Medical malpractice bill advances to House floor

A measure to rein in high-dollar medical malpractice awards in New Mexico is due to hit the state House floor for a vote, which could give the Senate a tight deadline for considering the complex issue.

Proponents portray the bill that emerged from the House Judiciary Committee on Wednesday as a key way to keep New Mexico from losing physicians but the controversy so far has focused on which hospitals in the state should benefit from reform.

The committee voted 10-0 Wednesday to advance a version of House Bill 99, filed by Rep. Christine Chandler, D-Los Alamos, who described the substitute bill as a compromise that emerged after talks broke down between hospitals, physician groups, trial attorneys and other stakeholders.

A key issue, which still is evolving, is how to limit punitive damages that are sometimes awarded in cases of reckless or willful misconduct for the state's largest corporate hospitals. 

"There was a lot of discussion about what the cap should be for the larger systems and the like, and there were conversations between the hospitals and the lawyers as to what that should be," Chandler told the committee. "This bill sort of splits the difference."

Chandler said her bill would create a multitiered cap on punitive damages that varies according to the type and size of a medical clinic or hospital. She estimated the bill would cap punitive damages at about $1 million for independent physicians and clinics, $6 million for locally owned hospitals and $15 million for larger corporate-owned hospitals.  All the caps would increase in tandem with the consumer price index.

Chandler said she drafted the substitute bill in consultation with Gov. Michelle Lujan Grisham, who supports House Bill 99 and has suggested calling lawmakers into special session if they fail to pass medical malpractice reform during the regular session, which ends Feb. 19.

Troy Clark, CEO of the New Mexico Hospital Association, said the lower $6 million cap on punitive damages likely will apply to five New Mexico hospitals, including Cibola General Hospital in Grants, Holy Cross Medical Center in Taos, Rehoboth McKinley Christian Hospital in Gallup and San Juan Regional Medical Center in Farmington. 

The higher $15 million caps would apply to more than 30 hospitals statewide, including five Presbyterian Healthcare System hospitals and five Lovelace hospitals, Clark said. The higher cap also would apply to 11 post-acute hospitals, which are rehabilitation or behavioral health facilities, he said.

Clark said the Hospital Association supports the new substitute version of HB 99.

"We've been pushing for lower caps, obviously," Clark said. The $15 million cap is "kind of at the threshold of what the hospitals felt still made a meaningful difference in our ability to recruit and retain physicians. We still feel this is a meaningful bill to address the situation of our access-to-care crisis."

House Speaker Javier Martínez, D-Albuquerque, who voted for the substitute bill, said he is skeptical that limiting punitive damages will solve New Mexico's physician shortage.

"I am a little disappointed that (in) 2026 here we are looking for another solution to a problem that I think goes a lot deeper than medical malpractice," Martínez said. "I think that so much of that horror story goes well beyond this issue. I really hope that in 2029 we're not in the same situation trying to fix something again."

Trial lawyers also expressed disappointment with the substitute bill.

"We went into the session being told this was about protecting doctors, and then they pivoted and the big corporations said 'no deal unless we get the same protections,'" Albuquerque attorney Cid Lopez told the Journal.

Lopez, who has represented victims and families in medical malpractice cases, said the bill as written "really takes away the power of juries to hold those big corporations fully accountable."

Dr. Darren Shafer, president of Presbyterian Medical Group, said system officials appreciate Chandler's leadership and the bipartisan engagement that shaped the bill.

"Medical malpractice reform is complex, but this legislation reflects serious, good-faith work to address long-standing challenges that affect patients, clinicians, and access to care across New Mexico," Shafer said.

The committee's unanimous approval of the substitute bill also killed an amendment introduced last month by Rep. Liz Thomson, D-Albuquerque, that would have left unlimited punitive damages on larger corporate-owned hospitals while limiting damages for five smaller hospitals in the state. That amendment drew opposition from hospital and physician groups.

New Mexico currently has no limits on punitive damages, which has resulted in sizable damage awards against hospitals in recent years. Supporters of the caps say fear of punitive damages has driven up medical malpractice insurance premiums and discouraged physicians from practicing in New Mexico.

Unclear is whether limits on punitive damages will result in lower medical malpractice insurance premiums. 

Chandler told members of the Judiciary Committee on Feb. 6 she was "very skeptical" that insurance costs for physicians and hospitals would decrease if the bill becomes law.

But the bill would allow hospitals, doctors and insurance companies to plan for risk because they would know what the maximum awards would be, except for uncapped medical expenses, she said.

"Does your car insurance ever go down? No," Chandler said. "Does your health insurance go down? Does house insurance ever go down, even if you have no incidents? No. But I think it will stabilize."