Medical malpractice reform predicted to gradually improve NM doctor shortage, but no instant fix

After years of controversy, the latest overhaul of New Mexico's medical malpractice laws took just 28 days this legislative session.

Under a reform bill expected to be signed by Gov. Michelle Lujan Grisham:

• Hospitals will benefit from a first-ever cap on punitive damages, and they won three more years to participate in a state-run malpractice insurance fund.
• New Mexico's doctors could see malpractice insurance premiums drop anywhere from 3% to 16%.
• Those who have been seriously harmed, or lost loved ones to medical malpractice, will find more legal hurdles to achieving big payouts if they sue for damages.

And as for the public frustrated with long waits for doctor appointments or sick patients who can't find specialists? Relief will arrive, supporters say. 

But just about everyone agrees it will take longer than just 28 days.

"I think we will know that it has been effective when we all aren't having the conversations around our dinner tables or in the neighborhood saying, 'I'm trying to get an appointment, and I can't get in,'" said Troy Clark, president and CEO of the New Mexico Hospital Association. "I think that really is the true measuring stick."

Clark said it's going to take "some time" for the impact of the changes to be felt.

"I hope within, goodness, no more than three years," Clark told the Journal, "we will have made significant improvements in access to care in our state."

The Senate voted 40-2 late Tuesday to approve House Bill 99, sending to the governor's desk a bill that would limit punitive damages in medical malpractice cases for the first time in New Mexico's history.

Rep. Christine Chandler, D-Los Alamos, the lead sponsor and driving force behind the bill, said she hopes word will get around that New Mexico is a good place to practice medicine.

"Doctors within the state will start, hopefully, telling their colleagues from outside the state that it's a better environment to be practicing from a litigation standpoint," Chandler said Friday.

How long before New Mexicans notice shorter wait times to see a doctor?

"That's a tough one," Chandler said. "I think in a couple of years, we should start seeing some reaction to what we've done. People have to start feeling confident that the changes have stuck."

A key feature of HB 99 is a tiered system that caps punitive damages at about $1 million for independent physicians and clinics, $6 million for locally owned hospitals and $15 million for larger corporate-owned hospital systems, Chandler estimates. Punitive damages are intended to deter and punish willful and reckless behavior.

New Mexico currently has no caps on punitive damages awarded by juries, which in the past two years resulted in a $15 million punitive damage award against Presbyterian Hospital over a metal retractor left inside a patient during abdominal surgery.

In November 2024, a Bernalillo County jury awarded $412 million in compensatory and punitive damages to a widower who suffered permanent harm after receiving penile injections at NuMale Medical Center in Albuquerque. That award, which was also based on claims of deceptive trade practices and fraud, was later reduced to $96.5 million under a bankruptcy settlement in Nevada involving the national chain.

Kathy Love, a New Mexico trial attorney, participated in negotiations seeking changes to the state's Medical Malpractice Act agreeable to doctors, hospitals and other stakeholders. Love said she is disappointed with the final outcome.

"We agreed to caps on punitive damages for doctors," Love said of the talks. "These corporations and insurance companies put millions of dollars into advertising, misinformation and fear tactics that resulted in a law that gives multibillion-dollar companies a pass on accountability."

A $15 million cap on punitive damages will do nothing to deter multibillion-dollar hospital corporations from behavior that harms patients, Love said.

"I think the most important part about this particular bill is that individual patients are getting nothing out of this," she said. "Only the hospitals and the insurance companies are getting something out of this bill."

Somewhat more tangible, is the anticipated increase in the number of physicians expected to seek licenses to practice in New Mexico under related legislation approved this session allowing the state to join an interstate medical compact.

The New Mexico Medical Board projected that physician license applications will increase by 10% to 15%, in line with the average rate of increase experienced by other states that have joined the compact, according to a legislative analysis.

The compact will allow a more expedited licensing process for physicians. That bill sailed through the Legislature this year, after a similar measure stalled in committee during the 60-day session in 2025.

In that same session last year, lawmakers killed a different measure aimed at alleviating the physician shortage by limiting attorneys fees and setting up a public safety fund with 75% of any punitive damages awarded to an injured patient.

Proponents blamed New Mexico trial lawyers for the defeat back then. 

But this year, the political winds shifted as hospital and medical-backed groups took to social media and other outlets to rally for malpractice reform. The governor herself made the issue a priority of this year's legislative session.

