2022 MICRA Modernization Agreement

 

On May 16, 2022, Governor Gavin Newsom signed AB 35 (MICRA Modernization) into law. The Governor's action followed a bipartisan and nearly unanimous vote by the state Legislature. As part of the landmark agreement reflected in AB 35, proponents of FIPA have removed the initiative from the November ballot. The law will go into effect January 1, 2023. Under the modernized MICRA law, the underlying principles of MICRA were preserved -- ensuring access to care and protecting our health care delivery system from runaway costs.
 

The ‘Fairness for Injured Patients Act’, or FIPA, was the ballot initiative that set to end MICRA in November. FIPA would have effectively eliminated MICRA’s cap on non-economic damages by introducing a new broadly defined “catastrophic injury” category, made attorney’s fees additive on top of damages, and allowed trial lawyers to go after physicians’ personal assets. AB 35 makes significant, but much more modest, changes to MICRA’s cap on noneconomic damages, which is currently $250k and has not changed since MICRA was adopted in 1975:

  • 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. The cap
  • 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.

Critical MICRA guardrails 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 fact sheet that includes additional details on this important legislation.

Click here to read the full statement from CMA President, Robert E. Wailes, MD.