Don’t let med-mal defendants use the ACA to gut medical damages

A medical damages roadmap that addresses the interplay between the ACA, MICRA and the collateral-source rule

Steven Heimberg
2015 November

The Patient Protection and Affordable Care Act (“the ACA”) became law in 2010 (42 U.S.C. § 18001 et seq.). Its “headline” provisions broadened health-care coverage by disallowing denials of coverage for preexisting conditions and abolishing lifetime limits on coverage. Its claims to affordability and availability came from several purchasing options through private and publically run marketplaces, while allegedly reducing coverage costs.

Unfortunately, medical-malpractice defendants quickly tried to use the ACA to take further advantage of an egregious provision of the Medical Injury Compensation Reform Act of 1975 (“MICRA”). (Civ. Code, § 3333.1 (“Section 3333.1”).) They sought to (1) exploit a provision allowing defendants to present evidence of collateral sources for certain medical benefits; and (2) argue that the ACA’s new and expanded coverages constitute admissible collateral sources under MICRA because they are allegedly mandated and universal.

The bulk of medical-malpractice recoveries are economic damages, often based solely on future medical costs, and noneconomic damages already unjustly capped. Defendants could easily strip a medical-malpractice case of practically all its value if not fought correctly, particularly where defendants mischaracterize case law, contradict MICRA’s explicit terms, and ignore its legislative intent. Defendants thus far have ignored the prospects for future coverage under the ACA and the unfair effects on plaintiffs of such evidence.

The following is a roadmap for defeating defendants’ attempts to introduce evidence of the ACA to reduce future damages. It addresses the interplay between the ACA, MICRA and the collateral-source rule, and the speculative nature of future ACA coverage. These efforts must be carefully undertaken and fully understood; otherwise, they pose grave consequences not only for each case but for the medical-malpractice plaintiffs’ bar.

MICRA’s limitation to the collateral-source rule likely does not apply to the ACA

One of MICRA’s key provisions – and the largest threat to economic damages – is a limitation on the collateral-source rule. (Section 3333.1.)

The collateral-source rule provides: “[I]f an injured party received some compensation for his injuries from a source wholly independent of the tortfeasor, such payments should not be deducted from the damages which the plaintiff otherwise would collect from the tortfeasor.” (Hrnjak v. Graymar, Inc. (1971) 4 Cal.3d. 725, 729.)

Defendants wrongly posit that every collateral source is admissible under MICRA. Section 3333.1 has numerous limitations that profoundly impact its application, including the type of collateral sources; their timing; and the effect of introducing the collateral sources.

Furthermore, admitting evidence of collateral sources outside of this exception is reversible error, even if the court issues a limiting instruction. (Hrnjak, supra, 4 Cal.3d at pp. 729 & 734.) And defendants have the burden of proving the collateral source is admissible.

Defendants have the burden of proving the ACA is a collateral source under MICRA

MICRA is an affirmative defense (Pressler v. Irvine Drugs, Inc. (1985) 169 Cal.App.3d 1244) that defendants almost always assert in their answers, including section 3333.1. “Except as otherwise provided by law, a party has the burden of proof as to each fact the existence or nonexistence of which is essential to the claim for relief or defense that he is asserting.” (Evid. Code, § 500.) Therefore, the defendant has the burden to establish that the ACA is within MICRA’s exception to the collateral-source rule.

Defendants’ burden dovetails nicely with the general law strongly enforcing the collateral-source rule. (Hrnjak, supra, 4 Cal.3d. at p. 729.) Utilizing the following roadmap, most courts will be reluctant to break new ground and find that defendants have met their burden.

MICRA offers only a limited abrogation of the collateral-source rule

MICRA does not make all collateral sources admissible in medical-malpractice actions; Section 3333.1 provides only a limited exception.

To qualify as an exception to the collateral-source rule, the funding source has to be within section 3333.1, which provides, in pertinent part, that a medical-malpractice defendant

may introduce evidence of any amount payable as a benefit to the plaintiff as a result of the personal injury pursuant to the United States Social Security Act, any state or federal income disability or worker’s compensation act, any health, sickness or income-disability insurance, accident insurance that provides health benefits or income-disability coverage, and any contract or agreement of any group, organization, partnership, or corporation to provide, pay for, or reimburse the cost of medical, hospital, dental, or other health care services.

