Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Cates/Borrego
/Jaramillo
LAST UPDATED
ORIGINAL DATE 01/31/2025
SHORT TITLE Hospital Patient Safety Act
BILL
NUMBER House Bill 138/ec
ANALYST Rommel
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
HCA Up to $251.9 Up to $1,007.5 Up to $1,007.5 Up to $2,266.9 Recurring General Fund
DOH Up to $1,178.4 Up to $4,713.4 Up to $4,713.4
Up to
$10,605.2
Recurring General Fund
Total Up to $1,430.3 Up to $5,720.9 $Up to $5,720.9
Up to
$12,872.1
Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to House Bill 72
Sources of Information
LFC Files
Agency Analysis Received From
Health Care Authority (HCA) Aging and Long-Term Services Department (ALTSD)
Department of Health (DOH)
Board of Nursing (BON)
SUMMARY
Synopsis of House Bill 138
House Bill 138 (HB138) creates the Hospital Patient Safety Act and would require hospitals to
establish three staffing committees for nursing, direct care professional and technical staff, and
service staff. Staffing plans are to be certified to be sufficient to provide adequate and
appropriate delivery of healthcare services.
HB138 would require hospitals to post approved hospital staffing plans and submit the plans to
the Department of Health (DOH) by January 1, 2026, and on every July 1 and January 1
thereafter.
HB138 would require hospitals to employ sufficient staff to meet the ratios outlined by the
legislation and to adopt rules on the training of direct patient care personnel, whether they are
permanently or temporarily employed. Hospitals would be prohibited from assigning unlicensed House Bill 138/ec – Page 2
personnel to perform duties that require a licensed nurse or require specialized knowledge, but
licensed and registered nurses could work within their scope of practice.
Staffing plans would be waived in the event of national or state emergencies, unforeseen weather
conditions, or infectious disease epidemic affecting hospital staff.
This bill contains an emergency clause and would become effective immediately on signature by
the governor.
FISCAL IMPLICATIONS
DOH provides an estimate of budget impact for the New Mexico Behavioral Health Institute
(NMBHI) under the legislation that would require hiring additional nurses at a cost of $4.6
million a year to meet the 1:4 staffing ratio required under the bill:
Currently, the [nurse to patient] ratios at NMBHI are roughly 1:16. This would require
NMBHI to hire four times the nurses currently employed at both the Adult Psychiatric
Division (APD) and Forensic Division. A conservative estimate at NMBHI would be 40
additional nurses.
The Health Care Authority (HCA) Division of Health Improvement (DHI) notes expenses would
include computer hardware, phone and IT services and subscriptions, and provides an estimate of
additional operating budget impact:
[HB138] would require both the addition of a new data reporting system application to
track and manage the information, as well as the need for additional staff (16.5 FTE) to
provide oversight to conduct surveys and complaint investigations and administrative
support for those activities.
• HCA estimates that a new data management and reporting system will need to be
developed and implemented to collect and manage the data. It is unknown what the cost
of such an application would be.
• HCA estimates it would take 4 FTE healthcare surveyors to survey 50 hospitals
annually for compliance with the act and posted staffing for each hospital unit.
• While the number of complaints of violations of HB138 requirements is unknown, the
HCA bases FTE estimates [on] 200 complaint investigations, including necessary follow-
ups, per year. HCA estimates it would take an additional 1 FTE complaint intake
specialist, and 10 FTE nurse surveyors to investigate complaints annually.
• HCA estimates it would take a 0.5 FTE attorney to participate in or respond to court
filings for injunctive relief.
• HCA estimates it would take 1 FTE annually to develop and maintain the HCA website
for posting hospital reports, analyzing data and reporting performance, managing records
requests, and associated tasks.
Fiscal impact includes FY25 expenses for the last quarter of the fiscal year. The estimate does
not include any compensation escalation in FY27.
SIGNIFICANT ISSUES
Healthcare providers in New Mexico and throughout the United States are experiencing nursing
shortages, which affects patient care. The 2024 New Mexico Healthcare Workforce Committee
Report indicates, with no redistribution of the current workforce, an additional 5,353 registered House Bill 138/ec – Page 3
nurses would be needed for all New Mexico counties to meet the national benchmark (92 per 10
thousand population).
1
High patient-staff ratios likely increase unsafe conditions for patients and burnout for nurses. The
Board of Nursing (BON) documents considerable evidence in the medical/nursing literature that
attests to high ratios leading to burnout. BON also points to one preliminary study indicating that
better staffing ratios could result in cost savings for hospitals.
