Newsom Signs Compromise Law Raising The Limit On Medical Malpractice Damages

May 24, 2022

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Source: San Francisco Chronicle, by Bob Egelko

California’s $250,000 limit on damages for pain and suffering caused by medical malpractice, a ceiling enacted by lawmakers in 1975 at the insistence of doctors and insurers, will be lifted next year. Gov Gavin Newsom signed compromise legislation Monday, sponsored by consumer advocates and supported by medical groups, that will not remove all limits on malpractice damages but will raise them to account for some of the inflation in the past 47 years.

Under AB35 by Assembly Majority Leader Eloise Gómez Reyes, D-Colton (San Bernardino County), the new limits for noneconomic damages in 2023 will be $350,000 for nonfatal medical malpractice by a physician and $500,000 for malpractice causing death. The maximum will rise gradually over the next decade, to $750,000 for non-death cases and $1 million for fatal cases, and increase by 2% a year thereafter for inflation.

When a doctor and other medical institutions, such as hospitals, commit acts of malpractice on the same victim, the limits will rise to as much as $1.05 million next year and $2.25 million in 10 years in non-death cases, with higher caps for fatal cases.

The current $250,000 damage limit would have been worth about $50,000 in 1975. The 1975 law, the Medical Injury Compensation Reform Act, or MICRA, does not restrict damages for a patient’s economic losses, such as wages and medical expenses.

“For decades, medically injured patients suffered from both the pain of being wrongfully injured and the unfairness of a system that severely restricted their access to justice,” said Craig M. Peters, president of Consumer Attorneys of California. “This historic agreement will ensure patients are more fairly compensated when their rights have been violated.”

“After decades of negotiations, legislators, patient groups, and medical professionals have reached a consensus that protects patients and the stability of our health care system,” Newsom said in a statement.

AB35 was also endorsed by the California Medical Association and the California Hospital Association as an alternative to a proposed November ballot initiative that would have increased the damage limit to $1.25 million, and removed all limits on damages for malpractice causing catastrophic injury or death. The sponsors of the initiative dropped it after lawmakers reached their agreement.

MICRA, signed by then-Gov. Jerry Brown, was sponsored by medical groups that said it was needed to keep doctors from leaving the state for fear of being bankrupted by unlimited damage awards.

Consumer groups contended the law rewarded incompetent doctors and their insurers at the expense of their patients. But previous efforts to modify or repeal MICRA failed in the Legislature, and in 2014 two-thirds of state voters rejected Proposition 46, which would have substantially increased the damage limits and required physicians to undergo drug and alcohol testing.

The law can have a drastic impact on individual cases. Two-year-old Steven Olsen of Chula Vista (San Diego County) slipped and fell on a walk in the woods with his family in 1992 and was treated for a sinus injury by doctors who failed to conduct a scan that would have detected brain injuries, a consumer group said. He wound up with lifelong blindness and brain damage and was awarded $7 million by a jury for pain and suffering — an amount slashed to $250,000 under MICRA.

“Although it is too late for my family to benefit from this change, at least others won’t have to endure the same suffering ours did three decades ago,” said Steven’s father, Scott Olsen, a board member of the nonprofit Consumer Watchdog and a sponsor of the now-shelved November ballot measure.

Dr. Robert Wailes, president of the California Medical Association, said the agreement was reached “because the two sides of the ballot measure campaign put differences aside, found common ground and recognized a rare opportunity to protect both our health care delivery system and the rights of injured patients.”

 

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