HB 107

                                1  HOUSE BILL 107
                                2     57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
                                3  INTRODUCED BY
                                4  Jenifer Jones and Catherine J. Cullen and Nicole Chavez
                                5
                                6
                                7
                                8
                                9
                                10  AN ACT
                                11   RELATING TO HEALTH CARE; AMENDING DEFINITIONS IN THE MEDICAL
                                12   MALPRACTICE ACT; LIMITING THE AMOUNT OF DAMAGES THAT CAN BE
                                13   AWARDED DUE TO A MEDICAL MALPRACTICE CLAIM; REQUIRING PAYMENTS
                                14   FROM THE PATIENT'S COMPENSATION FUND TO BE MADE AS EXPENSES ARE
                                15   INCURRED; LIMITING THE AVAILABILITY OF PUNITIVE DAMAGES IN
                                16   MEDICAL MALPRACTICE CLAIMS; LIMITING ATTORNEY FEES IN
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                                17   MALPRACTICE CLAIMS.
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                                18
                                19   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
                                20  SECTION 1.     Section 41-5-3 NMSA 1978 (being Laws 1976,
                                21   Chapter 2, Section 3, as amended) is amended to read:
                                22  "41-5-3.     DEFINITIONS.--As used in the Medical Malpractice
                                23   Act:
                                24  A.    "advisory board" means the patient's
                                25   compensation fund advisory board;
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                                1  B.   "control" means equity ownership in a business
                                2    entity that:
                                3  (1)   represents more than fifty percent of the
                                4    total voting power of the business entity; or
                                5  (2)   has a value of more than fifty percent of
                                6    that business entity;
                                7  C.   "fund" means the patient's compensation fund;
                                8  D.   "health care provider" means a person, a
                                9    corporation, an organization, a facility or an institution
                                10   licensed or certified by this state to provide health care or
                                11   professional services as a doctor of medicine, a hospital, an
                                12   outpatient health care facility, a doctor of osteopathy, a
                                13   chiropractor, [podiatrist] a podiatric physician, a nurse
                                14   anesthetist, a physician's assistant, a certified nurse
                                15   practitioner, a clinical nurse specialist or a certified nurse-
                                16   midwife or a business entity that is organized, incorporated or
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                                17   formed pursuant to the laws of New Mexico that provides health
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                                18   care services primarily through natural persons identified in
                                19   this subsection.    "Health care provider" does not mean a person
                                20   or entity protected pursuant to the Tort Claims Act or the
                                21   Federal Tort Claims Act;
                                22  E.   "hospital" means a facility licensed as a
                                23   hospital in this state that offers [in-patient] inpatient
                                24   services, nursing or overnight care on a twenty-four-hour basis
                                25   for diagnosing, treating and providing medical, psychological
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                                1    or surgical care for three or more separate persons who have a
                                2    physical or mental illness, disease, injury or rehabilitative
                                3    condition or are pregnant and may offer emergency services.
                                4    "Hospital" includes a hospital's parent corporation, subsidiary
                                5    corporations or affiliates if incorporated or registered in New
                                6    Mexico; employees and locum tenens providing services at the
                                7    hospital; and agency nurses providing services at the hospital.
                                8    "Hospital" does not mean a person or an entity protected
                                9    pursuant to the Tort Claims Act or the Federal Tort Claims Act;
                                10  F.   "independent outpatient health care facility"
                                11   means a health care facility that is an ambulatory surgical
                                12   center, an urgent care facility or a free-standing emergency
                                13   room that is not, directly or indirectly through one or more
                                14   intermediaries, controlled or under common control with a
                                15   hospital.   "Independent outpatient health care facility"
                                16   includes a facility's employees, locum tenens providers and
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                                17   agency nurses providing services at the facility.    "Independent
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                                18   outpatient health care facility" does not mean a person or
                                19   entity protected pursuant to the Tort Claims Act or the Federal
                                20   Tort Claims Act;
                                21  G.   "independent provider" means a doctor of
                                22   medicine, doctor of osteopathy, chiropractor, [podiatrist]
                                23   podiatric physician, nurse anesthetist, physician's assistant,
                                24   certified nurse practitioner, clinical nurse specialist or
                                25   certified nurse-midwife who is not an employee of a hospital or
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                                1    outpatient health care facility.     "Independent provider" does
                                2    not mean a person or entity protected pursuant to the Tort
                                3    Claims Act or the Federal Tort Claims Act.     "Independent
                                4    provider" includes:
                                5  (1)   a health care facility that is:
                                6  (a)   licensed pursuant to the [Public
                                7    Health Act] Health Care Code as an outpatient facility;
                                8  (b)   not an ambulatory surgical center,
                                9    an urgent care facility or a free-standing emergency room; and
                                10  (c)   not hospital-controlled; and
