The NICA program was intended to reduce doctors’ malpractice bills and provide a dignified existence and financial cushion for families crushed by the delivery of an infant with devastating brain damage. But some parents report a program that’s both indifferent to their fears and hostile to their needs.

This article was produced for ProPublica’s Local Reporting Network in partnership with the Miami Herald. Sign up for Dispatches to get stories like this one as soon as they are published.

Every other month, Jay Alexander Benitez would be hospitalized with pneumonia or other respiratory infections that stemmed from the profound brain damage he suffered at birth. “It was heartache,” the boy’s mother, Alexandra Benitez, said. “Being in the hospital scared him.”

Jay’s pulmonologist said that regular therapy with a nebulizer — a machine that delivers vaporized medication to the lungs to improve breathing — might prevent some of those illnesses. But Benitez said she was forced to wait months before the treatments could begin.

A Florida law passed in 1988 had prevented the Benitezes from filing a malpractice suit to recoup the costs of their son’s care but promised that a no-fault fund would pick up the tab.

Alexandra Benitez soon learned that the no-fault fund, the Birth-Related Neurological Injury Compensation Association, or NICA, would pay for nothing — not until she had first gone to Medicaid, an insurance program loathed by many of Florida’s poorest residents for its cut-rate reimbursements and propensity to fight claims large and small.

When Jay’s pulmonologist recommended the nebulizer machine to loosen mucus in his lungs, Medicaid said no. The family needed extra feeding tubes for Jay’s gastrostomy, a procedure in which a port is inserted directly into the stomach to provide nutrition. Medicaid said no. Jay’s doctor prescribed a “stander,” an adjustable frame that could be used to develop muscle strength in the boy’s legs. Medicaid said no.

Jay Benitez Credit: Courtesy of Alexandra Benitez

NICA would not cover any medical care for her son until she could prove that Medicaid had already denied the claim and show a signed doctor’s letter verifying that the child really needed whatever she was requesting — not just breathing treatments, but also diapers, syringes, anything.

“They make the family jump through all these hoops. Just to get what children are entitled to,” said Benitez, who lives in Lakeland, just east of Tampa Bay. “Hardship, that’s what it is.”

This is the story of how Florida lawmakers stripped parents of the right to sue over births gone catastrophically wrong, created a no-fault program funded by fees paid by doctors and hospitals to cover those claims, made hundreds of millions investing those funds in the stock market, accumulated $1.5 billion in assets and then offloaded much of the costs of care onto taxpayers.

That left parents like the Benitezes to grapple with Medicaid’s arcane rules, a shortage of doctors willing to accept Medicaid patients and frequent denials of claims.

About 125 of the 215 brain-damaged clients, some of them now adults, currently in Florida’s NICA program qualify for Medicaid, and they are required to seek help first from the taxpayer-funded safety-net plan. Those with private health insurance coverage also must ask their insurer to pay for care.

After decades of enforcing this last-to-pay policy, NICA faces an existential reckoning.

Florida legislators approved a bill of sweeping reforms for the program after the Miami Herald and the nonprofit newsroom ProPublica began publishing an investigative series in April documenting parents’ frustrations with NICA. Gov. Ron DeSantis has yet to sign the bill.

And a federal lawsuit alleges that by telling parents to go to Medicaid first, NICA is causing them to commit fraud by filing a false claim with Medicaid when NICA was supposed to pay instead.

Both Medicaid and NICA consider themselves a “payer of last resort,” meaning they pick up only what insurance and other “third parties” do not. But in reality only one program can be last in line to pay, and that — as explicitly stated in federal law — is Medicaid, the whistleblower lawsuit says.

A federal district judge in Fort Lauderdale rejected an effort by NICA to throw out the suit, a decision the program is appealing.

When asked in a Sept. 25, 2008, deposition what would happen if Medicaid were to stop covering care for people in the program, NICA Executive Director Kenney Shipley replied: “It would make NICA insolvent.”

Neither NICA nor the Agency for Health Care Administration, which administers Medicaid in Florida, would provide figures for how much Medicaid has spent over the years on children enrolled in NICA. But an analysis AHCA performed for NICA in 2020 casts doubt on Shipley’s dire prediction.

