ProAssurance is committed to California, and we continue to advocate for, serve, and defend California healthcare providers. In an effort to keep our insureds informed of important changes in their state, we monitor key legistlative efforts, including the MICRA Modernization legislation that will became January 1, 2023.
Overall, we believe the new law strikes a sensible balance: It provides compensatory justice for injured patients while maintaining an overall healthcare system that is accessible to all Californians.
To learn more about the new law, visit the California Medical Association’s MICRA Modernization 2022 site. The full text of the law is available on the California Legislative Information site.
Key Provisions of the MICRA Modernization Legislation Regarding Non-Economic Damages
- The new law increases existing limit of $250,000 to $350,000 for non-death cases and $500,000 for wrongful death cases, effective January 1, 2023.
- There will be incremental increases over 10 years raising the cap to $750,000 for non-death cases and $1,000,000 for wrongful death cases, after which a 2.0% annual adjustment for inflation will apply.
- The new law creates three separate categories for a total of three possible caps in each case. A healthcare provider or healthcare institution can only be held liable for damages under one category, regardless of how the categories are applied or combined. The categories are:
- One cap for healthcare providers (regardless of the number of providers or causes of action)
- One cap for healthcare institutions (regardless of the number of institutions or causes of action)
- One cap for unaffiliated healthcare institutions or providers at that institution that commit a separate and independent negligent act
Other Key Provisions of the MICRA Modernization Legislation
- Periodic Payment of Future Economic Damages – At the request of either party, periodic payments can be utilized for future economic damages starting at $250,000 (presently at $50,000).
- Limits on Attorney Contingency Fees – Creates a two-tiered system (previously four-tiered) with the option to petition courts for a higher contingency fee for cases that go to trial.
- 25% contingency fee limit for claims resolved PRIOR to civil complaint being filed or arbitration demand being made
- 33% contingency fee limit for claims resolved AFTER civil complaint is filed or arbitration demand is made
- Protections for Benevolent Gestures and Statements of Fault by Healthcare Providers – Establishes new discovery and evidentiary protections for all pre-litigation expressions of sympathy, regret, or benevolence— including statements of fault by a healthcare provider to an injured patient or their family in relation to the pain, suffering, or death of a person or an adverse patient safety event or unexpected medical outcome.
To Our ProAssurance California Insureds:
- There are no plans for filed rate increases in 2023. We will monitor claims data to determine appropriate next steps. If frequency of reported claims is substantially higher, we may consider a rate increase. Bottom line: all decisions will be data driven.
- ProAssurance is committed to California. We continue to advocate for, serve, and defend California healthcare providers.
- We are the No. 2 writer of physicians in California with over $123M in Direct Written Premium (2021 NAIC end of the year data).
- Our local service team members have extensive California knowledge and expertise and are ready to assist our clients and stakeholders.
- Continued strong defense for our insureds – We continue to work with our insureds and defend claims as appropriate.
- Underwriting will continue to evaluate accounts’ unique exposures and losses to develop renewal and new business pricing.
- We expect loss costs to increase with the new cap limits and separate categories available in 2023.
ProAssurance Article in Risk & Insurance
Managing the New MICRA: Ways This California Law Affects Health Care
Lucy Sam, Vice President, Underwriting, West Region, Gina Harris, Regional Claims Executive, and Shep Tapasak, Senior Vice President, Specialty Underwriting, discuss the impact of this legislation on Medical Professional Liability.
Read a copy of the article in Risk & Insurance magazine.