As closed-door talks stall, medical malpractice fix could hinge on limits to punitive damages

SANTA FE — While no final deal has been struck, negotiations between hospital executives, trial lawyers and other stakeholders on possible changes to New Mexico’s medical malpractice laws have yielded some areas of agreements — and some potential sticking points.

Gov. Michelle Lujan Grisham's office is backing House Bill 99, filed by Rep. Christine Chandler, D-Los Alamos, which is scheduled for its first committee hearing Friday.

A key feature of Chandler's bill would place a $6 million cap on punitive damages for hospitals, which is likely to attract opposition from the New Mexico Trial Lawyers Association and patient-safety groups. 

Currently, New Mexico has no limit on punitive damages, which has resulted in eye-popping damage awards against hospitals in recent years. Supporters of the bill say unlimited punitive damages have attracted out-of-state malpractice attorneys to New Mexico, driven up the cost of malpractice insurance and discouraged physicians from practicing in the state.

"I care about trying to get a reasonable medical malpractice bill in place that will help us recruit doctors to the state," Chandler said Thursday. 

In its current form, Chandler said her bill would cap punitive damages at the same amounts that state law currently caps compensatory damages, which is approximately $750,000 for physicians, $1 million for outpatient health care facilities and $6 million for hospitals. 

Compensatory damages cover actual losses such as medical bills and lost wages, while punitive damages are awarded for wrongdoing.

Despite several weeks of negotiations, representatives of hospitals, physician groups, trial lawyers and other stakeholders have failed to reach an agreement, Chandler said. She delayed a hearing on the measure "until I had a sense about whether there was a meeting of the minds, and there apparently wasn't. So we'll proceed with the bill and move it as appropriate."

Meanwhile, the top health official in the governor's administration said Thursday she’s “extremely concerned” about doctors leaving New Mexico and possible hospital closures due to rising insurance premiums and liability concerns.

“They don’t feel like they’re practicing in a supportive environment,” said Health Secretary Gina DeBlassie, referring to health care providers.

She also told reporters she’s hopeful an agreement can be reached during this year’s session to fix an “imbalance” in current state law. The number of medical malpractice claims per physician has increased significantly since lawmakers approved a 2021 overhaul of the state’s medical malpractice laws, DeBlassie added.

“We’ve got a shortage of providers, access to care is challenging for everyone and this isn’t the only fix — but this is a big piece of it,” she said.

Kathy Love, a past president of the New Mexico Trial Lawyers Association, said she and a group of other stakeholders began meeting in late December in an attempt to reach an agreement on medical malpractice reforms. Love said she believed the intent was to provide physicians with protection from large punitive damages that they believe are driving up malpractice insurance costs.

"We started this shortly after Christmas and we had multiple days of meetings and negotiations," Love said. "I felt that we were 90% of the way to a deal that doctors would have been very happy with." 

The deal would have limited punitive damages for independent doctors and those who work for hospitals, she said. It also would have provided liability protections for small, rural hospitals in New Mexico.

But the negotiations broke down Monday when some of the largest hospital corporations in the state demanded caps on punitive damages identical to those of physicians, Love said.

"The hospitals effectively stalled the negotiations by insisting on removing punitive damages for hospitals," she said. Love said trial lawyers are hopeful negotiations can resume. 

Troy Clark, president and CEO of the New Mexico Hospital Association, said in a written message Thursday that the organization supports House Bill 99 "as it delivers meaningful reform by advancing targeted, balanced changes that stabilize New Mexico’s malpractice environment while maintaining patient protections and accountability." 

In all, at least six bills dealing with medical malpractice have been filed since the start of the 30-day legislative session last week, but Chandler's bill is the first to receive a committee hearing.

If none of the bills are successful before lawmakers adjourn Feb. 19, Lujan Grisham has said she would consider calling the Legislature back to Santa Fe for a special session on the issue.

Dan Boyd covers state government and politics for the Journal in Santa Fe. Follow him on X at @DanBoydNM or reach him via email at dboyd@abqjournal.com.

Olivier Uyttebrouck covers courts and legal affairs. You can reach him at ouyttebrouck@abqjournal.com.