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What is MICRA and how does it affect my Medical Malpractice Claim?

“MICRA” is an acronym for Medical Injury Compensation Reform act of 1975 and it is a set of laws that severely impacts the rights of people injured by medical malpractice in California. It is a patently unfair statutory scheme that was placed into law by the legislature at the urging of lobbyists for insurance industry under the guise of an alleged “crisis” of out-of-control jury verdicts which was making insurance premiums for doctors and other healthcare providers too expensive and thereby limiting the public’s ability to find a physician. This claim proved to be less than accurate. After passage of the laws, malpractice premiums continued to increase, and subsequent litigation between physicians’ groups and their own insurers resulted in findings that argue against the need for MICRA in the first place. THIS LAW NEEDS TO BE CHANGED!

What Does MICRA Do?

MICRA accomplishes several functions, all of which limit a person’s ability to successfully pursue a lawsuit for medical or healthcare malpractice. The laws set a cap on general damages in the amount of $250,000. They shorten the time limits people have to bring a lawsuit. They eliminate the Collateral Source Rule. They limit the fees an attorney can charge. They allow a physicians insurance company to pay a jury verdict over time as opposed to paying a lump sum after trial. There are other aspects of MICRA as well and all of the provisions act in concert to deny a victim of medical malpractice the ability to seek proper redress from our Court system.

General Damage CAP of $250,000.00

There are typically two types of damages a plaintiff can recover in a malpractice action. Special or Economic damages relate to both past and future economic losses or expenditures. Items such as medical bills and lost earnings are examples of Special Damages. A plaintiff can recover Special Damages up to the amount awarded by the jury with no limit. General Damages are often referred to as a person’s pain and suffering. It is damages awarded for things like physical and emotional pain, loss of enjoyment of life, inability to engage in activities of daily living, etc. MICRA caps general damages in California Medical Malpractice cases at $250,000.00. As an example, if an elderly person who is retired dies because of malpractice, her spouse can only recover a maximum of $250,000.00 in that case because there are no economic damages to recover other than perhaps the cost of funeral and burial expenses. Compare that case to one where an elderly person who is retired dies as a result of someone running a red light where there are no caps on general damages. Another example is where a child suffers life altering injuries because of medical negligence during delivery that result in that child requiring round the clock assistance for the rest of his life. That child is only entitled to recover $250,000.00 for the pain and suffering, loss of enjoyment of life, etc. he will endure over the course of his lifetime. This cap, combined with the expenses associated with medical experts needed in these cases, makes many rightful malpractice claims economically untenable to pursue. If the legislature had allowed for the cap to grow with inflation, the current cap would be over $700,00.00.

Shortened Statute of Limitations

The statue of limitations is a time period set by the legislature that dictates how long a person has to file a lawsuit. Different types of lawsuits have different time frames. The statue of limitations for injury cases is generally two years from the date of the injury. MICRA shortened the statute of limitations for medical malpractice cases to one year from when you knew or should have known that you were injured by someone’s wrongdoing or three years from the date of the injury, whichever is first. This results in many people being barred from pursuing a valid claim because they did not seek an attorney out in time.

Limited Attorney Fees

Most malpractice cases are pursued under a contingency fee agreement between the client and her attorney. This type of fee structure calls for the attorney to be paid a percentage of the recovery and if there is no recovery, then the attorney does not get paid. A typical contingency fee agreement calls for the attorney to earn 33.3% to 40%. MICRA does not allow this. MICRA sets a decreasing percentage in these cases of 40% of the first $50,000.00; 33.3% of the next $50,000.00; 25% of the next $500,000.00 and 15% of any recovery over $600,000.00. While limiting fees may appear beneficial to the public at first glance, this part of MICRA adds to the difficulty patients have in finding a lawyer to take a valid malpractice claim. These cases rely on medical expert witnesses that are very expensive (charging anywhere from $600 to $1000 per hour). Combining the cap on damages with the expense of pursuing the case and the limit on what an attorney may earn if she is successful makes many cases not economically viable for an attorney to pursue because the financial risk the attorney must assume by way of advancing the costs of the case and investing her hours is greater than the potential recovery leaving many viable malpractice cases without an attorney.

Corrupting the Collateral Source Rule

In a typical injury case, the Collateral Source Rule, which is a long-standing common law in California precludes a defendant from introducing evidence to a jury that proves that a third party, like an insurance company, paid for any of the bills or expenses incurred by the plaintiff as a result of a defendant’s negligence. In turn, the insurance companies can recover the amount they paid directly from their insured after the lawsuit is concluded. Not in malpractice cases. The defense can introduce evidence to the jury that someone other than the plaintiff paid those bills, and it then eliminates the third party’s ability to recover that amount from the plaintiff.

Periodic Payments

MICRA allows a defendant who is ordered to pay a plaintiff damages over time instead of immediately after the verdict. This severely prejudices injured individuals who may have lost their job, home, ability to work, etc.