What California doctors need to know about the recent medical malpractice legislation changes in California:
On May 13th, Assembly Bill 35 passed unanimously in the California State Assembly and is on the governor’s desk for signature. This bill is an update to the Medical Injury Compensation Reform Act (MICRA) and will cause the “Fairness for Injured Patients Act” (FIPA) initiative to be withdrawn from this November’s ballot.
Effective January 1, 2023, the limit on non-economic damages (currently $250,000) will be increased by $40,000. The limitations will increase by that amount each January for ten years. Starting January 1, 2034, the limit will see inflation increases of 2% annually. This is the first time the cap has been adjusted since 1975.
However, this legislation has put an end to FIPA appearing on the November ballot.
FIPA would have adjusted the cap for inflation since the cap was established in 1975, abolished the option of periodic payments, required reimbursement of attorneys fees for successful plaintiffs without a cap, extended the statute of limitations, allowed for double recovery of medical damages, removed limits on attorney’s contingency fees, and would have been retroactive. FIPA could have led to an 80-100% increase in medical liability insurance rates.
The passage of AB 35, greatly decreases the chance of a rate increase in California for 2022 or 2023. The Doctors Company, the nation’s largest physician-owned medical malpractice insurer, has reported that they do not anticipate making any changes to their California rate filing or California specialty-specific base rates for 2022 or 2023. While rates will eventually need to up updated, they should be gradual and not nearly as significant as if FIPA had passed.
Have other questions about California medical malpractice insurance? We can help! Check out our California resource page for doctors or call us at 1-800-969-1339.