HB 143

                                1  HOUSE BILL 143
                                2     57TH LEGISLATURE - STATE OF NEW MEXICO - SECOND SESSION, 2026
                                3  INTRODUCED BY
                                4        Jenifer Jones and Nicole Chavez and Elaine Sena Cortez
                                5  and Alan T. Martinez and Luis M. Terrazas
                                6
                                7
                                8
                                9
                                10  AN ACT
                                11   RELATING TO HEALTH CARE; INCREASING THE RURAL HEALTH CARE
                                12   PRACTITIONER TAX CREDIT; CREATING THE PHYSICIAN INCOME TAX
                                13   CREDIT; EXPANDING THE RURAL HEALTH CARE PRACTITIONER TAX CREDIT
                                14   TO INCLUDE ADDITIONAL ELIGIBLE HEALTH CARE PRACTITIONERS;
                                15   ENACTING THE MEDICAL RESIDENCY LOAN REPAYMENT ACT; GRANTING
                                16   LOAN REPAYMENT AWARDS TO CERTAIN MEDICAL RESIDENTS AND MEDICAL
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                                17   FELLOWS; PROVIDING FOR CONTRACTS, CONTRACT CANCELLATIONS AND
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                                18   CONTRACT ENFORCEMENT; CREATING A FUND; AMENDING DEFINITIONS IN
                                19   THE MEDICAL MALPRACTICE ACT; LIMITING THE AMOUNT OF DAMAGES
                                20   THAT CAN BE AWARDED DUE TO A MEDICAL MALPRACTICE CLAIM;
                                21   REQUIRING PAYMENTS FROM THE PATIENT'S COMPENSATION FUND TO BE
                                22   MADE AS EXPENSES ARE INCURRED; LIMITING THE AVAILABILITY OF
                                23   PUNITIVE DAMAGES IN MEDICAL MALPRACTICE CLAIMS; LIMITING
                                24   ATTORNEY FEES IN MALPRACTICE CLAIMS; REQUIRING THE HEALTH CARE
                                25   AUTHORITY TO CONDUCT COST STUDIES FOR EACH TYPE OF HEALTH CARE
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                                1    PROVIDER THAT IS REIMBURSED BY MEDICAID; MAKING AN
                                2    APPROPRIATION.
                                3
                                4    BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
                                5  SECTION 1.     Section 7-2-18.22 NMSA 1978 (being Laws 2007,
                                6    Chapter 361, Section 2, as amended) is amended to read:
                                7  "7-2-18.22.    RURAL HEALTH CARE PRACTITIONER TAX CREDIT.--
                                8  A.   A taxpayer who files an individual New Mexico
                                9    tax return, who is not a dependent of another individual, who
                                10   is an eligible health care practitioner and who has provided
                                11   health care services in New Mexico in a rural health care
                                12   underserved area in a taxable year may claim a credit against
                                13   the tax liability imposed by the Income Tax Act.     The credit
                                14   provided in this section may be referred to as the "rural
                                15   health care practitioner tax credit".
                                16  B.   The rural health care practitioner tax credit
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                                17   may be claimed and allowed in an amount that shall not exceed:
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                                18  (1)   [five thousand dollars ($5,000)] fifteen
                                19   thousand dollars ($15,000) for all physicians, osteopathic
                                20   physicians, dentists, psychologists, podiatric physicians and
                                21   optometrists who qualify pursuant to the provisions of this
                                22   section and have provided health care during a taxable year for
                                23   at least one thousand five hundred eighty-four hours at a
                                24   practice site located in an approved rural health care
                                25   underserved area.    Eligible health care practitioners listed in
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                                1    this paragraph who provided health care services for at least
                                2    seven hundred ninety-two hours but less than one thousand five
                                3    hundred eighty-four hours at a practice site located in an
                                4    approved rural health care underserved area during a taxable
                                5    year are eligible for one-half of the tax credit amount; and
                                6  (2)   [three thousand dollars ($3,000)] nine
                                7    thousand dollars ($9,000) for all pharmacists, dental
                                8    hygienists, physician assistants, certified registered nurse
                                9    anesthetists, certified nurse practitioners, clinical nurse
                                10   specialists, registered nurses, midwives, licensed clinical
                                11   social workers, licensed independent social workers,
                                12   professional mental health counselors, professional clinical
                                13   mental health counselors, marriage and family therapists,
                                14   professional art therapists, alcohol and drug abuse counselors,
                                15   licensed practical nurses, emergency medical technicians,
                                16   paramedics, speech-language pathologists, occupational
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                                17   therapists, chiropractic physicians and physical therapists who
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                                18   qualify pursuant to the provisions of this section and have
                                19   provided health care during a taxable year for at least one
                                20   thousand five hundred eighty-four hours at a practice site
                                21   located in an approved rural health care underserved area.
                                22   Eligible health care practitioners listed in this paragraph who
                                23   provided health care services for at least seven hundred
                                24   ninety-two hours but less than one thousand five hundred
                                25   eighty-four hours at a practice site located in an approved
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                                1    rural health care underserved area during a taxable year are
                                2    eligible for one-half of the tax credit amount.
