In 1975, California passed MICRA, a law designed to reduce healthcare costs by controlling medical malpractice insurance premiums and ensuring fair compensation for malpractice victims. The law limits non-economic damages in malpractice lawsuits but does not restrict compensation for economic damages like medical bills or lost wages. 

California was one of the first states to implement medical malpractice reform, and other states have since adopted similar reforms. However, the law remains a subject of legal and policy debate even decades after its enactment. 

This blog aims to understand the complexities surrounding MICRA and its various aspects. Whether you are a healthcare provider, an attorney, a patient with potential malpractice concerns, or someone interested in learning about this critical aspect of California law, the information below should give you a more detailed understanding of the California Medical Injury Compensation Reform Act.

Why the Micra Law Was Passed

During the 1960s and early 1970s, there was a significant increase in medical malpractice claims and payouts. This surge created a crisis in malpractice insurance, with healthcare providers facing exorbitant premiums. Many physicians experienced financial strain due to the steep insurance costs, and some even struggled to obtain coverage.

The rising costs of malpractice insurance prompted a heated debate among stakeholders. Physicians and healthcare organizations pushed for reforms to control the escalating insurance expenses, arguing that these costs were unsustainable and impeded their ability to deliver quality care. On the other hand, patient advocacy groups and trial lawyers expressed concerns about restricting patients’ rights to seek full compensation for injuries caused by medical negligence.

MICRA law was introduced to stabilize the medical malpractice insurance market by setting caps on damages and implementing other provisions like periodic payment of awards. The predictability provided by these measures helped insurers assess price risks more accurately, leading to greater stability in premiums for healthcare providers.

Key Components of MICRA Law

Recognizing the crucial aspects of the laws governing many aspects of our lives is essential. In this section, we explore the critical components of MICRA to understand its longstanding effects on patients and healthcare providers in California.

 

Cap on Non-Economic Damages

Non-economic damages refer to intangible losses such as pain and suffering, emotional distress, and loss of consortium. Unlike economic damages, which can be quantified, non-economic damages are subjective and often contentious in legal disputes.

In California, starting on January 1, 2023, MICRA increased the $250,000 cap for non-economic damages. There are now two existing caps for medical malpractice cases depending on whether the case involves wrongful death or is a non-death case. 

 

In wrongful death cases, the cap for non-economic damages has been increased to $500,000. This amount increases by $50,000 annually until 2033, when it reaches $1 million. This will then continue to increase by 2% annually to adjust for inflation. 

 

For non-death cases for non-economic damages, a plaintiff can receive up to $350,000. This amount increases by $40,000 each year through 2033. After the ten years are up, the economic damages cap will continue to increase by 2% annually. 

 

Statute of Limitations

Medical malpractice cases in California are subject to a statute of limitations. This means you have three years from the date of injury or one year from the date you discovered the injury, whichever comes first, to file a claim. 

 

Also, California has a “delayed discovery” rule that allows plaintiffs to file within one year from the date they discovered or should have found their injury. Failure to file within the prescribed time can result in the case being dismissed, so knowing the statute of limitations is crucial for potential plaintiffs.

 

Periodic Payments

The California Medical Injury Compensation Reform Act allows future medical expenses exceeding $250,000 to be paid periodically instead of as a lump sum. This is beneficial for both parties involved in the case. Defendants can avoid a significant financial burden, and plaintiffs can receive continuous medical care without exhausting all the compensation too quickly.

 

Choosing periodic payments allows both parties to benefit from financial predictability. This option can also affect settlement negotiations as parties can consider the long-term implications of a structured settlement versus a lump-sum payment.

 

Professional Negligence Screening Panels

Under MICRA law, a professional negligence panel must review some medical malpractice cases before proceeding to trial. The purpose of this panel is to assess the validity of the case and provide an opportunity for resolving disputes early on. Doing so can help frivolous claims and reduce the burden on the court system. 

 

Although the panel’s findings are not legally binding, they can impact the course of the litigation, including settlement negotiations or trial strategies, depending on the panel’s evaluation of the case’s strengths and weaknesses.

Legislative Efforts To Amend or Repeal MICRA

The discussion surrounding the MICRA law has led to efforts to change or remove certain parts of the law. Advocacy groups, lawyers, and policymakers are engaging in talks to find a balance between ensuring that malpractice victims receive fair compensation and maintaining a sustainable healthcare system. Proposals to adjust the cap on non-economic damages or introduce alternative methods for addressing malpractice issues are part of ongoing conversations among the legal and healthcare communities.

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