Agency records for the period from January 2009 through Sept. 20, 2017, show AHCA paid at least $35.8 million to provide care through Medicaid for 122 people with NICA coverage. That equates to less than $5 million per year.

Still, federal law is clear that without a specific exemption, which NICA does not have, Medicaid must pay last, said Sara Rosenbaum, a health law professor at George Washington University and adviser to Congress on federal Medicaid payment and access policy.

“I’m not understanding why [Medicaid] has not come down on them like a load of bricks,” Rosenbaum said. “There’s something upside down about this whole arrangement.”

Helping Doctors, Billing Taxpayers

Florida lawmakers created NICA to reduce malpractice insurance premiums for doctors by shielding them from lawsuits for birth injuries that result in profound physical and cognitive disabilities, usually due to oxygen deprivation.

Obstetricians pay $5,000 a year for coverage under the program, an amount that hasn’t been raised in 33 years and would be nearly $12,000 in today’s dollars. All other licensed Florida doctors pay $250 a year. Hospitals chip in $50 per live birth.

In return for barring parents from suing, NICA compensates them with a one-time payment and a commitment to cover a lifetime of “medically necessary” care for the injured child.

But parents whose injured children are enrolled in NICA and qualify for Medicaid based on their income say Florida stripped them of the right to sue and replaced it with essentially the same medical treatment that every other poor and disabled child is entitled to in the state. In Florida, Medicaid rates below the median for quality of care when compared with other states.

“They said our son was going to be taken care of. All his medical care would be taken care of,” Benitez said of NICA. “Then, every little thing my son needed, we had to fight for it.”

The bill adopted by Florida legislators in April attempts to make life easier for families like the Benitezes. The legislation raises the one-time benefit to families from $100,000 to $250,000, boosts the payment when a child dies from $10,000 to $50,000 and requires for the first time that at least one member of the NICA board of directors be the parent of a child in the program.

A proposal to raise the $5,000 OB-GYN dues and the $250 annual fee for all others doctors by up to 3% a year, starting in 2022, was shelved.

Lawmakers left for a later date the issue of whether NICA can keep sending families to Medicaid first for their care.

During hearings, Florida lawmakers proposed adding a statutory requirement that NICA repay Medicaid for the care it has provided to children since the program began and going forward. NICA’s administrators beseeched them not to do it.

“I would just plead with you not to take action that could potentially cost hundreds of millions of dollars to the NICA program, potentially put it in financial jeopardy, and really derail where we’re trying to go with all of these positive benefits,” said Steve Ecenia, general counsel for NICA.

“This amendment causes us great concern and we would ask you not to adopt it,” said Ecenia, who is also a lobbyist for one of Florida’s largest for-profit hospital chains, HCA Healthcare.

The proposal was dropped.

NICA did not respond to a question about Ecenia’s characterization given that Florida data shows Medicaid has spent less than $5 million a year on these children over a recent nine-year stretch.

In the final bill, lawmakers directed Florida’s Medicaid agency to tally the “extent and value” of NICA’s potential liability for Medicaid spending and make recommendations about whether the state should recover those funds.

Whatever the Legislature does, NICA’s reliance on Medicaid may be doomed because of the lawsuit filed in Fort Lauderdale federal court.

NICA asked that the case be dismissed, raising a defense in court filings that the program is a state agency that cannot be sued.

In a 14-page order issued Sept. 18, U.S. District Judge William P. Dimitrouleas rejected the argument, finding that NICA is not a state agency and that federal and state laws make NICA legally responsible for paying health care claims before those costs can be passed on to taxpayers. NICA has asked the 11th U.S. Circuit Court of Appeals in Atlanta to reverse Dimitrouleas’ ruling.

In a 2019 email, Shipley, NICA’s executive director, acknowledged the risk that a judge might rule the program must pay first, with Medicaid serving only as a backup. She called this the “Sword of Damocles,” referring to the myth of the king who had to sit beneath a sword hanging by a thread.

The only other program like NICA, in Virginia, was forced to stop sending children to Medicaid for their care in 2018 and paid millions of dollars back to the federal government after being sued by the same whistleblower who filed suit in Florida.