(Section 3333.1 (emphasis added).)

Brown v. Stewart (1982) 129 Cal.App.3d 331 has controlled what qualifies as MICRA collateral sources nearly since MICRA’s inception. Brown is not consistent with the defendants’ ACA claims. It held that publically-financed entitlement programs and federal programs − both of which apply to the ACA – are outside the Section 3333.1(a) exception.

Brown set forth six reasons for excluding such programs: (1) payments would be made to the provider instead of the plaintiff (Brown, supra, 129 Cal.App.3d at p. 337); (2) the Legislature intended to exclude entitlement programs from MICRA (id. at p. 338); (3) payments would constitute an impermissible, unconstitutional gift of public funds because they bail out the health-care industry with no direct public benefit (Id. at p. 341); (4) the Legislature intended to exclude sources with reimbursement rights (Id. at p. 342); (5) treating payments that permit recovery by a federal source as MICRA collateral sources would violate federal supremacy (Ibid.); and (6) Medi-Cal payments and sources that draw from them are excluded from MICRA.

Payments are made to providers, not patients

ACA plans, like nearly all public health plans, make payments to providers rather than patients. (See DeMichele, et. al, How Does Health Insurance Work? (November 15, 2014) <> [as of August 24, 2015].) Under Brown, insurance payments not “payable to the plaintiff” are outside Section 3333.1(a)’s provisions. (Brown, supra, 129 Cal.App.3d at p. 337.) Brown rejected prefatory language in MICRA reducing damages “by any benefits to which the patient is entitled by reason of the loss.” It allowed only benefits payable directly to the plaintiff. (Id. at p. 338 (italics in the original).) This reasoning applies to the ACA because those benefits are paid directly to providers instead of plaintiffs.

ACA benefits are entitlements excluded under MICRA

Brown concluded the Legislature intended to exclude entitlement programs from Section 3333.1(a). (Brown, supra, 129 Cal.App.3d at p. 338.) The ACA can be considered an entitlement program under the Brown analysis. (See Id. at pp. 337-38.) It is a federally-mandated government-assistance scheme (see 26 U.S.C. § 5000A and King v. Burwell (2015) 135 S.Ct. 2840); it intends to extend health coverage to all Americans in need (see, e.g., 42 U.S.C. §§ 18001-18003); it is administered by state and federal government agencies (see, e.g., 45 C.F.R. § 144.101, et seq. and 45 C.F.R. § 150.101, et seq.); and payments are made directly to providers, not patients.

Including the ACA within the MICRA limitation would constitute an impermissible gift of public funds

Brown held that “bail[ing] out doctors and other health care providers . . . in the absence of a direct public benefit, [is] . . . an impermissible gift of public funds” in violation of the California Constitution. (Brown, supra, 129 Cal.App.3d at p. 342.) Arambula v. Wells (1999) 72 Cal.App.4th 1006 similarly prohibited tortfeasors from benefitting from charitable donations to an injured plaintiff. It ruled that the tortfeasor may not “hijack” an offset for these donations to “gain a windfall.” (Id. at p. 1013.)

Most medical-malpractice plaintiffs, and certainly the severely injured, will be unable to work or obtain ACA insurance through employers. The bleak choice for such plaintiffs is public funding to purchase an ACA plan. Defendants are not entitled to hijack these sources to bail out their clients and gain a windfall.

Defendants frequently argue certain legislative aims of MICRA, particularly the risk of doctors leaving the state or practicing without insurance and increased malpractice premiums. (See Fein v. Permanente Medical Group (1985) 38 Cal.3d 137, 158-59.) Arguing that MICRA was not intended to bail out the health-care industry through an unconstitutional gift of public funds usually overcomes these arguments.

