Landmark Legislation Preserves Medical Liability Reform (MICRA) in California

May 23, 2022—California’s lawmakers have enacted legislation to ensure the preservation of the state’s longstanding Medical Injury Compensation Reform Act (MICRA). The Doctors Company worked closely with the California Medical Association and the Coalition to Protect MICRA (also known as Californians Allied for Patient Protection), an alliance that includes a wide range of organizations representing physicians, dentists, hospitals, advanced practice clinicians, community clinics, and medical liability insurers, to craft this agreement. We are proud of our contribution to this critical legislation that preserves the essential features of MICRA for future generations of Californians.

Assembly Bill 35 (AB 35)—which will become effective on January 1, 2023—updates California’s historic medical liability reform statutes originally passed in 1975. As a result of this new legislation, the catastrophic “Fairness for Injured Patients Act” (FIPA) initiative has been withdrawn from the November 2022 ballot. 

Had the FIPA initiative been enacted, there would have been no legislative recourse. MICRA would have been lost forever. Literally overnight, California would have transformed into one of the country’s worst environments for medical malpractice litigation. FIPA would have:

• Effectively eliminated the cap on noneconomic damages.
• Abolished periodic payments. 
• Required defendants to pay unlimited attorneys’ fees for successful plaintiffs (in addition to any indemnity payment). 
• Extended the statute of limitations.
• Allowed double recovery of medical damages.
• Removed all limits on attorneys’ contingency fees
• Been retroactive, meaning it would have applied to the more than 12,000 open MPL claims in California.

To cover FIPA’s changes, healthcare providers’ medical liability insurance rates would have had to increase 80 to 120 percent, almost overnight. The increased loss costs over the first 10 years would have been several billions of dollars.

With the withdrawal of the initiative and the passage of the new legislation, MICRA’s key features are maintained. The increase in noneconomic damage caps is limited and will not take full effect for 10 years.

California’s healthcare providers can look forward to long-term stability and the end of the continual battles to eliminate MICRA entirely. It is a major step toward achieving an accessible and affordable healthcare system for all Californians. 

Please contact Government Relations with any questions.

About MICRA

California’s Medical Injury Compensation Reform Act (MICRA) ensures injured patients receive fair compensation while preserving access to healthcare by keeping doctors, nurses, and healthcare providers in practice and hospitals and clinics open. Without MICRA’s protections, many of California’s neediest populations could face reduced access to much-needed services.

Today, MICRA serves as a national model, saving California’s healthcare system billions of dollars each year and increasing patients’ access to healthcare by keeping doctors, nurses, and other healthcare providers in practice and hospitals and clinics open.

MICRA is especially critical in protecting access to specialty and high-risk services, including:

• OB/GYN and other women’s healthcare.
• Rural healthcare.
• Low income healthcare services.
• Community clinics.
• HIV/AIDS specialty services.

Undermining MICRA’s intent will also reduce access to routine health care, including regular screenings for high blood pressure, cholesterol, diabetes, sexually transmitted diseases and other serious health risks.