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

SPONSOR Papen

DATE TYPED 3/10/05

HB

SHORT TITLE Nursing Facility Medical Malpractice

SB 856

ANALYST Hanika-Ortiz

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

None

SOURCES OF INFORMATION

LFC Files

Responses Received From

Aging and Long-Term Services Department (ALTSD)

Department of Health (DOH)

Attorney General’s Office (AGO)

SUMMARY

Synopsis of Bill

SB856 amends the definition of “health care provider” in Section 41-5-3 NMSA 1978, a section

of the Medical Malpractice Act, to include nursing homes, intermediate care facilities and post-

acute health care facilities.

Significant Issues

DOH reports the Medical Malpractice Act makes available professional liability insurance to

providers if certain qualifications are met such as having liability insurance up to $200,000 per

occurrence. When a patient files a claim against a health care provider defined in the Act, they

must take their case before a Medical Review Commission prior to taking other legal action. The

Medical Review Commission is comprised of representatives of licensed health care providers

and members of the state bar. Except for punitive damages, the amount recoverable is not to ex-

ceed $600,000. The value of the accrued medical and related benefits is not subject to this limita-

tion. A health care provider’s personal liability is limited to $200,000.

Senate Bill 856-- Page 2

PERFORMANCE IMPLICATIONS

ALTSD believe SB 856 will require elderly and disabled victims of poor care in nursing homes

and similar facilities to go through an administrative process before bringing suit to address their

injuries.

FISCAL IMPLICATIONS

The high cost of liability insurance is becoming cost prohibitive in some states and SB 856 may

be one solution for these entities.

Victims of poor care in certain facilities subject to the Act will have damage caps placed on their

potential recoveries.

TECHNICAL ISSUES

The AGO questions whether the added wording to the definition of health care provider is neces-

sary. The current wording includes corporations, organizations and facilities that provide health

care and professional services. It would appear that nursing homes, intermediate care facilities,

and post-acute health care facilities are included within the current definition, but perhaps the

proposal is considered necessary to make explicit what some have argued is not clearly implicit

in the current language.

DOH suggests the term “intermediate care facility”, page 1, line 23, be revised to read “interme-

diate nursing care facility” to distinguish it from an “intermediate care facility for the mentally

retarded” (ICF/MR).

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL.

The current law will remain unchanged.

AHO/lg