office of the Attorney General and the North Carolina Board of Medical Examiners.  Disciplinary action shall be taken against a physician provider for an act or acts showing (i) lack of ability or competence to practice medicine  with reasonable skill or safety to patients; (ii) unprofessional conduct, including, but not limited to, any departure from, or the failure to conform to, the standards of acceptable and prevailing medical practice or the ethics of the profession; or (iii) for any other reason for which a physician is otherwise subject to disciplinary action.  If upon investigation there is reasonable cause for disciplinary action against any provider, as determined in the discretion of either the Attorney General, the Board of Medical Examiners, or any other appropriate licensing board to which the investigation has been referred, disciplinary proceedings shall be commenced.  The office of the Attorney General and the Board of Medical Examiners shall receive copies of all applications and accompanying documentation in order to commence investigations.  Any authority conducting an investigation may obtain assistance from one or more impartial physicians in evaluating the clinical aspects of such investigation.  Necessary and reasonable funds shall be made available for this investigation from the Fund.  A report of disciplinary actions taken shall be made annually and shall be of public record.
"§ 130A-463.  Comprehensive, integrated assistance.
The Department shall develop a program for referral to evaluation centers, assistance with applications, clinical assessment of needs and available resources, determination of eligibility, management of care, and compensation.  To the extent feasible and consistent with the purposes of this Article, the Department shall integrate the Program with existing assistance programs to further the goal that all disabled or impaired children in North Carolina may receive comprehensive, interdisciplinary assistance and service in gaining access to all available resources for which they are eligible.
"§ 130A-464.  Referrals.
Referrals will be accepted from all sources, including, but not limited to, the following:  (i)	local health departments, (ii) departments of social services, (iii) hospitals, (iv) health care providers, (v) preschool and school health programs, (vi) volunteer agencies, (vii) impaired persons and their families and (viii) early intervention programs.  Referrals shall be made to the most accessible Department evaluation center.
"§ 130A-465.  Application assistance.
The Director, by and through a service coordinator individually assigned, shall assist each applicant in the preparation of an application for benefits under the Program on forms provided by the Department.  The service coordinator shall also assist in obtaining appropriate information, including identification of providers, time and place where the birth occurred, medical records, evaluations, other clinical information, and information relative to the applicant's medical condition and needs.
"§ 130A-466.  Determination of impairment.
The Director shall timely determine whether the applicant has a birth-related neurological impairment.  In making such determination, the Director shall consider the evaluations, prognoses, and other documentation in or with the application.  Upon the request of any applicant or provider, or upon the Director's own initiative, the Director may solicit further evaluations and prognoses by one or more qualified and impartial physicians.  The Director shall consider, but is not bound by, such solicited recommendations.
"§ 130A-467.  Clinical assessment; need; resources.
(a)	If the Director determines that the applicant has a birth-related neurological impairment, a written clinical assessment shall be made identifying the impairment and associated disabilities or special needs.  The assessment shall be interdisciplinary and shall include collection and review of pertinent historical and medical information, evaluation of overall health status, developmental level, child/family relations, and where possible, the etiology of the impairment.  The clinical assessment shall include a comprehensive coordinated care plan for the delivery of services and necessary appliances to the impaired person.
(b)	A written financial assessment shall also be made of the availability of potential third party payment sources and of direct services or other benefits, from all sources, including governmental or private insurance.  Resources of the applicant or the applicant's family shall not be considered in making the financial assessment.  The service coordinator shall assist in providing information on possible resources and in securing eligibility for, and access to them.  The Program shall have a plan for integrated access to benefits through other State programs and agencies.  When sources of benefits are exhausted or insufficient to meet the established needs of the impaired person, Program payments shall be disbursed from the Fund pursuant and subject to this Article.
"§ 130A-468.  Determination letter.
The determination of whether the applicant has a birth-related neurological impairment, the basis for the determination, and if affirmative, the clinical and financial resource assessments, shall be set forth in writing in a determination letter from the Director to the applicant.  Written notice of the determination shall be sent by the Director to the Secretary, the named providers, the Attorney General, and the Board of Medical Examiners or other appropriate licensing board.
"§ 130A-469.  Case management; payments.
(a)	Case management shall be provided through the evaluation centers and service coordinators.  It shall include assistance to assure that impaired persons receive adequate services consistent with the care plan, regular consultation and follow-up, and to assure that changing needs are identified and satisfied by the provision of adequate services.  Impaired persons shall receive Program support for unmet expenses for (i) necessary and essential case coordination, (ii) developmental evaluation, (iii) special education, (iv) vocational training, (v) physical, emotional, or behavioral therapy and other medical care and (vi) devices and rehabilitative services relative to and necessitated by the impairment.  Long-term custodial care shall not be deemed to be necessary and essential medical care.  Medical conditions not associated with the impairment do not qualify for Program support.  Subject to this Article, Fund payments shall be disbursed for case management and authorized payments consistent with the care plan, on a supplemental basis after all other sources of payment, benefits, or services are exhausted.  In circumstances in which a newly-eligible impaired person has incurred otherwise qualifying unmet expenses prior to determination, retroactive Fund reimbursement is authorized.
(b)	Fund payments shall not be considered in determinations of assets or income in governmental assistance programs where the level of support is based upon assets or income.  Fund payments shall not be considered a third party benefit entitlement in calculations of eligibility for governmental assistance programs.
(c)	Payments at a level comparable to amounts paid through Medicaid or other comparable government assistance programs will be paid directly to providers or suppliers of benefits after receipt of statements for authorized services or benefits.
"§ 130A-470.  Appeals.