2
Hospitals may serve very different populations and, thus, have different staffing ratios needed to
provide quality care. The Centers for Medicare and Medicaid Services (CMS) publish
requirements for participation in Medicare and Medicaid that dictate adequate staffing but do not
dictate specific ratios.
3
In accordance with CMS rules, the hospital director of nursing is
responsible for nurse staffing levels and determining the type and number of nursing staff
necessary to provide nursing care for all areas of the hospital. Determining appropriate staffing
for any given unit or facility considers many variables, including patient complexity and needs;
the experience, education, qualifications, skills and competency of available staff; shift-to-shift
variables; and patient turnover.
BON notes prohibiting an unlicensed assistive person (UAP) from the scope of practice outlined
may have unintended effects. BON points out that many of these procedures have, under direct
supervision, been performed by UAPs in the past. It further notes, “Non-traditional health
professions students benefit from pipeline and pathway programs through stacked credential
approaches to traditional college. This exclusion of UAP roles may interrupt or negatively
impact that option.”
PERFORMANCE IMPLICATIONS
HB138 contains no performance measures but the HCA Division of Health Improvement may
wish to consider developing metrics such as trends in staffing ratios, patient outcomes, and the
number of staffing violations and resolutions. Other potential measurable outcomes would be
nurse job satisfaction, nurse burnout, and nurse retention.
ADMINISTRATIVE IMPLICATIONS
While HB138 references DOH, the bill would require the HCA to promulgate rules, monitor,
investigate alleged violations of the act, and ensure compliance with the requirements of the
legislation. See “Technical Issues.”
HCA notes the following administrative implications:
Monitoring compliance with HB138 would be a new and additional workload. Currently,
the Division of Health Improvement surveys hospitals either upon initial licensure of the
hospital, when directed to do so by CMS, or when a state complaint is received. The
1
https://digitalrepository.unm.edu/nmhc_workforce/13/
2
Lasater, K. B., Aiken, L. H., Sloane, D., French, R., M. B., Alexander, M., & McHugh, M. D. (2021). Patient
outcomes and cost saving associated with hospital safe nurse staffing legislation: an observational study. BMJ Open,
11:e052899. doi: 10.1136/bmjopen-2021-052899.
3
Code of Federal Regulations 42 CFR 482.23(b) House Bill 138/ec – Page 4
Division of Health Improvement would need additional staff to monitor compliance with
all requirements of HB138 and investigate complaints. Funds would be needed for salary
and benefits, as well as rent, supplies, equipment, communication, travel, cars, copying,
and information technology for new staff. Contract funds would also be needed to cover
the costs of fair hearings for contested civil monetary penalties and other sanctions
imposed by the Division of Health Improvement to enforce the provisions of the act.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
HB138 potentially duplicates House Bill 72 (HB72), which creates a hospital staffing ratio
committee to advise the HCA in setting minimum staffing ratios for nursing units in the state’s
hospitals. HB72 would develop ratios through a statewide committee and HB138 would result in
each hospital developing its own staffing committee.
TECHNICAL ISSUES
HB138 references “the department” [of Health] within Chapter 24 NMSA 1978 but hospital
licensing authority now lies within the Health Care Authority’s Division of Health Improvement.
OTHER SUBSTANT IVE ISSUES
A growing body of research indicates that enhanced nurse-to-patient ratios can have a positive
impact on quality of care and patient outcomes.
4
California and Massachusetts require specific
ratios within certain hospital units. Other states require public reporting of staffing ratios by the
hospitals. Another option states have exercised is nurse-driven staffing committees convened at
the hospital level.
On April 22, 2024, CMS issued the Minimum Staffing Standards for Long-Term Care Facilities
and Medicaid Institutional Payment Transparency Reporting final rule. CMS is finalizing a total
nurse staffing standard of 3.48 hours per resident day (HPRD), which must include at least 0.55
HPRD of direct registered nurse (RN) care and 2.45 HPRD of direct nurse aide care. Long-term
care facilities may use any combination of nurse staff (RN, licensed practical nurse (LPN) and
licensed vocational nurse (LVN), or nurse aide) to account for the additional 0.48 HPRD needed
to comply with the total nurse staffing standard.
HR/hj/hg/sgs
4
Health Serv Res. 2021 Mar 15;56(5):885–907. doi: 10.1111/1475-6773.13647