A birth injury diagnosis can change a family’s finances almost overnight. Neonatal intensive care unit (NICU) charges, physical-therapy co-pays and specialist appointments may begin accumulating while parents are still trying to understand what the diagnosis means for their child’s future.

Families are not limited to a single way of addressing those costs. Insurance appeals, hospital financial-assistance programs, tax-advantaged health accounts and medical-billing advocates may each reduce the financial burden. When an injury such as Erb’s palsy resulted from a preventable error during delivery, a medical-malpractice claim may provide another avenue for addressing long-term expenses. These options are not mutually exclusive, and families may use several at the same time.

Because eligibility rules, deadlines and coverage terms vary, families may benefit from keeping copies of bills, Explanation of Benefits notices, medical records and correspondence in one place. A written record can help them track what has been paid, identify disputed charges and respond before an appeal or assistance deadline passes.

The cost of a NICU stay and ongoing therapy

NICU costs vary significantly based on the level of care a baby needs and the length of the hospital stay. Non-medical expenses alone—including lodging, meals and mileage for parents visiting daily—average about $513 per day, or approximately $6,500 for a typical 14-day stay, according to a 2025 study published in Health Affairs Scholar. Those figures do not include medical charges, which can reach tens of thousands of dollars per day for higher levels of care.

For a birth injury, expenses often continue well after discharge. They may include physical and occupational therapy, specialist follow-up appointments and, in more severe cases, surgical consultations. Because these costs are generally distributed over months or years rather than arriving in one bill, families may find them more manageable with a long-term plan.

Appealing a denied insurance claim

An insurance denial is not necessarily final. Under the Affordable Care Act, most health plans must provide a formal internal appeals process. Families generally have up to 180 days from the date of a denial notice to submit an internal appeal, according to HealthCare.gov’s internal appeals guidance.

If the internal appeal is denied, the next step is an external review. An independent reviewer conducts that review, and the decision is typically binding on the insurer.

Families can help organize the process by:

• Requesting the Explanation of Benefits (EOB) and the specific reason for the denial in writing.
• Asking the child’s physician or NICU care team to provide a letter of medical necessity.
• Recording the appeal deadline immediately. The period begins on the date of the denial notice, not the date the family reads it.
• Asking whether an expedited review is available if delaying treatment could affect the child’s recovery.

Hospital financial assistance and charity care

Many families do not realize that nonprofit hospitals are required to offer financial assistance. Under Internal Revenue Code Section 501(r), hospitals with 501(c)(3) tax-exempt status must maintain a written financial-assistance policy, publicize it and process qualifying applications, according to the IRS guidance on charitable hospitals.

Eligibility is generally tied to household income relative to the Federal Poverty Level. Assistance may range from a partial discount to a full write-off of the bill. Families seeking help should contact the hospital’s billing or financial-counseling office and ask specifically for its “financial assistance policy” or “charity care policy.” The exact term varies by hospital.

Most nonprofit hospitals also cannot send a bill to collections while a financial-assistance application is under review.

Using an HSA or FSA for ongoing care

If either parent has access to a health savings account (HSA) or flexible spending account (FSA), the account may be used to pay for a broad range of qualified medical expenses on a tax-advantaged basis. These expenses can include co-pays, deductibles and therapy costs that insurance does not cover.

The IRS identifies eligible expenses in Publication 969. Reviewing the current guidance can clarify expenses that families may not expect to qualify, including certain travel costs related to medical care.

HSA funds roll over from year to year and may be invested. That can make an HSA useful when a child’s care costs continue through the early years rather than being resolved in one billing cycle. Families should verify whether a particular expense qualifies under the applicable IRS rules and account requirements.

Reviewing bills with a medical-billing advocate

Hospital bills can contain errors, and NICU and specialist bills with hundreds of line items are no exception. A medical-billing advocate reviews itemized statements for duplicate charges, incorrect billing codes and services that were not provided. The advocate may then negotiate with the hospital or insurer on the family’s behalf.

The Patient Advocate Foundation offers case-management support free of charge to eligible families. Its services can include assistance with insurance appeals and applications for financial assistance. For some families, the organization may be a useful first contact before they hire a paid advocate.

FinTechZoom’s guide to medical costs, lost income and legal help after an accident discusses a similar process for evaluating expenses and potential legal recourse after an unexpected medical event.

When a preventable delivery error may be involved

In some cases, a birth injury such as Erb’s palsy may result from a preventable error during delivery, such as excessive pulling on an infant’s head or shoulders during a difficult birth. When families believe that occurred, a medical-malpractice claim may be considered alongside insurance, financial-assistance and billing-support options.

Families exploring that possibility may seek a firm with experience in birth-injury cases, including Erb’s palsy. Sokolove Law, a Boston-based national personal-injury firm, has more than four decades of experience representing families affected by birth injuries. The firm says it has recovered more than $1.1 billion for families in birth-injury and other cases and employs an in-house team of registered nurses. Those nurses help families assess whether a preventable error may have contributed to an injury before any legal process begins.

A consultation with a birth-injury law firm does not commit a family to pursuing a claim. It is a way to determine whether a claim may be worth examining while the family also considers insurance appeals and financial-assistance programs. FinTechZoom’s loans and financing resources also discuss how families may bridge expenses while a claim or appeal is pending.

No outcome is guaranteed. Erb’s palsy can occur even when appropriate medical care is provided during a difficult delivery, and whether a particular case involved a preventable error must be evaluated based on its individual facts.

Frequently asked questions

How much does a NICU stay typically cost?

Non-medical costs for parents, including lodging, meals and mileage, average about $513 per day, or roughly $6,500 for an average 14-day stay, according to a 2025 peer-reviewed study. Medical charges are separate and vary widely according to the level of care.

How long do I have to appeal a denied insurance claim?

Generally, families have 180 days from the date of the denial notice to file an internal appeal under federal Affordable Care Act rules. If that appeal is denied, an external review is the next step.

Do all hospitals offer financial assistance?

Nonprofit hospitals with 501(c)(3) tax-exempt status must maintain a financial-assistance policy under IRS Section 501(r). For-profit hospitals are not required to maintain such a policy, although some may offer assistance.

Can I use an HSA or FSA for my baby’s therapy costs?

In most cases, physical and occupational therapy are qualified medical expenses under IRS rules. Families should confirm eligibility against the current guidance in IRS Publication 969.

What does a medical-billing advocate do?

A medical-billing advocate reviews itemized bills for errors, duplicate charges and incorrect codes, then negotiates directly with the hospital or insurer. Some services, including those provided through the Patient Advocate Foundation, are free for eligible families.

Is Erb’s palsy always caused by medical malpractice?

No. Erb’s palsy can occur even when appropriate medical care is provided during a difficult delivery. A birth-injury attorney would need to evaluate whether a specific case involved a preventable error.

Does pursuing a malpractice claim guarantee compensation?

No. Claim outcomes cannot be guaranteed, and each case depends on its own facts. A consultation with a birth-injury law firm is a way to understand what options may be available.