WHAT IS
MICRA?
1. INTRODUCTION
The Medical Injury Compensation Reform Act of 1975 ("MICRA") was enacted in
California to provide affordable medical malpractice insurance for physicians and the
continued availability of health care to Californians. MICRA limits jury awards in medical
malpractice cases to $250,000 for pain and suffering, allows awards of $50,000 or more for
future medical expenses and wage loss to be paid at regular intervals over the life of the
injured plaintiff, and allows defendant physicians to introduce evidence of a
plaintiff’s health care coverage for medical and hospital expenses incurred by the
plaintiff.
2. $250,000 LIMIT ON PAIN AND SUFFERING
Jurors in medical malpractice cases can award damages to plaintiffs for past and future
pain and suffering, physical impairment or disfigurement. These are known as noneconomic
damages. MICRA codified Civil Code section 3333.2 which limits noneconomic damage awards
to a maximum of $250,000.
Plaintiffs are limited to a maximum of $250,000 for noneconomic damages even if there
is more than one defendant being sued for medical malpractice. Furthermore, the surviving
spouse and children of a deceased patient are also limited to $250,000 for noneconomic
damages in a medical malpractice wrongful death case. However, the spouse of an injured
plaintiff suing for his or her own emotional distress as a "direct victim" of
the physician’s malpractice, or for loss of consortium, is entitled to a separate
$250,000 limit for noneconomic damages.
Accordingly, the jury in a medical malpractice case should be asked to render a special
verdict which separately identifies the amount in damages being awarded for noneconomic
damages.
3. PERIODIC PAYMENTS FOR FUTURE LOSS
Jurors can award damages in medical malpractice cases for future economic and
noneconomic loss. MICRA codifies Code of Civil Procedure section 667.7 which allows awards
for future damages of $50,000 or more to be paid periodically, or in regular intervals,
over the life expectancy of the plaintiff.
Periodic payments of awards for future loss can result in significant cost savings for
defendants because the gross value of the award for future economic damages to paid over
the life of the plaintiff can be significantly more than the present value of that award.
Furthermore, periodic payments for future medical expenses cease upon the death of the
plaintiff.
A. NO PERIODIC PAYMENTS FOR PRESENT VALUE AWARD OF FUTURE
NONECONOMIC LOSS
Jury awards for future noneconomic loss are typically expressed in special verdicts as
the present value of the plaintiff’s future pain and suffering. Thus, defendants have
no economic incentive to seek periodic payments of future noneconomic damage awards since
the cost of an annuity purchased to pay the periodic payments would typically equal the
present value award by the jury.
Plaintiffs can request periodic payment of their future noneconomic damage award based
upon its present value where circumstances warrant. In such cases, defendants may seek to
purchase an annuity for less than the present value award for noneconomic damages made by
the jury that will provide for the periodic payments to be made a part of the judgment.
Defendants should fashion a special verdict which requests that the jury determine both
the present value and the gross value of any award for future noneconomic loss.
B. PERIODIC PAYMENTS FOR FUTURE ECONOMIC LOSS
Jury verdicts in medical malpractice cases typically specify the gross amount of future
economic damages awarded for future medical expenses and wage loss. Defendants are
entitled to request periodic payments of future economic damage awards of $50,000 or
greater.
C. COURTS DETERMINE PERIODIC PAYMENTS TO BE MADE
Defendants often request that the award for future economic damages be paid in equal
monthly installments for the life expectancy of plaintiff. The courts may adjust the
payment schedule to meet the health needs of plaintiff, including the creation of a lump
sum payment out of the future economic damage award upon entry of judgment.
The courts may also fashion the periodic payments based upon an annuity that may be
purchased by defendant for the present value of the future economic damage award if this
amount was specifically determined by the jury in a special verdict.
D. PERIODIC PAYMENT SETTLEMENT
The parties in a medical malpractice case often settle after a plaintiff verdict by
negotiating the periodic payment schedule to be paid by defendant through an annuity
acceptable to plaintiff. This settlement allows the defendant to obtain a dismissal of the
action. Furthermore, the cost of an annuity may be less than the present value of the
future economic damage award if the annuity company believes that the life expectancy of
the plaintiff is less than determined by plaintiff, because periodic payments for future
medical expenses may terminate upon the death of the plaintiff. Parenthetically, periodic
payments for wage loss do not terminate upon the plaintiff’s death.
To maximize a defendant’s ability to negotiate the most favorable result,
defendants should not request that the jury identify the present value of plaintiff’s
future economic loss in a special verdict.
E. PERIODIC PAYMENT JUDGMENT
Failure to settle after a plaintiff verdict in a medical malpractice case will result
in the court’s determination as to the proper periodic payment schedule for the award
for future economic damages. This determination will be made a part of the judgment and
defendant may purchase an annuity to meet the periodic payments ordered by the court.
Defendants requesting that the future economic damage award in a judgment be paid
periodically must demonstrate that they have adequate insurance or post security in the
form of an annuity acceptable to plaintiff and the court to meet these future obligations.
Unfortunately, a defendant facing a periodic payment for the future economic damage
award which is a part of the judgment, cannot obtain a satisfaction of the judgment until
the final periodic payment is made. If plaintiff were to die before the final payment is
made, defendant must return to court to seek modification of the judgment to reflect the
fact that payments for future medical expenses are no longer available.
4. POST TRIAL MICRA MOTIONS
Defendants should provide plaintiffs with notice of the MICRA provisions as a part of
their affirmative defenses in their answers, in their trial briefs, and as a motion in
limine.
Defendants should request a special verdict which has the jury specify the present and
gross value of any award for future noneconomic loss. It is not necessary to request that
the jury determine the present value of any award for future economic damages.
Defendants receiving an adverse verdict must seek a stay of entry of judgment to allow
time to file appropriate motions under MICRA or enter into a settlement.
In the event of an adverse verdict, medical malpractice defendants interested in
settlement should enter into negotiations over the periodic payments to be made for the
future economic damages awarded. Through the use of guaranteed payouts and shortened life
expectancy, defendants can often purchase annuities to fund the negotiated periodic
payments with significant cost savings. Plaintiffs must approve of the purchase of the
annuity to effectuate the settlement.
If a settlement is not possible, appropriate post-trial motions must be made to fashion
a periodic payment schedule as a part of the judgment that will result in the best
possible cost savings for defendant.
5. EVIDENCE OF HEALTH CARE COVERAGE ADMISSIBLE
In personal injury cases in California, plaintiffs are allowed to seek recovery of the
medical expenses incurred as a result of defendant’s negligence. The collateral
source rule prevents defendants from introducing evidence that plaintiff’s medical
expenses have been paid by a collateral source such as plaintiff’s health plan.
However, in medical malpractice cases, defendants may introduce evidence of payment of
plaintiff’s medical expenses by Social Security, government income, disability, or
workers’ compensation coverage, or plaintiff’s health or disability insurance,
accident insurance providing income or medical payments benefits, or health plan, under
Civil Code section 3333.1.
Payments by Medi-Cal or Medicare are not admissible because the government has the
right to seek reimbursement through a lien on any recovery by plaintiff. No other liens
are allowed by section 3333.1.
If defendants introduce evidence of payment by a collateral source, plaintiff are
entitled to introduce evidence of payments they have made for the coverage by the
collateral source, such as the monthly cost of the health plan.
The jury may ignore the collateral source payments, or award the cost of the health
coverage as economic damages.
