FIFTY-FIFTH LEGISLATUREHB 75/a
FIRST SESSION, 2021
March 17, 2021
Mr. President:
Your JUDICIARY COMMITTEE, to whom has been referred
HOUSE BILL 75, as amended
has had it under consideration and reports same with recommendation that it DO PASS, amended as follows:
1. Strike House Judiciary Committee Amendment 1.
2. On page 1, line 11, after the semicolon, strike the remainder of the line, strike all of lines 12 and 13 and insert in lieu thereof "CLARIFYING AND MODERNIZING THE MEDICAL MALPRACTICE ACT; RAISING PERSONAL LIABILITY AND RECOVERY CAPS; LIMITING PARTICIPATION BY HOSPITALS AND OUTPATIENT HEALTH CARE FACILITIES; REQUIRING A THIRD-PARTY ADMINISTRATOR FOR THE PATIENT'S COMPENSATION FUND; REQUIRING ANNUAL FUND AUDITS; CREATING AN ADVISORY BOARD; REQUIRING ANNUAL ACTUARIAL STUDIES; REQUIRING SURCHARGES SUFFICIENT TO BRING THE FUND TO SOLVENCY BY DECEMBER 31, 2026; AMENDING, REPEALING AND ENACTING SECTIONS OF THE NMSA 1978.".
3. On pages 1 through 4, strike Sections 1 and 2 in their entirety and insert in lieu thereof the following sections:
"SECTION 1. Section 41-5-3 NMSA 1978 (being Laws 1976, Chapter 2, Section 3, as amended) is amended to read:
"41-5-3. DEFINITIONS.--As used in the Medical Malpractice Act:
A. "advisory board" means the patient's compensation fund advisory board;
B. "fund" means the patient's compensation fund;
[A.] C. "health care provider" means a person, corporation, organization, facility or institution licensed or certified by this state to provide health care or professional services as a doctor of medicine, hospital, outpatient health care facility, doctor of osteopathy, chiropractor, podiatrist, nurse anesthetist, [or] physician's assistant, certified nurse practitioner, clinical nurse specialist or certified nurse-midwife or a business entity that is organized, incorporated or formed pursuant to the laws of New Mexico that provides health care services primarily through natural persons identified in this subsection;
D. "hospital" means a facility licensed as a hospital in this state that offers in-patient services, nursing or overnight care on a twenty-four-hour basis for diagnosing, treating and providing medical, psychological or surgical care for three or more separate persons who have a physical or mental illness, disease, injury or a rehabilitative condition or are pregnant and may offer emergency services. "Hospital" includes a hospital's parent corporation, subsidiary corporations or affiliates if incorporated or registered in New Mexico; employees and locum tenens providing services at the hospital; and agency nurses providing services at the hospital;
E. "independent provider" means a doctor of medicine, doctor of osteopathy, chiropractor, podiatrist, nurse anesthetist, physician's assistant, certified nurse practitioner, clinical nurse specialist or certified nurse-midwife who is not an agent of a hospital or outpatient health care facility. "Independent provider" includes a business entity that is not a hospital or outpatient health care facility that employs or consists of members who are licensed or certified as doctors of medicine, doctors of osteopathy, chiropractors, podiatrists, nurse anesthetists, physician's assistants, certified nurse practitioners, clinical nurse specialists or certified nurse-midwives and the business entity's employees;
[B.] F. "insurer" means an insurance company engaged in writing health care provider malpractice liability insurance in this state;
[C.] G. "malpractice claim" includes any cause of action arising in this state against a health care provider for medical treatment, lack of medical treatment or other claimed departure from accepted standards of health care [which] that proximately results in injury to the patient, whether the patient's claim or cause of action sounds in tort or contract, and includes but is not limited to actions based on battery or wrongful death; "malpractice claim" does not include a cause of action arising out of the driving, flying or nonmedical acts involved in the operation, use or maintenance of a vehicular or aircraft ambulance;
[D.] H. "medical care and related benefits" means all reasonable medical, surgical, physical rehabilitation and custodial services and includes drugs, prosthetic devices and other similar materials reasonably necessary in the provision of such services;
I. "occurrence" means all injuries to a patient caused by health care providers' successive acts or omissions that combined concurrently to create a malpractice claim;
J. "outpatient health care facility" means an entity that is licensed pursuant to the Public Health Act as an outpatient facility, including ambulatory surgical centers, free-standing emergency rooms, urgent care clinics, acute care centers and intermediate care facilities and includes a facility's employees, locum tenens providers and agency nurses providing services at the facility. "Outpatient health care facility" does not include independent providers;
[E.] K. "patient" means a natural person who received or should have received health care from a [licensed] health care provider under a contract, express or implied; and
[F.] L. "superintendent" means the superintendent of insurance [of this state]."
