In summary

The doctor’s lobby, advocacy groups and legislative leaders announce a California medical malpractice deal to keep a measure off the ballot.

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Update: This story was updated May 12, 2022 to reflect the Legislature’s approval.

After years of multimillion-dollar battles over medical malpractice awards, California legislators  passed a deal increasing the monetary amount patients could claim in lawsuits while also averting a costly November ballot battle.

The deal, which passed both chambers with near unanimous votes, replaced a ballot measure with legislation raising the cap for a patient’s “non-economic damages,” or pain and suffering, although in a more incremental approach than the initiative would have.

“The legislative resolution we reached ends a decades-long political fight that pitted patients and families against insurance companies,” said Nick Rowley, trial attorney and author of the ballot initiative, in a statement.

It will be sent to the Governor’s desk for his signature.  

Medical organizations have long contended that unlimited malpractice awards would drive up the cost of care and reduce the number of providers in the state. Thursday’s vote on gradual increases was hailed as a landmark measure to avert that outcome.

“This bill will help to ensure health care providers can keep their doors open while also balancing the financial needs of patients with health care related injuries,” said Lisa Maas, executive director of Californians Allied for Patient Protection, which represents medical organizations opposed to the ballot initiative, in a statement.

If signed, starting Jan. 1, 2023, cases not involving a patient death will have a new limit of $350,000, with an increase over the next 10 years to $750,000 and a 2% annual adjustment for inflation after that. Meanwhile, cases involving a death will have an increased limit of $500,000 that will grow over the next 10 years to $1 million, with a 2% annual increase thereafter.

Under current law, a $250,000 cap only applies to non-economic damages and Californians who suffer from medical malpractice can recover as much as they need for medical bills and loss of income.

“The two sides of the ballot measure campaign have committed to putting patients first, to prioritizing the stability of affordable access to health care, and to set aside differences to do what’s right for all Californians,” Dr. Robert E. Wailes, president of the California Medical Association, said in a letter sent to members.

In the letter, Wailes said his organization is working with Gov. Gavin Newsom’s administration and the Legislature to turn this new arrangement into law. “Under the agreement, the initiative will be withdrawn from the ballot and this watershed agreement will preclude another costly fight.” 

In contrast, the ballot measure, known as the “Fairness for Injured Patients Act,” sought to increase the compensation cap for non-economic damages from $250,000 toabout $1.2 million. The measure was backed by families of injured patients, trial lawyers and the advocacy group Consumer Watchdog

The ballot measure would have allowed a judge to exceed that cap if a patient died or suffered a “catastrophic injury,” meaning an injury that left them permanently disabled or disfigured.

Rowley, principal funder of the measure, told CalMatters taking the legislative route through Assembly Bill 35 secures a cap increase for patients and their families. The legislation would allow for multiple caps — one for a medical institution and another for a provider, for example. That means that in a case not involving a death, a patient could potentially hold multiple parties liable and receive more than $350,000, Rowley said. 

“That’s a big change and that number is going to go up,” he said. 

Rowley said he is ready to pull the ballot measure as long as the bill is signed as is. Newsom has until the end of June to sign. 

The Medical Injury Compensation Reform Act, or MICRA, which first set a cap on malpractice payouts, was signed by Gov. Jerry Brown in 1975 during a special legislative session convened after the California Medical Association raised the alarm on skyrocketing malpractice premiums. At the time, Los Angeles doctors were told by insurers that their costs would increase five fold.

“This has been an issue since before I came to the Legislature,” said state Sen. Tom Umberg, one of the legislators carrying the bill. “I think MICRA needed adjustments some time ago…[but] it’s been difficult to achieve a compromise.”

In opposition to the ballot measure, a coalition of health providers argued that it would essentially have eliminated the cap and significantly increased the number of lawsuits filed in the state. They argued it would result in less resources for patient care and ultimately drive up the cost of health care. 

Medical malpractice costs account for approximately 1% of total health care spending in the state, according to a Legislative Analyst’s Office analysis of an early version of the ballot measure. Raising or removing the cap is likely to increase overall health care spending though an exact dollar amount is hard to determine, the analysis states.

What this means for patients and their families

Charles Johnson, chairperson of the campaign in support of the ballot measure, lost his wife, Kira Johnson, in 2016 during a scheduled C-section at Cedars Sinai Medical Center. He sued the hospital and has a pending case.

The new limits, if passed, wouldn’t apply to his case, but he said he took on this role so that other families could seek legal representation and accountability. 

“Lawyers told me time and time again that they couldn’t take my case because of these caps,” Johnson said. The $250,000 barely covers legal fees and families are often discouraged from going to court because they can’t afford it, he said. 

“Medical malpractice is expensive to try,” he said. “You’re going to spend upwards of $100,000 just to go to trial.” Most families only go to court if they have the resources or if they can get an attorney to take their case pro bono, he said.

If it becomes law, this agreement would grant families the opportunity for justice, he said. “The financial part is just one piece of this…there is no number that will bring my wife back,” he said. “For these families, it’s about justice.”

Johnson said striking a deal with the opposition and enacting changes through legislation is the best solution for families.

Carmen Balber, executive director of Consumer Watchdog, a supporter of the measure, said the bill will fundamentally change patients’ access to justice when they are harmed by medical negligence. 

“The reason it was on the ballot is because families are locked out of the courtroom; they have no access to accountability because of how low this cap is,” she said.

A long time coming

In 2014, a similar ballot measure to raise the caps on monetary awards was soundly defeated by a two-thirds vote. 

Fighting these measures at the ballot box is an expensive endeavor, particularly when they’re brought before voters time and time again. The proposed compromise would avoid another costly fight. Already, Rowley’s measure has generated $23.2 million in contributions, with a bulk of the funds — $21.9 million — raised by opposition groups.

In recent years, special interest groups have successfully pressured lawmakers into enacting reforms by threatening high-priced ballot battles. Last year, three measures — including a soda tax ban, an internet privacy expansion, and a lead paint liability limit — were pulled from the ballot after similar deals were reached.

The 2014 medical malpractice ballot measure generated more than $70 million in contributions, with opposition industry groups — including insurers and physicians groups — raising the bulk of the funds, while attorneys funded most of the support.

Attempts to reform the original malpractice law in the Legislature have also repeatedly failed, and constitutional challenges to the law have been rejected by the state appellate and supreme courts. Earlier this year, the state Supreme Court ruled that the liability cap also applies to physicians assistants practicing under the supervision of a doctor.

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Ana covers health policy and the COVID-19 pandemic. She joined CalMatters in 2020 after four years at Kaiser Health News. She started her reporting career at McClatchy’s Merced Sun-Star. Her work has...

Kristen Hwang reports on health care and policy for CalMatters. She is passionate about humanizing data-driven stories and examining the intersection of public health and social justice. Prior to joining...