                                3  C.   Before an eligible health care practitioner may
                                4    claim the rural health care practitioner tax credit, the
                                5    practitioner shall submit a completed application to the
                                6    department of health that describes the practitioner's clinical
                                7    practice and contains additional information that the
                                8    department of health may require.      The department of health
                                9    shall determine whether an eligible health care practitioner
                                10   qualifies for the rural health care practitioner tax credit and
                                11   shall issue a certificate to each qualifying eligible health
                                12   care practitioner.    The department of health shall provide the
                                13   taxation and revenue department appropriate information for all
                                14   eligible health care practitioners to whom certificates are
                                15   issued in a secure manner on regular intervals agreed upon by
                                16   both the taxation and revenue department and the department of
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                                17   health.
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                                18  D.   A taxpayer claiming the credit provided by this
                                19   section shall submit a copy of the certificate issued by the
                                20   department of health with the taxpayer's New Mexico income tax
                                21   return for the taxable year.    If the amount of the credit
                                22   claimed exceeds a taxpayer's tax liability for the taxable year
                                23   in which the credit is being claimed, the excess may be carried
                                24   forward for three consecutive taxable years.
                                25  E.   A taxpayer allowed a tax credit pursuant to this
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                                1    section shall claim the credit on forms and in a manner
                                2    required by the department.
                                3  F.   The tax credit provided by this section shall be
                                4    included in the tax expenditure budget pursuant to Section
                                5    7-1-84 NMSA 1978, including the annual aggregate cost of the
                                6    tax credit.
                                7  G.   As used in this section:
                                8  (1)   "eligible health care practitioner" means:
                                9  (a)   a dentist or dental hygienist
                                10   licensed pursuant to the Dental Health Care Act;
                                11  (b)   a midwife that is a:   1) certified
                                12   nurse-midwife licensed by the board of nursing as a registered
                                13   nurse and licensed by the public health division of the
                                14   department of health to practice nurse-midwifery as a certified
                                15   nurse-midwife; or 2) licensed midwife licensed by the public
                                16   health division of the department of health to practice
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                                17   licensed midwifery;
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                                18  (c)   an optometrist licensed pursuant to
                                19   the provisions of the Optometry Act;
                                20  (d)   an osteopathic physician licensed
                                21   pursuant to the provisions of the Medical Practice Act;
                                22  (e)   a physician licensed pursuant to the
                                23   provisions of the Medical Practice Act or a physician assistant
                                24   licensed pursuant to the provisions of the Physician Assistant
                                25   Act;
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                                1  (f)   a podiatric physician licensed
                                2    pursuant to the provisions of the Podiatry Act;
                                3  (g)   a psychologist licensed pursuant to
                                4    the provisions of the Professional Psychologist Act;
                                5  (h)   a registered nurse licensed pursuant
                                6    to the provisions of the Nursing Practice Act;
                                7  (i)   a pharmacist licensed pursuant to
                                8    the provisions of the Pharmacy Act;
                                9  (j)   a licensed clinical social worker or
                                10   a licensed independent social worker licensed pursuant to the
                                11   provisions of the Social Work Practice Act;
                                12  (k)   a professional mental health
                                13   counselor, a professional clinical mental health counselor, a
                                14   marriage and family therapist, an alcohol and drug abuse
                                15   counselor or a professional art therapist licensed pursuant to
                                16   the provisions of the Counseling and Therapy Practice Act;
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                                17   [and]
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                                18  (l)   a physical therapist licensed
                                19   pursuant to the provisions of the Physical Therapy Act;
                                20  (m)   an emergency medical technician or a
                                21   paramedic licensed pursuant to the Emergency Medical Services
                                22   Act;
                                23  (n)   a speech-language pathologist
                                24   licensed pursuant to the Speech-Language Pathology, Audiology
                                25   and Hearing Aid Dispensing Practices Act;
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                                1  (o)   an occupational therapist licensed
                                2    pursuant to the Occupational Therapy Act; and
                                3  (p)   a chiropractic physician licensed
                                4    pursuant to the Chiropractic Physician Practice Act;
                                5  (2)   "health care underserved area" means a
                                6    geographic area or practice location in which it has been
                                7    determined by the department of health, through the use of
                                8    indices and other standards set by the department of health,
                                9    that sufficient health care services are not being provided;
                                10  (3)   "practice site" means a private practice,
                                11   public health clinic, hospital, public or private nonprofit
                                12   primary care clinic or other health care service location in a
                                13   health care underserved area; and
                                14  (4)   "rural" means a rural county or an
                                15   unincorporated area of a partially rural county, as designated
                                16   by the health resources and services administration of the
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                                17   United States department of health and human services."
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                                18        SECTION 2.    A new section of the Income Tax Act is enacted
                                19   to read:
                                20        "[NEW MATERIAL] CREDIT--PHYSICIAN INCOME TAX CREDIT.--
                                21  A.   A taxpayer who is a physician and has completed
                                22   a medical residency may claim a credit against the taxpayer's
                                23   tax liability imposed pursuant to the Income Tax Act for up to
                                24   five consecutive taxable years in which the taxpayer practices
                                25   medicine full-time in New Mexico and has an outstanding balance
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                                1    of a student loan taken to defray the expenses of a medical
                                2    education.    The credit authorized pursuant to this section may
                                3    be referred to as the "physician income tax credit".