SECTION 2. Section 41-5-5 NMSA 1978 (being Laws 1992, Chapter 33, Section 2) is amended to read:
"41-5-5. QUALIFICATIONS.--
A. To be qualified under the provisions of the Medical Malpractice Act, a health care provider shall:
(1) establish its financial responsibility by filing proof with the superintendent that the health care provider is insured by a policy of malpractice liability insurance issued by an authorized insurer in the amount of at least [two hundred thousand dollars ($200,000)] two hundred fifty thousand dollars ($250,000) per occurrence or [for an individual health care provider, excluding hospitals and outpatient health care facilities] by having continuously on deposit the sum of [six hundred thousand dollars ($600,000)] seven hundred fifty thousand dollars ($750,000) in cash with the superintendent or such other like deposit as the superintendent may allow by rule [or regulation]; provided that hospitals and outpatient health care facilities that establish financial responsibility through a policy of malpractice liability insurance may use any form of malpractice insurance; and provided further that for independent providers, in the absence of an additional deposit or policy as required by this subsection, the deposit or policy shall provide coverage for not more than three separate occurrences; and
(2) pay the surcharge assessed on health care providers by the superintendent pursuant to Section 41-5-25 NMSA 1978.
B. For hospitals or outpatient health care facilities electing to be covered under the Medical Malpractice Act, the superintendent shall determine, based on a risk assessment of each hospital or outpatient health care facility, each hospital's or outpatient health care facility's base coverage or deposit and additional charges for the [patient's compensation] fund. The superintendent shall arrange for an actuarial study [as provided in Section 41-5-25 NMSA 1978] before determining base coverage or deposit and surcharges.
C. A health care provider not qualifying under this section shall not have the benefit of any of the provisions of the Medical Malpractice Act in the event of a malpractice claim against it; provided that beginning July 1, 2021, hospitals and outpatient health care facilities shall not participate in the medical review process, and beginning January 1, 2027, hospitals and outpatient health care facilities shall have the benefits of the other provisions of the Medical Malpractice Act except participation in the fund."
SECTION 3. Section 41-5-6 NMSA 1978 (being Laws 1992, Chapter 33, Section 4) 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. The aggregate dollar amount includes 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. In jury cases, the jury shall not be given any instructions dealing with this limitation. Beginning January 1, 2023, the per occurrence limit on recovery shall be adjusted annually by the consumer price index for all urban consumers.
C. 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 an injury or death to a patient as a result of malpractice shall not exceed four million dollars ($4,000,000) per occurrence for claims brought against a hospital or outpatient health care facility if the injury or death occurred in calendar year 2022. The aggregate dollar amount includes 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. In jury cases, the jury shall not be given any instructions dealing with this limitation.
D. 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 an injury or death to a patient as a result of malpractice shall not exceed four million five hundred thousand dollars ($4,500,000) per occurrence for claims brought against a hospital or outpatient health care facility if the injury or death occurred in calendar year 2023. The aggregate dollar amount includes 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. In jury cases, the jury shall not be given any instructions dealing with this limitation.
E. 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 an injury or death to a patient as a result of malpractice shall not exceed five million dollars ($5,000,000) per occurrence for claims brought against a hospital or outpatient health care facility if the injury or death occurred in calendar year 2024. The aggregate dollar amount includes 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. In jury cases, the jury shall not be given any instructions dealing with this limitation.
