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F I S C A L I M P A C T R E P O R T

SPONSOR Komadina

DATE TYPED 2/02/05

HB

SHORT TITLE Midwife Risk Insurance Coverage

SB 292

ANALYST Wilson

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

Duplicates SB 418

Relates to SB 6 & SB 427

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

See Narrative

SOURCES OF INFORMATION

LFC Files

Responses Received From

Health Policy Commission (HPC)

Public School Insurance Authority (PSIA

Department Of Health (DOH)

Public Regulation Commission (PRC)

No Response From

General Services Department (GSD)

SUMMARY

Synopsis of Bill

Senate Bill 292 allows licensed midwives to collaborate for the purpose of purchasing risk insur-

ance. It extends Risk Management Division’s (RMD) authority to offer insurance or to self-

Senate Bill 292- Page 2

insure these types of midwife associations, cooperatives or mutual alliances.

Two or more midwives may purchase risk insurance coverage upon becoming part of an associa-

tion, cooperative or mutual alliance, whereupon the RMD shall maintain a separate account for

them.

As defined in the bill, “Midwife” means a Midwife who is licensed through the DOH, or a Certi-

fied Nurse Midwives (CNM) who is licensed through the Board of Nursing and the DOH.

Significant Issues

The increase in the cost of medical malpractice insurance, particularly for providers involved in

childbirth, has caused these providers to limit or stop services. Availability of coverage through

RMD offers another option for these providers.

Licensed Midwifes (LMs) and CNMs perform 33% of the deliveries in New Mexico Records, as

well as other health services to women and babies. In two counties they provide more than half

the pregnancy health services. The loss of these providers could have a serious negative impact

on New Mexico women’s ability to access health care. Both LMs and CNMs provide safe, high

quality services and serve high proportions of poor, underserved women and families. The aver-

age CNM sees 65% Medicaid patients.

CNMs do most of their deliveries at hospitals, which require liability insurance. Only one in-

surer offers liability insurance to CNMs for hospital deliveries and other health care services.

This company’s rates increased by 60% for 2005, and are expected to increase by 30% for 2006.

The liability insurance rate in 2005 for a CNM is between $14 thousand and $18 thousand.

Many women and families choose out of hospital births for reasons of privacy, personal attention

and greater family involvement. Numerous studies have shown that professionally attended

home births and birthing center births for low-risk women have outcomes at least as good as

hospital births for low-risk women (e.g., women who give birth at home have fewer procedures

during their labor compared to those planned hospital births). These deliveries cost less because

there is no hospital charge for home births, and midwives use fewer interventions like forceps or

epidurals that add to the cost of delivery.

DOH claims there have been no lawsuits naming CNMs in New Mexico since at least 1996.

Only three claims have been filed against LMs in the last ten years, and two of them were dis-

missed.

FISCAL IMPLICATIONS

The PSIA notes all medical providers are experiencing significant problems due to rising medi-

cal malpractice. Midwives and OB/GYN specialists represent a small portion of all providers.

It is not likely that RMD would not be able to provide substantial savings in its premium for New

Mexico Midwives compared to medical malpractice insurers who cover larger pools of provid-

ers.

Senate Bill 292- Page 3

ADMINISTRATIVE IMPLICATIONS

The PRC notes the mission of the RMD is to provide risk management and insurance-related

services to the various agencies of state government. Although associations of midwives would

not be part of state government, the door to allowing non-government entities to enjoy access to

insurance coverages procured by the Risk Management Division has already been opened by

Subsection B of §15-7-3 which requires the RMD to provide liability coverage to certain non-

profit corporations under certain circumstances.

DUPLICATION/RELATIONSHIP

SB 292 duplicates SB 418

SB 292 relates to SB 6, Malpractice for Certified Nurse-Midwives and SB 427, Health Facility

& Care Provider Insurance

OTHER SUBSTANTIVE ISSUES

Presently no insurer offers professional liability insurance for out-of-hospital deliveries. LMs

and CNMs are essentially the only providers of out-of-hospital delivery services, including home

deliveries and birthing center deliveries, for pregnant women and their families. Most midwives

provide over half their services to Medicaid patients. Practitioners who do not have liability in-

surance cannot qualify for reimbursement from Medicaid.

DW/sb