The Medical Injury Compensation Reform Act (MICRA) was passed in 1975 in response to a perceived “crisis” of rising costs of premiums for medical malpractice insurance because of high damage awards by juries. Soon after the law was enacted, it was determined that there was no correlation between premiums and the measures implemented through MICRA, yet MICRA has been active for over 45 years now.
What Do I Need to Know About MICRA?
Key provisions of the “old” MICRA included:
- Cap on Non-Economic Damages. MICRA placed a cap on non-economic damages (such as pain and suffering) that can be awarded in medical malpractice cases.
- Limitation on Attorney’s Fees. Under the “old” MICRA provided stiff limits on what attorneys could recover in attorney’s fees, i.e. 40% on the first $50,000 recovered, 33% on the next $50,000; 25% on the next $500,000, and 15% of anything that exceeds $600,000.
- Periodic Payments. Section 666.7 of the Code of Civil Procedures required that the superior court order judgments in malpractice suits to be completed in periodic payments, if one of the parties requests it. This provision applies to all judgments where the total amount of the award exceeds $50,000.
What Effect Did MICRA Have on the Justice System?
As a result, MICRA has profoundly limited access to justice for the deserving victims of medical negligence. MICRA put a $250,000 cap on non-economic damages – those that are designed to compensate for physical pain, mental suffering, loss of quality of life, disfigurement, and disability.
Just imagine: under the “old” MICRA, the value of a case involving the death of someone who is not working or retired generally was limited to $250,000 regardless of the number of defendants. Likewise, under the “old” MICRA, the loss of a child due to preventable and even egregious malpractice was valued at no more than $250,000. 47 years ago, $250,000 may have been a substantial amount of money, but it certainly is not in 2022, especially in cases where a significant loss took place.
The limitations on attorneys’ fees meant that many lawyers were unwilling to take cases, narrowing the pool of experienced medical malpractice attorneys that exist today.
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What Is MICRA Reform?
On May 12, 2022, the California Legislature resolved one of the thorniest disputes in state politics by raising a cap on medical malpractice damages for the first time in 47 years. Starting January 2023, the cap will increase, multiple new caps will become available, and attorney’s fees will increase. With this new legislation in place, more and more attorneys are becoming interested in getting involved with medical negligence cases.
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What Are the Current MICRA Provisions?
In a breakthrough legislation that was recently signed into law, starting January 2023, the cap will increase, multiple caps will become available, and attorney’s fees will increase. As such, starting in January 2023:
- If the case doesn’t involve a patient’s death, there will be a limit of $350,000 on noneconomic damages, with an incremental increase of $40,000 every year over the next 10 years to $750,000. There will be a 2% annual adjustment for inflation after that.
- If the case involves a patient’s death, the noneconomic damages limit will be $500,000, with an incremental increase of $50,000 every year over the next 10 years to $1 million. There will be a 2.0% annual adjustment for inflation after that.
- New MICRA creates three separate categories of defendants for a total of three possible caps on non-economic damages, therefore increasing the gross potential amount of non-economic damages to be recovered to three times the amount available previously.
- Contingent attorney fees cap goes up to 25% if the action is resolved prior to the filing of an action and 33% if the recover occurs after.
- Judgments may not be split into periodic payments unless they exceed $250,000. This will require insurers to retain greater liquidity to pay out more money more quickly.
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What Effect Does MICRA Reform Have on Medical Malpractice Cases?
With the new MICRA legislation in place, more and more attorneys are becoming interested in getting involved with medical negligence cases. A huge influx of filings of medical negligence cases occurred in January 2023, many them filed by attorneys that have no background or expertise in medical malpractice litigation. However, inherently, medical malpractice lawsuits are complex, expensive, and require specialized knowledge and expertise in handling them.
MICRA Reform opens new opportunities for those who have been injured to seek justice. As new attorneys join the practice area, it is crucial to rely on our medical malpractice attorney’s decades of experience. Over the years, attorneys at Arias Sanguinetti have developed a reputation for aggressive and zealous representation of their client and consistently delivering exceptional results.
If you have a claim, call our offices today.
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