California tort reform endangered: Court may void group protection

CMA fears that physicians could face another liability insurance crisis if the trial court decision is allowed to stand.

By Tanya Albert, AMNews staff. June 24, 2002.

Physicians nationwide look to California's well-established tort reform law as one of the best examples of what's necessary to keep medical liability insurance rates stable. But leaders of the state's organized medicine groups fear that two rulings at the trial court level could put a chink in the armor the law has offered physicians for nearly three decades.

The $250,000 cap on noneconomic damages and other limits that the Medical Injury Compensation Reform Act -- commonly known as MICRA -- offers to physicians sued for malpractice has traditionally shielded lawfully organized physician groups from large pain and suffering jury awards.

MICRA is often cited as the reason why California physicians haven't experienced the spike in medical liability rates that physicians in West Virginia, Nevada, Pennsylvania and other states without tort reform have experienced in the past year.

But recently, trial courts in Orange County and San Francisco said two physician partnerships are not the "health care providers" that MICRA was designed to protect. Both cases are headed to appellate court.

The California Medical Assn. says the decision allows medical corporations, physician partnerships and other groups that physicians form under state laws to be held responsible for more than the $250,000 limit MICRA places on noneconomic damages. Also, it could jeopardize MICRA's limit on attorney fees, shorter statutes of limitations and other provisions that traditionally have applied to physician groups. [...]