                                4  B.    The amount of the tax credit shall be in an
                                5    amount equal to fifty thousand dollars ($50,000) for the
                                6    taxable year the taxpayer meets the requirements of this
                                7    section.
                                8  C.    A taxpayer shall apply for certification of
                                9    eligibility for the tax credit from the higher education
                                10   department on forms and in the manner prescribed by that
                                11   department.       If the higher education department determines that
                                12   the taxpayer meets the requirements of this section, that
                                13   department shall issue a dated certificate of eligibility to
                                14   the taxpayer providing the amount of tax credit for which the
                                15   taxpayer is eligible and the taxable years in which the credit
                                16   may be claimed.       The higher education department shall provide
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                                17   the department with the certificates of eligibility issued
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                                18   pursuant to this subsection in an electronic format at
                                19   regularly agreed upon intervals.
                                20  D.    That portion of the tax credit that exceeds a
                                21   taxpayer's income tax liability in the taxable year in which
                                22   the credit is claimed shall be refunded to the taxpayer.
                                23  E.    A taxpayer allowed to claim a tax credit
                                24   pursuant to this section shall claim the tax credit in a manner
                                25   required by the department.       The credit shall be claimed within
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                                1    three taxable years of the end of the year in which the higher
                                2    education department certifies the credit.
                                3  F.   The credit provided by this section shall be
                                4    included in the tax expenditure budget pursuant to Section
                                5    7-1-84 NMSA 1978, including the annual aggregate cost of the
                                6    credit.
                                7  G.   As used in this section:
                                8  (1)   "physician" means a physician licensed
                                9    pursuant to the provisions of the Medical Practice Act, an
                                10   osteopathic physician licensed pursuant to the provisions of
                                11   the Medical Practice Act or a dentist licensed pursuant to the
                                12   Dental Health Care Act; and
                                13  (2)   "practices medicine full-time" means
                                14   providing health care within the scope of a physician's
                                15   practice for at least one thousand five hundred eighty-four
                                16   hours during the taxable year."
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                                17        SECTION 3.     A new section of Chapter 21 NMSA 1978 is
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                                18   enacted to read:
                                19        "[NEW MATERIAL] SHORT TITLE.--Sections 3 through 9 of this
                                20   act may be cited as the "Medical Residency Loan Repayment
                                21   Act"."
                                22        SECTION 4.     A new section of Chapter 21 NMSA 1978 is
                                23   enacted to read:
                                24        "[NEW MATERIAL] DEFINITIONS.--As used in the Medical
                                25   Residency Loan Repayment Act:
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                                1  A.   "applicant" means a person applying for an
                                2    award;
                                3  B.   "award" means the grant of money pursuant to the
                                4    Medical Residency Loan Repayment Act to repay loans;
                                5  C.   "department" means the higher education
                                6    department;
                                7  D.   "fund" means the medical residency loan
                                8    repayment fund;
                                9  E.   "loan" means a grant of money pursuant to a
                                10   contract between a medical resident or a medical fellow and the
                                11   federal government, the state government or a commercial lender
                                12   to defray the costs incidental to an undergraduate or medical
                                13   education and that requires either repayment of principal and
                                14   interest or repayment in services;
                                15  F.   "medical fellow" means an individual who has
                                16   completed a medical fellowship in an institution of higher
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                                17   education in New Mexico; and
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                                18  G.   "medical resident" means an individual who has
                                19   completed a medical residency in an institution of higher
                                20   education in New Mexico."
                                21        SECTION 5.    A new section of Chapter 21 NMSA 1978 is
                                22   enacted to read:
                                23        "[NEW MATERIAL] POWERS AND DUTIES.--The department may:
                                24  A.   grant an award to repay loans obtained for
                                25   undergraduate education and medical training obtained by a
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                                1    medical resident or medical fellow upon such terms and
                                2    conditions as may be imposed by rule of the department; and
                                3  B.   delegate to other agencies or contract for the
                                4    performance of services required by the medical residency loan
                                5    repayment program."
                                6  SECTION 6.     A new section of Chapter 21 NMSA 1978 is
                                7    enacted to read:
                                8  "[NEW MATERIAL] AWARDS--CRITERIA--CONTRACT TERMS.--
                                9  A.   An applicant shall have completed a medical
                                10   residency or medical fellowship before applying for an award
                                11   and agreed to work as a physician in New Mexico for five
                                12   consecutive years upon receiving an award.
                                13  B.   Prior to receiving an award, a medical resident
                                14   or medical fellow shall file an application with the department
                                15   that meets the criteria established by rule of the department.
                                16  C.   An award recipient shall certify on at least an
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                                17   annual basis the recipient's continued employment as a
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                                18   physician practicing medicine in New Mexico.