“Always Denying Me”

As Alexandra Benitez drifted in and out of consciousness during her son’s chaotic delivery, she tried first to console her husband. Everything will be OK, she said, “because we are in the hospital after all.” Bleeding heavily from what she later learned was a tear between her uterus and her baby’s placenta, Benitez later bargained with her doctors.

“I told them to forget about me,” Benitez said. “Just take my son, and save him.”

Jay and Alexandra Benitez Credit: Courtesy of Alexandra Benitez

Born with a severe brain injury, Jay Alexander Benitez was approved for NICA coverage in December 2001.

Alexandra Benitez, now 48, said she was told that NICA would cover a lifetime of care for Jay but not that she would have to get denials from Medicaid first.

“This was a constant thing, because my son always needed something,” Benitez said.

Medicaid, like NICA, did cover nursing care. Initially it agreed to pay for eight hours daily, allowing Benitez time to sleep, cook or clean the house. To remain eligible, Benitez had to reapply every six months and meet the low-income requirements.

If a family’s bank account crept over $2,000, Medicaid would terminate the nursing care for exceeding the program’s low-income requirements. Currently, a Florida household of three cannot earn more than $29,207 a year to qualify for Medicaid. Denials, delays, reductions in care and terminations can be appealed.

For years, the Benitez family lived on a razor’s edge of poverty, one roof leak or car repair away from ruin.

“They were always denying me,” Benitez said.

Benitez said she wishes NICA knew how Jay’s profound disabilities affected the entire family and how dedicated she and her husband were to his well-being.

“He was a happy soul,” Benitez said. “Even though his body was in constant pain he would fight through it.”

Jay died at home on Jan. 29, 2015, after suffering a massive seizure. He was 15. Benitez said she did whatever she could to make Jay’s life better. Having to slog through repeated requests, denials and appeals with Medicaid before NICA would pay depleted her.

“When you have a child you have hopes and dreams. You see them in the future. You don’t look forward to burying your own child,” she said. “It’s a hard, long road. A long fight. ... My son’s life, my family’s life, was not easy at all.”

Perpetuating Poverty

Although NICA and Medicaid cover a limited amount of in-home nursing care — and NICA even pays parents to watch their own children — some families are forced to patch together caregiving plans with nurses who don’t show up for work, sleep on the job, relocate unexpectedly or simply leave midshift, records show.

Pat Wear, who helped oversee a disability advocacy group in Florida before becoming commissioner for mental health and developmental disabilities in Kentucky, said low reimbursement rates are “at the heart of” Medicaid’s — and therefore NICA’s — inability to provide reliable, let alone high-quality, in-home nursing care.

“There’s a direct correlation between the reimbursement rates and quality of care,” said Wear, who is now retired. “Generally speaking, you get what you pay for.”

Even when NICA covers expenses that Medicaid won’t, it is NICA policy that the program will pay at the same reimbursement rate as Medicaid — which critics say ensures that the quality of care seldom exceeds what Medicaid can provide.

Florida’s Medicaid program spent less per enrollee to provide care for people with disabilities than almost any other state, ranking 44th out of 50 states in 2018, the most recent year reported in federal data.

In 2014, a Florida federal judge found that Medicaid’s low reimbursement rates relegated impoverished children to an inferior health care system.

Dr. Rex Northup, a retired critical care specialist who headed the Florida Panhandle region of another taxpayer-funded program, Children’s Medical Services, testified before the judge at the time. He described how some Pensacola families on Medicaid had to travel almost 350 miles to the University of Florida’s Shands Hospital in Gainesville to find a specialist willing to treat a medically complex child — not because the specialty was that rare, but because many doctors simply weren’t willing to accept Medicaid reimbursement rates.

Medicaid was “supposed to provide care equal to other insurance,” Northup said. Except in extremely rare cases, it didn’t, he added.

Then-U.S. Circuit Judge Adalberto Jordan found that Florida’s Medicaid reimbursement rates were so low that children in the state’s program did not have adequate or reasonable access to medical and dental care as required by federal law. The case settled, with health regulators vowing to improve reimbursement rates and access to care. (Jordan was elevated to the 11th U.S. Circuit Court of Appeals while the lawsuit was still pending.)

As part of the settlement, Florida’s Medicaid agency instituted an incentive plan that raised reimbursement rates for pediatricians who met certain requirements. Some are now paid the Medicare rate for elders, which is higher.