                                11  (2)   a business entity that is not a hospital
                                12   or outpatient health care facility that employs or consists of
                                13   members who are licensed or certified as doctors of medicine,
                                14   doctors of osteopathy, chiropractors, [podiatrists] podiatric
                                15   physicians, nurse anesthetists, physician's assistants,
                                16   certified nurse practitioners, clinical nurse specialists or
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                                17   certified nurse-midwives and the business entity's employees;
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                                18  H.   "insurer" means an insurance company engaged in
                                19   writing health care provider malpractice liability insurance in
                                20   this state;
                                21  I.   "malpractice claim" includes any cause of action
                                22   arising in this state against a health care provider for
                                23   medical treatment, lack of medical treatment or other claimed
                                24   departure from accepted standards of health care that
                                25   proximately results in injury to the patient, whether the
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                                1    patient's claim or cause of action sounds in tort or contract,
                                2    and includes but is not limited to actions based on battery or
                                3    wrongful death; "malpractice claim" does not include a cause of
                                4    action arising out of the driving, flying or nonmedical acts
                                5    involved in the operation, use or maintenance of a vehicular or
                                6    aircraft ambulance;
                                7  J.   "medical care and related benefits" means all
                                8    reasonable medical, surgical, physical rehabilitation and
                                9    custodial services and includes drugs, prosthetic devices and
                                10   other similar materials reasonably necessary in the provision
                                11   of such services;
                                12  K.   "occurrence" means all [injuries to a patient
                                13   caused by health care providers' successive acts or omissions
                                14   that combined concurrently to create a malpractice claim]
                                15   claims for damages from all persons arising from harm to a
                                16   single patient, no matter how many health care providers,
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                                17   errors or omissions contributed to the harm;
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                                18  L.   "outpatient health care facility" means an
                                19   entity that is hospital-controlled and is licensed pursuant to
                                20   the [Public Health Act] Health Care Code as an outpatient
                                21   facility, including ambulatory surgical centers, free-standing
                                22   emergency rooms, urgent care clinics, acute care centers and
                                23   intermediate care facilities and includes a facility's
                                24   employees, locum tenens providers and agency nurses providing
                                25   services at the facility.    "Outpatient health care facility"
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                                1    does not include:
                                2  (1)   independent providers;
                                3  (2)   independent outpatient health care
                                4    facilities; or
                                5  (3)   individuals or entities protected pursuant
                                6    to the Tort Claims Act or the Federal Tort Claims Act;
                                7  M.   "patient" means a natural person who received or
                                8    should have received health care from a health care provider,
                                9    under a contract, express or implied; and
                                10  N.   "superintendent" means the superintendent of
                                11   insurance."
                                12        SECTION 2.     Section 41-5-6 NMSA 1978 (being Laws 1992,
                                13   Chapter 33, Section 4, as amended) is amended to read:
                                14        "41-5-6.     LIMITATION OF RECOVERY.--
                                15  A.   Except for punitive damages and past and future
                                16   medical care and related benefits, the aggregate dollar amount
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                                17   recoverable by all persons for or arising from any injury or
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                                18   death to a patient as a result of malpractice shall not exceed
                                19   six hundred thousand dollars ($600,000) per occurrence.      [for
                                20   malpractice claims brought against health care providers if the
                                21   injury or death occurred prior to January 1, 2022.    In jury
                                22   cases, the jury shall not be given any instructions dealing
                                23   with this limitation.
                                24  B.   Except for punitive damages and past and future
                                25   medical care and related benefits, the aggregate dollar amount
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                                1    recoverable by all persons for or arising from any injury or
                                2    death to a patient as a result of malpractice shall not exceed
                                3    seven hundred fifty thousand dollars ($750,000) per occurrence
                                4    for malpractice claims against independent providers; provided
                                5    that, beginning January 1, 2023, the per occurrence limit on
                                6    recovery shall be adjusted annually by the consumer price index
                                7    for all urban consumers.
                                8  C.   The aggregate dollar amount recoverable by all
                                9    persons for or arising from any injury or death to a patient as
                                10   a result of malpractice, except for punitive damages and past
                                11   and future medical care and related benefits, shall not exceed
                                12   seven hundred fifty thousand dollars ($750,000) for claims
                                13   brought against an independent outpatient health care facility
                                14   for an injury or death that occurred in calendar years 2022 and
                                15   2023.
