2021 Revisions to Medical Malpractice Act – Signed into Law

After 45 years, the Medical Malpractice Act, first established in 1976, was revised in the 2021 Legislative Session that ended March 20th.  Governor Michelle Lujan Grisham signed the thrice-amended HB75 (CH16-HB75-2021 (003)) into law on April 1st.

Thank you for your support over the past two months sharing your voice, your story and your support for the clinicians of New Mexico. This significant accomplishment would not have been possible without you.

Background
Given the tumultuous and pandemic-afflicted year 2020 turned out to be, NMMS made it clear to the Office of Superintendent of Insurance that we had no interest in opening the MMA this year and tackling a revision.  OSI agreed and also advised against opening the Act or trying to fix the deficit in the Patient Compensation Fund (PCF). The Superintendent asked for time to allow a new assessment strategy to be implemented and evaluated.

However, Rep. Damon Ely sponsored and pre-filed HB75 on behalf of the Trial Lawyers Association so we knew the challenge was on. HB75 simply removed the hospitals from the act, with no plan or thought to the havoc that would ensue.  In response, NMMS along with our partners in the Clinician Coalition – the hospitals, nurse practitioners, Presbyterian, Lovelace, and many others – developed a comprehensive revision to the MMA and asked Senator Liz Stefanics and Senator Gay Kernan to sponsor SB239. As the weeks passed, it was clear that with the composition of the Legislature, there would be a med-mal bill passed and signed this year, and that we had to do our level-best getting the fairest deal possible for physicians and their patients.

Over the last week of the session, stakeholders hammered out an agreement. Here are some highlights from the amended bill:

Expansion of Health Care Provider Definition

• In addition to the currently eligible doctors, hospitals and facilities, expands the list of qualified health care providers (QHP) eligible to be covered by the MMA to include certified nurse practitioners, clinical nurse specialists, certified nurse midwives and health care business entities.

Patient’s Compensation Fund Oversight

• Establishment of a PCF Advisory Board by July 1, 2021
  • Nine members, chosen annually by their respective professional organizations
    • Two members each representing: New Mexico Medical Society, New Mexico Hospital Association, New Mexico Trial Lawyers Association, and patient advocates
    • One member representing certified nurse practitioners
  • This committee will review all processes and data associated with the administration of the PCF, advise the superintendent of insurance and report annually to the legislature
• The superintendent of insurance will contract with a licensed third-party administrator to administer the fund and provide an annual audit of the PCF.

Patient’s Compensation Fund Debt Obligation

• Annual surcharges for participating in the PCF will be set with the intention of bringing the fund to solvency – with no projected deficit – by December 31, 2026
• All qualified and participating hospitals and outpatient health care facilities will be responsible for eliminating any portion of the fund deficit attributable to them by December 31, 2026
• Beginning in 2027, hospitals and outpatient facilities will not be eligible for participation in the PCF.

Malpractice Caps

• Base coverage for all QHPs increases from $200,000 to $250,000 (most commonly this is through underlying insurance carried by the QHP)
• All independent providers are covered by the PCF from the base level to the new individual cap on non-economic damages of $750,000 (with an annual Consumer Price Index (CPI) adjustment beginning in 2023)
• Hospitals and outpatient facilities will also be covered by the PCF through 2026 and will have an additional threshold of liability on non-economic damages of $4m in 2022 and rising annually to $6m in 2026 with an annual adjustment according to the CPI going forward.

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