                                19  D.   The following debts are not eligible for
                                20   repayment pursuant to the Medical Residency Loan Repayment Act:
                                21  (1)   amounts incurred as a result of
                                22   participation in state loan-for-service programs or other
                                23   state programs the purposes of which state that service be
                                24   provided in exchange for financial assistance;
                                25  (2)   scholarships that have a service component
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                                1    or obligation;
                                2  (3)   personal loans from friends or relatives;
                                3  (4)   loans that exceed individual standard
                                4    school expense levels; and
                                5  (5)   loans that are eligible for another state
                                6    or federal loan repayment program.
                                7  E.   Award criteria shall provide that:
                                8  (1)   the applicant shall have graduated from a
                                9    medical school accredited by the liaison committee on medical
                                10   education or the commission on osteopathic college
                                11   accreditation;
                                12  (2)   the applicant shall be licensed to
                                13   practice in New Mexico as a licensed physician;
                                14  (3)   award amounts may be modified based on
                                15   available funding or other special circumstances; and
                                16  (4)   an award for an approved applicant shall
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                                17   be in an annual amount to repay the applicant's loan
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                                18   indebtedness within three years.
                                19  F.   Every loan repayment award shall be evidenced by
                                20   a contract between the medical resident or medical fellow and
                                21   the department on behalf of the state.    The contract shall
                                22   provide for the payment by the state of a stated sum to the
                                23   medical resident's or medical fellow's federal government
                                24   lender, state government lender or commercial lender and shall
                                25   state the obligations of the medical resident or medical fellow
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                                1    under the medical residency loan repayment program as
                                2    established by the department.
                                3  G.   A contract between a medical resident or medical
                                4    fellow and the department shall provide that if the medical
                                5    resident or medical fellow does not comply with the terms of
                                6    the contract, the medical resident or medical fellow shall
                                7    reimburse the department for all loan payments made on the
                                8    medical resident's or medical fellow's behalf plus
                                9    reasonable interest at a rate to be determined by the
                                10   department unless the department finds acceptable extenuating
                                11   circumstances for why the medical resident or medical fellow
                                12   cannot serve or comply with the terms of the contract.       All
                                13   money reimbursed to the department pursuant to this subsection
                                14   shall be transferred to the fund.
                                15  H.   Awards from the fund shall be made to the
                                16   federal government lender, state government lender or
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                                17   commercial lender for a medical resident or medical fellow who
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                                18   has received an award and shall be considered a payment on
                                19   behalf of the medical resident or medical fellow pursuant to
                                20   the contract between the department and the medical resident or
                                21   medical fellow.    An award shall not obligate the state or the
                                22   department to a medical resident's or medical fellow's lender
                                23   for any other payment and shall not be considered to create any
                                24   privity of contract between the state or the department and the
                                25   lender.
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                                1  I.   The department shall adopt rules to implement
                                2    the provisions of the Medical Residency Loan Repayment Act.
                                3    The rules:
                                4  (1)   shall provide a procedure for determining
                                5    the amount of the loan that will be repaid; and
                                6  (2)   may provide for the disbursement of awards
                                7    to the lender in annual or other periodic installments."
                                8  SECTION 7.     A new section of Chapter 21 NMSA 1978 is
                                9    enacted to read:
                                10        "[NEW MATERIAL] CONTRACTS--ENFORCEMENT--CANCELLATION.--
                                11  A.   The general form of a contract required pursuant
                                12   to the Medical Residency Loan Repayment Act shall be
                                13   prepared and approved by the department's general counsel, and
                                14   each contract shall be signed by the medical resident or
                                15   medical fellow and the secretary of higher education or the
                                16   secretary's authorized representative on behalf of the state.
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                                17   The department is vested with full and complete authority and
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                                18   power to sue in its own name for any balance due to the state
                                19   from a medical resident or medical fellow under a loan
                                20   repayment contract.
                                21  B.   The department may cancel a contract made
                                22   between the department and a medical resident or medical fellow
                                23   pursuant to the Medical Residency Loan Repayment Act for any
                                24   reasonable cause deemed sufficient by the department."
                                25        SECTION 8.     A new section of Chapter 21 NMSA 1978 is
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                                1    enacted to read:
                                2  "[NEW MATERIAL] MEDICAL RESIDENCY LOAN REPAYMENT FUND
                                3    CREATED.--The "medical residency loan repayment fund" is
                                4    created as a nonreverting fund in the state treasury.    The fund
                                5    consists of appropriations, repayment of awards and interest
                                6    received by the department, income from investment of the fund,
                                7    gifts, grants and donations.    The fund shall be administered by
                                8    the department, and money in the fund is appropriated to the
                                9    department to make awards pursuant to the Medical Residency
                                10   Loan Repayment Act.    Expenditures from the fund shall be made
                                11   on warrants of the secretary of finance and administration
                                12   pursuant to vouchers signed by the secretary of higher
                                13   education or the secretary's authorized representative."
                                14        SECTION 9.    A new section of Chapter 21 NMSA 1978 is
                                15   enacted to read:
                                16        "[NEW MATERIAL] REPORTS.--On or before December 1 of each
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                                17   year, the department shall submit a report to the governor and
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                                18   the legislative finance committee of the department's
                                19   activities, the awards granted and the job title and duties of
                                20   each loan recipient.    The report shall also include any
                                21   contract cancellations and enforcement actions the department
                                22   has taken."