F. 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 an injury or death to a patient as a result of malpractice shall not exceed five million five hundred thousand dollars ($5,500,000) per occurrence for claims brought against a hospital or outpatient health care facility if the injury or death occurred in calendar year 2025. The aggregate dollar amount includes 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. In jury cases, the jury shall not be given any instructions dealing with this limitation.
G. 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 an injury or death to a patient as a result of malpractice shall not exceed six million dollars ($6,000,000) per occurrence for claims brought against a hospital or outpatient health care facility if the injury or death occurred in 2026; provided that beginning January 1, 2027, the per occurrence limit shall be adjusted annually by the consumer price index for all urban consumers. The aggregate dollar amount includes 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. In jury cases, the jury shall not be given any instructions dealing with this limitation.
[B.] H. The value of accrued medical care and related benefits shall not be subject to [the six hundred thousand dollar ($600,000)] any limitation.
[C. Monetary damages shall not be awarded for future medical expenses in malpractice claims.
D.] I. A health care provider's personal liability is limited to [two hundred thousand dollars ($200,000)] 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 thousand dollars ($200,000)] two hundred fifty thousand dollars ($250,000) shall be paid from the [patient's compensation] fund [as provided in Section 41-5-25 NMSA 1978] except as provided in Subsection K of this section.
[E. For the purposes of Subsections A and B of this section, the six hundred thousand dollar ($600,000) aggregate amount recoverable by all persons for or arising from any injury or death to a patient as a result of malpractice shall apply only to malpractice occurring on or after April 1, 1995.]
J. 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.
K. Until January 1, 2027, amounts due from a judgment or settlement against a hospital or 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 outpatient health care facility and not by the fund. Beginning January 1, 2027, amounts due from a judgment or settlement against a hospital or outpatient health care facility shall not be paid from the fund."
SECTION 4. Section 41-5-7 NMSA 1978 (being Laws 1992, Chapter 33, Section 5, as amended by Laws 1992, Chapter 33, Section 6) is amended to read:
"41-5-7. [FUTURE] MEDICAL EXPENSES AND PUNITIVE DAMAGES.--
[A. In all malpractice claims where liability is established, the jury shall be given a special interrogatory asking if the patient is in need of future medical care and related benefits. No inquiry shall be made concerning the value of future medical care and related benefits, and evidence relating to the value of future medical care shall not be admissible. In actions upon malpractice claims tried to the court, where liability is found, the court's findings shall include a recitation that the patient is or is not in need of future medical care and related benefits.
B. Except as provided in Section 41-5-10 NMSA 1978, once a judgment is entered in favor of a patient who is found to be in need of future medical care and related benefits or a settlement is reached between a patient and health care provider in which the provision of medical care and related benefits is agreed upon, and continuing as long as medical or surgical attention is reasonably necessary, the patient shall be furnished with all medical care and related benefits directly or indirectly made necessary by the health care provider's malpractice, subject to a semi-private room limitation in the event of hospitalization, unless the patient refuses to allow them to be so furnished.
C.] A. Awards of past and future medical care and related benefits shall not be subject to the [six hundred thousand dollar ($600,000) limitation] limitations of recovery imposed in Section 41-5-6 NMSA 1978.
[D. Payment for medical care and related benefits shall be made as expenses are incurred.
E.] 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 [two hundred thousand dollars ($200,000)] 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 [patient's compensation] fund.
C. 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.
[F.] D. 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.
[G. The court in a supplemental proceeding shall estimate the value of the future medical care and related benefits reasonably due the patient on the basis of evidence presented to it. That figure shall not be included in any award or judgment but shall be included in the record as a separate court finding.
H.] E. 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 [patient's compensation] 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 [on a derivative basis] where that imposition would not be otherwise authorized by law."
