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SENATE BILL 121
57TH LEGISLATURE - STATE OF NEW MEXICO - FIRST SESSION, 2025
INTRODUCED BY
George K. Muñoz
AN ACT
RELATING TO MEDICAL MALPRACTICE; PROVIDING IMMUNITY FROM
LIABILITY TO THE THIRD-PARTY ADMINISTRATOR THAT ADMINISTERS THE
PATIENT'S COMPENSATION FUND.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
SECTION 1. Section 41-5-25 NMSA 1978 (being Laws 1992,
Chapter 33, Section 9, as amended) is amended to read:
"41-5-25. PATIENT'S COMPENSATION FUND--THIRD-PARTY
ADMINISTRATOR--ACTUARIAL STUDIES--SURCHARGES--CLAIMS--
PRORATION--PROOFS OF AUTHENTICITY.--
A. The "patient's compensation fund" is created as
a nonreverting fund in the state treasury. The fund consists
of money from surcharges, income from investment of the fund
and any other money deposited to the credit of the fund. The
fund shall be held in trust, deposited in a segregated account
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in the state treasury and invested by the state investment
office and shall not become a part of or revert to the general
fund or any other fund of the state. Money from the fund shall
be expended only for the purposes of and to the extent provided
in the Medical Malpractice Act. All approved expenses of
collecting, protecting and administering the fund, including
purchasing insurance for the fund, shall be paid from the fund.
B. The superintendent shall contract for the
administration and operation of the fund with a qualified,
licensed third-party administrator, selected in consultation
with the advisory board, no later than January 1, 2022. The
third-party administrator shall provide an annual audit of the
fund to the superintendent. The third-party administrator
shall have the same immunity from liability as the
superintendent for actions taken within the scope of the duties
prescribed by the Medical Malpractice Act.
C. The superintendent, as custodian of the fund,
and the third-party administrator shall be notified by the
health care provider or the health care provider's insurer
within thirty days of service on the health care provider of a
complaint asserting a malpractice claim brought in a court in
this state against the health care provider.
D. The superintendent shall levy an annual
surcharge on all New Mexico health care providers qualifying
under Section 41-5-5 NMSA 1978. The surcharge shall be
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determined by the superintendent with the advice of the
advisory board and based on the annual independent actuarial
study of the fund. The surcharges for health care providers,
including hospitals and outpatient health care facilities whose
qualifications for the fund end on January 1, 2027, shall be
based on sound actuarial principles, using data obtained from
New Mexico claims and loss experience. A hospital or
outpatient health care facility seeking participation in the
fund during the remaining qualifying years shall provide, at a
minimum, the hospital's or outpatient health care facility's
direct and indirect cost information as reported to the federal
centers for medicare and medicaid services for all self-insured
malpractice claims, including claims and paid loss detail, and
the claims and paid loss detail from any professional liability
insurance carriers for each hospital or outpatient health care
facility and each employed health care provider for the past
eight years to the third-party actuary. The same information
shall be available to the advisory board for review, including
financial information and data, and excluding individually
identifying case information, which information shall not be
subject to the Inspection of Public Records Act. The
superintendent, the third-party actuary or the advisory board
shall not use or disclose the information for any purpose other
than to fulfill the duties pursuant to this subsection.
E. The surcharge shall be collected on the same
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basis as premiums by each insurer from the health care
provider. The surcharge shall be due and payable within thirty
days after the premiums for malpractice liability insurance
have been received by the insurer from the health care provider
in New Mexico. If the surcharge is collected but not paid
timely, the superintendent may suspend the certificate of
authority of the insurer until the annual premium surcharge is
paid.
F. Surcharges shall be set by October 31 of each
year for the next calendar year. Beginning in 2021, the
surcharges shall be set with the intention of bringing the fund
to solvency with no projected deficit by December 31, 2026.
All qualified and participating hospitals and outpatient health
care facilities shall cure any fund deficit attributable to
hospitals and outpatient health care facilities by December 31,
2026.
G. If the fund would be exhausted by payment of all
claims allowed during a particular calendar year, then the
amounts paid to each patient and other parties obtaining
judgments shall be prorated, with each such party receiving an
amount equal to the percentage the party's own payment schedule
bears to the total of payment schedules outstanding and payable
by the fund. Any amounts due and unpaid as a result of such
proration shall be paid in the following calendar years.
H. Upon receipt of one of the proofs of
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authenticity listed in this subsection, reflecting a judgment
for damages rendered pursuant to the Medical Malpractice Act,
the superintendent shall issue or have issued warrants in
accordance with the payment schedule constructed by the court
and made a part of its final judgment. The only claim against
the fund shall be a voucher or other appropriate request by the
superintendent after the superintendent receives:
(1) until January 1, 2022, a certified copy of
a final judgment in excess of two hundred thousand dollars
($200,000) against a health care provider;
(2) until January 1, 2022, a certified copy of
a court-approved settlement or certification of settlement made
prior to initiating suit, signed by both parties, in excess of
two hundred thousand dollars ($200,000) against a health care
provider; or
(3) until January 1, 2022, a certified copy of
a final judgment less than two hundred thousand dollars
($200,000) and an affidavit of a health care provider or its
insurer attesting that payments made pursuant to Subsection B
of Section 41-5-7 NMSA 1978, combined with the monetary
recovery, exceed two hundred thousand dollars ($200,000).
I. On or after January 1, 2022, the amounts
specified in Paragraphs (1) through (3) of Subsection H of this
section shall be two hundred fifty thousand dollars
($250,000)."
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