by Karine Mkrtchyan, Esq.
Fraser Watson Croutch, LLP
After the reconstructive post-pandemic period, on January 1, 2023, the healthcare industry, insurers, and medical malpractice community will enter into a transformation era, influenced by the historic amendments to the 1975 Medical Injury Compensation Reform Act (MICRA) Statutes. After failed ballot measures in the last few decades, healthcare and consumer advocates demonstrated a unified front and reached an agreement outlined in Assembly Bill 35 to modify MICRA. The updated statutes apply to all cases filed or arbitrations demanded on or after January 1, 2023; they will not apply retroactively.
Key MICRA Changes:
One cap for all “health care providers,” regardless of the number of providers or causes of action, licensed under Division 2 of the Business & Professions Code e.g., physicians, physician assistants.
Case Example:
In certain scenarios, there may be a conflicting interpretation of the multiple caps described in the amended statute. As some health care institutions increasingly provide insurance coverage and employ individual physicians through their physician groups, there may be an overlapping relationship between the “health care provider” and the “health care institution.” In such setting, the issue is whether a “health care institution” (hospital) may be responsible for two separate caps: under the vicarious liability theories for the acts of the “health care provider” (physician) and for the independent act of another employee (nurse).
To illustrate, consider the following scenario:
A surgeon allegedly negligently performs a cholecystectomy on a patient at Hospital. During patient’s stay at Hospital, nurse allegedly fails to properly monitor the patient’s vitals and fails to properly report the symptoms of infection to the physician. Because of the alleged delay in treatment, the patient becomes septic and succumbs to her injuries. Patient’s family files suit against the Hospital and the surgeon. Hospital employs both the surgeon and the nurse.
In this scenario, plaintiffs may seek to apply two caps in the case: one for the “health care provider” (surgeon) and one for the “health care institution” (nurse) since there is a separate independent act of negligence by the nurse and the surgeon. However, defendant Hospital may argue that only one cap should apply for the negligent acts of the physician and the nurse, since the statute has defined “health care institution” to include “all persons and entities for which vicarious liability theories, including, but not limited to, the doctrines of respondeat superior, actual agency, and ostensible agency, may apply.” Amended Civil Code §3333(j)(2). The statute further provides: “No health care institution defendant shall be liable for damages for noneconomic losses in more than one of the categories set forth in this section, regardless of the application or combined application thereof.” Amended Civil Code §3333.2(e).
A potential result of the multiple noneconomic damages’ caps applied in a single case is that litigants may file Motions for Summary Adjudication to adjudicate the underlying agency relationship to eliminate an additional cap.
Other changes:
Chapter 3 has been added to the Health and Safety Code, which establishes additional discovery and evidentiary protections for expressions of sympathy, regret, or benevolence, including statements of fault, made prior to the filing of a lawsuit or demand for arbitration.
AB 35 also provides for contingency attorney fees of 25% for cases that settle before a civil complaint is filed or arbitration is demanded, and 33% of the recovery after a complaint or arbitration demand is filed. The new statute allows the court to grant a higher contingency fee upon a showing of “good cause” if an action is tried in a civil court or arbitrated. Amended Business and Professions Code §6146.
The minimum amount of judgment required to request periodic payments will increase from $50,000 to $250,000. Amended Code of Civil Procedure §667.7.
