Report: To Bolster N.M.’s Medical Workforce, Reform Malpractice Law, Cut Red Tape

Included in the list of structural and legal shifts is a money matter: The report recommends New Mexico create a $2 billion permanent fund to bankroll proposed other changes.

“While some of the recommendations in this report will save taxpayer money, like malpractice reform, many of the other recommendations collectively carry an annual price tag of around $100 million,” the report says. “The legislature can pay for these reforms without raising taxes or reducing spending on other essential programs by creating a permanent fund for health care using some of the volatile revenues from the current oil and gas boom in New Mexico.”

New Mexico’s health care worker shortage plagues nearly every corner of the state and was only exacerbated during the coronavirus pandemic.

Citing data compiled by the New Mexico Health Care Workforce Committee, Think New Mexico’s report noted the state lost 30% of its primary care providers between 2017 and 2021, while OB-GYNs, dentists, psychiatrists, pharmacists and emergency medical technicians also saw steep drop-offs.

Los Alamos is currently the only county in the state without a shortage when it comes to national standards of access to health care providers, the report said.

Health care industry leaders have called repeatedly for changes to the state’s Medical Malpractice Act in recent years after lawmakers overhauled the law in 2021, raising the payout caps for civil claims. Providers have faced surging costs for medical malpractice insurance after the change. Think New Mexico noted in its report an independent provider’s average annual premium for a standard malpractice insurance policy is about $43,020, while a similar policy would cost about $22,030 in Arizona or $23,772 in Colorado.

The nonprofit think tank called for a number of revisions, including capping attorneys’ fees, ending the lump-sum payouts that began after legislative changes in 2021 and limiting the amount of punitive damages that can be awarded to plaintiffs by a jury.

Under the 2021 overhaul, the cap for hospitals was raised initially to $4 million in 2022 and was set to increase each year until it reaches $6 million in 2026. Lawmakers gave smaller outpatient clinics a break in 2023, setting their payout cap at $1 million, but other medical facilities have seen their caps — and insurance premium costs — continue to rise.

Nathan said the goals of proposed changes in the Think New Mexico report are to “restore some balance” but maintained the reforms would be good for all parties.

The main beneficiaries of these loopholes in the Medical Malpractice Act are lawyers,” he said. “The reforms that we’re proposing would prioritize the patient while making New Mexico a better place for health care providers to practice and paying lawyers a fair wage for their services.”

The think tank also recommended New Mexico join all 10 major interstate health care worker compacts, which allow providers to practice across state lines, including via telehealth. New Mexico is now a member of the Enhanced Nursing Licensure compact, but not those that apply to physicians, physical therapists, counselors and other specialists.

“New Mexico is one of only five states that have adopted fewer than two interstate health care compacts,” the report said, noting several lawmakers in 2023 tried and failed to pass bills to join more compacts.

Other recommendations outlined in the report:

• Creating a centralized credentialing system for health care workers.
• Making the state’s tax policy more friendly to health care providers, including by permanently repealing the gross receipts tax on all medical services.
• Increasing Medicaid reimbursement rates and reducing the portion of Medicaid claims that are denied.
• Supporting the educational pipeline for health care workers, including at both the high school and college levels.
• Allowing international physicians to apply for provisional licenses to practice in the state.