                                23        SECTION 10.    A new section of the Public Assistance Act is
                                24   enacted to read:
                                25        "[NEW MATERIAL] COST STUDIES REQUIRED.--
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                                1  A.   At least every three years, the authority shall
                                2    conduct cost studies for the purposes of determining the cost
                                3    of providing health care services for each type of health care
                                4    provider that is reimbursed by medicaid for providing services
                                5    to recipients.     The cost studies shall include recommendations
                                6    for adequate reimbursement rates for each type of health care
                                7    provider reimbursed by medicaid based on:
                                8  (1)   the cost to provide competitive
                                9    compensation to health care providers; and
                                10  (2)   recent and projected changes in costs due
                                11   to factors that include inflation and rising wages.
                                12  B.   When the authority submits a budget request to
                                13   the legislature, the authority shall include the most recent
                                14   cost study performed for each type of health care provider that
                                15   is reimbursed by medicaid.
                                16  C.   The authority shall not be required to perform
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                                17   cost studies for every type of health care provider that is
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                                18   reimbursed by medicaid in the same year, so long as a cost
                                19   study is conducted for each type of health care provider at
                                20   least every three years.
                                21  D.   For the purposes of this section, "medicaid"
                                22   means the federal-state program administered by the authority
                                23   pursuant to Title 19 or Title 21 of the federal Social Security
                                24   Act."
                                25  SECTION 11.   Section 41-5-3 NMSA 1978 (being Laws 1976,
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                                1    Chapter 2, Section 3, as amended) is amended to read:
                                2  "41-5-3.   DEFINITIONS.--As used in the Medical Malpractice
                                3    Act:
                                4  A.    "advisory board" means the patient's
                                5    compensation fund advisory board;
                                6  B.    "control" means equity ownership in a business
                                7    entity that:
                                8  (1)   represents more than fifty percent of the
                                9    total voting power of the business entity; or
                                10  (2)   has a value of more than fifty percent of
                                11   that business entity;
                                12  C.    "fund" means the patient's compensation fund;
                                13  D.    "health care provider" means a person, a
                                14   corporation, an organization, a facility or an institution
                                15   licensed or certified by this state to provide health care or
                                16   professional services as a doctor of medicine, a hospital, an
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                                17   outpatient health care facility, a doctor of osteopathy, a
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                                18   chiropractor, [podiatrist] a podiatric physician, a nurse
                                19   anesthetist, a physician's assistant, a certified nurse
                                20   practitioner, a clinical nurse specialist or a certified nurse-
                                21   midwife or a business entity that is organized, incorporated or
                                22   formed pursuant to the laws of New Mexico that provides health
                                23   care services primarily through natural persons identified in
                                24   this subsection.     "Health care provider" does not mean a person
                                25   or an entity protected pursuant to the Tort Claims Act or the
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                                1    Federal Tort Claims Act;
                                2  E.   "hospital" means a facility licensed as a
                                3    hospital in this state that offers [in-patient] inpatient
                                4    services, nursing or overnight care on a twenty-four-hour basis
                                5    for diagnosing, treating and providing medical, psychological
                                6    or surgical care for three or more separate persons who have a
                                7    physical or mental illness, disease, injury or rehabilitative
                                8    condition or are pregnant and may offer emergency services.
                                9    "Hospital" includes a hospital's parent corporation, subsidiary
                                10   corporations or affiliates if incorporated or registered in New
                                11   Mexico; employees and locum tenens providing services at the
                                12   hospital; and agency nurses providing services at the hospital.
