How Was MICRA Passed? - Adamson Ahdoot LLP

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How Was MICRA Passed?

February 7, 2022 Alan Ahdoot

The second part of our series explains the impact of this 1975 law and what it is; but also how and why it passed.

The Medical Injury Compensation Reform Act (MICRA) is a California statute that puts a cap on the amount of non-economic damages awarded in medical malpractice lawsuits. Per MICRA, no matter how high non-economic damages may be valued, a plaintiff (or plaintiffs) may not recover more than $250,000 for non-economic damages.

*Non-economic damages are commonly referred to as pain and suffering in the personal injury world and may include damages like loss of enjoyment of life, loss of consortium, and disfigurement.

Why did the need for such a statute arise and how was it passed? During the mid-1970s, physicians and other medical care providers faced an insurance crisis. At the time, many patients were filing frivolous lawsuits and juries were awarding excessive settlements, which drove insurance premiums up and caused many doctors to lose insurance coverage. An announcement of insurance premium increases of as much as 400% in 1975 was the breaking point for many physicians across the state.

As a result, physicians faced what they saw as several non-acceptable choices: raise costs and drive many patients away, move their practice out of state, quit practicing medicine, or lose insurance coverage. The California Medical Association (CMA) organized and mobilized outraged physicians, uncertain about their future. A grassroots campaign led by these physicians and CMA demanded the state take action to cut the cost of malpractice insurance.

Following a rally in May 1975, then-Governor Jerry Brown began a session involving CMA, healthcare providers, insurance companies, and trial lawyers. After 5 months of hearings, the California legislature passed AB 1XX, which is now known as MICRA. Governor Brown signed this collection of statutes into law on September 23, 1975.

Although many attempts to change or eliminate MICRA have been made since the law was passed, including the famous “Napkin Deal,” struck between tobacco industry lobbyists, insurance companies, and representatives of the California Medical Association to avoid a costly ballot initiative in 1987, MICRA caps remain the same. MICRA faces opposition again this November when a measure attempting to repeal this statute will be placed on the ballot.

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