Placeholder MICRA Reform Bill Gets Tepid Response

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Senate President Introduces Placeholder Bill, But Both Sides Gear Up For Initiative

Democrats in Sacramento have strong ties to both trial lawyers and the medical industry. But even efforts by Senate President Pro Tem Darrell Steinberg may not avert an upcoming campaign fight over medical malpractice suit payouts.

Steinberg on Friday introduced SB 1429, a placeholder bill that currently serves as little more than a foot in the door. It states that "It is the intent of the Legislature to bring interested parties together" to negotiate over a law capping malpractice damages. Submitted just before this year's legislative deadline, the bill could be amended later to carry more substantial changes.

Even so, neither side sounds optimistic.

"I think the arrogance of the medical establishment is likely to make it believe that it's above having to concede a single inch," said Jamie Court, head of advocacy group Consumer Watchdog. Court's group, other consumer advocates and plaintiffs lawyers want to increase the current, $250,000 capy on non-economic medical malpractice damages to $1 million.

Jim Deboo, a campaign manager who represents health care organizations and others who oppose the increase, said Steinberg's placeholder bill "doesn't alter the dynamics of the situation."

"In the current health care environment, any proposal certain to cause more lawsuits, increase costs, and reduce access is simply a nonstarter," he said.

Mark Hedlund, communications director for Steinberg, said the senator is "hoping to push [a negotiation] process along." Steinberg has stated repeatedly that he's sympathetic to trial lawyers' main grievance in the matter: that the $250,000 cap on non-economic malpractice damages, enshrined in the 1975 Medical Injury Compensation Reform Act, or MICRA, should be adjusted for inflation.

"Thirty-eight years at $250,000 without an increase? That doesn't make sense to me," Steinberg said at a Jan. 15 press conference.

Trial lawyers sought a deal with the medical industry in 2013 to boost the cap, but the effort was unsuccessful. So trial lawyers turned to Plan B, a ballot initiative seeking to raise the cap to $1 million.

They included a provision that would impose random drug tests on hospital doctors, a safety measure also meant to pressure the medical industry into coming to the table. The initiative would also require doctors use an existing database to prevent patients shopping around for doctors who would prescribe them unnecessary drugs.

Among those who are part of the reform effort are Consumer Attorneys of California, a trial lawyer lobby; Consumer Watchdog; and wealthy techonology entrepreneur Bob Pack, whose children were killed by driver on medication obtained through doctor-shopping. The group says it has the 830,000-plus signatures it needs to get on the ballot.

Brian Kabateck, last year's CAOC president who is heading up the trial lawyers' part of the campaign, said Steinberg's bill was a welcome sign. But after the lack of movemnet last year, he said, he isn't counting on a legislative deal.

"We've always been supportive of a legislative solution to the MICRA problem, and the idea is, at least there's a vehicle there now if a del can be made," he said.

Nevertheless, he said he wasn't sure that a deal could be struck, and meanwhile, "we have to turn in our signatures by March 24."

A legislative deal would have to be complete for the group to decide not to file the signatures, he added. Simply beginning conversations about reform wouldn't be enough to deter a ballot fight.

If the initiative does go on the ballot, the medical industry is likely to outspend MICRA reform advocates. Late last year, the industy said it had already borrowed upward of $31 million for a campaign to defeat the measure.

Kabateck and Court, however, say public sympathy is on their side.

"They're going to have to outspend us eight to one," Kabateck said, "and we'll still beat them."

The medical industry contends that public concern over healht care reform will mean voters won't want to risk increasing lawsuits that could drive up costs for patients.

Jay Angoff, a partner with Mehri & Skalet, told the Daily Journal in October that California medical malpractice insurers are so profitable that even with a MICRA cap increase, they wouldn't be able to justify a rate increase. Angoff is a former Missouri insurance commissioner and previous director of the Health and Human Services Office of Consumer Information and Insurance Oversight.

But Bill Hmm, a former head of the nonpartisan state Legislative Analyst's Office, said the insurance industry's profitability is volatile, making future rate increases hard to predict.

Hamm, who in 2008 contributed to a report that opposed raising the MICRA cap, also argued that increases lawsuits would cause doctors to become more risk-averse.

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