Page 43

medico news

Appeals court upholds constitutionality of MICRA’s $250,000 cap on noneconomic damages California’s 5th Appellate District Court recently upheld the constitutionality of our state’s landmark Medical Injury Compensation Reform Act (MICRA), which caps noneconomic damage awards at $250,000. This case, Stinnett v. Tam, is just the latest in many legal challenges to MICRA that have been funded by trial lawyer groups from across the country. The California Medical Association (CMA) filed a “friend of the court” brief and also participated in oral argument, telling the court that the broader goal of MICRA—to ensure access to care—is just as relevant today as it was in 1975. CMA noted that as recently as 2005, the Legislature declared that there was a “growing crisis” in physician supply, and that California needs to continue to attract and retain physicians rather than drive them away. CMA was joined in this case, through CMA’s Amicus Curiae Committee, by the California Hospital Association, the California Dental Association, and the American Medical Association. The original complaint, filed in 2007, concluded with a jury verdict awarding the plaintiff $148,302 for past economic loss, $1,242,093 for future economic loss, and $6,000,000 for noneconomic damages, also called “pain and suffering.” In a post-verdict motion, the defendant moved to reduce the noneconomic damages award pursuant to MICRA’s $250,000 cap. The plaintiff opposed the motion, arguing that MICRA is unconstitutional, because the medical professional liability insurance crisis of 1975 no longer

exists, thereby eliminating the rational basis that originally justified MICRA. The trial court disagreed and granted the defendant’s motion. The appeals court agreed with the lower court’s ruling. Today, MICRA is still working to restrain premium rates in California, while states without liability reform are seeing dramatically higher premiums. Because of MICRA, California has a system that is affordable, pays patients for their full economic and medical losses, and promotes patient safety and improved patient care. MICRA allows patients with justifiable medical negligence claims to receive the following forms of compensation: • Unlimited economic damages for past and future medical costs. • Unlimited damages for lost wages, lifetime earning potential, or any other economic losses. • Unlimited punitive damages. • Up to $250,000 for noneconomic damages (pain and suffering) MICRA’s $250,000 cap on noneconomic damages has proven to be an effective way of limiting meritless lawsuits and keeping health care costs lower, but has been targeted by the trial lawyers because it restricts the amount of money they can collect in attorney’s fees. MICRA includes a sliding pay scale to control attorney contingency fees, ensuring that more money goes to patients, not lawyers. (CMA Alert, September 19, 2011 issue)

Blue Cross seeking to settle overpayment refund requests; physicians encouraged to carefully review settlement language before signing As previously reported, the California Medical Association (CMA) has received a number of complaints from physicians that the Anthem Blue Cross Special Investigations Unit (SIU) is requesting refunds outside of the 365-day period allowed by California law. State law allows health plans to pursue recovery of any type of overpayment made to providers within 365 days of the date the claim was paid. For claims older than 365 days, plans can seek to recover overpayments only if the alleged overpayment was “caused in whole or in part by fraud or misrepresentation on the part of the provider.” CMA believes that Blue Cross is using an overly broad definition of “misrepresentation” to seek recoupment on claims older than one year. In June, CMA filed a formal complaint with the Department of Managed Health Care (DMHC) asking that it investigate these potential violations. DMHC subsequently referred CMA’s complaint to its Enforcement Division. CMA has received calls from physicians who report that they have

been contacted by Blue Cross SIU, offering to reduce overpayment amounts due if they agree to sign settlement agreements. CMA believes some of the recoupment requests that the SIU is trying to settle may be the same requests that are the subject of our complaint filed with DMHC. Physicians who are approached to sign any type of settlement agreement are strongly encouraged to ask for the offer in writing and to have an attorney review the settlement before signing. Often, these types of settlement agreements require that physicians waive and abandon their legal rights over the moneys at issue. To help physicians understand their rights and options when it comes to health plan refund requests, CMA has published a “Special Investigations Unit Audit Guide.” This document is available free to members in CMA’s online resource library at http://www.cmanet.org/ resource-library. (CMA Alert, September 19, 2011 issue) SEPTEMBER / OCTOBER 2011 | THE BULLETIN | 43

Profile for SCCMA/MCMS

2011 September/October  

2011 September/October  

Profile for 18621