                                13   "Hospital" does not mean a person or an entity protected
                                14   pursuant to the Tort Claims Act or the Federal Tort Claims Act;
                                15  F.   "independent outpatient health care facility"
                                16   means a health care facility that is an ambulatory surgical
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                                17   center, an urgent care facility or a free-standing emergency
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                                18   room that is not, directly or indirectly through one or more
                                19   intermediaries, controlled or under common control with a
                                20   hospital.   "Independent outpatient health care facility"
                                21   includes a facility's employees, locum tenens providers and
                                22   agency nurses providing services at the facility.    "Independent
                                23   outpatient health care facility" does not mean a person or an
                                24   entity protected pursuant to the Tort Claims Act or the Federal
                                25   Tort Claims Act;
                                     .233054.2
                                                                   - 18 -
                                1  G.   "independent provider" means a doctor of
                                2    medicine, doctor of osteopathy, chiropractor, [podiatrist]
                                3    podiatric physician, nurse anesthetist, physician's assistant,
                                4    certified nurse practitioner, clinical nurse specialist or
                                5    certified nurse-midwife who is not an employee of a hospital or
                                6    outpatient health care facility.     "Independent provider" does
                                7    not mean a person or an entity protected pursuant to the Tort
                                8    Claims Act or the Federal Tort Claims Act.     "Independent
                                9    provider" includes:
                                10  (1)   a health care facility that is:
                                11  (a)   licensed pursuant to the [Public
                                12   Health Act] Health Care Code as an outpatient facility;
                                13  (b)   not an ambulatory surgical center,
                                14   an urgent care facility or a free-standing emergency room; and
                                15  (c)   not hospital-controlled; and
                                16  (2)   a business entity that is not a hospital
[bracketed material] = delete
                                17   or outpatient health care facility that employs or consists of
underscored material = new
                                18   members who are licensed or certified as doctors of medicine,
                                19   doctors of osteopathy, chiropractors, [podiatrists] podiatric
                                20   physicians, nurse anesthetists, physician's assistants,
                                21   certified nurse practitioners, clinical nurse specialists or
                                22   certified nurse-midwives and the business entity's employees;
                                23  H.   "insurer" means an insurance company engaged in
                                24   writing health care provider malpractice liability insurance in
                                25   this state;
                                     .233054.2
                                                                    - 19 -
                                1  I.   "malpractice claim" includes any cause of action
                                2    arising in this state against a health care provider for
                                3    medical treatment, lack of medical treatment or other claimed
                                4    departure from accepted standards of health care that
                                5    proximately results in injury to the patient, whether the
                                6    patient's claim or cause of action sounds in tort or contract,
                                7    and includes but is not limited to actions based on battery or
                                8    wrongful death; "malpractice claim" does not include a cause of
                                9    action arising out of the driving, flying or nonmedical acts
                                10   involved in the operation, use or maintenance of a vehicular or
                                11   aircraft ambulance;
                                12  J.   "medical care and related benefits" means all
                                13   reasonable medical, surgical, physical rehabilitation and
                                14   custodial services and includes drugs, prosthetic devices and
                                15   other similar materials reasonably necessary in the provision
                                16   of such services;
[bracketed material] = delete
                                17  K.   "occurrence" means all [injuries to a patient
underscored material = new
                                18   caused by health care providers' successive acts or omissions
                                19   that combined concurrently to create a malpractice claim]
                                20   claims for damages from all persons arising from harm to a
                                21   single patient, no matter how many health care providers,
                                22   errors or omissions contributed to the harm;
                                23  L.   "outpatient health care facility" means an
                                24   entity that is hospital-controlled and is licensed pursuant to
                                25   the [Public Health Act] Health Care Code as an outpatient
                                     .233054.2
                                                                   - 20 -
                                1    facility, including ambulatory surgical centers, free-standing
                                2    emergency rooms, urgent care clinics, acute care centers and
                                3    intermediate care facilities and includes a facility's
                                4    employees, locum tenens providers and agency nurses providing
                                5    services at the facility.    "Outpatient health care facility"
                                6    does not include:
                                7  (1)   independent providers;
                                8  (2)   independent outpatient health care
                                9    facilities; or
                                10  (3)   individuals or entities protected pursuant
                                11   to the Tort Claims Act or the Federal Tort Claims Act;
                                12  M.   "patient" means a natural person who received or
                                13   should have received health care from a health care provider,
                                14   under a contract, express or implied; and
                                15  N.   "superintendent" means the superintendent of
                                16   insurance."
[bracketed material] = delete
                                17        SECTION 12.    Section 41-5-6 NMSA 1978 (being Laws 1992,
underscored material = new
                                18   Chapter 33, Section 4, as amended) is amended to read:
                                19        "41-5-6.    LIMITATION OF RECOVERY.--
                                20  A.   Except for punitive damages and past and future
                                21   medical care and related benefits, the aggregate dollar amount
                                22   recoverable by all persons for or arising from any injury or
                                23   death to a patient as a result of malpractice shall not exceed
                                24   six hundred thousand dollars ($600,000) per occurrence.      [for
                                25   malpractice claims brought against health care providers if the
                                     .233054.2
                                                                    - 21 -
                                1    injury or death occurred prior to January 1, 2022.    In jury
                                2    cases, the jury shall not be given any instructions dealing
                                3    with this limitation.
                                4  B.   Except for punitive damages and past and future
                                5    medical care and related benefits, the aggregate dollar amount
                                6    recoverable by all persons for or arising from any injury or
                                7    death to a patient as a result of malpractice shall not exceed
                                8    seven hundred fifty thousand dollars ($750,000) per occurrence
                                9    for malpractice claims against independent providers; provided
                                10   that, beginning January 1, 2023, the per occurrence limit on
                                11   recovery shall be adjusted annually by the consumer price index
                                12   for all urban consumers.
                                13  C.   The aggregate dollar amount recoverable by all
                                14   persons for or arising from any injury or death to a patient as
                                15   a result of malpractice, except for punitive damages and past
                                16   and future medical care and related benefits, shall not exceed
[bracketed material] = delete
                                17   seven hundred fifty thousand dollars ($750,000) for claims
underscored material = new
                                18   brought against an independent outpatient health care facility
                                19   for an injury or death that occurred in calendar years 2022 and
                                20   2023.
