House Bill (HB) 75 FAQs: Amendments to the New Mexico Medical Malpractice Act

  • When will HB 75 be effective?
  • January 1, 2022.
  • Who is protected as a qualified healthcare provider under HB 75?
  • Defined in HB 75, "health care provider" means a person, corporation, organization, facility, or institution licensed or certified by this state to provide healthcare or professional services as a doctor of medicine, outpatient healthcare facility, doctor of osteopathy, chiropractor, podiatrist, nurse anesthetist, or physician’s assistant.

    The definition was recently expanded to include nurse practitioners, clinical nurse specialists, certified nurse-midwives, and a business entity’s employees. (N.M. Stat. 41-5-3E.)
  • How do I determine if I am an outpatient healthcare facility?
  • HB 75 defines “outpatient health care facility” to include “an entity that is licensed pursuant to the Public Health Act as an outpatient facility, including ambulatory surgical centers, free-standing emergency rooms, urgent care clinics, acute care centers and intermediate care facilities and includes a facility’s employees, locum tenens providers and agency nurses providing services at the facility.” (§41-4-3J.)

    Therefore, all licensed facilities are affected by HB 75. Health Facility Licensing and Certification (HFLC) is composed of two bureaus—the Program Operations Bureau and the District Operations Bureau. These two bureaus are responsible for the licensing and certifying of all health facilities in New Mexico. For more information on health facility licensing and certification, visit the New Mexico Department of Health website.
  • How does HB 75 impact outpatient healthcare facilities?
  • HB 75 places outpatient healthcare facilities under the same cap as hospitals. On January 1, 2022, facilities that fall under the definition of an outpatient healthcare facility will go from a $600,000 cap to a $4,000,000 cap overnight. Thereafter, the cap will increase by $500,000 annually until 2027 when it reaches $6,000,000 plus an annual cost of living increase. HB 75 defines “outpatient healthcare facility” as “an entity that is licensed pursuant to the Public Health Act as an outpatient facility, including ambulatory surgical centers, free-standing emergency rooms, urgent care clinics, acute care centers, and intermediate care facilities and includes a facility's employees, locum tenens providers and agency nurses providing services at the facility.”
  • How will HB 75 impact my insurance premiums in 2022?
  • The base premium for your primary limits with The Doctors Company will increase due to the increase in primary limits to $250,000 as mandated by HB 75. In addition, there will be an increase in the Patient Compensation Fund (PCF) charge. The PCF will release their new rates no later than October 31, 2021, to be effective January 1, 2022.
  • What if I have already paid my Patient Compensation Fund premiums beyond January 2022?
  • The Doctors Company is tracking Patient Compensation Fund (PCF) premiums paid and will apply all unearned PCF premium (PCF premiums paid beyond January 2022) from your current policy towards the new PCF premium.
  • Will The Doctors Company continue to offer insurance in New Mexico?
  • Yes. The Doctors Company is physician-owned and the leading provider of physician medical professional liability insurance in New Mexico.
  • As an existing New Mexico physician member, what can I expect to happen effective January 1, 2022?
  • If you are not currently on a January 1 renewal term, your policy will be rewritten effective January 1, 2022. This means you will receive a new policy number, policy documents, and annual premium statement. January 1 will be your new annual renewal anniversary. This change will be made to comply with the increased limit of liability for qualified healthcare professionals, as well as the change in annual Patient Compensation Fund surcharges due to requirements of HB 75.
  • What role is The Doctors Company taking to advocate for independent physicians in relation to HB 75?
  • The Doctors Company advocates for and defends medical liability reforms in New Mexico. We work closely with a coalition of healthcare organizations, such as the New Mexico Medical Society, to protect our members and to safeguard patients’ access to healthcare. The Doctors Company advocates for our members and their patients both in the legislative process and in the judicial system.

    We advocated against the amendments to the New Mexico Medical Malpractice Act in HB 75 sought by the trial lawyers that will cause certain sectors of healthcare to see skyrocketing increases in judicial awards literally overnight and will move New Mexico closer to a medical liability crisis similar to what was experienced in this state decades ago. The Doctors Company is committed to aggressive advocacy on behalf of our members, and healthcare in general, and we will continue to help elected officials understand how laws like HB 75 negatively impact healthcare liability protections which, in turn, lessens access to healthcare. The Doctors Company will continue to work with our coalition partners to advocate in support of stronger medical liability protections in New Mexico, including advocating for badly needed amendments to HB 75.
  • If it is determined I am an agent of a hospital, will my policy at The Doctors Company still cover me?
  • New Mexico courts will likely rule on the question of who is an agent of a hospital at some point. Your policy will cover you at your primary limits subject to the terms and conditions of the policy.
  • Will the HB 75 changes have any impact on open claims?
  • The effective date of the provisions of Sections 1 through 6, 8 through 12, and 15 through 17 of the New Mexico Medical Malpractice Act is January 1, 2022. The effective date of the provisions of Sections 7, 13, and 14 is July 1, 2021. Section 7 governs administration and operation of the Medical Panel process; Section 13 governs the administration of the Patient Compensation Fund (PCF), including actuarial studies, surcharges, claims proration and proofs of authenticity; and Section 14 relates to the establishment of the PCF Advisory Board and its duties.
  • How will HB 75 changes impact my Tribute® Plan balance?
  • You will continue to accrue Tribute at the current 10 percent of annual The Doctors Company premium.
  • Will HB 75 impact my part-time discount?
  • You will see an increase in base premiums and Patient Compensation Fund charges. However, The Doctors Company will still allow part-time discounts, in accordance with its New Mexico filing.
  • Can a nurse practitioner be added to my policy in 2022 since they will be brought under the Patient Compensation Fund?
  • Yes.
  • What is the difference between claims-made and occurrence coverage?
  • Occurrence coverage covers any incidents that occurred during the policy period regardless of when the claim is reported. An occurrence policy allows you protections afforded by the New Mexico Medical Malpractice Act.