Actions pursuant to G.S. 130A-468 and G.S. 130A-469 constitute final agency decisions for purposes of appeal under Chapter 150B of the General Statutes and applicable Department rules governing agency appeals.  Without limiting the rights of any other person, the Secretary, representing the interests of the State in assuring prudent use of Fund assets, shall have standing to appeal.  If an applicant prevails in any civil action seeking judicial review, the court may, in its discretion, allow that applicant to recover reasonable attorneys' fees incurred in pursuing the appeal, to be taxed as court costs against the Department, and to be reimbursed from the Fund.  An applicant shall petition for attorneys' fees within 30 days of final disposition of his case.
"§ 130A-471.  Scope.
This Article applies to all births occurring in North Carolina on or after the effective date of this Article.
"§ 130A-472.  North Carolina Birth-Related Neurological Impairment Trust Fund.
(a)	There is authorized and established in the Department the Birth-Related Neurological Impairment Trust Fund to finance payments under, and administrative costs of the Program.  The Secretary shall administer the Fund, subject to review, recommendations, and approval by the Birth-Related Neurological Impairment Trust Fund Council.  The Council shall consist of the Secretary, who shall serve as Chairman, the State Treasurer, and the State Auditor.  The Council shall advise the Secretary regarding administration of the Fund, including establishment of assessments, review and approval of budgets for expenditures and any revised budgets, distribution of Program funds, and actuarial soundness of the Fund.  The Council shall meet not less than quarterly each year.
(b)	The State Treasurer shall be custodian of the Fund and shall invest its assets in accordance with G.S. 147-69.2 and G.S. 147-69.3.  The Fund is subject to the oversight of the State Auditor under Article 5A of Chapter 147 of the General Statutes.  The Fund is hereby expressly designated and eligible to receive and accrue all interest and other earnings on its assets under G.S. 147-86.11(g).  The Fund and any payments from the Fund are not subject to taxation.
(c)	Subject to approval of the Birth-Related Neurological Impairment Trust Fund Council, necessary and reasonable administrative expenses of the Department, the office of the Attorney General, the Board of Medical Examiners, and any other appropriate licensing board to which an investigation is referred, for activities directed by this Article, may be charged against the Fund.  After the initial two years of operation of the Program such expenses shall not exceed five percent (5%) of the previous year's Fund disbursements.  Withdrawals from the Fund are hereby authorized as needed until expended to carry out the intent and purposes of this Article, and recognizing the importance thereof, all Fund principal and income shall be used to support the Program pursuant to this Article.
"§ 130A-473.  Fund; assessments.
(a)	The Department shall adopt rules to administer the Fund, including rules governing the establishment and management of the initial and annual assessments required by this section.  Assessments are not subject to premium taxes.  The Fund is eligible to receive sums from private or public foundations, corporations, individuals and other sources and from governmental appropriations, which if received shall serve to supplement the Fund.
(b)	Under these rules, there shall be levied an assessment on each delivery, with fifty-five percent (55%) of the assessment remitted by the physician provider or providers performing or supervising the delivery, and forty-five percent (45%) of the assessment remitted by the hospital or birthing facility provider in which the delivery is performed.  The total combined assessment shall not exceed one hundred seventy dollars ($170.00) per delivery.  Assessments shall not be required to be paid by a provider on deliveries for which no fee is charged.
(c)	The Secretary shall collect and enforce collection of all assessments required to be paid under this section.  Any person who fails to pay to the Fund the assessments required under this section within 90 days of the delivery shall, in addition to such unpaid assessments, pay to the Fund interest at the rate established by the Secretary of Revenue under G.S. 105-241(i), and there shall also be added to said unpaid assessments an amount equal to fifty percent (50%) of the amount of such unpaid assessments.
"§ 130A-474.  Actuarial investigation; valuations; gain/loss analysis; notice if assessments prove insufficient; reserves.
(a)	At least annually, the Secretary shall undertake, with the assistance of an independent actuary, an actuarial investigation of the requirements of the Fund in determining the amount of assessment.  The investigation shall be based on the Fund's experience in the first and succeeding years of operation, and shall include, without limitation, investigation of the actual and projected assets and liabilities of the Fund.  Any determinations and recommendations shall be filed with the Birth-Related Neurological Impairment Trust Fund Council.
In the event that the Birth-Related Neurological Impairment Trust Fund Council finds that maximum assessment receipts and receipts from all other sources are inadequate relative to disbursements for the Fund to be administered on an actuarially sound basis, the Director shall be promptly notified and disbursements shall be adjusted to achieve and maintain an actuarially sound administration.  The General Assembly shall be  promptly notified of such a finding.
(b)	Under these rules, for so long as the Fund is effective and in force, professional medical liability insurance carriers insuring obstetrical risks in this State, under the supervision of the Commissioner of Insurance, shall establish reserve accounts for that portion of collected insurance premiums attributable to anticipated birth-related neurological impairment losses and expenses and hold the same for a period of five years.  At the end of this period, the reserved sums and earnings shall be paid by the insurance carriers to the Fund.  Carriers or insureds will not be obligated for premium tax for the transferred amounts.
"§ 130A-475.  Right of State to bring action.
If the Director makes an award to an impaired person, the State, on behalf of the Fund, shall be subject to, and may bring a subrogation action against any nonprovider for any right of recovery or cause of action available at law."
Sec. 2.  In the event any provision of this act is held to be invalid by any court of competent jurisdiction, the court's holding as to that provision shall not affect the validity or operation of other provisions of this act; and to that end the provisions of this act are severable.
Sec. 3.  This act shall become effective January 1, 1991, except that, effective upon ratification, the Department of Environment, Health, and Natural Resources shall begin to adopt rules to implement this Article.  These rules shall not become effective until January 1, 1991.