SECTION 5. Section 41-5-9 NMSA 1978 (being Laws 1976, Chapter 2, Section 9) is amended to read:
"41-5-9. DISTRICT COURT--CONTINUING JURISDICTION.--[A.] The district court from which final judgment [issues] issued shall have continuing jurisdiction in cases where future medical care and related benefits [are] were awarded pursuant to Section [7] 41-5-7 NMSA 1978 for malpractice claims arising from occurrences prior to July 1, 2021.
[B. In all cases where the patient's continued need of such benefits or the degree to which such benefits are needed is challenged at a point in time after a judgment is entered, the court, sitting without a jury, shall determine whether such need continues to exist and the extent of such need.
C. Whenever a patient petitions the district court for an increase in medical care and related benefits, the petition shall be set down for hearing at the earliest possible time and takes precedence over all matters except older matters of the same character and motions for preliminary injunctions filed pursuant to Section 21-1-1 (65, 66) NMSA 1953.
D. The health care provider shall have the burden of proving that the patient's need for benefits has subsided or abated or that medical care and related benefits are not reasonably necessary, which it shall establish by clear and convincing evidence. The patient shall have the burden of proving that his need for medical care and related benefits has increased, which he shall establish by a preponderance of the evidence.]"
SECTION 6. Section 41-5-13 NMSA 1978 (being Laws 1976, Chapter 2, Section 13) is amended to read:
"41-5-13. LIMITATIONS.--No claim for malpractice [arising out of an act of malpractice which occurred subsequent to the effective date of the Medical Malpractice Act] may be brought against a health care provider unless filed within three years after the date that the act of malpractice occurred, except that [a minor under the full age of six years shall have until his ninth birthday in which to file. This subsection applies to all persons regardless of minority or other legal disability] the times limited for the bringing of actions by minors and incapacitated persons shall be extended so that they shall have one year from and after the age of majority or termination of incapacity within which to commence the actions."
SECTION 7. Section 41-5-14 NMSA 1978 (being Laws 1976, Chapter 2, Section 14) is amended to read:
"41-5-14. MEDICAL REVIEW COMMISSION--INDEPENDENT PROVIDERS.--
A. The "New Mexico medical review commission" is created. The function of the New Mexico medical review commission is to provide panels to review all malpractice claims against [health care] independent providers who are natural persons covered by the Medical Malpractice Act.
B. Those eligible to sit on a panel shall consist of health care providers licensed pursuant to New Mexico law and residing in New Mexico and [the] members of the state bar.
C. The only cases [which] that a panel will consider [include all] are cases involving [any] an alleged act of malpractice occurring in New Mexico by [health care providers] an independent provider qualified under the Medical Malpractice Act. Beginning July 1, 2021, cases involving an alleged act of malpractice by a hospital or outpatient health care facility shall not be considered and such claims shall not be filed with the New Mexico medical review commission.
D. An attorney shall submit a case for the consideration of a panel, prior to filing a complaint in any district court or other court sitting in New Mexico, by addressing an application, in writing, signed by the patient or [his] the patient's attorney, to the director of the New Mexico medical review commission.
E. The director of the New Mexico medical review commission [will] shall be an attorney appointed by and serving at the pleasure of the chief justice of the New Mexico supreme court.
F. The chief justice shall set the director's salary and report the [same] salary to the superintendent in [his] the superintendent's capacity as custodian of the [patient's compensation] fund."
SECTION 8. Section 41-5-15 NMSA 1978 (being Laws 1976, Chapter 2, Section 15) is amended to read:
"41-5-15. COMMISSION DECISION REQUIRED--APPLICATION.--
A. No malpractice action may be filed in any court against a qualifying [health care] independent provider or the independent provider's employer, master or principal based on a theory of respondeat superior or any other derivative theory of recovery before application is made to the New Mexico medical review commission and its decision is rendered; provided, however, that an independent provider and the patient may stipulate to forego the panel process.