    Claims-made coverage covers any incidents that occur after your retroactive date reported to your insurance carrier during the policy period. Below are some additional considerations for claims-made coverage.
    • Maturation: Since your coverage will begin at your retroactive date and the period of time will get longer with each successive policy year, the policy “matures,” and the premiums increase due to the maturation over the first five years
    • Extended reporting period (ERP) or “tail” coverage: Upon cancellation of the policy, in order to continue reporting claims, an extended reporting period endorsement or “tail” must be purchased for additional premium. The member could potentially qualify for free tail under death, disability, or retirement.
  • Can I change to a claims-made policy and what are the requirements?
  • You may change to a claims-made policy by purchasing limits of liability from The Doctors Company at $1M per claim / $3M annual aggregate. There are no other requirements. However, it is important to know that you will not have protections afforded by the New Mexico Medical Malpractice Act. We will require a signed disclosure statement acknowledging the member’s understanding of foregoing protections afforded by the New Mexico Medical Malpractice Act.
  • Is claims-made coverage going to be available inside and outside of the New Mexico Medical Malpractice Act?
  • Claims-made coverage is available but will not be available inside the New Mexico Medical Malpractice Act.
  • Under which damages cap in HB 75 will I fall?
  • HB 75 increases the cap on damages from $600,000 to $750,000 beginning January 1, 2022, for independent providers (this includes business entities such as personal corporations and employees).
  • Am I protected by the $750,000 damage cap if I am a hospital-employed physician?
  • No. The $750,000 cap only applies to “independent providers.”
  • Am I protected by the $750,000 damage cap if I am an outpatient healthcare facility–employed physician?
  • No. The $750,000 cap only applies to “independent providers.”
  • Under what conditions do I need coverage in excess of $750,000?
  • If you are a medical provider who does not qualify as an “individual provider” as defined in HB 75, then you may need coverage in excess of $750,000. This includes medical providers who are employees or agents of a hospital or outpatient healthcare facility.
  • If I or my practice are found liable for the higher facility cap amount, will I be liable for the amounts above $750,000 and the multimillion facility cap?
  • Any liability beyond the issued $250,000 insurance limit as a qualified provider and the additional $500,000 limit issued by the fund, other than medical costs, will be the responsibility of the provider.
  • Does The Doctors Company offer an excess limits policy to physicians?
  • Currently, The Doctors Company does not offer excess limits in New Mexico.
  • How much will my premiums rise with the increased limits required under HB 75?
  • We are in the process of developing the rates for this increase in limits and will be notifying our members as soon as they are finalized and approved by the New Mexico Department of Insurance. The Patient Compensation Fund will be promulgating new rates by October 31, 2021, effective January 1, 2022.
  • Will I still get to have my medical malpractice case heard before the medical-legal panel?
  • Effective July 1, 2021, hospitals and outpatient healthcare facilities will no longer participate in panel proceedings. Only “independent providers” are subject to panel proceedings, and the process is optional if the parties stipulate to forego a hearing.
  • Is a qualified healthcare provider (QHP) medical practice covered for the actions of an employee who does not qualify as a QHP under HB 75?
  • HB 75 defines an independent provider to include a business entity that is not a hospital or outpatient healthcare facility that employs or consists of members who are licensed or certified as one of the recognized QHP categories of providers “and the business entity’s employees.”
  • Does HB 75 allow a patient to sue me for more than one policy limit for the same course of treatment?
  • HB 75 states that “the term ‘occurrence’ shall not be construed in such a way as to limit recovery to only one maximum statutory payment if separate acts or omissions cause additional or enhanced injury or harm as a result of the separate acts or omissions.”
  • Why am I limited to only three occurrences per policy period under HB 75 when outpatient healthcare facilities and hospitals have unlimited occurrences?
  • HB 75 retains the three-occurrence–limit for individual providers that has existed since the New Mexico Medical Malpractice Act was first enacted. Hospitals and outpatient healthcare facilities do not have such limits, but they are required to undergo an annual risk assessment to determine base coverage requirements and Patient Compensation Fund surcharges.
  • When the cost-of-living adjustments begin under HB 75, will they apply to my primary insurance limit, to the Patient Compensation Fund limit, or both?
  • HB 75 does not indicate how the cost-of-living adjustments apply.
  • How will the cost-of-living adjustments for the Patient Compensation Fund limit be determined?
  • HB 75 links the determination of the cost-of-living adjustments to the annual consumer price index.
  • Will I have to pay additional surcharges to help cure the Patient Compensation Fund deficit?
  • Very likely. HB 75 requires the Patient Compensation Fund to get back to solvency by the end of 2026.
  • How will Patient Compensation Fund surcharges be determined to help cure the Patient Compensation Fund deficit?
  • Patient Compensation Fund surcharges for hospitals and qualified healthcare providers are to be developed by the Office of the Superintendent of Insurance working with the Patient Compensation Fund advisory board and independent actuaries.
  • Will new participants in the Patient Compensation Fund be required to pay an additional surcharge to cure the deficit?
  • That level of detail is not directly provided in the text of HB 75, but it is expected that existing and new participants in the Patient Compensation Fund will be subject to the same surcharge.
  • How large is the Patient Compensation Fund deficit that needs to be cured?
  • The exact number is unknown, but more information can be found at the Patient Compensation Fund website.