                                16  D.   In calendar year 2024 and subsequent years, the
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                                17   aggregate dollar amount recoverable by all persons for or
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                                18   arising from an injury or death to a patient as a result of
                                19   malpractice, except for punitive damages and past and future
                                20   medical care and related benefits, shall not exceed the
                                21   following amounts for claims brought against an independent
                                22   outpatient health care facility:
                                23  (1)   for an injury or death that occurred in
                                24   calendar year 2024, one million dollars ($1,000,000) per
                                25   occurrence; and
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                                1  (2)   for an injury or death that occurred in
                                2    calendar year 2025 and thereafter, the amount provided in
                                3    Paragraph (1) of this subsection, adjusted annually by the
                                4    prior three-year average consumer price index for all urban
                                5    consumers, per occurrence.
                                6  E.   In calendar year 2022 and subsequent calendar
                                7    years, the aggregate dollar amount recoverable by all persons
                                8    for or arising from any injury or death to a patient as a
                                9    result of malpractice, except for punitive damages and past and
                                10   future medical care and related benefits, shall not exceed the
                                11   following amounts for claims brought against a hospital or a
                                12   hospital-controlled outpatient health care facility:
                                13  (1)   for an injury or death that occurred in
                                14   calendar year 2022, four million dollars ($4,000,000) per
                                15   occurrence;
                                16  (2)   for an injury or death that occurred in
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                                17   calendar year 2023, four million five hundred thousand dollars
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                                18   ($4,500,000) per occurrence;
                                19  (3)   for an injury or death that occurred in
                                20   calendar year 2024, five million dollars ($5,000,000) per
                                21   occurrence;
                                22  (4)   for an injury or death that occurred in
                                23   calendar year 2025, five million five hundred thousand dollars
                                24   ($5,500,000) per occurrence;
                                25  (5)   for an injury or death that occurred in
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                                1    calendar year 2026, six million dollars ($6,000,000) per
                                2    occurrence; and
                                3  (6)    for an injury or death that occurred in
                                4    calendar year 2027 and each calendar year thereafter, the
                                5    amount provided in Paragraph (5) of this subsection, adjusted
                                6    annually by the consumer price index for all urban consumers,
                                7    per occurrence.
                                8  F.    The aggregate dollar amounts provided in
                                9    Subsections B through E of this section include payment to any
                                10   person for any number of loss of consortium claims or other
                                11   claims per occurrence that arise solely because of the injuries
                                12   or death of the patient.
                                13  G.] B.    In jury cases, the jury shall not be given
                                14   any instructions dealing with the limitations provided in this
                                15   section.
                                16  [H.] C.      Except as provided in Section 41-5-7 NMSA
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                                17   1978, the value of accrued medical care and related benefits
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                                18   shall not be subject to any limitation.
                                19  [I.    Except for an independent outpatient health
                                20   care facility] D.     A health care provider's personal liability
                                21   is limited to [two hundred fifty thousand dollars ($250,000)]
                                22   two hundred thousand dollars ($200,000) for monetary damages
                                23   and medical care and related benefits as provided in Section
                                24   41-5-7 NMSA 1978.     Any amount due from a judgment or settlement
                                25   in excess of [two hundred fifty thousand dollars ($250,000)]
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                                1    two hundred thousand dollars ($200,000) shall be paid from the
                                2    fund [except as provided in Subsections J and K of this
                                3    section.
                                4  J.   An independent outpatient health care facility's
                                5    personal liability is limited to five hundred thousand dollars
                                6    ($500,000) for monetary damages and medical care and related
                                7    benefits as provided in Section 41-5-7 NMSA 1978.     Any amount
                                8    due from a judgment or settlement in excess of five hundred
                                9    thousand dollars ($500,000) shall be paid from the fund.
                                10  K.   Until January 1, 2027, amounts due from a
                                11   judgment or settlement against a hospital or hospital-
                                12   controlled outpatient health care facility in excess of seven
                                13   hundred fifty thousand dollars ($750,000), excluding past and
                                14   future medical expenses, shall be paid by the hospital or
                                15   hospital-controlled outpatient health care facility and not by
                                16   the fund.    Beginning January 1, 2027, amounts due from a
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                                17   judgment or settlement against a hospital or hospital-
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                                18   controlled outpatient health care facility shall not be paid
                                19   from the fund.
