The Virginia Birth Injury Fund: A Story

Cody’s chance to live a normal life ended at birth when a maternal infection went undiagnosed by doctors. His birth ushered in the beginning of a crushing legal and medical battle for his parents to get the assistance he was owed. 

The family initially sought relief from the Virginia Birth Injury Fund (VBIF) — a no-fault insurance system that is supposed to cover expenses for victims of birth-related injury in Virginia. The General Assembly created the program in 1987 as a tort-reduction effort designed to keep malpractice lawsuits out of courts and cap awards for plaintiffs. The fund pays claimants directly with money that comes from premiums paid by doctors and hospitals that enroll in the VBIF program. 

Cody’s claims were initially denied by VBIF, whose own team of medical malpractice attorneys and consultants aggressively fought Cody’s admission into the program. 

After years of litigation, VBIF admitted Cody into the program.  However, the VBIF also instructed Cody’s family to apply and receive Medicaid benefits. The VBIF then instructed Cody’s family to initially filter all payment requests to VBIF through Medicaid. This resulted in Medicaid paying for treatment for Cody, and others, which was otherwise payable by VBIF.  This was in contravention of federal law. 

In other words, Virginia taxpayers were paying for children’s medical expenses that were supposed to be covered by VBIF. 

Cody’s family, represented by Gentry Locke, filed a qui tam action, which is a lawsuit against entities that make false claims to the U.S. government.  In this case, we argued that VBIF forced Cody’s family to make a false claim when they sent paperwork to Medicaid stating they had no other source of payment for medical expenses. 

After years of litigation, VBIF agreed to make changes.  In late 2018, more than 15 years after Cody was born, VBIF paid $20.7 million to resolve the matter. 

During the course of the VBIF lawsuit, we discovered Florida had a birth injury program called the Neurological Injury Compensation Association (NICA), which was modeled after the Virginia program. Like Virginia, Florida’s program was shifting costs to Medicaid rather than paying claims for participants. 

In 2019, we filed an action in Florida against NICA to recover funds improperly paid by Medicaid for NICA’s plan participants. 

NICA’s main defense was that it claimed it was a part of the state government and therefore could not be sued. Virginia initially made a similar claim, but we successfully argued that the VBIF was a private insurance fund and not a state agency. 

Ultimately, NICA paid $51 million to settle the case. 

The cases brought financial settlements for our clients, but the cases also initiated real changes at the state government level. In Virginia, the General Assembly passed legislation requiring VBIF to buy health insurance plans for its participants.  The fund can no longer force claimants to send claims to Medicaid. 

Florida went even further. The state legislature made significant changes to NICA, added oversight, and even paid $100,000 to every plan participant. Like Virginia, the Florida fund is now forbidden from forcing participants to submit initial claims to Medicaid. 

These cases have given us an opportunity to become well versed in both VBIF policy, procedure, and remedies, as well as related qui tam lawsuits.

Contact us today to speak with one of our medical malpractice attorneys in Roanoke, Lynchburg, Richmond, or Norfolk.