B. This application shall contain the following:
[(1) a brief statement of the facts of the case, naming the persons involved, the dates and the circumstances, so far as they are known, of the alleged act or acts of malpractice; and]
(1) the name of the health care provider against which the claims are asserted;
(2) a short and plain statement of the grounds as to why the New Mexico medical review commission has jurisdiction over the claims being asserted;
(3) the specific date or date range when the malpractice allegedly occurred;
(4) so far as known, a brief statement of the facts supporting the patient's malpractice claim; and
[(2)] (5) a statement authorizing the panel to obtain access to all medical and hospital records and information pertaining to the matter giving rise to the application and, for the purposes of its consideration of the matter only, waiving any claim of privilege as to the contents of those records. Nothing in that statement shall in any way be construed as waiving that privilege for any other purpose or in any other context, in or out of court."
SECTION 9. Section 41-5-16 NMSA 1978 (being Laws 1976, Chapter 2, Section 16) is amended to read:
"41-5-16. APPLICATION PROCEDURE.--
A. Upon receipt of an application for review, the New Mexico medical review commission's director or [his delegate] the director's designee shall cause to be served a true copy of the application on the [health care] independent providers [involved] against which claims are asserted. Service shall be effected pursuant to New Mexico law. If the [health care] independent provider involved chooses to retain legal counsel, [his] the independent provider's attorney shall informally enter [his] an appearance with the director.
B. The [health care] independent provider shall answer the application for review and in addition shall submit a statement authorizing the panel to obtain access to all medical and hospital records and information pertaining to the matter giving rise to the application and, for the purposes of its consideration of the matter only, waiving any claim of privilege as to the contents of those records. Nothing in that statement shall in any way be construed as waiving that privilege for any other purpose or in any other context, in or out of court.
C. In instances where applications are received employing the theory of respondeat superior or some other derivative theory of recovery, the director shall forward such applications to the state professional societies, associations or licensing boards of both the individual [health care] independent provider whose alleged malpractice caused the application to be filed and the [health care] independent provider named a respondent as employer, master or principal."
SECTION 10. Section 41-5-17 NMSA 1978 (being Laws 1976, Chapter 2, Section 17) is amended to read:
"41-5-17. PANEL SELECTION.--
A. Applications for review shall be promptly transmitted by the director of the New Mexico medical review commission to the directors of the [health care] independent provider's state professional society or association and the state bar association, who shall each select three panelists within thirty days from the date of transmittal of the application.
B. If no state professional society or association exists or if the [health care] independent provider does not belong to [such] a society or association, the director shall transmit the application to the [health care] independent provider's state licensing board, which shall in turn select three persons from the [health care] independent provider's profession and, where applicable, [to] two persons specializing in the same field or discipline as the [health care] independent provider.
C. In cases where there are multiple defendants, [the case against each health care provider may be reviewed by a separate panel, or] a single combined panel [may] shall review the [claim] claims against all [parties defendant, at the discretion of the director] party defendants. At the discretion of the panel chair, a hearing involving multiple defendants may include fewer than three panelists from the independent provider's profession and fewer than three lawyer panel members per defendant.
D. Except for cases involving multiple defendants, three panel members from the [health care] independent provider's profession and three panel members from the state bar association shall sit in review in each case.
[E. In those cases where the theory of respondeat superior or some other derivative theory of recovery is employed, two of the panel members shall be chosen from the individual health care provider's profession and one panel member shall be chosen from the profession of the health care provider named a respondent employer, master or principal.
F.] E. The director of the medical review commission or [his] the director's delegate, who shall be an attorney, shall sit on each panel and serve as [chairman] chair.
[G. Any] F. A member shall disqualify [himself] the member's self from consideration of [any] a case in which, by virtue of [his] circumstances, [he] the member feels [his] the member's presence on the panel would be inappropriate, considering the purpose of the panel. The director may excuse a proposed panelist from serving.
[H.] G. Whenever a party [shall make and file] makes and files an affidavit that a panel member selected pursuant to this section cannot, according to the belief of the party making the affidavit, sit in review of the application with impartiality, that panel member shall proceed no further. Another panel member shall be selected by the [health care] independent provider's professional association, state licensing board or the state bar association, as the case may be. A party may not disqualify more than three proposed panel members in this manner in any single malpractice claim."
