TAPA: MICRA Expert Reports Cap on Noneconomic Damages Essential

The following was issued Tuesday by Texas Alliance for Patient Access:

Testimony before the Texas Senate’s State Affairs Committee has focused on whether Texas should embrace the effective health care lawsuit reforms that California enacted 28 years ago. California’s landmark Medical Injury Compensation Reform Act (MICRA) was passed in 1975.

The anchor reform according to the MICRA proponents is a $250,000 cap on noneconomic jury awards for subjective damages, such as emotional pain and suffering.

“We know, we do not speculate, that MICRA is effective in providing sustainable insurance rates, in preserving access to medical care and in providing full indemnification of injured patients,” Richard Anderson, M.D., stated in testimony before the Senate committee.

Dr. Anderson, president of The Doctors’ Company, a physician-owned insurance company in California, told senators, “We know unlimited noneconomic judgments require unlimited premiums, which lead to unlimited increases in the cost of health care and decreased access by the most vulnerable among us.” He went on to note that the California reforms, like those now before the Texas Legislature, do not cap economic or actual damages for medical expenses or past/present/future earnings.

Dr. Anderson cited the following facts as evidence of MICRA’s success:

*California liability insurance premiums are approximately 40 percent less than the national average;
*In California, the number of verdicts with awards of $1 million or more is 1.31 per 1,000 doctors, compared to a national average of 1.93;
*In California, it takes approximately 1.8 years for a lawsuit to proceed through the legal process to settlement. In states with no caps on noneconomic damages, the process takes approximately 2.4 years;
*And, injured patients benefit directly from MICRA. For example, on a $1 million judgment, the patient receives almost 80 percent of the award, compared to about 60 percent of the award pre-MICRA.

On any given day, more than 125,000 professional liability lawsuits are in progress against America’s doctors, according to Dr. Anderson. And in Texas, 87 percent of claims filed against physicians are closed with no payment made, according to a survey conducted by the Texas Medical Liability Trust.

In his testimony, Dr. Anderson addressed questions relating to the alleged impact of Proposition 103, rather than MICRA, in lowering liability insurance premiums. He noted that medical liability insurers specifically were exempted from the Proposition 103 rate rollback that California enacted in 1989.

Key components of MICRA include:

1. a $250,000 cap on non-economic damages with no exceptions,
2. a collateral source rule that allows juries to be told of other
benefits available to the patient,
3. periodic payments of future damages, and
4. a sliding scale limit on attorneys’ contingency fees.

“There is an overpowering public necessity for the reform measures recommended in this report, and no alternative method of meeting such public necessity can be shown,” Dr. Anderson added.

Dr. Anderson’s testimony in support of Texas adopting similar health care lawsuit reforms was reportedly enthusiastically endorsed by the state’s largest health care lawsuit reform advocates, including the Texas Medical Association, the Texas Hospital Association and Texas Alliance for Patient Access.