The MICRA limitation excludes any source that can seek reimbursement

MICRA’s terms exclude government-funded ACA policies. Section 3333.1(b) bars collateral sources from seeking reimbursement from the patient or tortfeasor, stating that “no source of [excepted] collateral benefits . . . shall recover any amount against the plaintiff.” ACA policies are highly likely to be government-funded, including through Medi-Cal and Medicare and are government-based entitlement programs. Those plans likely have subrogation or lien rights, excluding them from Section 3333.1(b).

By analogy, any recovery for treatment under a California Children’s Services   program is subject to reimbursement. (Health & Saf. Code, § 123982.) Regional Centers, which are publicly funded by the California Department of Developmental Services, also have lien rights against any recovery. (Welf. & Inst. Code, § 4659.10.)

Where there is a recoupment right, permitting ACA evidence would violate federal supremacy

Admitting ACA payments subject to recovery by a federal source as collateral sources under Section 3333.1 would violate federal supremacy principles. The Medi-Cal and Medicare statutes require states to seek reimbursement from medical- malpractice recoveries. (42 U.S.C. §§ 1396a(a)(25) & 1395y(b)(2)(B); Welf. & Inst. Code, § 14124.71.) Most other government sources do as well, such as California Children’s Services (Health & Saf. Code, § 123982) and Regional Centers (Welf. & Inst. Code, § 4659.10).

The statutory recoupment rights of any ACA policy funded by a government source would conflict with Section 3333.1, which prevents a collateral source from recovering against a plaintiff. (See Hernandez v. Cal. Hosp. Med. Ctr. (2000) 78 Cal.App.4th 498 (treating Medi-Cal payments as a collateral source “would create a direct conflict with statutory recoupment sections”).) They are inadmissible under Section 3333.1.

Medi-Cal payments and sources that draw from them are outside of MICRA

On the bases above, Brown completely eliminated Medi-Cal from the MICRA exception to the collateral-source rule and strongly suggested that Medicare was outside of MICRA. It also eliminated any sources that draw from them. (Brown, supra, 129 Cal.App.3d at p. 337.) This exclusion and the reasons for it appear to apply to the ACA.

ACA policies are highly likely to be government-funded. There is extensive governmental involvement with ACA plans. Section II(A) of the ACA provides for improved access to Medicaid/Medi-Cal. This is being implemented; the 2014/ 2015 California fiscal budget set aside $16.9 billion to cover 3.7 million individuals under Medi-Cal relating to the implementation of the ACA, with the federal government funding the costs of 2.3 million of those recipients. (Governor’s budget summary (Jan. 9, 2015) Cal. Leg. (2015-16 Reg. Sess.) p. 26.) The federal government and states that have elected to run their own exchanges, including California, share responsibility for administering the ACA. The bulk of the implementation has fallen to the Centers for Medicare and Medicaid Services, which supervises states’ ACA exchanges. (See, e.g., 45 C.F.R. § 144.101, et seq.; 45 C.F.R. § 150.101, et seq.; and Lee, Here’s Everything You Need to Know about Obamacare’s Error-Plagued Websites, The Washington Post (October 9, 2013).)

Even if some past ACA benefits passed MICRA scrutiny, all future ACA benefits are beyond MICRA’s collateral-source rule exception

The explicit terms of Section 3333.1, and its legislative history, strongly suggest that future collateral sources are beyond MICRA’s exception to the collateral-source rule. Thus, any future care assumed to be provided by the ACA remains inadmissible under the collateral-source rule, regardless of the court’s acceptance of the arguments above.

Statutory interpretation supports exclusion

Section 3333.1(a) states, in relevant part: “[T]he defendant may introduce evidence of any amount payable as a benefit to the plaintiff . . . . [If that occurs,] the plaintiff may introduce evidence of any amount which the plaintiff has paid or contributed to secure his right to any insurance benefits.” (Emphasis added.) The issue is what the term “payable” to the plaintiff means.

