One of the most contentious and very emotional issues this year in the 2023 New Mexico legislature has been medical malpractice claims and the need to place reasonable caps on such claims. At the very core of the issue is the 2021 rewrite of the medical malpractice law. The rewrite made it impossible for New Mexico licensed doctors to secure and afford medical malpractice insurance with a $5 million cap when they practiced in independent outpatient clinics. Independent outpatient clinics were faced with the crisis of being unable to obtain the medical insurance they needed to continue operating.
The proposed changes to the medical malpractice law centers on medical clinics that are not owned by hospitals. Surgical centers and urgent care clinics independently owned by physicians were included with larger hospital insurance coverage requirements. The potential closure of independent clinics loomed large because of the medical malpractice insurance coverage requirements. Much smaller, independent medical clinics are a critical part of New Mexico’s health care system network, especially in rural New Mexico.
Some standalone emergency rooms, urgent care centers and surgical clinics with maximum malpractice payouts with an insurance coverage cap set at $750,000 would have seen the cap rise to $6 million by 2027 under the 2021 law rewrite that included them in the same category as hospitals. Urgent care centers and surgical clinics argued they will be unable to afford or even obtain malpractice insurance with a cap that high. Proposals backed by the doctors were rejected by Democratic lawmakers in both legislative chambers earlier this session.
Patient advocates challenged the claims made by clinics and physicians and argued patients who face lifelong effects of medical procedures gone wrong deserve fair compensation. Patients and their advocates testified against measures reducing the cap early in the session, describing heartbreaking stories of injury and death caused by medical mistakes.
Under Senate Bill 523, introduced in the Senate Tax, Business and Transportation Committee on March 14, those small, independent medical practices would see a permanent payout cap of $1 million starting in 2024. The threat of medical malpractice claims and mandated insurance threatened to reduce even further the State’s shortage of doctors. The state is facing a major shortage of medical providers with the number of physicians in New Mexico falling 30% between 2017 and 2021 according to one story.
SENATE BILL 523 BIPARTISAN COMPROMISE ANNOUNCED
On March 14, a mere 4 days before the end of the 2023 New Mexico legislative session, Governor Michelle Lujan Grisham announced that a bipartisan agreement had been reached aimed at ensuring independent outpatient clinics will be able to obtain the medical malpractice insurance they need to continue operating in 2024. The governor announced the new legislation during a morning news conference at the Capitol, where she was flanked by Democrat Senate Majority Leader Peter Wirth, D-Santa Fe, and Republican Senate Minority Leader Greg Baca, R-Belen. The compromise is that independent clinics’ financial exposure to legal claims will increase from $750,000 next year as planned but with a $1 million cap on damages rather than the $5 million limit that had been set to take effect.
Under Senate Bill 523, a patient who files a medical malpractice claim against an independent clinic could recover up to $1 million, but the patient compensation fund, not the independent clinic, would cover the portion of the damages between $500,000 and $1 million. The $1 million cap would be adjusted for inflation, starting in 2025. Senate Bill 523 also includes provisions excluding federal health care facilities from New Mexico’s medical malpractice law and they will not be subject to the caps on damages. The bill also requires public tracking of claims and settlements involving outpatient clinics. The compromise is supported by the trial lawyers association and an array of groups representing doctors, hospitals and nurse practitioners.
In announcing the compromise, Governor Lujan Grisham said it was clear that under the 2021 rewrite of the medical malpractice law that small independent outpatient the clinics could not obtain full legal insurance with the $5 million cap but could with the $1 million compromised cap. According to the Governor insurance companies, whom she reached out to, have confirmed they can provide coverage under the proposed changes to the law. The compromise is intended to strike a balance that ensures doctors can continue to practice in independent clinics and patients can obtain justice in court for medical errors.
The negotiated compromise agreement in contained in Senate Bill 523. What is impressive is that it is jointly sponsored by the Democratic and Republican leaders in both legislative chambers which should ensure quick passage in both chambers. The governor said Democratic and Republican leaders in the House backed the bill and had signed onto it as sponsors.
Senate Majority Leader Peter Wirth, D-Santa Fe, and Senate Minority Leader Greg Baca, R-Belen, both trial attorneys, helped produce Senate Bill 523 by overseeing last-minute talks between a physicians’ group and trial lawyers representing patients. Both Senators acknowledged that the governor helped “close the deal”.
Wirth was first approached by patient attorneys last year, he said, adding they wanted help finding common ground with medical providers.
Baca said doctors and other health care professionals had contacted him last year with concerns about the higher malpractice caps.
Senator Wirth said he was first approached by patient attorneys last year who said they wanted his help finding common ground with medical providers. The negotiations produced a bill the lawyers and doctors say they can live with. He said the comprise they agreed is far more preferable than having lawmakers force an agreement upon them. Senate Majority Leader Peter Wirth said this:
“This is the kind of issue that really needed to be resolved by the parties. … [If the bill becomes law] it will create stability for current providers and it creates more certainty for new outpatient facilities looking to open up in New Mexico.”
Sanator Baca said doctors and other health care professionals had contacted him last year with concerns about the higher malpractice caps. Senator Baca for his part said this about the compromise:
“We’ve come to a compromise here that is going to be workable and functional for a long time.”
The link to a quoted news sources are here:
March 14, New Mexico Political Report “Governor announces compromise-measure on medical malpractice payouts” https://nmpoliticalreport.com/
COMMENTARY AND ANALYSIS
On March 14, Senate Bill 523 won unanimous endorsement from the Senate Tax, Business and Transportation Committee. It will now be presented to the full Senate on Wednesday March 15 and once passed it will advance to the House. Once it passes the Senate, the legislation will have to clear at least one committee in the House of Representatives before hitting the House floor before noon Saturday, when the session ends. The passage of Senate Bill 523 will be one of the most consequential pieces of legislation enacted during the session and the House needs to act swiftly.