"Everybody we heard from understood they couldn't get the care when they needed it," Clark told the Journal, "but they didn't understand what the underlying problems were, and that's what a lot of that effort is, to say, 'Let's help you understand access to care is the problem. Medical malpractice is one of the contributors along the way.'"

Other contributing factors: the gross receipts tax on physicians, expedited licenses, student loan repayments and tax credits that weren't to the level other states, Clark said.

Fueling the push for change, a legislative survey found that 65% of New Mexico physicians surveyed last December were considering leaving the state to practice elsewhere. Of those, 83% reported the cause as punitive damages associated with medical malpractice, with 76% citing medical malpractice and 51% citing quality of life and compensation.

Rep. Nicole Chavez, R-Albuquerque, sounded the alarm in a recent legislative committee hearing.

"If we don't act this session, I think it's going to be too late and our constituents are just not going to be able to see doctors," Chavez said. Speaking of House Bill 99, "I really think it has a balance of fairness and it's making sure New Mexicans can see a doctor when they need one."

House Majority Floor Leader Reena Szczepanski, D-Santa Fe, said during that same hearing that it was a struggle to set a punitive damages cap, which she said has the greatest impact on those most severely harmed by medical malpractice.

Those would include families of people who have died as a result of medical negligence or those seriously and permanently harmed.

"You know, 99% of cases (of malpractice) probably would never even come close to the cap," she said.

2021 compromise

Just five years ago, the Legislature passed a comprehensive malpractice bill that required hospitals to exit participation in a state fund originally set up in 1976 to help physicians unable to access private medical malpractice insurance.

The so-called patient compensation fund is supposed to provide affordable malpractice coverage that caps the amount of damages awarded against the member health care providers.

New Mexico hospitals were permitted as qualified providers in 2006 but were required to leave the fund by the end of this year, under the 2021 legislation. Chandler's bill this year extends the deadline for another three years.

The fund ran into solvency issues that required a $100 million bailout from the state Legislature from 2022 to 2024.

Chandler, the sponsor of House Bill 99, cautioned during committee debate that the bill wasn't a panacea but was an attempt to create a stable environment that should lead to lower medical malpractice premiums. In recent days, Chandler has argued that the bill should significantly lower premiums.

If malpractice premiums don't decline, the state Office of the Superintendent of Insurance could review rates set by insurance companies because state law prohibits excessive rates, she said.

The New Mexico Medical Society said the new reforms will offer greater protections to physicians who fear the consequences of a medical malpractice lawsuit.

"While HB 99 does not outright bar the enforcement of a judgment for punitive damages against a physician, it caps any such judgment and makes it much harder for a plaintiff to plead and recover punitive damages," said Jessie Hunt, a spokeswoman for the organization.

Reaction

The state's three largest hospital systems lauded the Legislature's action this session.

"We are encouraged by the passage of HB 99 and view it as an important initial step forward for New Mexico’s healthcare system," said Lovelace Healthcare system spokeswoman Whitney Alcantar on Friday. "Improving the state’s medical liability environment helps address pressures that have contributed to physician recruitment and retention challenges and should, over time, support improved access to care."

Asked about the new legislation, she added that a more “stable environment will better position us to attract and retain physicians, advanced practice providers and nurses, helping ensure New Mexicans can receive timely, high-quality care close to home.”

At Christus St. Vincent Hospital in Santa Fe, spokesman Arturo Delgado said the reforms will "contribute to improving access to care over time." He said the company expects to see gradual improvements in recruitment and retention of clinicians that will help reduce wait times for appointments and expand services.

"It won't be an overnight fix, but changing the legal framework sends a strong message that New Mexico values and supports its health care workforce," Delgado told the Journal.

Dr. Darren Shafer, Presbyterian Medical Group president, said the reforms create "clearer standards and greater predictability in the malpractice environment.”

As a nonprofit health system, he said, "any financial benefit realized would be reinvested into patient care and expanding access to services.”

Presbyterian, which employs 850 doctors, currently has 101 physician vacancies statewide, said a spokeswoman.

In the future, longtime Albuquerque medical malpractice attorney Lisa Curtis said there will be more legislative efforts to protect patients and good doctors.

"Our people need better medical care and the good doctors need protection," Curtis said. "This law does neither."

Szczepanski said the Legislature still has "a lot of work to do," including addressing deficiencies in health care data, such as determining the number of physicians practicing in the state.

Or else, she said, how will the state know if the medical malpractice reforms are attracting and retaining physicians?

"One of the goals has been to increase the number of physicians statewide," Szczepanski said. "And I don't know that we're going to have an answer a year from now."