Since California’s landmark medical malpractice reforms – the Medical Injury Compensation Reform Act (MICRA) – were enacted almost 50 years ago, they have successfully struck a balance between compensatory justice for injured patients while maintaining an overall health care system that is accessible and affordable for Californians.
Since that time, California’s physician and provider communities have repeatedly defended MICRA through expensive battles at the ballot, in the courtroom and in the legislature.
This year, we were again facing another costly initiative battle. The so-called Fairness for Injured Patients Act, which had qualified for the November 2022 ballot, would have obliterated existing safeguards for out-of-control medical lawsuits and would have resulted in skyrocketing health care costs. This act demanded that patients who are injured have the right to seek compensation from alleged providers who 'injured' them. The original MICRA act of thee1970s limited compensation to $250,000.
But for the first time in a generation, we were met with an opportunity to achieve a meaningful consensus between competing interests through a revised framework that could protect both the rights of injured patients while keeping MICRA’s essential guardrails solidly in place for patients and providers alike.
“With today’s signing of AB 35, we have achieved what few thought was possible,” said California Medical Association President Robert E. Wailes, M.D
AB 35 passed through the California Legislature with nearly unanimous support, demonstrating broad bipartisan support. As part of the landmark agreement reflected in AB 35, proponents of the Fairness for Injured Patients Act have withdrawn the initiative. The initiative cannot be returned to the November 2022 ballot.
California’s new modernized MICRA statutes will provide predictability and affordability of medical liability insurance rates for decades to come, while protecting existing safeguards against skyrocketing health care costs. It will also bring greater accountability, patient safety and trust by making it possible for physicians and patients to have a full and open conversation after an unforeseen outcome.
Under the modernized MICRA law reflected in AB 35, which will go into effect on January 1, 2023, the underlying principles of MICRA were preserved – ensuring access to care and protecting our health care delivery system from runaway costs. Important guardrails of MICRA will continue unchanged, including advance notice of a claim, the one-year statute of limitations to file a case, the option of binding arbitration, early offer of proof for making punitive damage allegations and allowing other sources of compensation to be considered in award determinations. Furthermore, a new provision has been added to the law that protects expression of sympathy by a health care provider to an injured patient and their family, allowing physicians to express empathy, benevolence and even statements of fault after an unforeseen outcome without fear that such statements or gestures will be used against them.
The element that has garnered the most interest surrounds changes to the limit on non-economic damages in medical malpractice cases, which has been $250k since 1975. As opposed to the ballot measure, which would have effectively eliminated the cap on non-economic damages entirely, under the agreement:
Cases not involving a patient death will have a limit of $350k on the effective date of January 1, 2023, with an incremental increase over the next 10 years to $750k and a 2.0% annual inflationary adjustment thereafter.
Cases involving a patient death will have a limit of $500k on the effective date of January 1, 2023, with an incremental increase over the next 10 years to $1 million and a 2.0% annual inflationary adjustment thereafter.
Other critical MICRA guardrails that will remain in place with modest updates include the ability to pay awards of future damages over time and limits on plaintiff's attorney's contingency fees. CMA has prepared a publicly available fact sheet that provides additional details on this important legislation.
“CMA is proud to have been part of this landmark achievement for the benefit of all Californians,” said Dr. Wailes. “We look forward to a new era of long-term stability around MICRA that will allow California’s physician and provider communities to focus on other ways to improve access to care and public health for all Californians.
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