Medical Injury Compensation Reform Act

The Medical Injury Compensation Reform Act (MICRA) of 1975 was a statute enacted by the California Legislature in August 1975 (and signed into law by Governor Jerry Brown in September) which was intended to lower medical malpractice liability insurance premiums for healthcare providers in that state by decreasing their potential tort liability. MICRA's stated justification, in turn, was to keep healthcare providers as a whole financially solvent, thus lowering the cost of healthcare services and increasing their availability. Almost all of MICRA is still in effect and still part of California law.

Provisions

MICRA consists of the following parts:

• Damage cap - non-economic damages are limited to $250,000 (and this amount is not indexed for inflation).
• Attorney's fee cap - attorney fees that are taken from the amount of the settlement are limited.
• Time limits - shortened statute of limitations for actions against healthcare providers.
• Binding arbitration.
• Periodic payments - doctors are allowed to pay the award over time.

These are codified at a number of different locations in the California Codes: Business & Professions Code Section 6146, Civil Code Sections 3333.1 and 3333.2, and Code of Civil Procedure Section 667.7.

Results

Between 1985 and 1988, malpractice premiums rose 47 percent.^[1] After 1988, the insurance premiums in California experienced a decrease. It is contested as to whether this decrease was a result of Proposition 103. Proposition 103 enacted Section 1861.01 of the California Insurance Code, which explicitly required the rollback of insurance premiums by "at least 20%".^[2]

Influence

The perceived success of MICRA in helping California healthcare providers stay financially solvent in turn inspired similar tort reform initiatives in other states. A prominent example was Nevada's Question 3, which was enacted by the voters of that state in 2004 by a 60% majority. Like MICRA, Question 3 set a maximum schedule for attorney's fees, and capped noneconomic damages at a slightly higher number, $350,000. Question 3 was also known as the KODIN Initiative after its main sponsor, Keep Our Doctors In Nevada. KODIN promoted Question 3 by pointing to an alleged trend of Nevada doctors fleeing the state for states with lower malpractice premiums like California. To directly counter KODIN, the Nevada plaintiffs' bar put Questions 4 and 5 on the same ballot, and both 4 and 5 were defeated.

References

1. ^ The Foundation for Taxpayer and Consumer Rights, How Insurance Reform Lowered Doctors' Medical Malpractice Rates in California: and How Malpractice Caps Failed, http://www.consumerwatchdog.org/documents/1008.pdf (March 7, 2003)
2. ^ Cal. Ins. Code § 1861.01.