SOURCE: Albuquerque Journal
House Bill 75 was passed in New Mexico’s 2021 legislative session and became effective Jan. 1, with the stated purpose “to Clarify and Modernize the New Mexico Medical Malpractice Act, to raise liability caps and limit participation by Hospitals and Outpatient Healthcare Facilities (OPHCFs).”
The original New Mexico Medical Malpractice Act (NM MMA) was passed in 1976 and had a cap limit of $600,000 per claim for all health care providers and survived multiple legal challenges during its 45 years of existence. Clearly, the 1976 NM MMA needed to be “clarified and modernized,” and the limit needed to be updated to a reasonable amount, given 45 years with few changes.
HB 75’s stated intent was to modernize the lack of reasonable increases in the 1976 law. HB 75 did include hospitals and OPHCFs under the same basic limitations as independent health care providers of $250K per claim and $750K for all claims in one year. However, HB 75 then added a second layer of increased limits for hospitals and OPHCFs, boosting the current 1976 $600,000 limit to an eventual $6 million – starting at $4 million Jan. 1 and increasing to $6 million in 2026. This second tier of limits is in excess of the basic limits of $250K per claim and $750K for all claims per year required to enroll in the New Mexico Medical Malpractice Act.
The $750K basic limits cap and the additional layers of exposure create a gap in coverage for hospitals and OPHCFs, which are uninsured for claims exceeding $750K for medical liability claims up to $4 million in 2022 increasing to $6 million in 2026. HB 75 destroys any semblance of a limited medical liability cap for hospitals and OPHCFs. The $4 million to $6 million second-layer cap for potential claims could amount to excessive losses from one claim, which would easily bankrupt a hospital and certainly their agent employees. Agent employees include: MD hospitalists, advanced practice nurses, and technicians in the employ of hospitals and OPHCFs.)
In addition to the above, HB 75 mandates annual increases in Patient Compensation Fund surcharges to NM MMA insureds to reduce the fund’s deficit of $66,838,000 to zero by 2026.
In spite of deficits, the answer to the increasing cost of medical professional liability insurance is a reasonable and fair government-sponsored limitation to excessive medical accident claims, especially non-economic claims.
In a national study of medical liability claims, it was found that, while claims with loss values greater than $1 million represent only 4% of total number of claims, in terms of loss dollars, these large claims represent 60% of dollars paid for all losses.
The need for a reasonable limit on non-economic medical liability claims is urgent. A PEW report some years ago found “the underlying rationale for patient compensation funds (PCFs) is that the private for-profit insurance sectors are an insufficient reliable source of excess medical liability insurance.”
The 2023 New Mexico Legislative session is a two-month session, and legislation to repair House Bill 75 should be a priority to include reasonable limits and resolve the potential disaster to New Mexico health care. All New Mexico citizens should contact their state representatives and state senators to discuss the ill effects of HB 75 and urge passing corrective legislation in the 2023 Legislature.