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CSDA has joined a broad coalition representing health care providers, including healthcare districts, in supporting Assembly Bill 35 (Reyes). AB 35 represents a historic compromise among stakeholders which will make important changes to MICRA, thereby preserving it for years to come.

MICRA, originally enacted in 1975, includes a cap on noneconomic damages from medical professional negligence of $250,000, among other provisions. The protections afforded by MICRA have supported medical stability and predictability for decades, and are designed to provide patients with fair compensation for professional negligence, while protecting the availability and accessibility of health care services. However, MICRA’s cap on noneconomic damages has not increased with inflation, which has eroded its value over time.

MICRA’s provisions have been the source of controversy in the courts and in the Legislature, generating several attempts to make legislative changes to the Act. MICRA has also been the source of costly ballot initiatives seeking to make changes to the Act, including an unsuccessful effort in 2014 (Proposition 46), and a pending ballot initiative expected to appear on the November 2022 ballot.

AB 35 was negotiated among opponents of MICRA, and supporters of MICRA, including Californians Allied for Patient Protection (CAPP), a coalition which includes CSDA. Healthcare districts constitute an important component of CSDA’s special districts membership. These districts provide and support an array of health care services, including hospital services, clinics, and other health programs designed to enhance health in the communities they serve.  Healthcare districts play a critical role in their local communities in both urban and rural settings, including underserved areas, and MICRA is critical component to preserving medical accessibility.

Key components of AB 35 include:

1. This bill makes changes to the caps on attorneys’ contingency fees. Under existing law, such fees are capped by percentages which decrease as litigation recoveries increase. This bill will instead impose percentage caps based on the stage of litigation during which the litigation was resolved, with the percentage increasing in later stages, and percentages in excess of 33% left to the judge’s discretion.

2. This bill increases the single $250,000 cap on noneconomic damages under existing law as follows:

1. in any action for injury against a health care provider or health care institution based on professional negligence that does not involve wrongful death, the injured plaintiff shall be entitled to recover up to $350,000 in noneconomic losses, regardless of the number of health care providers or institutions, in each of the following categories:
   1. against one or more health care providers, collectively;
   2. against one or more health care institutions, collectively; and,

• against one or more health care providers or health care institutions that are unaffiliated with the above defendants based on separate and independent acts of professional negligence that occurred at, or in relation to medical transport to, a health care institution unaffiliated with a health care institution described above, collectively.

1. The cap increases by $40,000 per year for 10 years, to $750,000. For professional negligence involving wrongful death, the cap starts at $500,000 and increases to $1,000,000 over 10 years. The caps will then be adjusted by 2% per year for inflation beginning in 2034. The bill increases the threshold for periodic payments.

2023. The above caps apply for cases filed or arbitrations demanded on or after January 1, 2023.

3. This bill updates various definitions, and protects certain health provider statements from use in litigation.

CSDA is supporting AB 35 as a means to preserve MICRA’s pivotal role well into the future. These changes will also resolve the November 2022 ballot measure which threatens the essential protections of MICRA.