What Is MICRA?
“MICRA” stands for the Medical Injury Compensation Reform Act of 1975, which was enacted by the California Legislature in September of 1975. For the past 40 plus years, this legislation has dramatically impacted the rights of individuals who have been harmed or killed as a result of medical malpractice or negligence.
The alleged reasoning behind this legislation was to control the supposed rising cost of premiums for medical malpractice insurance for doctors and other healthcare providers. Since the passage of this legislation, it has been shown that the so-called insurance crisis was really no crisis at all, and there is no evidence whatsoever that premiums have been affected.
What Does the Medical Injury Compensation Reform Act Do?
MICRA has a number of different components.
In summary, though, MICRA:
- Limits the amount of monetary damages an injured person may receive through a successful medical malpractice claim
- Shortens the statute of limitations
- Reduces chargeable attorneys’ fees
- Makes the collateral source rule inapplicable
- And allows for the periodic payments of jury verdicts
Every one of these facets of MICRA operates to the significant disadvantage of the person who has suffered injury or loss as a result of a healthcare provider's negligence.
General Damages Cap Set at $250,000
One of the most draconian aspects to MICRA is the absolute limitation of $250,000 for any and all general damages in all cases.
This means that any award for anyway a person’s life has been affected as a result of the injury is limited to a maximum of $250,000, including:
- And more
This is essentially the only type of personal injury or wrongful death case that has any limit whatsoever on these types of damages. For example, if a 25-year-old underwent cervical spine surgery and the surgeon performing the procedure did so negligently and caused him to be paralyzed from the neck down, there would still be a limit of $250,000 for the pain and suffering.
Even if the case went to jury trial and the jury awarded $50 million, the first thing the trial judge would do would be to reduce the $50,000,000 to $250,000. This is a prime example of why the legislative cap is so grossly unfair.
It is critical to note that this $250,000 limit has not been increased at all since the implementation of the statute over 40 years ago. Even if the minimal cost of living increases had been added, this limit would be well over $1 million today.
In today’s dollars, the $250,000 in 1975 equates to less than $70,000 taking into account inflation and cost of living. In short, this provision of MICRA is categorically unfair to any person or family who has been injured or harmed by the negligence of a healthcare professional.
Shortening the Statute of Limitations
MICRA also provides a separate and distinct statute of limitations for medical malpractice actions. Statutes can be complicated in these types of cases and this article is not a primer on this subject.
However, the short story is that in most cases the statute of limitations will be one year from the date of injury or the date that the injury and its negligent cause is discovered. This basically means that while typical personal injury statutes of limitation are two years, medical malpractice statutes are usually one year.
This impacts a person’s ability to bring a lawsuit and is another example of why this particular statute is harmful to those who have been injured as a result of a healthcare provider’s negligence.
Limited Attorney Fees
MICRA limits the amount of fees an attorney can charge. While the typical contingent fee agreement is 33 1/3% before a complaint is filed and 40% thereafter, MICRA does not allow those percentages.
MICRA allows an attorney to charge:
- 40% of the first $50,000.00 recovered
- 33 1/3% of the next $50,000 recovered
- 25% of the next $500,000
- And 15% of any amount recovered in excess of $600,000
Additionally, any costs expended by the attorney in the prosecution of the case must be deducted from the settlement amount first, which is different than normal personal injury cases.
While at first glance this seems to be beneficial to injured persons, it is not. Medical negligence cases are typically quite complex, costly, and, as stated above, limited in the amount of damages that can be obtained.
They can be very risky for the attorney that must often advance many thousands of dollars on a case where his fees are limited and the maximum recovery in damages is significantly reduced. Thus, many attorneys will simply not take these types of cases.
Even if a person has a viable medical malpractice case, attorneys may—and often do—choose not to accept representation because of these limitations.
Unique Collateral Source Rule
In the typical case, the collateral source rule prohibits a defendant from introducing evidence of whether a collateral source—typically an insurance company—has made payments to any medical bills.
For example, if a person treats with a physician and incurs a $10,000 bill and his insurance company pays $5,000 to extinguish that bill, historically the plaintiff would be able to introduce the entire $10,000 bill as an element of his or her damages and the defense would not be able to introduce evidence of any insurance payments.
While the collateral source rule has recently been limited by new case law, it is still an important protective measure for injured persons. In medical malpractice cases, the collateral source rule is effectively eliminated, and the defense can introduce evidence of any insurance payments made.
Periodic Payments Delays Awards
MICRA allows a defendant who is ordered to pay damages to pay those damages over time instead of immediately after the verdict or arbitration award. For example, in an automobile accident case, if a jury returns a verdict of $100,000, the defendant will be ordered to pay the entire amount essentially right away.
If the same jury awarded the same amount of $100,000 in a medical malpractice case, the defense may request to pay that amount in periodic payments over time instead of right away. This is a serious hardship to a person who has already been badly harmed and financially strained.
What Can Be Done?
Many attorneys and consumer rights groups have been attempting to either eliminate MICRA or at least change some of its provisions for years without success. However, voters will hopefully have an ability to change some of the most damaging provisions in the upcoming November 2020 election.
The signature gathering campaign has begun for legislation entitled The Fairness to Injured Patients Act (FIPA). Among other things, FIPA would raise the $250,000 cap to approximately $1.2 million and would make it possible in some cases to circumvent the cap entirely for certain cases that involve catastrophic injury or death.
It is important for everyone to realize the dramatic negative impact of MICRA and do everything possible to change or eliminate this destructive piece of legislation.