What's The Matter Here? MICRA California

by Robert E. Rosenthal

This is the first in a series of blogs discussing issues relating to our judicial system, including what I perceive to be problems with the system, both generally and specifically. I will examine controversial topics and specific problems in a system that is in some respects antiquated, in other respects simply broke, and in many respects doing just fine, thank you. My observations are just that, my views, not necessarily criticism or a demand for change. In forty plus years of practicing law in California, I have experienced and seen things that require discussion, if not fixing. That is my goal here: hopefully instigating discussion and perhaps change to our system, if not in our opinions.

I start by noting the obvious to those of us in the profession: The justice system we have in America remains the best in the world. While problems abound, our system remains the best. Sometimes aspects of the system are broken not due to the system itself or those involved in that system, but due to policies or laws unrelated to what is right or effective—oftentimes the result of political or financial motivation. In such cases, we must be vigilant in protecting our system from politically or financially motivated change. Change must be motivated solely by needed improvement.

The most glaring example of political and financially motivated change (or rather lack of change) in our system is MICRA. MICRA is an acronym for Malpractice Insurance Compensation Reform Act. It was originally enacted in 1975, when the medical malpractice insurance industry put a gun to the head of California physicians and created a sense of panic in the public by threatening to and in fact severely increasing medical malpractice premiums to California medical professionals, resulting in threatened increased medical costs or the loss of physicians.

The MICRA legislation was intended to avert what was feared to be a medical catastrophe. It was intended to retain reasonable malpractice premiums while also providing what the CMA (California Medical Association) described as “fair compensation” for patients’ pain and suffering, and “ensuring money recovered goes to patients, not lawyers.” California’s legislators, at the urging of Governor Brown following his negotiations with the medical and insurance industries, enacted MICRA as emergency legislation, without the typical and customary debate, thought or public input.

While the fears of high malpractice premiums “may” have been a viable argument in 1975 to have MICRA instituted, certainly, now 40 plus years later, the argument is neither justified nor reasonable. Today the insurance industry is healthy. Doctors’ malpractice premiums are not the most troubling issue facing the medical industry, rather, it is an insurance industry that places a premium on its own profitability and not on providing fair compensation for medical services or needed care to patients. The very fact that both the CMA and insurance industry claim 1975’s MICRA limitations continue to provide a fair basis for compensating patients severely injured by their care providers’ negligence, patently demonstrates their subjectivity and disregard for true fairness to those they serve: patients.

Without arguing the merits or need for MICRA in 2016, the fact is clear that what was reasonable compensation for patients in 1975 is not the same today. No one can argue that $250,000.00 in 1975 is worth the same today, yet MICRA remains unadjusted, and as such, flies in the face of this reality. If MICRA had included annual cost-of-living adjustments or even annual reviews, MICRA might withstand scrutiny today. But the legislation has remained untouched since its 1975 inception. Scrutiny is required.

CMA and the insurance industry claim it is the trial lawyers seeking greater fees that has motivated prior attempts to increase the MICRA $250,000.00 limit. What is not discussed is that, in fact, MICRA limits the amount of fees an attorney can charge in representing a patient/client. No other limitation of attorney fees exists for any other type of professional negligence or for that matter, simple negligence.

Let’s say your child loses the vision in an eye due to the negligence of her ophthalmologist. What options does she have to seek damages for her loss? The answer is not about whether monetary damages are the appropriate way for her to seek compensation, as they are the only way our system provides for compensation. We no longer live in a society that provides an “eye for an eye” for compensation, our system only provides for money damages. In this case, MICRA limits those non-economic damages for the loss of vision, her nightmares, her pain and her inability to see, to only $250,000. She can recover economic damages (reimbursement for unpaid medical expenses, loss of income, etc.), but her real damage is her loss of sight and for that her recovery is limited. No exceptions.

The MICRA issues are complicated by economic reality. As the parents of a child who has lost her vision, it is incumbent upon you to seek an experienced attorney to pursue your daughter’s claims against the negligent doctor. But wait, the reality is that most competent and experienced attorneys are reluctant at best, or at worst, unwilling to take such a case. This is not only because the amount of attorney fees are limited to $250,000 by MICRA, but because of the difficulty in finding another ophthalmologist (expert witness) willing to testify against the negligent doctor. And once your attorney does find a willing expert, that “expert” is most likely a doctor who has chosen a career as a professional witness and not what is really needed: a practicing physician.

Then, economic reality requires your attorney to consider what is to be the cost of all needed experts, a cost that will have to be paid from the $250,000 maximum damages your daughter might receive in a settlement. Experts are required to testify in order to prove a malpractice case, and most doctors willing to testify against another doctor make the cost of their time worth the potential ridicule they face from the medical industry for testifying against “one of their own.” It is not unusual or unexpected to expect to pay $25,000-$50,000 for all of the medical experts required in a malpractice case. In the end, the relatively low amount of fees available to an attorney to handle a medical malpractice case makes most attorneys walk away from what is otherwise a case of liability, as the time and costs to prosecute the case are too high when considering the MICRA damage and fee restrictions.

The cost of trying a case—including experts and other costs—has increased significantly since 1975, yet there has been no adjustment in MICRA during that same time. A savvy defense attorney paid by the malpractice insurance carrier on behalf of the negligent doctor understands the economics of proving a case, and whether any amount is offered in settlement takes this into consideration, daring the plaintiff’s attorney to try a case and incur the costs and risk of paying for a trial. Finally, most insurance policies allow the negligent doctor to have approval rights over any settlement offer.

So consider the facts:
1. The same MICRA damage limitation after 41 years;
2. Attorney fees are statutorily limited;
3. Required expert costs have increased and make handling the case not cost effective;
4. Doctors themselves control malpractice litigation. They can force a case to trial by refusing to make an offer. Doctors (as experts) are necessary to testify against their peers, and these experts are required in every case. The practical inability to find a competent doctor to testify often results in an injured patient’s inability to find an attorney or prevail at trial or settlement.

So what are the possible answers to this patently unfair statute? The answer is update it, not eliminate it. My suggestions:
1. Increase the minimum in keeping with the cost of living since 1975; and
2. Allow the trial judge in every medical malpractice case to rule, pre-trial, on the applicability of MICRA after considering the injury and conduct of the physician involved. Clearly, a patient who had severe pain but has recovered with little or no residual, on-going effects from the malpractice would be an example of a case where MICRA limitations should apply. But a patient suffering a serious, life threatening or life altering injury should not be limited to any damage amount by a statute written by politicians.

My final thought: Why are doctors the beneficiaries of a law that protects them from injuries they are responsible for—injuries due not to normal risk, but to negligence. No other professionals who commit malpractice—architects, CPA’s, lawyers, real estate brokers, or engineers, to name a few—have the same protections when their negligence causes severe harm or injury.

The Insurance and Medical industries have used the public’s dislike and distrust of lawyers to convince that any proposed change is the result of money-grubbing lawyers or malingering patients. This issue is not about greedy lawyers. It is not about lawyers wanting higher fees. This is not about plaintiffs feigning injury or screaming whiplash. Attorney fees are regulated by MICRA, and I am not proposing change to those limitations. A patient’s injuries must be proven by experts, they cannot be feigned. This issue is about the medical and insurance industry’s refusing to acknowledge that their patients deserve fair compensation based upon today’s economic realities, not 1975’s. The public needs to be factually and objectively informed. Until you or a loved one is severely injured by the malpractice of a medical professional, will you truly understand the unfairness of MICRA?

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