New Mexico liability policy pushes patients, doctors out of state
As New Mexico lawmakers debate changes to laws concerning punitive damages in medical liability cases, the consequences of the state’s current legal climate are already showing up in patients’ daily lives.
A growing physician shortage – driven in part by rising liability costs and exposure to unlimited punitive damages – is making it increasingly difficult for patients to access routine and specialty care. The negative impacts include:
- Many New Mexico patients are unable to maintain consistent primary care relationships as physicians leave practices with little notice.
- Patients are being forced to seek routine and follow-up care in neighboring states due to local provider shortages.
- Patients managing ongoing or chronic conditions are particularly hard hit as the continuity of care is interrupted.
- New Mexico residents are being forced to relocate out of state because access to reliable care is no longer available.
Industry data suggests health care access issues are tied to New Mexico’s unique liability environment. Mike Stinson of the MLP Association, and Chair of the HCLA, described the state’s climate as “an anomaly,” noting that liability premiums are “substantially higher than in neighboring states.” That adds up to 33% more for internists than in Texas and 50% more for OB-GYNs than in Utah.
Supporters of reform argue that uncapped punitive damages create financial uncertainty that pushes physicians to practice elsewhere.
As lawmakers weigh reforms, the challenge will be finding a balance that preserves accountability without further eroding access to care. Click here to read more about the access to care crisis in New Mexico.
US Supreme Court ruling opens new avenues for medical lawsuit abuse
A US Supreme Court decision could significantly expand physicians’ exposure to medical liability, bypassing state safeguards designed to deter meritless or speculative claims.
In a January ruling, the Court held that medical liability plaintiffs filing in federal court are not required to comply with state “affidavit of merit” laws, which typically require an expert to certify that a claim has a reasonable basis before litigation proceeds. Justice Amy Coney Barrett concluded that such laws conflict with Rule 8 of the Federal Rules of Civil Procedure, which requires only “a short and plain statement” of the claim to initiate a lawsuit. Because federal procedural rules take precedence, state affidavit requirements cannot be enforced in federal court, even when state law would otherwise apply.
Statutes requiring affidavits of merit were adopted by many states as part of broader medical liability reforms to screen out meritless lawsuits early. By eliminating that threshold requirement in federal cases, the ruling creates a new pathway for plaintiffs to avoid those protections altogether.
“This decision provides an opportunity for forum shopping for litigants seeking to avoid state affidavit of merit requirements,” said Hillary A. Taylor, managing shareholder at Keating Jones Hughes. As a result, “cases against medical providers that would have been dismissed in state court will now be able to be litigated in federal court.”
While plaintiffs’ attorneys argue the decision simply eases access to courts, critics warn it undermines long established state reforms.
The ruling has the potential to weaken a key procedural safeguard and could open physicians and health care providers to additional meritless claims. To read more about the potential impact on state and federal medical liability climates, click here.
Why medical liability awards are on the rise
A recent news wire by the American Medical Association explains how so-called “nuclear verdicts” are becoming increasingly more common in medical liability cases, with awards exceeding $10 million on the rise.
The news wire highlights an AMA analysis that points to a sharp rise in the size of the nation’s largest verdicts and growing concern about the tactics driving those outcomes.
The average value of the top 50 medical liability verdicts reached $32 million in 2022, jumped to $48 million in 2023, and climbed again to $56 million in 2024. According to the AMA, this trend reflects more than isolated cases and signals a broader shift in litigation around liability lawsuits.
Wes Cleveland, a senior attorney at the AMA, identified four contributing factors. One is the rising severity of claims, which he attributed in part to declining public trust in health care and increased corporatization. Another is the use of the “reptile theory,” in which attorneys frame an individual case as a broader threat to community safety. “It focuses on what could happen and not what did happen,” Cleveland explained.
Additional tactics include price anchoring, where juries are primed with extremely high damage figures, and aggressive settlement strategies that may involve threatening physicians’ personal assets. The AMA noted that several states have already enacted, or are considering, legal reforms aimed at curbing these practices.
Click here to learn more about how recent nuclear verdicts have underscored ongoing concerns that escalating medical liability exposure can ultimately affect physician availability, costs, and patient access to care.