NICA administrators reject the claim that any children in the program who are insured by Medicaid are given inferior health care.

“NICA families receive care from some of the best, most specialized doctors in the United States — and no doctor has refused to care for a NICA patient, in Florida or elsewhere, due to reimbursement rates,” the program said in answer to a series of emailed questions from the Herald. “Not one.”

“If they, for some reason, do not accept a specific reimbursement rate for medically necessary and reasonable treatment, then NICA will pay whatever is necessary to make sure its families do not incur out-of-pocket expenses.”

NICA case management logs, obtained by the Herald under Florida’s public records law, are filled with references to parents calling the program, sometimes in tears over losing their jobs, and falling deeper into poverty, because of nursing-care issues:

  • Mother “states that there is no way she can work because nursing care is not dependable and many times she has to go to work and then come home to care for [her child] as well or can’t go to work at all because nurses don’t show up.”
  • “Nurses are calling off frequently and mother is having a hard time performing her job from home.”
  • “Mother called, lots of problems with keeping a nurse, one left for a different job, one sleeps on duty and parent did not want her back.”

That mother called NICA to complain that her “husband had to come home from work to take care of [their] child. Work told him he was missing too much time re sick child, if he left don’t come back.”

Later — the exact dates are redacted — the log noted the father’s employer followed through with the threat. “Last week, father was let go because he had to go home to care for child.”

The log noted the father could be paid $15 an hour to give care to his disabled child when he’s forced to leave work. But if the father quit his job for good or was fired, his caregiving pay from NICA would drop to $10 an hour.

Showdown in Federal Court

NICA’s current legal reckoning is being driven by the parents of a severely disabled boy named Cody Arven. In July 2015, they challenged the policies of the Virginia Birth-Related Neurological Injury Compensation Program. It was the model for NICA.

There are some differences between the two programs. Florida’s soon-to-be-expanded board of directors consists of doctors, hospital representatives and insurers. Virginia’s board already includes two members who represent people with “special needs,” as well as a plaintiffs’ attorney. In Virginia, parents have up to 10 years after a baby’s birth to file a claim, compared with five years in Florida. And while Virginia does not offer a one-time $100,000 award, it pays lost wages annually to the injured child once he or she turns 18. The pay is equal to 50% of the average private, non-agricultural wage. The benefit amounted to about $29,000 in 2020.

In their federal lawsuit, Veronica and Theodore Arven, the latter now deceased, accused Virginia’s birth injury fund of illegally dumping its costs on taxpayers through Medicaid. Cody Arven was accepted into the Virginia fund after his 2003 birth left him severely disabled.

In 2018, the Virginia program settled by paying $20.7 million to the U.S. government and agreeing to stop shifting costs to Medicaid in the future. For filing the whistleblower lawsuit, the Arvens received $4.1 million of that.

That same month, Virginia’s program started buying private health insurance for all of its covered children who had relied primarily on Medicaid, said George Deebo, the director. Deebo said the change caused about a 20% increase in spending for the program.

“It changed the order of how we pay for services,” he said of the settlement. “Essentially, we reversed position with Medicaid.”

Florida NICA took notice.

“This is a terrible outcome,” one of the Florida program’s lawyers, Paul R. Monsees, wrote in a January 2019 email to Shipley and NICA’s general counsel. “What is to stop” a family from filing such a whistleblower suit in Florida? Monsees asked.

Three months later, on April 25, 2019, the Arvens did exactly that. Under a federal law, any person can bring a civil lawsuit against companies or people who allegedly defraud the U.S. government.

Whistleblower lawsuits are initially sealed so potential wrongdoers aren’t tipped off and complaints can be investigated. The Arven lawsuit was unsealed in September 2020 when Dimitrouleas rejected NICA’s attempts to dismiss it.

Although the issues are similar to Virginia, the stakes are higher. Florida’s NICA program has accepted more claims — 433 compared with about 255 for Virginia.

Virginia’s fund holds $500 million, about one-third of NICA’s assets.

“Stealing From Medicaid”

Florida and federal law require AHCA to claw back payment whenever Medicaid covers medical services that could have been paid for by a so-called third party, such as a health insurance plan or NICA.

