New Mexico Medical Malpractice Act Update

©2023 The Doctors Company. The information contained herein is not intended to be and does not constitute legal advice; instead, all information, content, and material are for general information purposes only. This is not an exhaustive list of laws and regulations applicable to this subject matter; others may apply.

Summary of Legislative Changes to New Mexico Medical Malpractice Act

New Mexico HB 75 (2021) enacted sweeping changes to the New Mexico Medical Malpractice Act (hereinafter Act) including, but not limited to: changed the definitions of occurrence, outpatient health care facilities and other terms, increased the limits on medical liability damages, changed the statute of limitations for medical liability claims, and addressed the funding and management of the state’s Patient Compensation Fund (hereinafter PCF). Recognizing that there were issues not addressed or addressed poorly in HB 75, a special session was held in December of 2021 in which New Mexico HB 11 was enacted. HB 11 changed the definition of “independent providers” and created a new set of liability limits for outpatient health care facilities that were not majority owned and/or controlled by a hospital. 

HB 11 was a stop-gap measure that protected those outpatient health care facilities that are not majority owned and/or controlled from the higher limits imposed on other outpatient facilities for the calendar years 2022 and 2023. This brings us to New Mexico SB 523 (2023) which modifies further the definitions of outpatient health care facilities and establishes a separate limitation on medical liability damages for outpatient health care facilities that are not majority owned and/or controlled by a hospital. Below, please find a summary of important definitions and medical liability limit changes to the Act. These definitions and changes are all current law as of June 16, 2023.

Important Definitions

Independent Providers (HB 75) Independent Providers are defined as: a doctor of medicine, doctor of osteopathy, chiropractor, podiatrist, nurse anesthetist, physician’s assistant, certified nurse practitioner, clinical nurse specialist, or certified nurse-midwife who is not an employee or not an agent of a hospital or outpatient health care facility that employs or consists of members who are licensed or certified as doctors of medicine, doctors of osteopathy, chiropractors, podiatrists, nurse anesthetists, physician’s assistants, certified nurse practitioners, clinical nurse specialists, or certified nurse-midwives and the business entity’s employees. (SB 523) The definition of independent providers does not mean a person or entity protected pursuant to the Tort Claims Act or the Federal Tort Claims Act. The definition of independent provider does include a health care facility that is:

1. licensed pursuant to the Public Health Act as an outpatient facility;
2. not an ambulatory surgical center, urgent care facility or free-standing emergency room; and
3. not hospital-controlled.

Independent Health Care Facilities (SB 523) Independent Health Care Facilities are defined as: a health care facility that is an ambulatory surgical center, urgent care facility, or free-standing emergency room that is not, directly or indirectly through one or more intermediaries, controlled or under common control with a hospital. "Independent outpatient health care facility" includes a facility's employees, locum tenens providers, and agency nurses providing services at the facility. "Independent outpatient health care facility" does not mean a person or entity protected pursuant to the Tort Claims Act or the Federal Tort Claims Act.

Occurrence (HB 11) Occurrence is defined as: all injuries to a patient caused by health care providers' successive acts or omissions that combined concurrently to create a malpractice claim.

Control (SB 523) Control means equity ownership in a business entity that:

1. represents more than fifty percent of the total voting power of the business entity; or
2. has a value of more than fifty percent of that business entity.

Integrated Changes to New Mexico Medical Malpractice Act Per Enactment of HB 75 (2021), HB 11 (2021) and SB 523 (2023)

Under the amendments to the Act, the state’s limit on medical liability damages for independent health care providers of $600,000, plus medical expenses, was raised to $750,000, plus medical expenses, with an annual COLA (cost of living adjustment) tied to the federal consumer price index (CPI). The COLA adjustments begin on January 1, 2023. The new limit of $750,000 applies to claims for injury or death submitted on or after January 1, 2022. The underlying medical liability insurance coverage requirement for independent health care providers was raised from its former level of $200,000 to $250,000.

A separate liability limit of $4,000,000 was enacted beginning on January 1, 2022, for hospitals and outpatient health care facilities that are majority owned and/or controlled by a hospital. This separate limit will be raised by $500,000 per year to a total of $6,000,000 in 2026. Beginning January 1, 2027, a COLA will be applied to the hospital and facility limit as well. Until January 1, 2027, amounts due from a judgment or settlement against a hospital or facility (excluding past and future medical expenses which will be paid by the fund) in excess of $750,000 shall be paid by the hospital or facility. After January 2, 2027, the PCF will no longer pay any portion of a judgment or settlement against a hospital. However, per SB 523, hospital-controlled outpatient health care facilities may also participate in the PCF, and the Superintendent of Insurance shall determine, based on a risk assessment of each hospital-controlled outpatient health care facility, each hospital-controlled outpatient health care facility's base coverage or deposit and additional charges for the fund. The superintendent shall arrange for an actuarial study before determining base coverage or deposit and surcharges.

For independent health care facilities (see definitions), for injuries or deaths that occur in calendar years 2022 and 2023, there will be a liability limit of $750,000. This limit does not include punitive damages or damages for past and future medical care and related benefits. For injuries or death that occur in calendar year 2024, the liability limit is raised to $1,000,000, not including punitive damages or damages for past and future medical care and related benefits. Beginning calendar year 2025 and thereafter, the liability limit will be $1,000,000 adjusted annually by the prior three-year average consumer price index for all urban consumers, per occurrence. Independent health care facilities may participate in the state’s PCF if the facility:

1. Establishes its financial responsibility by filing proof with the superintendent that the health care provider is insured by a policy of malpractice liability insurance issued by an authorized insurer in the amount of at least five hundred thousand dollars ($500,000) per occurrence or by having continuously on deposit the sum of one million five hundred thousand dollars ($1,500,000) in cash with the superintendent or other like deposit as the superintendent may allow by rule; provided that for independent outpatient health care facilities, in the absence of an additional deposit or policy as required by this subsection, the deposit or policy shall provide coverage for not more than three separate occurrences; and
2. Pays the surcharge assessed on independent outpatient health care facilities by the superintendent pursuant to Section 41-5-25 NMSA 1978.

The personal liability of an independent outpatient health care facility is limited to $500,000 for monetary damages and medical care and related benefits as provided in Section 41-5-7 NMSA 1978. Any amount due from a judgment or settlement in excess of $500,000 shall be paid by the PCF.

Finally, the statute of limitations (SOL) for bringing a medical liability claim is modified to three (3) years after the date of the act of negligence occurred. For minors or incapacitated persons, the SOL is extended to one (1) year beyond the age of majority or the termination of an incapacity.

Please remember that the above is only a summary of the most significant changes made to the New Mexico Medical Malpractice Act by the various pieces of legislation. For the full details of each piece of legislation, please see the attached bills.

©2023 The Doctors Company. The information contained herein is not intended to be and does not constitute legal advice; instead, all information, content, and material are for general information purposes only. This is not an exhaustive list of laws and regulations applicable to this subject matter; others may apply.