SECTION 11. Section 41-5-18 NMSA 1978 (being Laws 1976, Chapter 2, Section 18) is amended to read:
"41-5-18. TIME AND PLACE OF HEARING.--A date, time and place for hearing shall be fixed by the director of the New Mexico medical review commission and prompt notice [thereof] of the hearing shall be given to the parties involved, their attorneys and the members of the panel. In no instance shall the date set be more than sixty days after the transmittal by the director of the application for review, unless good cause exists for extending the period. Hearings may be held anywhere in the state [of New Mexico], and the director shall give due regard to the convenience of the parties in determining the place of hearing. Upon the request of one party, within ten days of the answer filed by the respondent, the hearing shall be conducted via video conference, including attorneys, witnesses and panel members appearing remotely."
SECTION 12. Section 41-5-19 NMSA 1978 (being Laws 1976, Chapter 2, Section 19) is amended to read:
"41-5-19. HEARING PROCEDURES.--
A. At the time set for hearing, the attorney submitting the case for review shall be present and shall make a brief introduction of [his] the case, including a resume of the facts constituting alleged professional malpractice [which he is prepared to prove]. The [health care] independent provider against whom the claim is brought and [its] the independent provider's attorney may be present and may make an introductory statement of [its] the independent provider's case.
B. Both parties may call witnesses to testify before the panel, which witnesses shall be sworn. Medical texts, journals, studies and other documentary evidence relied upon by either party may be offered and admitted if relevant. Written statements of fact of treating [health care] independent providers may be reviewed. The monetary damages in any case shall not be a subject of inquiry or discussion.
C. The hearing [will] shall be informal, and no official transcript shall be made. Nothing contained in this [paragraph] subsection shall preclude the [taking] recording or transcribing of the testimony by the parties at their own expense.
D. At the conclusion of the hearing, the panel [may take the case under advisement or it may request that additional facts, records, witnesses or other information be obtained and presented to it at a supplemental hearing, which shall be set for a date and time certain, not longer than thirty days from the date of the original hearing unless the attorney bringing the matter for review shall in writing consent to a longer period.
E. Any supplemental hearing shall be held in the same manner as the original hearing, and the parties concerned and their attorneys may be present] shall deliberate and reach a decision."
SECTION 13. Section 41-5-25 NMSA 1978 (being Laws 1992, Chapter 33, Section 9, as amended) is amended to read:
"41-5-25. PATIENT'S COMPENSATION FUND--THIRD-PARTY ADMINISTRATOR--ACTUARIAL STUDIES--SURCHARGES--CLAIMS--PRORATION--PROOFS OF AUTHENTICITY.--
A. [There is created in the state treasury a] The "patient's compensation fund" [to be collected and received by the superintendent for exclusive use for the purposes stated in the Medical Malpractice Act] is created as a nonreverting fund in the state treasury. The fund consists of money from surcharges, income from investment of the fund and any other money deposited to the credit of the fund. The fund [and any income from it] shall be held in trust, deposited in a segregated account in the state treasury and invested [and reinvested by the superintendent with the prior approval of the state board of finance] by the state investment office and shall not become a part of or revert to the general fund or any other fund of [this] the state. [The fund and any income] Money from the fund shall [only] be expended only for the purposes of and to the extent provided in the Medical Malpractice Act. [The superintendent shall have the authority to use fund money to purchase insurance for the fund and its obligations] All approved expenses of collecting, protecting and administering the fund, including purchasing insurance for the fund, shall be paid from the fund.
B. The superintendent shall contract for the administration and operation of the fund with a qualified, licensed third-party administrator, selected in consultation with the advisory board, no later than January 1, 2022. The third-party administrator shall provide an annual audit of the fund to the superintendent.
C. The superintendent, as custodian of the [patient's compensation] fund, and the third-party administrator shall be notified by the health care provider or [his] the health care provider's insurer within thirty days of service on the health care provider of a complaint asserting a malpractice claim brought in a court in this state against the health care provider.
