SENATE BILL 176
57th legislature - STATE OF NEW MEXICO - first session, 2025
INTRODUCED BY
Martin Hickey and Pat Woods
AN ACT
RELATING TO MEDICAL MALPRACTICE; REQUIRING PAYMENTS FROM THE PATIENT'S COMPENSATION FUND TO BE MADE AS EXPENSES ARE INCURRED; REQUIRING SEVENTY-FIVE PERCENT OF THE PUNITIVE DAMAGES AWARDED IN MEDICAL MALPRACTICE CLAIMS TO BE AWARDED TO THE STATE; LIMITING ATTORNEY FEES IN MALPRACTICE CLAIMS; CREATING THE PATIENT SAFETY IMPROVEMENT FUND; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 41-5-6 NMSA 1978 (being Laws 1992, Chapter 33, Section 4, as amended) is amended to read:
"41-5-6. LIMITATION OF RECOVERY.--
A. Except for punitive damages and past and future medical care and related benefits, the aggregate dollar amount recoverable by all persons for or arising from any injury or death to a patient as a result of malpractice shall not exceed six hundred thousand dollars ($600,000) per occurrence for malpractice claims brought against health care providers if the injury or death occurred prior to January 1, 2022. In jury cases, the jury shall not be given any instructions dealing with this limitation.
B. Except for punitive damages and past and future medical care and related benefits, the aggregate dollar amount recoverable by all persons for or arising from any injury or death to a patient as a result of malpractice shall not exceed seven hundred fifty thousand dollars ($750,000) per occurrence for malpractice claims against independent providers; provided that, beginning January 1, 2023, the per occurrence limit on recovery shall be adjusted annually by the consumer price index for all urban consumers.
C. The aggregate dollar amount recoverable by all persons for or arising from any injury or death to a patient as a result of malpractice, except for punitive damages and past and future medical care and related benefits, shall not exceed seven hundred fifty thousand dollars ($750,000) for claims brought against an independent outpatient health care facility for an injury or death that occurred in calendar years 2022 and 2023.
D. In calendar year 2024 and subsequent years, the aggregate dollar amount recoverable by all persons for or arising from an injury or death to a patient as a result of malpractice, except for punitive damages and past and future medical care and related benefits, shall not exceed the following amounts for claims brought against an independent outpatient health care facility:
(1) for an injury or death that occurred in calendar year 2024, one million dollars ($1,000,000) per occurrence; and
(2) for an injury or death that occurred in calendar year 2025 and thereafter, the amount provided in Paragraph (1) of this subsection, adjusted annually by the prior three-year average consumer price index for all urban consumers, per occurrence.
E. In calendar year 2022 and subsequent calendar years, the aggregate dollar amount recoverable by all persons for or arising from any injury or death to a patient as a result of malpractice, except for punitive damages and past and future medical care and related benefits, shall not exceed the following amounts for claims brought against a hospital or a hospital-controlled outpatient health care facility:
(1) for an injury or death that occurred in calendar year 2022, four million dollars ($4,000,000) per occurrence;
(2) for an injury or death that occurred in calendar year 2023, four million five hundred thousand dollars ($4,500,000) per occurrence;
(3) for an injury or death that occurred in calendar year 2024, five million dollars ($5,000,000) per occurrence;
(4) for an injury or death that occurred in calendar year 2025, five million five hundred thousand dollars ($5,500,000) per occurrence;
(5) for an injury or death that occurred in calendar year 2026, six million dollars ($6,000,000) per occurrence; and
(6) for an injury or death that occurred in calendar year 2027 and each calendar year thereafter, the amount provided in Paragraph (5) of this subsection, adjusted annually by the consumer price index for all urban consumers, per occurrence.
F. The aggregate dollar amounts provided in Subsections B through E of this section include payment to any person for any number of loss of consortium claims or other claims per occurrence that arise solely because of the injuries or death of the patient.
G. In jury cases, the jury shall not be given any instructions dealing with the limitations provided in this section.
H. Except as provided in Section 41-5-7 NMSA 1978, the value of accrued medical care and related benefits shall not be subject to any limitation.
I. Except for an independent outpatient health care facility, a health care provider's personal liability is limited to two hundred fifty thousand dollars ($250,000) for monetary damages and medical care and related benefits as provided in Section 41-5-7 NMSA 1978. Any amount due from a judgment or settlement in excess of two hundred fifty thousand dollars ($250,000) shall be paid from the fund, except as provided in Subsections J and K of this section.
