The enactment of the Medical Indemnity Fund in New York State in 2011 has had an impact upon medical malpractice insurance carriers, hospitals, medical professionals and the legal system. Because of yet another insurance crisis in New York in the years preceding 2011, including the possibility of hospitals closing their obstetrical departments, the fund was enacted to give relief to hospitals and insurance carriers by shifting the cost of future medical damages in cases of alleged negligence during the birth admission, to the state, through shared payment by hospitals with obstetrical units.

Although the fund has had the intended effect of reducing the amount of cash paid by hospitals through settlement or trial, some unintended consequences have come to light in cases where one or more defendants settle, but other defendants choose to go to trial. An analysis of the interaction of the provisions of the fund with existing statutes will highlight the unintended consequences of substantially altering the amount of the cash owed by non-settling defendants after a verdict. This anomaly results from varying the sequence between the application of the fund and GOL §15-108; and whether the agreed to percentage attributed to the fund by the settling defendants takes precedence over a jury determination for the non-settling defendants. In order to preserve the legislative intent of the fund, legislative clarification is required.

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