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What Is MICRA?

Note: This post is part of an ongoing series about Proposition 46.

Recently on the blog, I announced that I would be doing a series of blog postsrelated to Proposition 46, the initiative on California ballots this November that proposes to raise medical malpractice caps and subject doctors to drug testing. This is a highly complex issue, and in order to arrive at an understanding of all the forces at play, we must first delve into the existing legislation, the Medical Injury Compensation Reform Act of 1975.

Here's a brief rundown of what kind of limits and regulations MICRA instituted:

- $250,000 Cap on Non-Economic Damages. This is by far the most widely publicized element of MICRA. Under the current legislation, $250,000 is the maximum amount that can be awarded for the non-economic aspects of any injury caused by medical malpractice, including but not limited to: permanent disfigurement; the death of a child, spouse or parent; loss of one or more limbs; permanent quadriplegia or other paralysis; loss of vision; and loss of fertility. This cap has stayed the same since 1975, and it was not indexed to inflation. There are only a few other states with caps as low as that of California, and they are states with a far lower cost of living such as Kansas and Montana.

At the same time, MICRA does not have a cap on economic damages. This means that under the current legislation, those with less earning power or who were unable to work prior to their injury will recover less than wealthier victims who earned more before their injury and will have more provable future wage loss due to their injuries. In other words, MICRA enforces inequitable and inadequate financial compensation for everyone, but especially hit hard are the victims who already struggle financially. They are essentially left with whatever non- economic damage recovery they might gain capped at $250,000.00. Because of the economics here, the cost of paying experts to testify and the cost of litigating malpractice cases, many lawyers simply will not accept cases with no economic damages.

-Caps on plaintiff's attorney fees. Under MICRA, attorneys get 40% of the first $50,000 of a settlement, 33.3% of the next $50,000, 25% of the next $500,000 and only 15% of any amount exceeding $600,000. This is true regardless of how much the attorney incurs in costs and it is the same whether the lawyer tries the case or settles it. Trying a medical malpractice case is very expensive because it requires health care providers, including doctors and nurses to review hours and hours of materials before they offer their opinions, first in deposition and then in trial. Going to trial in a case typically triggers an increase in the percentage a lawyer receives in a non malpractice case. Even if a plaintiff wanted to pay the attorney a higher fee, it is not allowed under MICRA.

On the other hand, there is absolutely no cap on defense lawyer fees. They get paid by the hour and thus actually get paid more for trying the case, win or lose. If the Plaintiff's lawyer loses the case at trial (80% or so are lost by the Plaintiff at trial) he has spent a lot of money out of pocket for experts, depositions, trial exhibits, etc. and will get paid nothing for his efforts. Those efforts, I can assure you are hours and hours of time and office resources. The defense lawyer is paid for his hours, his expenses, his experts, his trial exhibits, his depositions by the insurance company. That is true whether or not he wins the case.

-Admissibility of collateral sources. Essentially what this means is that if you have health insurance or any other entity that is likely to cover the cost of some of your injuries or future care, that information can be used in court to lower the amount of your verdict at trial. Examples of admissible sources include Social Security, disability, worker's comp, private health insurance, etc. . The jury gets to hear that you have had insurance pay for your bills and will probably reduce the verdict accordingly.

-Periodic payments for plaintiffs. If you get an award of more than $50,000 for your medical malpractice case, defendants are allowed to pay you periodically over the course of your life expectancy. This is great for the doctors and hospitals because they can use the victims money to invest while doling out bits and pieces over time to you, the victim. They will never actually pay the full amount awarded to you.

-Punitive Damages Hurdles. Let's say that a doctor, nurse or other healthcare provider committed such gross negligence that you want to seek punitive damages in the case. In order to do this, a plaintiff's attorney must make a motion and satisfy a very high threshold very early on in the case in order to even allow a jury to consider awarding punitive damages. Most of the time, this motion simply isn't made because information supporting the damage award is not known until late in the case or because the very high threshold to even be allowed to claim these damages cannot be met.

It is important to note that all of these restrictions apply only to medical malpractice cases. In other instances of civil liability outside the healthcare field, none of these rules exist. There is no admission of collateral sources, no periodic payments requirement, no caps on attorney's fees or non-economic damages. Only doctors, hospitals and other healthcare providers are offered this excessive protection, which in turn limits access to financial recovery for victims of malpractice and in many respects, effectively blocks their access to the court room.

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