[B. To create the patient's compensation fund] D. The superintendent shall levy an annual surcharge [shall be levied] on all New Mexico health care providers qualifying under [Paragraph (1) of Subsection A of] Section 41-5-5 NMSA 1978 [in New Mexico]. The surcharge shall be determined by the superintendent [based upon sound actuarial principles, using data obtained from New Mexico experience if available] with the advice of the advisory board and based on the annual independent actuarial study of the fund. The surcharges for health care providers, including hospitals and outpatient health care facilities whose qualifications for the fund end on January 1, 2027, shall be based on sound actuarial principles, using data obtained from New Mexico claims and loss experience. A hospital or outpatient health care facility seeking participation in the fund during the remaining qualifying years shall provide, at a minimum, the hospital's or outpatient health care facility's direct and indirect cost information as reported to the federal centers for medicare and medicaid services for all self-insured malpractice claims, including claims and paid loss detail, and the claims and paid loss detail from any professional liability insurance carriers for each hospital or outpatient health care facility and each employed health care provider for the past eight years to the third-party actuary. The same information shall be available to the advisory board for review, including financial information and data, and excluding individually identifying case information, which information shall not be subject to the Inspection of Public Records Act. The superintendent, the third-party actuary or the advisory board shall not use or disclose the information for any purpose other than to fulfill the duties pursuant to this subsection.
E. The surcharge shall be collected on the same basis as premiums by each insurer from the health care provider. [C.] The surcharge [with accrued interest] shall be due and payable within thirty days after the premiums for malpractice liability insurance have been received by the insurer from the health care provider in New Mexico. [D.] If the [annual premium] surcharge is collected but not paid [within the time limit specified in Subsection C of this section] timely, the superintendent may suspend the certificate of authority of the insurer [may be suspended] until the annual premium surcharge is paid.
[E. All expenses of collecting, protecting and administering the patient's compensation fund or of purchasing insurance for the fund shall be paid from the fund.]
F. Surcharges shall be set by October 31 of each year for the next calendar year. Beginning in 2021, the surcharges shall 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 shall cure any fund deficit attributable to hospitals and outpatient health care facilities by December 31, 2026.
[F. Claims payable pursuant to Laws 1976, Chapter 2, Section 30 shall be paid in accordance with the payment schedule constructed by the court.]
G. If the [patient's compensation] fund would be exhausted by payment of all claims allowed during a particular calendar year, then the amounts paid to each patient and other parties obtaining judgments shall be prorated, with each such party receiving an amount equal to the percentage [his] the party's own payment schedule bears to the total of payment schedules outstanding and payable by the fund. Any amounts due and unpaid as a result of such proration shall be paid in the following calendar years. [However, payments for medical care and related benefits shall be made before any payment made under Laws 1976, Chapter 2, Section 30.
G.] H. Upon receipt of one of the proofs of authenticity listed in this subsection, reflecting a judgment for damages rendered pursuant to the Medical Malpractice Act, the superintendent shall issue or have issued warrants in accordance with the payment schedule constructed by the court and made a part of its final judgment. The only claim against the [patient's compensation] fund shall be a voucher or other appropriate request by the superintendent after [he] the superintendent receives:
(1) until January 1, 2022, a certified copy of a final judgment in excess of two hundred thousand dollars ($200,000) against a health care provider;
(2) until January 1, 2022, a certified copy of a court-approved settlement or certification of settlement made prior to initiating suit, signed by both parties, in excess of two hundred thousand dollars ($200,000) against a health care provider; or
(3) until January 1, 2022, a certified copy of a final judgment less than two hundred thousand dollars ($200,000) and an affidavit of a health care provider or its insurer attesting that payments made pursuant to Subsection [E] B of Section 41-5-7 NMSA 1978, combined with the monetary recovery, exceed two hundred thousand dollars ($200,000).
[H. The superintendent shall contract for an independent actuarial study of the patient's compensation fund to be performed not less than once every two years.]
I. On or after January 1, 2022, the amounts specified in Paragraphs (1) through (3) of Subsection H of this section shall be two hundred fifty thousand dollars ($250,000)."