J. An independent outpatient health care facility's personal liability is limited to five hundred thousand dollars ($500,000) for monetary damages and medical care and related benefits as provided in Section 41-5-7 NMSA 1978. Any amount due from a judgment or settlement in excess of five hundred thousand dollars ($500,000) shall be paid from the fund.
K. Until January 1, 2027, amounts due from a judgment or settlement against a hospital or hospital-controlled outpatient health care facility in excess of seven hundred fifty thousand dollars ($750,000), excluding past and future medical expenses, shall be paid by the hospital or hospital-controlled outpatient health care facility and not by the fund. Beginning January 1, 2027, amounts due from a judgment or settlement against a hospital or hospital-controlled outpatient health care facility shall not be paid from the fund.
L. The term "occurrence" shall not be construed in such a way as to limit recovery to only one maximum statutory payment if separate acts or omissions cause additional or enhanced injury or harm as a result of the separate acts or omissions. A patient who suffers two or more distinct injuries as a result of two or more different acts or omissions that occur at different times by one or more health care providers is entitled to up to the maximum statutory recovery for each injury."
SECTION 2. Section 41-5-7 NMSA 1978 (being Laws 1992, Chapter 33, Section 5, as amended) is amended to read:
"41-5-7. MEDICAL EXPENSES AND PUNITIVE DAMAGES.--
A. Awards of past and future medical care and related benefits shall not be subject to the limitations of recovery imposed in Section 41-5-6 NMSA 1978.
B. The health care provider shall be liable for all medical care and related benefit payments until the total payments made by or on behalf of it for monetary damages and medical care and related benefits combined equals the health care provider's personal liability limit as provided in Subsection I of Section 41-5-6 NMSA 1978, after which the payments shall be made by the fund.
C. Payments made from the fund for medical care and related benefits shall be made as expenses are incurred.
[C.] D. Beginning January 1, 2027, any amounts due from a judgment or settlement against a hospital or outpatient health care facility shall not be paid from the fund if the injury or death occurred after December 31, 2026.
[D.] E. This section shall not be construed to prevent a patient and a health care provider from entering into a settlement agreement whereby medical care and related benefits shall be provided for a limited period of time only or to a limited degree.
F. In a malpractice claim in which punitive damages are awarded, the court shall divide the punitive damage award and enter judgment as follows:
(1) twenty-five percent of the punitive damage award shall be awarded to the prevailing party; and
(2) seventy-five percent of the punitive damage award shall be awarded to the state. All amounts awarded to the state shall be remitted to the state treasurer to be deposited into the patient safety improvement fund.
[E.] G. A judgment of punitive damages against a health care provider shall be the personal liability of the health care provider. Punitive damages shall not be paid from the fund or from the proceeds of the health care provider's insurance contract unless the contract expressly provides coverage. Nothing in Section 41-5-6 NMSA 1978 precludes the award of punitive damages to a patient. Nothing in this subsection authorizes the imposition of liability for punitive damages where that imposition would not be otherwise authorized by law."
SECTION 3. A new section of the Medical Malpractice Act is enacted to read:
"[NEW MATERIAL] LIMITING ATTORNEY FEES.--An attorney shall not contract for or collect a contingency fee for representing a person seeking damages in a malpractice claim in an amount that exceeds:
A. twenty-five percent of the dollar amount recovered, if the recovery is pursuant to a settlement agreement and release of all claims executed by all parties prior to the start of a trial or an arbitration proceeding; or
B. thirty-three percent of the dollar amount recovered, if the recovery is pursuant to settlement, arbitration or judgment that occurs after a trial or arbitration proceeding begins."
SECTION 4. A new section of the Medical Malpractice Act is enacted to read:
"[NEW MATERIAL] PATIENT SAFETY IMPROVEMENT FUND--CREATED.--
A. The "patient safety improvement fund" is created in the state treasury and shall be administered by the department of health. The patient safety improvement fund consists of distributions, appropriations, gifts, grants, donations and receipts from punitive damage awards in medical malpractice claims. Money in the patient safety improvement fund shall be invested by the state treasurer, and income from investment of the patient safety improvement fund shall be credited to the patient safety improvement fund. Money in the patient safety improvement fund shall be expended only as provided in this section.
B. Money in the patient safety improvement fund is subject to appropriation by the legislature to the department of health for the purposes of improving patient safety and health care outcomes. All payments made from the patient safety improvement fund shall be made by warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary of health or the secretary's authorized representative. Any unexpended or unencumbered balance remaining in the patient safety improvement fund at the end of a fiscal year shall not revert but shall remain to the credit of the patient safety improvement fund."
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