MICRA Gets a New Cap

MICRA Gets a New Cap

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I started practicing law in 1992. MICRA sucked then, and it still sucks.

Like many of you, I’ve advocated for change. I’ve signed petitions. I’ve lobbied in Sacramento. And, of course, I’ve written more than a few checks to help support the effort.

I honestly thought I’d be long retired before we saw any meaningful reform. I was wrong. Are the changes perfect? No. But in many respects, they’re game changers. To those who got this done: thank you. Much faith is restored.

With my practice focused on lien reduction and resolution, here are some initial thoughts on how the recent MICRA reforms will impact lien-related issues in the medical malpractice space.

Medi-Cal

Medi-Cal coverage falls outside MICRA’s problematic application of the collateral source rule. See Civil Code § 3333.1; Brown v. Stewart (1982) 129 Cal.App.3d 331. As a result, past Medi-Cal medical specials are treated similarly to those in other personal injury cases.

Correspondingly, when dealing with liens from the Department of Health Care Services, plaintiffs have been entitled to the protections of equitable apportionment under Welfare & Institutions Code § 14124.76 and Arkansas Department of Health and Human Services v. Ahlborn, 126 S. Ct. 1752 (2006).

However, evidencing the gross value of a plaintiff’s damages for purposes of applying Ahlborn principles has been constrained by the longstanding $250,000 general damages cap. See Martinez v. DHCS, 19 Cal.App.5th 370 (Cal. Ct. App. 2017). DHCS has also asserted the right to an offset against that gross value for anticipated future medicals it might cover. See Aguilera v. Loma Linda University Medical Center, 235 Cal. App. 4th 821 (2015). The result? Medi-Cal recipients in med-mal cases often end up worse off than victims of other personal injury torts.

So What Changes?

With the recent reforms to MICRA, plaintiffs in medical malpractice cases now have a stronger foundation for seeking meaningful reductions of Medi-Cal liens.

• The increased general damages caps—particularly in wrongful death cases—mean plaintiffs can show higher gross case values.
• The cumulative cap structure allows separate caps per category of defendant (e.g., one cap for individual providers, another for institutions, and another for third-party institutions). This adds further value.
• Many medical malpractice claims inherently involve wrongful death—either because the patient passes away before or during the litigation, or because the defense insists on including prospective wrongful death claims in a global settlement. With higher general damages, the economic viability of the estate’s claim increases, improving negotiation leverage and lien resolution opportunities.

The value of survival claims also gets a boost due to the revisions to C.C.P. § 377.34, which now allows recovery of the decedent’s general damages from the date of injury until the date of death.

Bigger Claims, Bigger Complications

Of course, with greater value in survival actions comes increased complexity. Evaluating and balancing estate versus wrongful death claims—particularly when there are overlapping beneficiaries—requires a nuanced understanding of how liens apply to each.

More economically viable survival claims will likely trigger more DHCS lien activity, and understanding how lien law intersects with these new MICRA structures is now more important than ever.

Explore More Resources with Lien Project Network

For a deeper dive into lien resolution strategies, settlement planning, and reimbursement challenges, explore our educational modules. Lien Project Network serves as a trusted resource for plaintiff attorneys, providing insights on financial planning, public benefits, and structured settlements in the context of lien management.

Need Assistance? Work With The Lien Project, PC

If you need expert legal assistance in navigating lien resolution, reimbursement claims, or settlement planning, our team at The Lien Project, PC is ready to help. As an LPN member, you earn credits that can be applied toward lien reduction and resolution services provided by The Lien Project, PC, allowing you to offset up to $900 per year. Your investment in continuing education through Lien Project Network not only enhances your lien resolution skills but also reduces the cost of engaging legal experts when needed.

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