MEDICAL MALPRACTICE CLAIM CHANGES

HB0107

HOUSE BILL 107

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

Jenifer Jones
and
Catherine J. Cullen
and
Nicole Chavez

AN ACT

RELATING TO HEALTH CARE; AMENDING DEFINITIONS IN THE MEDICAL
MALPRACTICE ACT; LIMITING THE AMOUNT OF DAMAGES THAT CAN BE
AWARDED DUE TO A MEDICAL MALPRACTICE CLAIM; REQUIRING PAYMENTS
FROM THE PATIENT'S COMPENSATION FUND TO BE MADE AS EXPENSES ARE
INCURRED; LIMITING THE AVAILABILITY OF PUNITIVE DAMAGES IN
MEDICAL MALPRACTICE CLAIMS; LIMITING ATTORNEY FEES IN
MALPRACTICE CLAIMS.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1.
Section 41-5-3 NMSA 1978 (being Laws 1976,
Chapter 2, Section 3, as amended) is amended to read:

"41-5-3. DEFINITIONS.--As used in the Medical Malpractice
Act:

A. "advisory board" means the patient's
compensation fund advisory board;

B. "control" means equity ownership in a business
entity that:

(1) represents more than fifty percent of the
total voting power of the business entity; or

(2) has a value of more than fifty percent of
that business entity;

C. "fund" means the patient's compensation fund;

D. "health care provider" means a person,
a

corporation,
an
organization,
a
facility or
an
institution
licensed or certified by this state to provide health care or
professional services as a doctor of medicine,
a
hospital,
an

outpatient health care facility,
a
doctor of osteopathy,
a

chiropractor, [
podiatrist
]
a podiatric physician, a
nurse
anesthetist,
a
physician's assistant,
a
certified nurse
practitioner,
a
clinical nurse specialist or
a
certified nurse-midwife or a business entity that is organized, incorporated or
formed pursuant to the laws of New Mexico that provides health
care services primarily through natural persons identified in
this subsection. "Health care provider" does not mean a person
or entity protected pursuant to the Tort Claims Act or the
Federal Tort Claims Act;

E. "hospital" means a facility licensed as a
hospital in this state that offers [
in-patient
]
inpatient

services, nursing or overnight care on a twenty-four-hour basis
for diagnosing, treating and providing medical, psychological
or surgical care for three or more separate persons who have a
physical or mental illness, disease, injury or rehabilitative
condition or are pregnant and may offer emergency services.
"Hospital" includes a hospital's parent corporation, subsidiary
corporations or affiliates if incorporated or registered in New
Mexico; employees and locum tenens providing services at the
hospital; and agency nurses providing services at the hospital.
"Hospital" does not mean a person or
an
entity protected
pursuant to the Tort Claims Act or the Federal Tort Claims Act;

F. "independent outpatient health care facility"
means a health care facility that is an ambulatory surgical
center,
an
urgent care facility or
a
free-standing emergency
room that is not, directly or indirectly through one or more
intermediaries, controlled or under common control with a
hospital. "Independent outpatient health care facility"
includes a facility's employees, locum tenens providers and
agency nurses providing services at the facility. "Independent
outpatient health care facility" does not mean a person or
entity protected pursuant to the Tort Claims Act or the Federal
Tort Claims Act;

G. "independent provider" means a doctor of
medicine, doctor of osteopathy, chiropractor, [
podiatrist
]

podiatric physician
, nurse anesthetist, physician's assistant,
certified nurse practitioner, clinical nurse specialist or
certified nurse-midwife who is not an employee of a hospital or
outpatient health care facility. "Independent provider" does
not mean a person or entity protected pursuant to the Tort
Claims Act or the Federal Tort Claims Act. "Independent
provider" includes:

(1) a health care facility that is:

(a) licensed pursuant to the [
Public
Health Act
]
Health Care Code
as an outpatient facility;

(b) not an ambulatory surgical center,

an
urgent care facility or
a
free-standing emergency room; and

(c) not hospital-controlled; and

(2) a business entity that is not a hospital
or outpatient health care facility that employs or consists of
members who are licensed or certified as doctors of medicine,
doctors of osteopathy, chiropractors, [
podiatrists
]
podiatric
physicians
, nurse anesthetists, physician's assistants,
certified nurse practitioners, clinical nurse specialists or
certified nurse-midwives and the business entity's employees;

H. "insurer" means an insurance company engaged in
writing health care provider malpractice liability insurance in
this state;

I. "malpractice claim" includes any cause of action
arising in this state against a health care provider for
medical treatment, lack of medical treatment or other claimed
departure from accepted standards of health care that
proximately results in injury to the patient, whether the
patient's claim or cause of action sounds in tort or contract,
and includes but is not limited to actions based on battery or
wrongful death; "malpractice claim" does not include a cause of
action arising out of the driving, flying or nonmedical acts
involved in the operation, use or maintenance of a vehicular or
aircraft ambulance;

