California's Medical Injury Compensation Reform Act (MICRA)

How SDCMS Helps You: Protecting MICRA

Many organizations, spearheaded by the trial lawyers, want to weaken, if not overturn, MICRA. CMA legal advocacy has prevailed in the past in defending MICRA (e.g., Palmer vs. Sharp Rees-Stealy Medical Group when there was an attempt to define medical groups as not qualifying as "healthcare providers" under the law and as such as not being protected by MICRA) and will prevail in the future with the help of those physicians who've decided to defend their practices and their patients by joining SDCMS-CMA.

*****

The Crisis

In the early 1970s, a medical malpractice insurance crisis gripped California. Liability premiums soared more than 300 percent because of more frequent and severe liability claims and larger malpractice jury awards. Many physicians - particularly in high-risk specialties such as obstetrics and neurosurgery - were forced to close their doors, either unable to get insurance or unable to afford inflated rates. Denied access to affordable care, California's patients suffered. In 1975, then-Governor Jerry Brown called a special session of the California Legislature to solve the "malpractice crisis."

California's Response

During that special session, on a bi-partisan vote, legislators took action to fix the broken system by enacting the Medical Injury Compensation Reform Act, or MICRA. Specifically, MICRA:

• Limits Attorney Contingency Fees. In an action against a healthcare provider for professional negligence, an attorney's contingency fee is limited to 40 percent of the first $50,000 recovered; 33 percent and 1/3 of the next $50,000; 25 percent of the next $500,000, and 15 percent of any amount exceeding $600,000.
• Limits on Non-Economic Damages. Non-economic damages in a claim against a healthcare provider for medical negligence are limited to $250,000. Economic damages, such as lost earnings, medical care, and rehabilitation costs, are not limited by statute. California Civil Code Section 3333.2.
• Evidence of Collateral Source Payments. A defendant in a medical liability action may introduce evidence of collateral source payments (such as from personal health insurance) as they relate to damages sought by the claimant. If a defendant introduces such evidence, the claimant may also introduce evidence of the cost of the premiums for such personal insurance. California Civil Code Section 3333.1.Ensures compensation for economic damages such as present and future medical costs, lost wages, future earnings, custodial care and rehabilitation.
• Provides a Statute of Limitations on Claims. In California, a claim for alleged medical negligence must be brought within one year from the discovery of an injury and its negligent cause, or within three years from injury. California Code of Civil Procedure Section 340.5.
• Requires Advance Notice of a Claim. To further the public policy of resolving meritorious claims outside of the court system, MICRA requires a claimant to give a 90-day notice of an intention to bring a suit for alleged professional negligence. If the notice is given within 90 days of the expiration of the statute of limitations, the statute is extended 90 days from the date of the notice. California Code of Civil Procedure Sections 364 and 365.
• Allows for Binding Arbitration of Disputes. Patients and their healthcare providers may agree that any future dispute may be resolved through binding arbitration. California statute requires specific language for such contracts and also provides that all such contracts be revocable within 30 days. California Code of Civil Procedure Section 1295.
• Provides for Periodic Payments of Future Damages. A healthcare professional may elect to pay a claimant's future economic damages, if over $50,000, in periodic amounts. This avoids a claimant's wasting of an award prior to actual need. California Code of Civil Procedure Section 667.7.

MICRA's Impact:

• MICRA has increased patients' access to healthcare by keeping doctors, nurses and other healthcare providers in practice and hospitals and clinics open.
• California now has some of the lowest malpractice premiums in the United States and the American Medical Association (AMA) and the American Hospital Association (AHA) hail MICRA as a "model."
• Without MICRA the decline in the number of obstetric providers in the state will only get worse, further threatening women's access to comprehensive, quality reproductive healthcare.
• MICRA saves California's healthcare system billions of dollars each year.
• Injured patients receive their awards 26 percent sooner than patients in states without MICRA reforms.
• Patients receive the lion's share of settlements and awards - not attorneys.