Defendants will argue it means not only amounts already paid or due to the plaintiff but also amounts that might be paid in the future. That is nonsensical. Something that has not yet occurred is not “payable” the same way that a “receivable” must have already been accrued. This notion is consistent with the rest of the provision, which establishes a “tit-for-tat” evidentiary plan: defendants can offer this (what is “payable” in benefits), and if they do, in fairness, plaintiffs can offer that (what plaintiff “has paid or contributed” towards premiums). This symmetry is wholly destroyed if a defendant can submit a lifetime of collateral benefits offset only by plaintiff’s past contributions, which would obviate the offset. A tortfeasor is not allowed to hijack collateral-source funding a plaintiff receives to gain a windfall through an offset for those sources. Otherwise, the MICRA symmetry the Legislature intended would be destroyed.

Basic principles of statutory construction further support this as the proper interpretation. If the exception to the collateral-source rule was interpreted to include evidence of future collateral payments, plaintiffs’ contributions would be rendered meaningless as to future damages. Logically, plaintiffs never would be able to introduce evidence of amounts they “have paid or contributed” in the future because they will not have made such payments or contributions as of the time of trial.

The Legislature never intended such meaningless or inoperative language. “Well-established canons of statutory construction preclude a construction which renders a part of a statute meaningless or inoperative.” (Manufacturers Life Ins. Co. v. Sup. Ct. (1995) 10 Cal.4th 257, 274) Courts must not adopt a statutory interpretation that reduces statutory language to mere surplusage. (People v Knight (2004) 121 Cal.App.4th 1568, 1575-56.)

The Legislature intended to exclude future medicals

Section 3333.1’s legislative history overwhelmingly demonstrates that all future ACA benefits are excluded. Before MICRA’s 1975 enactment, the Legislature considered seven different bills addressing whether a defendant could claim a future collateral source on the mere possibility that it might pay plaintiff’s future medical expenses. The first six bills all failed, and all had one thing in common that was not present in the seventh bill, which ultimately passed – a provision that would have allowed health-care-provider defendants to introduce evidence of possible future collateral sources.

The identical language in each failed bill was as follows:

The purpose of this section is to eliminate duplicate payment or recovery for the cost of medical care in actions for personal injuries against health care providers or health care institutions when such care has already been or will be provided by a collateral source.

(Emphasis added.)

The bill that passed dropped the language supporting future payment. (See Senate Bill No. 679, introduced April 2, 1975; Assembly Bill No. 1943, introduced April 17, 1975; Assembly Bill No. 1997, introduced April 21, 1975; Assembly Bill No. 1, introduced May 19, 1975 and ultimately passed on September 23, 1975; Assembly Bill No. 21, introduced May 28, 1975; Assembly Bill No. 22, introduced May 28, 1975; and Assembly Bill No. 27, introduced June 2, 1975.)

Bill Digests provide that this was no accidental oversight; instead, the Legislature intentionally rejected future collateral sources from MICRA. In the May 15, 1975 and June 10, 1975 Bill Digests, the question was raised whether the collateral-source rule should extend to evidence of future collateral sources: “The bill provides that its purpose is to prevent double recovery for the cost of medical care against health care providers “when such care has already been or will be provided by a collateral source. . . . Wouldn’t it be preferable to permit an offset only when the plaintiff has actually received payment?” (Underline in original; italics added.) Thereafter, the offending language was deleted.

Whether the ACA will provide sufficient coverage is completely speculative

Defense arguments that the ACA will cover plaintiff’s future medical costs are speculative on four fronts: (1) whether the ACA will exist in the future; (2) whether the funding source for future medical costs will fit the MICRA collateral source exception; (3) what costs the ACA will cover; and (4) the amount of offsets for the cost of obtaining coverage. “[F]actors which are speculative, remote or conjectural . . . ha[ve] no evidentiary value . . . .” (Pacific Gas & Elec. Co. v. Zuckerman (1987) 189 Cal.App.3d 1113, 1134.) Further, the jury “must not speculate or guess in awarding damages.” (Piscitelli v. Friedenberg (2001) 87 Cal.App.4th 953, 989; CACI No. 3900.)

Future coverage under the ACA is completely speculative. Congressional Republicans have voted to repeal it, and are still trying. The ACA has withstood two attacks in the U.S. Supreme Court (Nat’l Federation of Independent Business v. Sebelius (2012) 132 S.Ct. 2566; King v. Burwell (2015) 135 S.Ct. 2840) and numerous legal challenges to the ACA are undoubtedly forthcoming. It is uncertain whether the ACA will exist in the future, for how long, or in what form.

