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MICRA agreement signed into law with support from CDA, TDIC and hundreds of organizations

Revised law takes effect Jan. 1, 2023; November ballot measure withdrawn

April 27, 2022 5630
MICRA Update

Quick Summary:

“This agreement is in the best interest of patients and providers because it will protect patient access, ensure high-quality care and continue to contain health care costs as opposed to the sudden, drastic cost increases this year’s ballot measure or future measures would bring.” - CDA President Ariane Terlet, DDS

May 23 update 

Gov. Gavin Newsom today signed legislation enacting the agreement that revises the state’s MICRA law following approval by the state Legislature on bipartisan and nearly unanimous votes. The legislation, Assembly Bill 35, will take effect Jan. 1, 2023. The sponsors of a November 2022 ballot measure that would have dismantled the MICRA law have removed that measure from the ballot, precluding a costly ballot measure campaign this year and beyond.  

April 27: California’s health care community, including CDA and The Dentists Insurance Company (TDIC), has reached an agreement that will extend the long-term predictability and sustainability of the state’s medical professional liability law — the Medical Injury Compensation Reform Act (MICRA). This agreement settles a decades-long divide on the issue and will result in the withdrawal of a November 2022 ballot measure that would dismantle the MICRA law. 

The revised framework keeps in place MICRA’s essential cost-control guardrails while protecting the rights of injured patients. The MICRA coalition and the ballot measure sponsors will jointly support new legislation to codify the agreement, and the sponsors will remove the measure from the ballot when the legislation is signed into law.  

Since becoming law in 1975, MICRA has sought to strike a balance between compensatory justice for injured patients and maintaining an overall health care system that is accessible and affordable. MICRA has been the subject of expensive disputes in the courts, in the state Legislature and through the ballot measure process (most recently Proposition 46 in 2014), largely over the law’s $250,000 limit on noneconomic damages in medical negligence cases. 

This year’s ballot measure would have eliminated MICRA protections by creating a broad new category of lawsuits under which no cap on noneconomic damages or attorneys’ fees would apply. CDA has been a leading member of the campaign to oppose the measure. 

Facing another costly and disruptive ballot measure campaign, there was consensus among the MICRA coalition to settle this issue long-term. The agreement reached protects patients, ensures stability in provider liability costs and saves coalition members tens of millions of dollars in campaign costs that would have been expended this year and in future years.  

How the agreement updates MICRA 

The revised framework includes several provisions that would update MICRA while continuing its medical liability protections. The most central provision would change the limits on noneconomic damages from the current $250,000 to: 

  • Cases not involving a patient death: $350,000 starting Jan. 1, 2023, with an incremental increase over the next 10 years to $750,000. 
  • Cases involving a patient death: $500,000 starting Jan. 1, 2023, with an incremental increase over the next 10 years to $1 million. 
  • After 10 years, an annual 2% adjustment would apply to the limits. 
  • These new limits would only apply to cases filed Jan. 1, 2023, or later; they would not apply retroactively. 

Read more details on the agreement. 

CDA, TDIC leaders issue statements on agreement 

CDA President Dr. Ariane Terlet made the following statement:  

“This is a rare opportunity to achieve long-term stability and certainty about the future of the state’s MICRA law. This agreement is in the best interest of patients and providers because it will protect patient access, ensure high-quality care and continue to contain health care costs as opposed to the sudden, drastic cost increases this year’s ballot measure or future measures would bring. It’s clear that no matter how successful we are in defending MICRA, the fights only get more complicated and costly and the outcomes less certain. We urge the Legislature and Governor Newsom to approve this agreement quickly.”   

Dr. Dan Davidson, chair of the TDIC board of directors, added: 

“This agreement strikes a fair and appropriate balance that will provide important stability around the MICRA issue in California. It’s in the best interest of all involved to end the unpredictability that comes with the endless fighting and ballot measure campaigns over MICRA that could dismantle this important health care protection law. The modest, gradual changes included in this agreement mean that we won’t see any immediate MICRA-related premium increases, and it will give providers the predictability they need for the long-term.”  

Next steps in the process 

California law allows proponents to withdraw a measure from the ballot if an agreement is reached before the deadline of June 30. With stakeholders now in agreement about moving forward, both sides are working in coordination with the governor’s office and legislative leaders to advance legislation to be finalized before the initiative withdrawal deadline.  

Assuming expedited approval by the Legislature and governor, the updates to MICRA would take effect Jan. 1, 2023. This year’s ballot measure would not appear on the November ballot, and no future ballot measures would be needed for the adjustments of the cap noted above to take effect. 

“This agreement allows us to put this issue behind us, avoid another uncertain and disruptive ballot measure campaign and get back to focusing on our patients while starting a new and sustained era of stability around MICRA,” added Dr. Terlet. 

CDA will share further updates in the CDA newsroom as they develop.