The few exceptions to this rule are named in state and federal guidance and include state health agencies and federally designated benefits, such as the Indian Health Service, the Ryan White HIV/AIDS Program and the Women, Infants and Children program.

NICA is not on the list of exceptions — despite requests to state lawmakers and state and federal health regulators from NICA’s attorneys to be included.

When the Herald asked AHCA for records showing whether the agency has made any attempts to recover any money from NICA, the agency refused to answer, citing the pending federal lawsuit.

But while NICA’s attorneys failed to persuade AHCA to alter its policy on Medicaid liability, they have argued successfully thus far in state courts that NICA has no obligation to repay Medicaid.

Administrative law judges who preside over NICA petitions and claims at the Florida Division of Administrative Hearings have ruled repeatedly that the program is not liable for Medicaid spending.

That’s what happened in the case of Fatema Shakir, who entered the world when no one was looking. No doctor or nurse was in the delivery room, and her mom, Allyson Williams, was so numbed by pain blockers that she didn’t realize she had given birth in her hospital bed. Fatema, severely brain damaged, was found under the covers with no heartbeat.

Although revived that day in June 2007, Fatema would be left with profound brain damage rendering her unable to eat or breathe without tubes.

“What happened to Fatema shouldn’t have ever happened,” Williams said. “That shouldn't have ever happened.”

Fatema’s parents fought NICA compensation at first, arguing that there was no doctor present when she was born on June 3, 2007. Staying out of NICA might have enabled the parents to pursue a malpractice suit they filed in 2008.

Fatema Shakir, pictured here at age 4. Credit: Courtesy of Allyson Williams

But the NICA statute only requires a participating doctor — one who paid the $5,000 annual premium — to have provided obstetrical services any time during labor, delivery or resuscitation immediately after birth in order for the case to qualify for compensation.

In August 2013, Fatema’s parents abandoned their suit and accepted NICA benefits. As the case dragged on in administrative court, and Fatema’s needs grew more intense, Williams said she felt pressured to accept NICA and was relieved to get help no matter where it came from. Williams was a single mom, unable to keep a job, she said, with other young children at home.

“It wasn’t Fatema’s fault, but I couldn’t work because she had all these doctors’ appointments, and if she got sick she couldn’t go to [out-of-home daytime nursing care], and that just took a lot.”

But the month after Williams had accepted NICA, Florida’s Medicaid program slapped Fatema’s parents with a $1.4 million lien for Medicaid benefits that covered Fatema’s long stay in the neonatal intensive care unit after delivery and her subsequent care.

Nearly four years later, Fatema died at the age of 9 on April 15, 2017. Her father, Muhammad Shakir, died later that year.

Prior to Fatema’s death, Williams asked an administrative judge to order that NICA pay off the lien. The judge said no, stating that NICA was not responsible for past expenses paid by Medicaid. Williams appealed the denial to Florida’s First District Court of Appeal, which affirmed the administrative judge’s decision.

Ronald Gilbert, an Orlando attorney who represented Williams, said that after his client accepted the NICA benefits, AHCA never enforced the lien. Williams did not pay the lien, Gilbert said, and there is no record that NICA paid it.

“The lien went away, which is just stealing from Medicaid, in my opinion,” Gilbert said, “particularly if the NICA program has [$1.5] billion in financial reserves.”

Fatema continued to rely on Medicaid after being accepted into NICA. Williams said she does not recall who paid for Fatema’s care — NICA or Medicaid — but that the costs were covered. She said both NICA and Medicaid treated Fatema fairly, but that she would have preferred to sue for her daughter’s injuries.

“No amount of money in the world can replace the amount ... my daughter should have been awarded,” said Williams, who is now 42.

Federal regulators say they have not issued any legal opinions, letters or other written guidance with respect to NICA or the Virginia Birth-Related Neurological Injury Program.

Rosenbaum, the health law professor at George Washington University, said programs like NICA are in theory beneficial, but only if you “take the step of aligning it with Medicaid policy.”

If DeSantis signs the legislative reform bill adopted by lawmakers in April, then the state’s Medicaid agency will begin a review of NICA’s potential liability. The legislation requires AHCA to deliver a report of its findings by Nov. 1.