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Mediation Grand Rounds: Micra – 2023

On Behalf of | Sep 12, 2023 | Medical Malpractice

While most of you undoubtedly always have one or more medical malpractice cases in your pipeline and are therefore very likely to be familiar with the recent changes to the Medical Injury Compensation Reform Act (MICRA), we thought it would be useful to review the most significant of those changes so that we are all on the same page.

The 2023 changes in MICRA (known as the Modernized Medical Injury Compensation Reform Act) completely alter the medical malpractice landscape. MedMal cases have gone from being not very attractive in terms of potential damages and attorney fees to becoming reasonably attractive overall. Not perfect, not like your ordinary good personal injury case not subject to damage caps or limitations on fees but still much better than before. We can therefore expect many more of these cases to be filed.

In May 2022, the California Legislature passed AB 35, known as the Modernized Medical Injury Compensation Reform Act, which went into effect January 1, 2023. The law is not retroactive and only applies to cases filed after January 1, 2023.

The Act made several important changes to the 1975 MICRA. First, it divided defendants into three classes: (1) individual healthcare providers, (2) healthcare institutions, and (3) unaffiliated defendants.  The new law provides that in a non-wrongful death case general damages may be recovered against each type of defendant but caps the recovery at $350,000. In a death case, the cap is increased to $500,000. These new caps apply to all defendants collectively in each of the three categories.

This alone is a huge change as all general damages together were previously capped at $250,000. Now, if all three types of defendants are present as defendants in a case, the total available award would be $1,050,000 in a non-death case and $1,500,000 in a death case. An example of where this would apply is in a case where a physician (or other provider), a hospital, and an ambulance company are all defendants. One proviso though is that each type of defendant must have committed an independent act of negligence.

Another significant change is in the attorney fees. Previously, attorneys were compelled to use a sliding scale statutory scheme which significantly declined as the settlement or verdict increased. The new MICRA has done away with the sliding scale and sets attorney fees at a flat 25% if the cases settles before filing a complaint or a demand for arbitration and 33% after the filing of a complaint or demand for arbitration.

While there are other important provisions, the foregoing are the most relevant for our discussion.–