                                21  D.   In calendar year 2024 and subsequent years, the
                                22   aggregate dollar amount recoverable by all persons for or
                                23   arising from an injury or death to a patient as a result of
                                24   malpractice, except for punitive damages and past and future
                                25   medical care and related benefits, shall not exceed the
                                     .233054.2
                                                                   - 22 -
                                1    following amounts for claims brought against an independent
                                2    outpatient health care facility:
                                3  (1)   for an injury or death that occurred in
                                4    calendar year 2024, one million dollars ($1,000,000) per
                                5    occurrence; and
                                6  (2)   for an injury or death that occurred in
                                7    calendar year 2025 and thereafter, the amount provided in
                                8    Paragraph (1) of this subsection, adjusted annually by the
                                9    prior three-year average consumer price index for all urban
                                10   consumers, per occurrence.
                                11  E.   In calendar year 2022 and subsequent calendar
                                12   years, the aggregate dollar amount recoverable by all persons
                                13   for or arising from any injury or death to a patient as a
                                14   result of malpractice, except for punitive damages and past and
                                15   future medical care and related benefits, shall not exceed the
                                16   following amounts for claims brought against a hospital or a
[bracketed material] = delete
                                17   hospital-controlled outpatient health care facility:
underscored material = new
                                18  (1)   for an injury or death that occurred in
                                19   calendar year 2022, four million dollars ($4,000,000) per
                                20   occurrence;
                                21  (2)   for an injury or death that occurred in
                                22   calendar year 2023, four million five hundred thousand dollars
                                23   ($4,500,000) per occurrence;
                                24  (3)   for an injury or death that occurred in
                                25   calendar year 2024, five million dollars ($5,000,000) per
                                     .233054.2
                                                                    - 23 -
                                1    occurrence;
                                2  (4)    for an injury or death that occurred in
                                3    calendar year 2025, five million five hundred thousand dollars
                                4    ($5,500,000) per occurrence;
                                5  (5)    for an injury or death that occurred in
                                6    calendar year 2026, six million dollars ($6,000,000) per
                                7    occurrence; and
                                8  (6)    for an injury or death that occurred in
                                9    calendar year 2027 and each calendar year thereafter, the
                                10   amount provided in Paragraph (5) of this subsection, adjusted
                                11   annually by the consumer price index for all urban consumers,
                                12   per occurrence.
                                13  F.    The aggregate dollar amounts provided in
                                14   Subsections B through E of this section include payment to any
                                15   person for any number of loss of consortium claims or other
                                16   claims per occurrence that arise solely because of the injuries
[bracketed material] = delete
                                17   or death of the patient.
underscored material = new
                                18  G.] B.    In jury cases, the jury shall not be given
                                19   any instructions dealing with the limitations provided in this
                                20   section.
                                21  [H.] C.      Except as provided in Section 41-5-7 NMSA
                                22   1978, the value of accrued medical care and related benefits
                                23   shall not be subject to any limitation.
                                24  [I.    Except for an independent outpatient health
                                25   care facility] D.     A health care provider's personal liability
                                     .233054.2
                                                                      - 24 -
                                1    is limited to [two hundred fifty thousand dollars ($250,000)]
                                2    two hundred thousand dollars ($200,000) for monetary damages
                                3    and medical care and related benefits as provided in Section
                                4    41-5-7 NMSA 1978.    Any amount due from a judgment or settlement
                                5    in excess of [two hundred fifty thousand dollars ($250,000)]
                                6    two hundred thousand dollars ($200,000) shall be paid from the
                                7    fund [except as provided in Subsections J and K of this
                                8    section.
                                9  J.   An independent outpatient health care facility's
                                10   personal liability is limited to five hundred thousand dollars
                                11   ($500,000) for monetary damages and medical care and related
                                12   benefits as provided in Section 41-5-7 NMSA 1978.    Any amount
                                13   due from a judgment or settlement in excess of five hundred
                                14   thousand dollars ($500,000) shall be paid from the fund.
                                15  K.   Until January 1, 2027, amounts due from a
                                16   judgment or settlement against a hospital or hospital-
[bracketed material] = delete
                                17   controlled outpatient health care facility in excess of seven
underscored material = new
                                18   hundred fifty thousand dollars ($750,000), excluding past and
                                19   future medical expenses, shall be paid by the hospital or
                                20   hospital-controlled outpatient health care facility and not by
                                21   the fund.   Beginning January 1, 2027, amounts due from a
                                22   judgment or settlement against a hospital or hospital-
                                23   controlled outpatient health care facility shall not be paid
                                24   from the fund.
                                25  L.   The term "occurrence" shall not be construed in
                                     .233054.2
                                                                   - 25 -
                                1    such a way as to limit recovery to only one maximum statutory
                                2    payment if separate acts or omissions cause additional or
                                3    enhanced injury or harm as a result of the separate acts or
                                4    omissions.    A patient who suffers two or more distinct injuries
                                5    as a result of two or more different acts or omissions that
                                6    occur at different times by one or more health care providers
                                7    is entitled to up to the maximum statutory recovery for each
                                8    injury]."
