The Value of Membership - Protecting MICRA

Mohan Mallam, M.D., President,
San Bernardino County Medical Society
This is the second in a four-part series.

Throughout the years, organized medicine has met many challenges and won many victories in ongoing battles to protect physicians and patients. One of the most important has been protecting the Medical Injury Compensation Reform Act (MICRA). 

For many younger physicians, MICRA might be a term they have never heard before despite it being one of the most important pieces of legislation protecting them, their practice and their patients.  To have a better understanding we need to look back to 1975.

In the early 1970’s some physicians in high-risk specialties were unable to obtain malpractice insurance or unable to afford inflated rates. For some specialties, premiums increased 400% over a two year period! Out of control medical liability costs were forcing community clinics, health centers, and many specialties and other healthcare providers out of practice. Patients were suffering as they were denied access to affordable care. The California Medical Association (CMA) worked with Governor Jerry Brown who called a special session of the California Legislature to solve the crisis. In that session, legislators took bi-partisan action and enacted MICRA.

What does MICRA do?  First, it limits attorney contingency fees on a sliding scale and places a $250,000 limit on non-economic (pain and suffering) damages.  It does not limit, however, compensation for present and future medical costs, lost wages, future earnings, custodial care and rehabilitation.  It provides a statute of limitations on claims and requires advance notice of a claim.  It also allows for binding arbitration to settle disputes and provides for periodic payments for future damages.

MICRA is just as relevant today as it was in 1975. MICRA is still today the national model for reforms that has been enacted in many other states. Today, California has some of the lowest malpractice premiums in the United States. According to a 2004 Yale Journal Case Study, passage of reforms similar to MICRA in states currently lacking such statutes would result in premium savings of 25 to 30 percent annually.

But protecting MICRA is not something physicians can take for granted.  California trial lawyers continue to attack MICRA.  Recently, California's 5th Appellate District Court reviewed a challenge to MICRA.  The case, Stinnett v. Tam, alleged that the act is unconstitutional because the medical professional liability insurance crisis of 1975 no longer exists, thereby eliminating the rational basis that originally justified MICRA.  Fortunately for physicians, patients and healthcare in California in general, the court upheld MICRA’s constitutionality.

This is just the latest in many legal challenges to MICRA over the years that have been funded by consumer and trial lawyer groups from across the country. While they appear to champion patient rights, what the attorneys really don’t like is that MICRA restricts the amount of money they can collect in attorney fees.

More importantly, if the MICRA cap is lifted, all sectors of health care will be affected. A 2008 study by the Berkeley Research Group found that just doubling MICRA’s cap to $500,000 could cost California consumers and taxpayers $9.5 billion a year in higher health care costs.  Increased limits of coverage could be needed, which would increase premium rates substantially for physicians in all specialties, and impact other safety net providers, including hospitals, community clinics, and rural facilities, leaving less money for programs serving those in need.

For 36 years, CMA along with the county medical societies have advocated to maintain MICRA and keep malpractice insurance rates affordable for California physicians.

So what can you do? You can lend your voice to the fight to preserve MICRA by contacting your state and federal representatives and ask them to preserve and support MICRA-like reforms. I suggest that you take every opportunity to read up on MICRA and then spread the word through the media and your patients, friends, and colleagues. Maintain your membership in SBCMS and CMA. And finally, your contribution to federal and state political action committees like CALPAC helps us to advocate for and defend medical liability reforms.