MICRA

At CAP, our members generously contribute to our state and federal PACs, which has the mission to safeguard medical liability reform in California and Washington, D.C. The Medical Injury Compensation Reform Act of 1975 (MICRA) is the set of laws that governs litigation arising out of medical professional services. On a monthly basis, CAP keeps our membership informed on MICRA and legal issues in general in a column in the CAP memberBulletin.

MICRA is this state’s landmark legislation that continues to shape the debate on professional medical liability reform across the country. MICRA's seven comprehensive provisions have improved access to care, maintained access to the courtroom, and fostered innovative medicine in California through the elimination of defensive medicine and frivolous lawsuits. CAP presents this summary of all the MICRA provisions to help our members reacquaint themselves with the full breadth of this landmark legislation.

Limits on Non-Economic Damages. Non-economic damages in a claim against a health care provider for medical negligence are limited to $250,000. Economic damages, such as lost earnings, medical care, and rehabilitation costs, are not limited by statute. California Civil Code Section 3333.2.

Evidence of Collateral Source Payments. A defendant in a medical liability action may introduce evidence of collateral source payments (such as from personal health insurance) as they relate to damages sought by the claimant. If a defendant introduces such evidence, the claimant may also introduce evidence of the cost of the premiums for such personal insurance. Civil Code Section 3333.1.

Limits on Attorney Contingency Fees. In an action against a health care provider for professional negligence, an attorney’s contingency fee is limited to 40% of the first $50,000 recovered; 33% of the next $50,000; 25% of the next $500,000, and 15% of any amount exceeding $600,000. California Business and Professions Code Section 6146.

Advance Notice of a Claim. To further the public policy of resolving meritorious claims outside of the court system, MICRA requires a claimant to give a 90-day notice of an intention to bring a suit for alleged professional negligence. If the notice is given within 90 days of the expiration of the statute of limitations, the statute is extended 90 days from the date of the notice. California Code of Civil Procedure Sections 364 and 365.

Statute of Limitations. In California, a claim for alleged medical negligence must be brought within one year from the discovery of an injury and its negligent cause, or within three years from injury. Code of Civil Procedure Section 340.5.

Periodic Payments of Future Damages. A health care defendant may pay a claimant’s future economic damages, if over $50,000, in installments. This avoids a claimant’s wasting of an award prior to actual need. Code of Civil Procedure Section 667.7.

Binding Arbitration of Disputes. Patients and their health care providers may agree that any future dispute may be resolved through binding arbitration. California statute requires specific language for such contracts and also provides that physician-patient contracts be revocable within 30 days. Code of Civil Procedure Section 1295.

Though other provisions usually get more coverage when the Medical Injury Compensation Reform Act of 1975 is in the news, the statutory endorsement of physician-patient arbitration contracts has been part of MICRA since the beginning.

California Code of Civil Procedure Section 1295 states that contracts between patients and physicians that contain certain required language “are not contracts of adhesion, unconscionable, or otherwise improper.” These requirements include precise language in the first part of the arbitration agreement explaining that by signing the agreement, the parties are giving up their constitutional right have their dispute over the medical care rendered decided by a lawsuit in a court of law.

Since the Legislature’s passage of MICRA, the courts have consistently shown their acceptance of this alternative dispute resolution process. For example, judges have approved clauses in arbitration contracts signed by mothers covering the care of their unborn child and have also approved agreements that indicate the parties’ desire to arbitrate any dispute that may arise from care rendered before the agreement is signed.