A small minority of doctors account for most malpractice payments

By the time neurosurgeon Mark Erasmus lost his New Mexico medical license in 2024, he had racked up $19 million in medical malpractice payments to settle 26 patient claims dating to 2001.

An attorney who has sued Erasmus on behalf of four patients called Erasmus a "poster child" for a small number of New Mexico doctors who rack up a large share of the state's medical malpractice payments.

"We see the same people over and over," said Lisa Curtis, an Albuquerque attorney who specializes in medical malpractice cases.

By several measures, New Mexico has one of the highest rates of malpractice payments in the nation.

But only a small minority of New Mexico physicians are responsible for most of those malpractice payments, according to an analysis of the National Practitioner Data Bank, a federal repository of data about malpractice payments and physician disciplinary actions.

While reported malpractice payments have soared, spiking to more than $68 million in 2024, the number of disciplinary actions against physicians has declined in the same time period.

Medical malpractice and state laws permitting lawsuits for victims have become a major political issue in the past several years at the New Mexico Legislature. Lawmakers recently heard testimony from Robert Oshel, a former associate director of the National Practitioner Data Bank, who performed an analysis of more than two decades of data.

"It's pretty clear New Mexico has a medical malpractice problem," Oshel told lawmakers in October. "The problem, though, is malpractice itself, not payments."

New Mexico juries in recent years have awarded hefty damages to patients who have sued after being partially paralyzed or having sustained loss of bodily functions, or who have lost newborns at birth because of negligence. Most often those judgments have been appealed or settled for lower amounts out of court and the amounts paid aren't made public.

Oshel's analysis found that the total amount of money New Mexico paid out for medical malpractice has nearly doubled since 2022 to a record $68.5 million in 2024. 

Only two states — New Jersey and Pennsylvania — had larger mean malpractice payment amounts per physician than New Mexico in 2024. Also that year, New Mexico had 4.46 malpractice incidents per 100,000 people — a figure second only to New York.

Oshel told members of the New Mexico Legislative Health and Human Services Committee that fewer than 1% of New Mexico physicians are responsible for half the medical malpractice payments paid by the state over more than two decades.

Of the approximately 26,500 physicians who practiced in New Mexico from 1991 to 2024, 194 — 0.7% — were responsible for half the state's malpractice payments during that period. The vast majority of New Mexico physicians — about 94% — have never made a medical malpractice payment.

Oshel said the New Mexico Medical Board and hospitals themselves need to do a better job identifying problem physicians and take action to reduce the likelihood of malpractice.

"You've got to deal with the root cause, and that's the malpractice itself," Oshel said in a subsequent interview with the Journal.

"First, you've got to identify the people that are causing the bulk of the problems," he said. "You've got to try to identify people as early as possible where it appears there's a problem."

The likely places to flag potential problems are the state's medical board and hospital peer review organizations, which are bodies within each hospital that review clinical decisions and the physicians who make them.

"The peer review organizations ought to be the first line of defense," Oshel said. "The medical board is basically the last line of defense. One malpractice payment is a flag. If somebody has two or three or four, they've really got a problem and that's where the licensing board needs to get involved."

New Mexico Medical Board

Monique Parks, the New Mexico Medical Board's interim executive director, said in a written statement that the board doesn't investigate or participate in medical malpractice cases.

"Malpractice claims are sometimes settled by insurance companies on behalf of health care providers without their consent," before the case goes to trial, Parks said. All actions taken by the medical board concerning medical professionals are made public on the board's website.

Dr. Karen Carson, the chair of the New Mexico Medical Board, told lawmakers in November that the board launches an investigation when physicians rack up three or more malpractice payments in a five-year period based on National Practitioner Data Bank records.

The board also initiates an investigation for settlements of $1 million or more, Carson told members of the interim health and human services committee on Nov. 5.

Carson declined to discuss the Erasmus case. She told the Journal last week that the medical board is involved in discovery requests in pending lawsuits against Erasmus that prohibit her from making public comment.

The medical board revoked Erasmus' medical license in April 2024, alleging that insurance carriers paid some $19 million to settle 26 malpractice claims against him since 2001. The board also alleged that Erasmus had been sued nine times since 2021 and underwent a neuropsychological evaluation that found him "not fit to practice medicine," court records show.

Erasmus appealed the revocation of his license. But 1st Judicial District Court Judge Francis Mathew upheld the medical board's decision and, in April, the state Court of Appeals upheld Mathew's ruling. The New Mexico Supreme Court unanimously declined to hear the appeal.