SECTION 14. A new section of the Medical Malpractice Act, Section 41-5-25.1 NMSA 1978, is enacted to read:
"41-5-25.1. [NEW MATERIAL] PATIENT'S COMPENSATION FUND ADVISORY BOARD--CREATED--MEMBERSHIP--POWERS AND DUTIES.--
A. The "patient's compensation fund advisory board" is created to advise the superintendent and the third-party administrator. The office of superintendent of insurance shall provide staff services to the advisory board. The advisory board shall be established by July 2, 2021.
B. The nine-member advisory board shall be consist of:
(1) two representatives from the New Mexico trial lawyers association;
(2) two representatives of a statewide association representing hospitals;
(3) two representatives of a statewide association representing physicians;
(4) two patient or patient advocate representatives; and
(5) one representative of a statewide association representing certified nurse practitioners.
C. Members of the advisory board shall be chosen annually by their organizations, as applicable, and the patient or patient advocate representatives shall be chosen by the chief justice of the supreme court from nominations made by the New Mexico trial lawyers association. Members of the advisory board are entitled to receive per diem and mileage pursuant to the Per Diem and Mileage Act, but shall receive no other compensation, perquisite or allowance.
D. The advisory board shall elect a chair and a vice chair. A majority of the members constitutes a quorum for the transaction of business. All decisions of the advisory board shall be by majority vote of the members present.
E. The advisory board shall convene at least twice a year or at the request of the superintendent to:
(1) review the process and data for the setting of the surcharges for all qualified health care providers pursuant to the Medical Malpractice Act;
(2) advise the superintendent concerning surcharge data accumulation and results;
(3) advise the superintendent on the surcharges to be set by the superintendent; and
(4) prepare an annual report to the legislature on the operations and financial condition of the fund no later than the first day of each year's legislative session."
SECTION 15. Section 41-5-28 NMSA 1978 (being Laws 1976, Chapter 2, Section 29, as amended) is amended to read:
"41-5-28. PAYMENT OF MEDICAL REVIEW COMMISSION EXPENSES.--Unless otherwise provided by law, expenses incurred in carrying out the powers, duties and functions of the New Mexico medical review commission, including the salary of the director of the commission, shall be paid by the [patient's compensation] fund. The superintendent, in [his] the superintendent's capacity as custodian of the fund, shall disburse fund money to the director upon receipt of vouchers itemizing expenses incurred by the [New Mexico medical review] commission. The director shall supply the chief justice of the New Mexico supreme court with duplicates of all vouchers submitted to the superintendent. Expenses of the commission paid by the fund shall not exceed [three hundred fifty thousand dollars ($350,000)] five hundred thousand dollars ($500,000) in any single calendar year; provided, however, that expenses incurred in defending the commission shall not be subject to that maximum amount."
SECTION 16. Section 41-5-29 NMSA 1978 (being Laws 1992, Chapter 33, Section 10) is amended to read:
"41-5-29. FUND REPORTS.--On January 31 of each year, the superintendent shall, upon request, provide a written report to all interested persons of the following information:
A. the beginning and ending calendar year balances in the [patient's compensation] fund;
B. an itemized accounting of the total amount of contributions to the [patient's compensation] fund; [and]
C. all information regarding closed claims files, including an itemized accounting of all payments paid out; and
[C.] D. any other information regarding the [patient's compensation] fund that the superintendent or the legislature considers to be important."
SECTION 17. REPEAL.--Sections 41-5-2 and 41-5-10 NMSA 1978 (being Laws 1976, Chapter 2, Sections 2 and 10) are repealed.
SECTION 18. EFFECTIVE DATES.--
A. The effective date of Sections 7, 13 and 14 of this act is July 1, 2021.
B. The effective date Sections 1 through 6, 8 through 12 and 15 through 17 of this act is January 1, 2022.".
___________________________________
Joseph Cervantes, Chairman
Adopted_______________________ Not Adopted_______________________
(Chief Clerk) (Chief Clerk)
Date ________________________
The roll call vote was 8 For 1 Against
Yes: 8
No: Pirtle
Excused: None
Absent: None
HB0075JU1.wpd .220778.1