News & Press Releases

Landmark legislation to modernize MICRA signed by Governor Gavin Newsom

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Dear CMA Member, 

Today, Governor Gavin Newsom signed Assembly Bill 35 (MICRA Modernization) into law, and in doing so finalized an achievement few thought was possible. Californians Allied for Patient Protection (CAPP), the Consumer Attorneys of California, Nick Rowley—author and primary funder of the November ballot measure—and both sides of the looming initiative fight over the Medical Injury Compensation Reform Act (MICRA) worked together with the Legislature and Gov. Newsom to end a decades-long political battle and usher in a new era of stability around malpractice liability. 

The Governor’s action followed a bipartisan and nearly unanimous vote by the state Legislature, demonstrating broad support for this new approach. As part of the landmark agreement reflected in AB 35, proponents of the so-called Fairness for Injured Patients Act (FIPA) have removed the initiative from the November ballot. 

Since California’s landmark medical malpractice laws were enacted almost 50 years ago, they have successfully struck a balance between compensatory justice for injured patients while maintaining an overall health care system that is accessible and affordable for Californians. 

During that time, California’s physician and provider communities, through CAPP, have defended MICRA through expensive battles at the ballot, in the courtroom and in the legislature. CAPP is the large and diverse coalition working to protect access to health care through MICRA. Its membership includes the California Medical Association (CMA), California Hospital Association, California Dental Association, CMA’s component medical societies, medical malpractice insurance carriers, community clinics, Planned Parenthood Affiliates of California and many more. 

This year, we were again facing another costly initiative battle that would have obliterated existing safeguards for out-of-control medical lawsuits and would have resulted in skyrocketing health care costs. 

Instead, the two sides of the ballot measure campaign put differences aside, found common ground, and recognized a rare opportunity to protect both our health care delivery system and the rights of injured patients. The result is an agreement that puts patients first and prioritizes the stability of affordable access to health care. 

Under the modernized MICRA law reflected in AB 35, which will go into effect on January 1, 2023, the underlying principles of MICRA were preserved – ensuring access to care and protecting our health care delivery system from runaway costs. Important guardrails of MICRA will continue unchanged, including advance notice of a claim, the one-year statute of limitations to file a case, the option of binding arbitration, early offer of proof for making punitive damage allegations and allowing other sources of compensation to be considered in award determinations. Furthermore, a new provision has been added to the law that protects expression of sympathy by a health care provider to an injured patient and their family, allowing physicians to express empathy, benevolence and even statements of fault after an unforeseen outcome without fear that such statements or gestures will be used against them. 

The element that has garnered the most interest surrounds changes to the limit on non-economic damages in medical malpractice cases, which has been $250k since 1975. As opposed to the ballot measure, which would have effectively eliminated the cap on non-economic damages entirely, under the agreement: 

• Cases not involving a patient death will have a limit of $350k on the effective date of January 1, 2023, with an incremental increase over the next 10 years to $750k and a 2.0% annual inflationary adjustment thereafter. 
• Cases involving a patient death will have a limit of $500k on the effective date of January 1, 2023, with an incremental increase over the next 10 years to $1 million and a 2.0% annual inflationary adjustment thereafter. 

Other critical MICRA guardrails that will remain in place with modest updates include the ability to pay awards of future damages over time and limits on plaintiff's attorney's contingency fees. CMA has prepared a publicly available fact sheet that provides additional details on this important legislation, available at cmadocs.org/micra. 

CMA and the provider community remain united and committed to the principle of high-quality health care that is accessible and affordable to all Californians. For decades, we accomplished those goals in part by focusing our political resources on protecting MICRA against regular attacks. By creating long-term stability around MICRA, we can shift our focus, political influence, and resources to affect other positive changes for physician practices and improve access to care and public health for all Californians. 

Best wishes for a healthy future,

 Robert E. Wailes, M.D. 

President, California Medical Association