Moreover, it is total speculation as to the source of any future ACA coverage and whether that source would be beyond the MICRA exception. If your client must rely on public funding under the ACA, such as Medicare or Medi-Cal, that funding should not be an admissible collateral source. Severely injured plaintiffs are usually unemployed and are more likely to rely on public funds under the ACA. Further, the purchase of insurance cannot be compelled under the ACA. (See 26 U.S.C. § 5000A.)

Whether a particular ACA policy will cover a plaintiff’s specific future medical needs is speculative

Today, ACA policies are required only to include “essential health benefits” (“EHBs”); these are variable, extremely limited, and exclude much of the care that severely injured plaintiffs require, like attendant care. In California, long-term, custodial and nursing-home care are not currently EHBs and therefore not mandated in ACA plans. Similar coverage limitations exist for home health services and skilled nursing facilities. (California EHB Benchmark Plan, Centers for Medicare & Medicaid Services <https:// Benchmark-Summary.pdf > [as of August 24, 2015].) The overwhelming Republican opposition to the ACA makes it very uncertain whether the few big-ticket, chronic-care items currently covered will continue to be covered.

Whether ACA coverage will meet a plaintiff’s specific future needs is speculative

Whether future ACA policies will cover care by competent, much less referred, providers is dicey. The better treaters – those any plaintiff would reasonably desire – are likely to be unavailable. Networks under ACA policies already are limited, and superior facilities and providers are opting out. Several leading hospitals across the U.S. refuse to participate in ACA plans. (Richards, Top Hospitals Opt Out of Obamacare (Oct. 30, 2013) U.S. News & World Report.) Twenty percent of U.S. physicians already refuse to see patients covered by ACA plans. (Medical Group Management Association, ACA Exchange Implementation Report, May 2014.)

ACA plans offer 34 percent fewer providers than the average non-ACA commercial plans. (Exchange Plans Include 34 Percent Fewer Providers than the Average for Commercial Plans (July 15, 2015) Avalere Health <> [as of August 24, 2015].) Almost half of the doctors in one survey said they were not allowed to provide allegedly covered services to ACA patients. (Ibid.) There is often a crazy quilt of covered and uncovered services, forcing the use of unavailable out-of-network providers. For example, a surgeon may be in-network while the anesthesiologist and pathologists are out-of-network. (Herman, Network Squeeze: Controversies Continue Over Narrow Health Plans (March 28, 2015) Modern Healthcare.)

Plaintiffs may not be able to choose an ACA plan providing the necessary coverage. Disclosure requirements for ACA plans are so limited that consumers are often unware of the limitations when enrolling. In 2014, California consumers filed class-action lawsuits against Anthem and Cigna ACA plans, alleging fraud and false advertising for deceiving them about which hospitals and doctors participated in their networks. (Davidson v. Cigna 2014 WL 4980307 (LASC No. BC558566); Fesler v. Blue Cross 2014 WL 3361745 (LASC No. BC550739.) It is unlikely that a severely injured plaintiff will be able to traverse this morass.

Do not let the court decide vague claims of whether future ACA coverage is speculative. We have been successful presenting to the court a detailed argument specific to our clients’ more costly needs, and demonstrating why ACA evidence is speculative as to those needs.

Even if an existing ACA policy covers plaintiff’s future needs, its cost over time remains speculative

Civil Code section 3333.1(a) allows “evidence of any amount which the plaintiff has paid or contributed to secure his right to any insurance benefit concerning which the defendant has introduced evidence.” Even if the court were to extend this to future benefits, it would be impossible to present meaningful evidence of how much plaintiffs would pay for future ACA plans.

Premiums for ACA plans are unpredictable and escalating; their future cost is sheer guesswork. The court would need to decide, on a line-by-line basis, whether each future care item would be covered under the ACA and to what extent, requiring extensive analysis and testimony. This analysis would need to be presented numerous times because ACA plan costs differ among states. Such analysis would also require unfounded assumptions about which ACA insurers will continue to offer which plans in the future.

