Proposed California Bill Increases Medical Malpractice Damage Caps

A proposed bill updates the provisions of the Medical Injury Compensation Reform Act of 1975 (MICRA). The proposed California bill raises the damage caps in medical malpractice cases, allowing for increases in pain and suffering awards. In doing so, it also eliminates the need for a ballot proposal to address the same question.

How California Medical Malpractice Damage Caps are Changing

MICRA included a cap of $250,000 on medical malpractice damages. Specifically, this cap on damages does not relate to medical bills, lost earnings, or other economic losses. The cap applies to damages such as those for pain and suffering.

MICRA originally introduced the cap to curb the rising costs of defending and insuring medical malpractice claims. However, the $250,000 cap has proven increasingly unworkable in the years between 1975 and the present. Critics of the limit have noted that the cap deters attorneys from handling complex cases of medical malpractice. Additionally, the cap also prevents plaintiffs who have faced intense suffering from receiving damages that reflect their losses.

The deal raises the cap on pain and suffering awards to $350,000, beginning January 1, 2023. Over the next ten years, the cap rises to $750,000. Additionally, the deal modifies the cap on damages in medical malpractice claims that result in death. The deal raises the cap to $500,000 on January 1 and to $1 million over ten years. The deal pegs future raises in the cap to a 2 percent cost of living increase.

Legislative Efforts and Effects on Ballot Measures

Attorneys, doctors, and other interested parties struck the deal through negotiations. It requires that the California legislature introduce the legislation promptly. The deal also requires California Governor Gavin Newsom to sign the legislation no later than June 28, 2022.

In addition to addressing MICRA, the bill also prevents a bitter and expensive ballot proposal fight. The ballot proposal was planned for the November ballot. The proposal would have required pain and suffering damages to be tied to inflation, postdated to 1975. It would also have allowed awards that exceeded the cap in cases where a person dies or is permanently physically impaired, disfigured, or disabled.

Adjusting the cap on damages to the rate of inflation would have resulted in a significant and more immediate change. If adjusted for inflation, the cap of $250,000 in 1975 would today be worth $1.3 million.

The deal became an option due to a 2014 rule change. The rule change allows the legislature to negotiate and compromise even in the face of a pending ballot proposal. Before 2014, any statewide initiative had to appear on the ballot once the necessary voter signatures were submitted and verified. This meant the legislature would have had no chance to pass these changes to MICRA once the signatures were in. Under the 2014 rule change, however, the legislature had the opportunity to address the issue before it reached the ballot.

The legislature invoked this rule change twice before to pass new legislation rather than embroil the state in a ballot proposal. In 2016, the rule changed to address the state’s minimum wage. In 2018, the rule change expanded privacy protections over consumer data. Neither of these instances, however, drew the attention or outcry that medical malpractice damages caps have.

How These Changes May Affect California Medical Malpractice Cases

The first and perhaps most obvious change to California medical malpractice cases will come in the increase to the amount of damages for pain and suffering that plaintiffs may receive. Beginning next year, this amount will rise to $350,000 and continue to increase thereafter.

In addition, the way the cap applies to multiple defendants has changed. Under the original MICRA terms, a single $250,000 cap applied to non-economic damages, no matter how many parties were liable for medical malpractice.

Under the new terms, the cap applies separately to a doctor’s liability and to a hospital’s. In cases where a third, unaffiliated provider was also liable, a third cap may also apply. In 2023, for example, a patient who can demonstrate that a treating physician, a hospital, and a third unaffiliated provider are all liable may receive as much as $1.05 million in pain and suffering damages.

The new law is likely to change medical malpractice insurance in California. It will also affect how injured patients, healthcare providers, and attorneys think about the way they approach these cases.