The Medical Injury Compensation Reform Act (MICRA) of 1975 was a statute

Statute

A statute is a formal written enactment of a legislative authority that governs a state, city, or county. Typically, statutes command or prohibit something, or declare policy. The word is often used to distinguish law made by legislative bodies from case law, decided by courts, and regulations...

 enacted by the California Legislature in August 1975 (and signed into law by Governor Jerry Brown

Jerry Brown

Edmund Gerald "Jerry" Brown, Jr. is an American politician. Brown served as the 34th Governor of California , and is currently serving as the 39th California Governor...

 in September) which was intended to lower medical malpractice

Medical malpractice

Medical malpractice is professional negligence by act or omission by a health care provider in which the treatment provided falls below the accepted standard of practice in the medical community and causes injury or death to the patient, with most cases involving medical error. Standards and...

 liability insurance

Liability insurance

Liability insurance is a part of the general insurance system of risk financing to protect the purchaser from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy...

 premiums for healthcare providers in that state by decreasing their potential tort liability. MICRA's stated justification, in turn, was to keep healthcare providers as a whole financially solvent, thus lowering the cost of healthcare services and increasing their availability. Almost all of MICRA is still in effect and still part of California law

California law

California law consists of several levels, including constitutional, statutory, and regulatory law, as well as case law.-Constitutional law:...

.

Provisions

MICRA consists of the following parts:

• Damage cap - non-economic damages are limited to $250,000 (and this amount is not indexed for inflation).
• Attorney's fee
  Attorney's fee
  Attorney's fee is a chiefly United States term for compensation for legal services performed by an attorney for a client, in or out of court. It may be an hourly, flat-rate or contingent fee. Attorney fees are separate from fines, compensatory and punitive damages, and from court costs in a...
  
   cap - attorney fees that are taken from the amount of the settlement are limited.
• Time limits - shortened statute of limitations for actions against healthcare providers.
• Binding arbitration.
• Periodic payments - doctors are allowed to pay the award over time.

These are codified at a number of different locations in the California Codes

California Codes

The California Codes are 29 legal codes enacted by the California State Legislature, which together form the general statutory law of the state of California. Due to tradition and inertia, they have never been consolidated into a single unified code, unlike the United States Code or codifications...

: Business & Professions Code Section 6146, Civil Code Sections 3333.1 and 3333.2, and Code of Civil Procedure Section 667.7.

Results

Between 1985 and 1988, malpractice premiums rose 47 percent. After 1988, the insurance premiums in California experienced a decrease. It is contested as to whether this decrease was a result of Proposition 103. Proposition 103 enacted Section 1861.01 of the California Insurance Code, which explicitly required the rollback of insurance premiums by "at least 20%".

Influence

The perceived success of MICRA in helping California healthcare providers stay financially solvent in turn inspired similar tort reform initiatives in other states. A prominent example was Nevada's Question 3, which was enacted by the voters of that state in 2004 by a 60% majority. Like MICRA, Question 3 set a maximum schedule for attorney's fees, and capped noneconomic damages at a slightly higher number, $350,000. Question 3 was also known as the KODIN Initiative after its main sponsor, Keep Our Doctors In Nevada. KODIN promoted Question 3 by pointing to an alleged trend of Nevada doctors fleeing the state for states with lower malpractice premiums like California. To directly counter KODIN, the Nevada plaintiffs' bar put Questions 4 and 5 on the same ballot, and both 4 and 5 were defeated.