RURAL HOSPITAL MALPRACTICE LIABILITY INS. ACT

HB0187

HOUSE BILL 187

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

INTRODUCED BY

D. Wonda Johnson

AN ACT

RELATING TO HEALTH CARE; ENACTING THE RURAL HOSPITAL
MALPRACTICE LIABILITY INSURANCE ACT; CREATING A GRANT THAT
RURAL HOSPITALS CAN RECEIVE TO COVER THE COSTS OF MEDICAL
MALPRACTICE LIABILITY INSURANCE PREMIUMS; MAKING AN
APPROPRIATION; DECLARING AN EMERGENCY.

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

SECTION 1.
[
NEW MATERIAL
]

SHORT TITLE.--This act may be
cited as the "Rural Hospital Malpractice Liability Insurance
Act"
.

SECTION 2
. [
NEW MATERIAL
] DEFINITIONS.--As used in the
Rural Hospital Malpractice Liability Insurance Act:

A. "department" means the department of health;

B. "health care underserved area" means a
geographic area or practice location in which it has been
determined by the department, through the use of indices and
other standards set by the department, that sufficient health
care services are not being provided;

C. "premium grant" means money provided to a rural
hospital pursuant to the Rural Hospital Malpractice Liability
Insurance Act to cover the costs of malpractice liability
insurance premiums; and

D. "rural hospital" means a health care facility
licensed by the health care authority as a hospital that is
located in a rural or frontier area of the state, including a
critical access hospital.

SECTION 3.
[
NEW MATERIAL
] RURAL HOSPITAL MALPRACTICE
LIABILITY INSURANCE FUND.--

A. The "rural hospital malpractice liability
insurance fund" is created as a nonreverting fund in the state
treasury. The fund consists of appropriations, gifts, grants,
donations, income from investment of the fund and any other
revenue credited to the fund. The department shall administer
the fund, and money in the fund is appropriated to the
department to carry out the provisions of this section.
Expenditures shall be by warrant of the secretary of finance
and administration pursuant to vouchers signed by the secretary
of health or the secretary's authorized representative.

B. A rural hospital may apply to the department, in
a form and manner prescribed by the department, for a premium
grant. To be eligible for a premium grant pursuant to this
section, a rural hospital shall:

(1) demonstrate coverage, or an intent to be
covered, by a medical malpractice liability insurance policy
approved by the department of health;

(2) certify that all money granted to the
hospital pursuant to this section will be used exclusively for
paying malpractice liability insurance policy premiums;

(3) maintain operations and provide access to
essential health care services within a health care underserved
area;

(4) provide documentation required by the
department; and

(5) satisfy any other eligibility requirements
established by the department.

SECTION 4.
[
NEW MATERIAL
] DEPARTMENT DUTIES--REPORTING.--The department shall:

A. promulgate rules to develop:

(1) a premium grant application form for rural
hospitals to use;

(2) eligibility criteria for receiving a
premium grant; and

(3) reporting requirements for rural hospitals
that receive a premium grant. Reporting requirements shall
include the requirement to submit:

(a) financial documentation indicating
the financial stability of the rural hospital;

(b) information on staffing levels at
the rural hospital, including efforts to recruit and retain
health care providers; and

(c) information on the types of services
provided and the number of patients served by the rural
hospital; and

B. submit an annual report to the legislative
finance committee and the legislative health and human services
committee that includes:

(1) the name of each rural hospital that has
received a premium grant;

(2) the amount of money used to provide
premium grants to rural hospitals;

(3) an update on the cost of medical
malpractice liability insurance for rural hospitals; and

(4) an analysis of the effect that the premium
grant has had on each rural hospital's:

(a) financial stability;

(b) health care workforce; and

(c) ability to provide access to health
care.

SECTION 5.
APPROPRIATION.--Sixty-six million dollars
($66,000,000) is appropriated from the general fund to the
rural hospital malpractice liability insurance fund for
expenditure in fiscal year 2026 and subsequent fiscal years to
carry out the purposes of the Rural Hospital Malpractice
Liability Insurance Act. Any unexpended balance remaining at
the end of a fiscal year shall not revert.

SECTION 6.
EMERGENCY.--It is necessary for the public
peace, health and safety that this act take effect immediately.

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