                                20  L.   The term "occurrence" shall not be construed in
                                21   such a way as to limit recovery to only one maximum statutory
                                22   payment if separate acts or omissions cause additional or
                                23   enhanced injury or harm as a result of the separate acts or
                                24   omissions.    A patient who suffers two or more distinct injuries
                                25   as a result of two or more different acts or omissions that
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                                1    occur at different times by one or more health care providers
                                2    is entitled to up to the maximum statutory recovery for each
                                3    injury]."
                                4  SECTION 3.     Section 41-5-7 NMSA 1978 (being Laws 1992,
                                5    Chapter 33, Section 5, as amended) is amended to read:
                                6  "41-5-7.     MEDICAL EXPENSES AND PUNITIVE DAMAGES.--
                                7  A.   Awards of past and future medical care and
                                8    related benefits shall not be subject to the limitations of
                                9    recovery imposed in Section 41-5-6 NMSA 1978.
                                10  B.   The health care provider shall be liable for all
                                11   medical care and related benefit payments until the total
                                12   payments made by or on behalf of it for monetary damages and
                                13   medical care and related benefits combined equals the health
                                14   care provider's personal liability limit as provided in
                                15   Subsection [I] D of Section 41-5-6 NMSA 1978, after which the
                                16   payments shall be made by the fund.
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                                17  C.   [Beginning January 1, 2027, any amounts due from
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                                18   a judgment or settlement against a hospital or outpatient
                                19   health care facility shall not be paid from the fund if the
                                20   injury or death occurred after December 31, 2026] Payments made
                                21   from the fund for medical care and related benefits shall be
                                22   made as expenses are incurred.
                                23  D.   This section shall not be construed to prevent a
                                24   patient and a health care provider from entering into a
                                25   settlement agreement whereby medical care and related benefits
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                                1    shall be provided for a limited period of time only or to a
                                2    limited degree.
                                3  E.   A judgment of punitive damages against a health
                                4    care provider shall be the personal liability of the health
                                5    care provider.    Punitive damages may only be awarded if the
                                6    prevailing party demonstrates beyond a reasonable doubt that
                                7    the health care provider acted with malice, willful intent to
                                8    harm or wanton disregard for the rights or safety of others.
                                9    Punitive damages shall not be paid from the fund or from the
                                10   proceeds of the health care provider's insurance contract
                                11   unless the contract expressly provides coverage.    Nothing in
                                12   Section 41-5-6 NMSA 1978 precludes the award of punitive
                                13   damages to a patient.    Nothing in this subsection authorizes
                                14   the imposition of liability for punitive damages where that
                                15   imposition would not be otherwise authorized by law.
                                16  F.   A punitive damage award against:
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                                17  (1)   a hospital or a hospital-controlled
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                                18   outpatient health care facility shall not be in an amount that
                                19   exceeds three times the applicable limitation on compensatory
                                20   damages provided in Section 41-5-6 NMSA 1978; or
                                21  (2)   any other health care provider shall not
                                22   be in an amount that exceeds the applicable limitation on
                                23   compensatory damages provided in Section 41-5-6 NMSA 1978."
                                24        SECTION 4.    A new section of the Medical Malpractice Act
                                25   is enacted to read:
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                                1  "[NEW MATERIAL] LIMITING ATTORNEY FEES.--
                                2  A.   An attorney shall not contract for or collect a
                                3    contingency fee for representing a person seeking damages in a
                                4    malpractice claim in an amount that exceeds:
                                5  (1)   thirty percent of the first two hundred
                                6    fifty thousand dollars ($250,000) recovered pursuant to a
                                7    settlement agreement, an arbitration award or a judgment;
                                8  (2)   twenty-five percent of the portion
                                9    recovered pursuant to a settlement agreement, an arbitration
                                10   award or a judgment that is more than two hundred fifty
                                11   thousand dollars ($250,000) but not more than five hundred
                                12   thousand dollars ($500,000) in value;
                                13  (3)   twenty percent of the portion recovered
                                14   pursuant to a settlement agreement, an arbitration award or a
                                15   judgment that is more than five hundred thousand dollars
                                16   ($500,000) but not more than one million dollars ($1,000,000)
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                                17   in value; and
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                                18  (4)   fifteen percent of the portion recovered
                                19   pursuant to a settlement agreement, an arbitration award or a
                                20   judgment that is more than one million dollars ($1,000,000) in
                                21   value.
                                22  B.   Any amount recovered pursuant to a settlement
                                23   agreement, an arbitration award or a judgment for a malpractice
                                24   claim that is covered by the fund shall not contribute to an
                                25   attorney's contingency fee."
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                                1  SECTION 5.   APPLICABILITY.--The provisions of this act
                                2    apply to all claims for medical malpractice that arise on or
                                3    after the effective date of this act.
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