The burdensome and conjectural nature of such evidence should be excluded under Evidence Code section 352, as a waste of judicial resources and as prejudicing plaintiff’s ability to present meaningful evidence that counters defendant’s evidence of potential ACA coverage.

Allowing references to the ACA is patently unfair to injured victims

Forcing an ACA policy on an injured party, and thereby relieving a defendant of its burden to pay for that coverage, would be unfair for numerous reasons. The proffered evidence goes far beyond merely lowering costs to the defendant with no detriment to the plaintiff, as defendants typically argue. Instead, the plaintiff will be required to purchase limited coverage, which likely will not meet his needs and which will escalate in costs, from a static award already reduced by evidence of that very coverage.

ACA plans thus should be excluded because (1) the plaintiff will be forced unfairly to bear all risks of ACA coverage that is unlikely to meet his needs; (2) the reduced award will not fund coverage for those needs; (3) this occurs only so the defendant receives an unfair windfall; (4) defendants misapply the mitigation of damages doctrine; and (5) imposing an ACA policy would restrict unconstitutionally the plaintiff’s right to travel.

Plaintiff will face a reduction in quality care

Plaintiffs have the right to be made whole through jury awards. (Wisper Corp. v. California Commerce Bank (1996) 49 Cal.App.4th 948, 964.) Compelling an ACA policy in lieu of future damages does not fulfill this basic requirement. The ACA will limit the choice of providers and quality of care, thereby limiting the plaintiff’s ability to meet therapeutic goals, only so the defendant can save money.

The award will likely be inadequate to purchase needed care

It is unfair to assume that any award will remain sufficient to purchase a future ACA policy. Control of insurance costs under the ACA is practically nonexistent (see Ins. Code, §§ 10181-10181.13), and those costs could increase dramatically while the plaintiff’s recovery remains static.

In California, ACA rate increases reached 22.19 percent from August 2014 to August 2015. (Rate Review, Centers for Medicare & Medicaid Services <> [as of August 24, 2015].) A recent analysis projected 2016 premium increases as high as 19 percent in ten states and D.C. (Cox, et al., Analysis of 2016 Premium Changes and Insurer Participation in the Affordable Care Act’s Health Insurance Marketplaces (June 24, 2015) Henry J. Kaiser Family Foundation <> (as  of August 24, 2015).)

Future premium changes are unpredictable but would pale against any discount rates offered by defense economists. Forcing an ACA policy would minimize the benefits with no control over these escalating costs. Yet, defendants would require the plaintiff to purchase ACA coverage to receive the needed care. (If they simply cannot afford the care, plaintiffs would be relegated to Medi-Cal, which itself should preclude defendants’ use of Section 3333.1.)

If ACA “coverage” is permitted as evidence, the jury will almost certainly dock the plaintiff’s recovery. Defendants never understate what the ACA will cover, instead arguing that all care will be covered. Future premiums will be almost impossible to compute, and the jury likely will disregard them if not excluded. Most juries would not regard the anticipated large inflation increases because ACA insurers will likely receive any requested rate increase, no matter how ludicrous. (See Ins. Code, §§ 10181-10181.13 (failing to grant authority to California Department of Insurance to deny rate increases, no matter how large) and Rate Review, supra.)

Most ACA funding sources, governmental or private, likely will recover their costs from settlement proceeds for past care. Therefore, if evidence of the ACA is permitted, it is highly likely that plaintiff’s award will be reduced, and the funding source will recover against the plaintiff. MICRA was not intended to preclude necessary care or to limit defendants’ exposure at plaintiffs’ expense. Nor was a defendant to receive any disproportionate benefit at all.

Reductions in care and funding for plaintiffs result in an impermissible windfall for defendants

These effects of ACA evidence violate fundamental fairness principles, the collateral-source rule, and MICRA. The collateral-source rule’s entire premise is that any windfall should go to the wronged victim, not to the tortfeasor. (See Helfend v. Southern Cal. Rapid Transit Dist. (1970) 2 Cal.3d 1, 11; Arambula, supra, 72 Cal.App.4th at p. 1009.) The MICRA abrogation of the collateral-source rule is premised entirely on the notion that it mitigates a windfall to plaintiffs, allowing them only to recover the actual costs of the care required. (See Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541.) MICRA was not intended to provide a windfall to defendants.