J. "medical care and related benefits" means all
reasonable medical, surgical, physical rehabilitation and
custodial services and includes drugs, prosthetic devices and
other similar materials reasonably necessary in the provision
of such services;

K. "occurrence" means all [
injuries to a patient
caused by health care providers' successive acts or omissions
that combined concurrently to create a malpractice claim
]

claims for damages from all persons arising from harm to a
single patient, no matter how many health care providers,
errors or omissions contributed to the harm
;

L. "outpatient health care facility" means an
entity that is hospital-controlled and is licensed pursuant to
the [
Public Health Act
]
Health Care Code
as an outpatient
facility, including ambulatory surgical centers, free-standing
emergency rooms, urgent care clinics, acute care centers and
intermediate care facilities and includes a facility's
employees, locum tenens providers and agency nurses providing
services at the facility. "Outpatient health care facility"
does not include:

(1) independent providers;

(2) independent outpatient health care
facilities; or

(3) individuals or entities protected pursuant
to the Tort Claims Act or the Federal Tort Claims Act;

M. "patient" means a natural person who received or
should have received health care from a health care provider,
under a contract, express or implied; and

N. "superintendent" means the superintendent of
insurance."

SECTION 2.
Section 41-5-6 NMSA 1978 (being Laws 1992,
Chapter 33, Section 4, as amended) is amended to read:

"41-5-6. LIMITATION OF RECOVERY.--

A. Except for punitive damages and past and future
medical care and related benefits, the aggregate dollar amount
recoverable by all persons for or arising from any injury or
death to a patient as a result of malpractice shall not exceed
six hundred thousand dollars ($600,000) per occurrence. [
for
malpractice claims brought against health care providers if the
injury or death occurred prior to January 1, 2022. In jury
cases, the jury shall not be given any instructions dealing
with this limitation.

B. Except for punitive damages and past and future
medical care and related benefits, the aggregate dollar amount
recoverable by all persons for or arising from any injury or
death to a patient as a result of malpractice shall not exceed
seven hundred fifty thousand dollars ($750,000) per occurrence
for malpractice claims against independent providers; provided
that, beginning January 1, 2023, the per occurrence limit on
recovery shall be adjusted annually by the consumer price index
for all urban consumers.

C. The aggregate dollar amount recoverable by all
persons for or arising from any injury or death to a patient as
a result of malpractice, except for punitive damages and past
and future medical care and related benefits, shall not exceed
seven hundred fifty thousand dollars ($750,000) for claims
brought against an independent outpatient health care facility
for an injury or death that occurred in calendar years 2022 and
2023.

D. In calendar year 2024 and subsequent years, the
aggregate dollar amount recoverable by all persons for or
arising from an injury or death to a patient as a result of
malpractice, except for punitive damages and past and future
medical care and related benefits, shall not exceed the
following amounts for claims brought against an independent
outpatient health care facility:

(1) for an injury or death that occurred in
calendar year 2024, one million dollars ($1,000,000) per
occurrence; and

(2) for an injury or death that occurred in
calendar year 2025 and thereafter, the amount provided in
Paragraph (1) of this subsection, adjusted annually by the
prior three-year average consumer price index for all urban
consumers, per occurrence.

E. In calendar year 2022 and subsequent calendar
years, the aggregate dollar amount recoverable by all persons
for or arising from any injury or death to a patient as a
result of malpractice, except for punitive damages and past and
future medical care and related benefits, shall not exceed the
following amounts for claims brought against a hospital or a
hospital-controlled outpatient health care facility:

(1) for an injury or death that occurred in
calendar year 2022, four million dollars ($4,000,000) per
occurrence;

(2) for an injury or death that occurred in
calendar year 2023, four million five hundred thousand dollars
($4,500,000) per occurrence;

(3) for an injury or death that occurred in
calendar year 2024, five million dollars ($5,000,000) per
occurrence;

(4) for an injury or death that occurred in
calendar year 2025, five million five hundred thousand dollars
($5,500,000) per occurrence;

(5) for an injury or death that occurred in
calendar year 2026, six million dollars ($6,000,000) per
occurrence; and

(6) for an injury or death that occurred in
calendar year 2027 and each calendar year thereafter, the
amount provided in Paragraph (5) of this subsection, adjusted
annually by the consumer price index for all urban consumers,
per occurrence.

F. The aggregate dollar amounts provided in
Subsections B through E of this section include payment to any
person for any number of loss of consortium claims or other
claims per occurrence that arise solely because of the injuries
or death of the patient.

G.
]
B.
In jury cases, the jury shall not be given
any instructions dealing with the limitations provided in this
section.

[
H.
]
C. Except as provided in Section 41-5-7 NMSA
1978
, the value of accrued medical care and related benefits
shall not be subject to any limitation.