                                9  SECTION 13.     Section 41-5-7 NMSA 1978 (being Laws 1992,
                                10   Chapter 33, Section 5, as amended) is amended to read:
                                11        "41-5-7.     MEDICAL EXPENSES AND PUNITIVE DAMAGES.--
                                12  A.   Awards of past and future medical care and
                                13   related benefits shall not be subject to the limitations of
                                14   recovery imposed in Section 41-5-6 NMSA 1978.
                                15  B.   The health care provider shall be liable for all
                                16   medical care and related benefit payments until the total
[bracketed material] = delete
                                17   payments made by or on behalf of it for monetary damages and
underscored material = new
                                18   medical care and related benefits combined equals the health
                                19   care provider's personal liability limit as provided in
                                20   Subsection [I] D of Section 41-5-6 NMSA 1978, after which the
                                21   payments shall be made by the fund.
                                22  C.   [Beginning January 1, 2027, any amounts due from
                                23   a judgment or settlement against a hospital or outpatient
                                24   health care facility shall not be paid from the fund if the
                                25   injury or death occurred after December 31, 2026] Payments made
                                     .233054.2
                                                                    - 26 -
                                1    from the fund for medical care and related benefits shall be
                                2    made as expenses are incurred.
                                3  D.   This section shall not be construed to prevent a
                                4    patient and a health care provider from entering into a
                                5    settlement agreement whereby medical care and related benefits
                                6    shall be provided for a limited period of time only or to a
                                7    limited degree.
                                8  E.   A judgment of punitive damages against a health
                                9    care provider shall be the personal liability of the health
                                10   care provider.    Punitive damages may only be awarded if the
                                11   prevailing party demonstrates beyond a reasonable doubt that
                                12   the health care provider acted with malice, willful intent to
                                13   harm or wanton disregard for the rights or safety of others.
                                14   Punitive damages shall not be paid from the fund or from the
                                15   proceeds of the health care provider's insurance contract
                                16   unless the contract expressly provides coverage.    Nothing in
[bracketed material] = delete
                                17   Section 41-5-6 NMSA 1978 precludes the award of punitive
underscored material = new
                                18   damages to a patient.    Nothing in this subsection authorizes
                                19   the imposition of liability for punitive damages where that
                                20   imposition would not be otherwise authorized by law.
                                21  F.   A punitive damage award against:
                                22  (1)   a hospital or a hospital-controlled
                                23   outpatient health care facility shall not be in an amount that
                                24   exceeds three times the applicable limitation on compensatory
                                25   damages provided in Section 41-5-6 NMSA 1978; or
                                     .233054.2
                                                                    - 27 -
                                1  (2)   any other health care provider shall not
                                2    be in an amount that exceeds the applicable limitation on
                                3    compensatory damages provided in Section 41-5-6 NMSA 1978."
                                4  SECTION 14.    A new section of the Medical Malpractice Act
                                5    is enacted to read:
                                6  "[NEW MATERIAL] LIMITING ATTORNEY FEES.--
                                7  A.   An attorney shall not contract for or collect a
                                8    contingency fee for representing a person seeking damages in a
                                9    malpractice claim in an amount that exceeds:
                                10  (1)   thirty percent of the first two hundred
                                11   fifty thousand dollars ($250,000) recovered pursuant to a
                                12   settlement agreement, an arbitration award or a judgment;
                                13  (2)   twenty-five percent of the portion
                                14   recovered pursuant to a settlement agreement, an arbitration
                                15   award or a judgment that is more than two hundred fifty
                                16   thousand dollars ($250,000) but not more than five hundred
[bracketed material] = delete
                                17   thousand dollars ($500,000) in value;
underscored material = new
                                18  (3)   twenty percent of the portion recovered
                                19   pursuant to a settlement agreement, an arbitration award or a
                                20   judgment that is more than five hundred thousand dollars
                                21   ($500,000) but not more than one million dollars ($1,000,000)
                                22   in value; and
                                23  (4)   fifteen percent of the portion recovered
                                24   pursuant to a settlement agreement, an arbitration award or a
                                25   judgment that is more than one million dollars ($1,000,000) in
                                     .233054.2
                                                                    - 28 -
                                1    value.
                                2  B.   Any amount recovered pursuant to a settlement
                                3    agreement, an arbitration award or a judgment for a malpractice
                                4    claim that is covered by the fund shall not contribute to an
                                5    attorney's contingency fee."
                                6  SECTION 15.    APPROPRIATION.--Three million dollars
                                7    ($3,000,000) is appropriated from the general fund to the
                                8    medical residency loan repayment fund for expenditure in fiscal
                                9    year 2027 and subsequent fiscal years for the purposes of the
                                10   medical residency loan repayment fund.    Any unexpended balance
                                11   remaining at the end of a fiscal year shall not revert to the
                                12   general fund.
                                13        SECTION 16.    APPLICABILITY.--
                                14  A.   The provisions of Sections 1 and 2 of this act
                                15   apply to taxable years beginning on or after January 1, 2026.
                                16  B.   The provisions of Sections 11 through 14 of this
[bracketed material] = delete
                                17   act apply to all claims for medical malpractice that arise on
underscored material = new
                                18   or after the effective date of this act.
                                19  - 29 -
                                20
                                21
                                22
                                23
                                24
                                25
                                     .233054.2