Florida’s embattled compensation program for children who suffer brain damage at birth arbitrarily denied claims, failed to adequately describe rights and benefits in a parents’ handbook, and failed to explain its decisions to parents, according to a report released Tuesday by the state Auditor General.

The report validated many of the findings of a series of stories this year by the Miami Herald and ProPublica about Florida’s Birth-Related Neurological Injury Compensation Association, or NICA. The report came less than two months after Gov. Ron DeSantis signed a sweeping bill reforming the program. The Auditor General is an independent financial watchdog who reports to both chambers of the Florida Legislature.

Again and again, NICA’s leaders were more generous and forgiving with staff and stakeholders than they were with the families the program was designed to serve. Over the last two years, the report found, NICA spent nearly $800 for holiday luncheons and violated state spending laws by offering lavish buffets to employees and board members, but it refused to reimburse a family for the full amount of a $1,314 computer designed to help a nonverbal child speak.

Parents traveling with their children to out-of-town doctor appointments were limited to $6 for breakfast — although NICA administrators paid $158 per person for a board meeting breakfast buffet and all-day nonalcoholic drinks.

The audit faulted NICA both for how it accumulated money — NICA currently is sitting on almost $1.5 billion in assets — and for how the program spent it.

The Legislature created NICA in 1988 in response to persistent complaints from obstetricians that their medical malpractice insurance was becoming too expensive. The law precludes parents from suing their doctor or hospital when a child is born with severe brain damage as the result of oxygen deprivation or spinal cord injury.

In exchange for losing their day in court, parents are channeled into NICA, which is responsible for providing all “medically necessary” and “reasonable” care during the lifetime of their children.

In her 18-page report, Auditor General Sherrill F. Norman examined state laws, interviewed NICA employees and managers, sent a satisfaction survey to 279 parents or guardians, inspected NICA records and reviewed 98 NICA petitions at the Division of Administrative Hearings, where the program’s claims are litigated.

In a letter dated Aug. 12, NICA’s executive director, Kenney Shipley, addressed each of the auditor’s seven findings and said the program’s “proposed corrective actions for each finding will satisfy the issues raised.”

State Sen. Lauren Book, a Plantation Democrat who helped draft the last legislative session’s reform bill, referred to the Auditor General’s findings as “disgusting and despicable.”

“This bombshell report confirms the shameful treatment NICA families have endured for far too long — a culture of miserly greed whereby vulnerable families have had to fight tooth and nail for critical services and medical supplies simply to keep their children alive,” said Book, the Senate’s incoming minority leader.

“While NICA nickel and dimed families — even going so far as to hire a private investigator to tail a mother in order to deny claims — they simultaneously allowed millions of dollars in physicians’ dues to go uncollected, despite payment of these dues being legally required.”

Said Patricia Parrish, a NICA parent in Titusville who for years had lobbied board members and the state’s chief financial officer to reform the program, “This makes me ill — especially when resources were available to help our children, who desperately needed them.”

Florida’s auditor received survey responses from 120 parents and guardians, though not all responded to every question. Of the parents and guardians who responded to one question, 42% “expressed dissatisfaction” with NICA’s decisions to approve or deny requests for aid. Forty-one percent of respondents to another said the NICA handbook didn’t adequately explain the rights and benefits to which they were entitled.

The report did not delve deeply into NICA’s revenues, except to note that, from 2016 through the present, administrators had failed to collect more than $14.4 million in delinquent assessments from doctors.

Obstetricians who participate in the program must pay $5,000 annually in order to be granted immunity from lawsuits. Other doctors licensed in the state are required to pay $250 each year to sustain the program, and hospitals remit $50 for every live birth. The assessments are invested, helping the fund grow.

“While NICA included interest charges on the billing statements of non-participating physicians with delinquent assessment amounts, NICA did not consistently take additional actions, such as sending demand collection letters or filing suit in county court, to ensure the collection of delinquent” payments, the audit said.

NICA administrators told auditors they had not sent collection letters since September 2017. The program had filed its last court action to collect payments in January 2018. In her letter, Shipley cited “the substantial time and cost” necessary to enforce the assessments. She also questioned the audit’s assertion of $14.4 million in delinquent payments, saying NICA believes the number is closer to $8.4 million — most of which NICA believes will be paid within the next year.

Much of Norman’s report concerned how NICA spent its money. One finding faulted NICA administrators for denying claims from covered families without explaining the rejections. In one case, NICA reimbursed a family $1,000 for an augmentative communication device that cost $1,314. The devices help children with severe physical impairments speak.

“Absent records evidencing the basis for denying or limiting” a parent’s reimbursement request, NICA “cannot adequately demonstrate that the plan is being equitably administered,” the audit said.

The audit also criticized NICA for refusing to pay two bills for physical therapy sessions that were conducted remotely in March 2020 — though the state Agency for Health Care Administration had just issued an alert expanding the use of telemedicine during the coronavirus pandemic.

More generally, the audit said, NICA administrators did a poor job of documenting why they declined to help families. Though NICA’s computer system, which administrators call CARES, keeps track of all payments, the program has yet to establish a system for accounting for and tracking claim denials or disputes over refusals to pay.

In her letter, Shipley wrote the program was in the process of revising the computer system to “automatically track benefit denials and disputes.” Shipley said the program also was improving its system for communicating with families the reasons behind denials.

While NICA was not always forthcoming in reimbursements to parents, the audit questioned the program’s spending on administrators and board members.

From July 2019 through April 2021, administrators spent $6.1 million in agency expenses, the report said. The spending included “holiday luncheons” in 2019 and 2020 that cost the program $363 and $421, respectively. The parties, the auditor wrote, “did not appear to be clearly necessary to the performance of NICA’s statutory duties.”

Shipley defended the parties in her letter: “It is NICA’s view that these luncheons benefit the morale of NICA’s employees and were necessary to the performance of NICA’s administration of the plan.”

She added: “On a daily basis, NICA’s nurse case managers work with families who care for their catastrophically injured children. While the nurse case managers find their work very important and rewarding, it can be emotionally taxing at times.”

In the future, Shipley said, NICA won’t use administrative funds to pay for the parties.

At a meeting of the program’s Medical Advisory Committee in September 2019, the program paid $1,118 for a lunch buffet and nonalcoholic drinks that served four committee members and three NICA employees, the report said. That came to $160 per person.

Auditors also found 13 occasions where NICA employees disregarded state agency spending rules that limit expenses, totaling $1,046 in charges.

Families served by the program cannot be reimbursed for more than $6 for breakfast, $11 for lunch and $19 for dinner when they travel with their children for non-local doctor appointments or therapy visits.

When one family traveled out of state for their son’s surgery, the parents asked the program to upgrade their hotel room to include a microwave and small refrigerator. Shipley “authorized the upgrade, with the provision that [the] child’s per diem for meals would be applied to [the] upgrade,” a case log entry said.

In her response to the audit, Shipley defended the program’s spending. As to the meeting buffets, she wrote, “NICA viewed the provision of these meals as important to the performance of NICA’s administration of the plan.”

In the future, she added, “NICA will comply” with state expense laws.