[
I. Except for an independent outpatient health
care facility
]
D.
A health care provider's personal liability
is limited to [
two hundred fifty thousand dollars ($250,000)
]

two hundred thousand dollars ($200,000)
for monetary damages
and medical care and related benefits as provided in Section
41-5-7 NMSA 1978. Any amount due from a judgment or settlement
in excess of [
two hundred fifty thousand dollars ($250,000)
]

two hundred thousand dollars ($200,000)
shall be paid from the
fund [
except as provided in Subsections J and K of this
section.

J. An independent outpatient health care facility's
personal liability is limited to five hundred thousand dollars
($500,000) for monetary damages and medical care and related
benefits as provided in Section 41-5-7 NMSA 1978. Any amount
due from a judgment or settlement in excess of five hundred
thousand dollars ($500,000) shall be paid from the fund.

K. Until January 1, 2027, amounts due from a
judgment or settlement against a hospital or hospital-controlled outpatient health care facility in excess of seven
hundred fifty thousand dollars ($750,000), excluding past and
future medical expenses, shall be paid by the hospital or
hospital-controlled outpatient health care facility and not by
the fund. Beginning January 1, 2027, amounts due from a
judgment or settlement against a hospital or hospital-controlled outpatient health care facility shall not be paid
from the fund.

L. The term "occurrence" shall not be construed in
such a way as to limit recovery to only one maximum statutory
payment if separate acts or omissions cause additional or
enhanced injury or harm as a result of the separate acts or
omissions. A patient who suffers two or more distinct injuries
as a result of two or more different acts or omissions that
occur at different times by one or more health care providers
is entitled to up to the maximum statutory recovery for each
injury
]."

SECTION 3.
Section 41-5-7 NMSA 1978 (being Laws 1992,
Chapter 33, Section 5, as amended) is amended to read:

"41-5-7. MEDICAL EXPENSES AND PUNITIVE DAMAGES.--

A. Awards of past and future medical care and
related benefits shall not be subject to the limitations of
recovery imposed in Section 41-5-6 NMSA 1978.

B. The health care provider shall be liable for all
medical care and related benefit payments until the total
payments made by or on behalf of it for monetary damages and
medical care and related benefits combined equals the health
care provider's personal liability limit as provided in
Subsection [
I
]
D
of Section 41-5-6 NMSA 1978, after which the
payments shall be made by the fund.

C. [
Beginning January 1, 2027, any amounts due from
a judgment or settlement against a hospital or outpatient
health care facility shall not be paid from the fund if the
injury or death occurred after December 31, 2026
]
Payments made
from the fund for medical care and related benefits shall be
made as expenses are incurred
.

D. This section shall not be construed to prevent a
patient and a health care provider from entering into a
settlement agreement whereby medical care and related benefits
shall be provided for a limited period of time only or to a
limited degree.

E. A judgment of punitive damages against a health
care provider shall be the personal liability of the health
care provider.
Punitive damages may only be awarded if the
prevailing party demonstrates beyond a reasonable doubt that
the health care provider acted with malice, willful intent to
harm or wanton disregard for the rights or safety of others.

Punitive damages shall not be paid from the fund or from the
proceeds of the health care provider's insurance contract
unless the contract expressly provides coverage. Nothing in
Section 41-5-6 NMSA 1978 precludes the award of punitive
damages to a patient. Nothing in this subsection authorizes
the imposition of liability for punitive damages where that
imposition would not be otherwise authorized by law.

F. A punitive damage award against:

(1) a hospital or a hospital-controlled
outpatient health care facility shall not be in an amount that
exceeds three times the applicable limitation on compensatory
damages provided in Section 41-5-6 NMSA 1978; or

(2) any other health care provider shall not
be in an amount that exceeds the applicable limitation on
compensatory damages provided in Section 41-5-6 NMSA 1978.
"

SECTION 4.
A new section of the Medical Malpractice Act
is enacted to read:

"[
NEW MATERIAL
] LIMITING ATTORNEY FEES.--

A. An attorney shall not contract for or collect a
contingency fee for representing a person seeking damages in a
malpractice claim in an amount that exceeds:

(1) thirty percent of the first two hundred
fifty thousand dollars ($250,000) recovered pursuant to a
settlement agreement, an arbitration award or a judgment;

(2) twenty-five percent of the portion
recovered pursuant to a settlement agreement, an arbitration
award or a judgment that is more than two hundred fifty
thousand dollars ($250,000) but not more than five hundred
thousand dollars ($500,000) in value;

(3) twenty percent of the portion recovered
pursuant to a settlement agreement, an arbitration award or a
judgment that is more than five hundred thousand dollars
($500,000) but not more than one million dollars ($1,000,000)
in value; and

(4) fifteen percent of the portion recovered
pursuant to a settlement agreement, an arbitration award or a
judgment that is more than one million dollars ($1,000,000) in
value.

B. Any amount recovered pursuant to a settlement
agreement, an arbitration award or a judgment for a malpractice
claim that is covered by the fund shall not contribute to an
attorney's contingency fee."

SECTION 5.
APPLICABILITY.--The provisions of this act
apply to all claims for medical malpractice that arise on or
after the effective date of this act.

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