Erasmus' attorney, Bryan Davis, wrote in his appeal that the medical board relied on "unproven allegations" contained in malpractice lawsuits.

"The allegation ignored the reality that insurance companies settle medical malpractice cases that are defensible and winnable for many reasons besides whether the physician actually committed malpractice," Davis wrote in the appeal.

Davis also said that Erasmus didn't want to settle some of the claims but was overruled by hospitals and other defendants.

One case against Erasmus settled this year in a lawsuit filed by Diane Jennifer Gutierrez, a 53-year-old single mother. The suit alleged that Gutierrez was left partially paralyzed following a February 2022 surgery at Lovelace Medical Center for spinal fusion to relieve upper back and shoulder pain.

Gutierrez's attorney, Lisa Curtis, declined to disclose the settlement amount. Messages left this week for Holly Armstrong, an attorney for Erasmus and Lovelace Health System, were not immediately returned.

Curtis said hospitals are reluctant to take actions against surgeons, who are often the biggest moneymakers for a medical system.

"They are the most lucrative specialists for the hospital," Curtis said of surgeons. And because New Mexico's Medical Malpractice Act caps compensatory damages at $750,000, patients rely on punitive damages to force hospitals to take action against problem physicians.

New Mexico law allows a jury to award punitive damages if they find the defendant's actions were intentional, fraudulent or in reckless disregard for patient safety.

"The punitive damage piece is really, really important for stopping exactly this problem," Curtis said.

Oshel said the data he analyzed indicated that New Mexico needs to do a better job of identifying the small minority of physicians who cost the state millions in medical malpractice payments.

Dr. Darren Shafer, president of Presbyterian Medical Group, the largest health care system in the state, said Presbyterian is committed to "providing quality care and ensuring accountability" across the system.

"We have safeguards and layers of oversight built into our quality program including peer review, patient feedback, outcomes monitoring and benchmarking to industry best practices," Shafer said in a statement.

"As we work with policymakers to address medical malpractice reform, we believe it is important to remain focused on the drivers affecting access to care in New Mexico, including rising liability costs and the difficulty of recruiting and retaining providers," he said.

'Out of balance'

Fred Nathan, executive director of Think New Mexico, a Santa Fe-based nonprofit think tank, said reform of the state's Medical Malpractice Act is crucial regardless of actions by the state medical board.

"Two things can be true," Nathan said. "One is that the medical board can do a better job of policing the medical community, but also that our medical malpractice laws are completely out of balance."

Think New Mexico contends that New Mexico's malpractice laws make the state a magnet for out-of-state attorneys, drive up malpractice insurance costs and discourage doctors from practicing here. The nonprofit advocates measures such as capping attorney fees and punitive damage awards in malpractice cases.

"I think if you look around the country that would be true, probably in every state, that a tiny group of doctors have most of the medical malpractice," Nathan said.

But New Mexico doctors too often feel compelled to settle lawsuits that have no merit because they fear huge punitive damages, he said.

New Mexico has no limit on punitive damages, which are not covered by malpractice insurance, Nathan said. Six states don't allow punitive damages and 21 others limit them, he said.

"A lot of very good doctors are getting hit with lawsuits and settling them, not because there's merit there, but because they don't want to risk their whole life savings," he said.

Kristina Fisher, Think New Mexico's associate director, said New Mexico needs an "all of the above" approach to addressing the state's physician shortage.

"Let's absolutely improve the medical board," she said. "Let's improve the safety precautions. But let's also look at the malpractice laws that we are hearing from so many doctors are just incredibly burdensome and much more unbalanced than in other states."

Private equity-owned hospitals

Theresa Hacsi, an Albuquerque medical malpractice attorney, testified in another recent interim legislative hearing that medical negligence is occurring more often in New Mexico because of the state's high number of private equity-owned hospitals.

"There is a direct correlation between private equity participating in the market and the amount insurance companies are paying out in medical malpractice cases," she said.

Patients are more likely to fall, get new infections, or experience other forms of harm during their stay in a hospital after it is acquired by a private equity firm, according to a 2023 study led by researchers at Harvard Medical School.

Corporate demands on the practice of medicine in such settings can put doctors "in a bad spot," Hacsi said. Some solutions: enacting a corporate practice of medicine statute that allows providers to have more autonomy, and requiring safe nurse-to-patient ratios.

According to the Private Equity Stakeholder Project, New Mexico has the highest proportion of private equity-owned hospitals in the country at 38% — the national average is 8%.

Olivier Uyttebrouck covers the court system. You can reach him at ouyttebrouck@abqjournal.com