MICRA’s periodic-payment section (Code Civ. Proc., § 667.7) and its legislative history exemplify this legislative intent. MICRA permits periodic (installment) payments of verdicts. Section 667.7’s express purpose is to balance the equities, mandating that plaintiff’s compensation “meet[s] the needs of an injured plaintiff . . . for whatever period is necessary. . . .” (Id., subd. (f) (italics added).) Any judgment monies remaining unpaid at a plaintiff’s death revert to defendants. (Id., subd. (d).) The Legislature authorized periodic payment to “prevent windfalls to non-dependent heirs.” (Keene, California’s Medical Malpractice Crisis, A Legislator’s Guide to the Medical Malpractice Issue (Geo. U. and Nat. Conf. of State Legs. 1976) p. 31.)

Extensive discussion of MICRA’s legislative aims and analogous theories of excluding harmful evidence are beyond this article’s scope; however, MICRA’s clear legislative purpose is to strike a balance that avoids windfalls to either side. Admitting ACA evidence would require plaintiffs to assume the risks of all the ACA’s speculative aspects, which is unfair and disproportionate considering the likely windfall to defendants.

Defendants misapply the mitigation-of-damages doctrine

Defendants’ ACA motions misconstrue the mitigation-of-damages doctrine, arguing that plaintiffs must mitigate by obtaining the allegedly available ACA coverage. This is flatly wrong in several respects.

First, plaintiffs, by statute, cannot be compelled to purchase ACA policies (26 U.S.C. § 5000A), so such “mitigation” is prohibited by the very statute defendants seek to enforce. Secondly, the argument wrongly assumes availability of care and coverage. Perhaps most importantly, defendants simply misstate the doctrine.

“The rule of mitigation of damages has no application where its effect would be to require the innocent party to sacrifice and surrender important and valuable rights.” (Valle de Oro Bank v. Gamboa (1994) 26 Cal.App.4th 1686, 1691.) The doctrine only requires a plaintiff to make a reasonable choice among care options, not to sacrifice any care so defendant saves money. (See Green v. Smith (1968) 261 Cal.App. 392, 396-97.) Forcing a plaintiff to rely on an ACA policy will greatly restrict care to second-level providers and other limited benefits under each particular policy.

Imposing ACA coverage would restrict unconstitutionally the plaintiff’s right to travel

In Shapiro v. Thompson (1969) 394 U.S. 618, the U.S. Supreme Court held, in the context of a plaintiff receiving benefits, that: (1) all citizens are free to travel, without inhibition by statute, throughout the country; (2) this constitutional right of interstate travel is “fundamental;” and (3) without a compelling state interest, no state may act in a manner that restricts this right. (Id. at pp. 629, 637 & 643-44.)

ACA benefits vary dramatically from state to state. (See, e.g., National Conference of State Legislatures, “State Health Insurance Mandates and the ACA Essential Benefits Provisions.) Any evidence of ACA benefits pertains only to a particular state. To continue to receive this coverage, the plaintiff would be required to forever reside where those benefits are available, forcing the plaintiff to live only where the necessary ACA benefits are available.


The ACA is still in flux. If not repealed, its precise effects in medical-malpractice litigation are still uncertain. What is clear is that the ACA has opened the door for the defense to attempt to demolish economic damages in a field where noneconomic damages are already woefully limited. This article provides a general roadmap of arguments and approaches to combat these assaults at the trial level. Although it is not exhaustive, and details of each individual plaintiff’s needs must be considered and presented carefully, following this approach should help salvage an already limited recovery and provide your client with better future care.

Steven Heimberg Steven Heimberg

Steven Heimberg M.D., Attorney at Law is both a physician and a personal injury attorney. The founding partner of Heimberg Barr, LLP, he has practiced law for more than 25 years, earning remarkable results for his clients including the highest medical-malpractice verdict in California history at the time of the award. He is a longtime board member of CAOC and Emeritus board member of CAALA.

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