New Mexico 2025 Regular Session

New Mexico Senate Bill SB449 Compare Versions

Only one version of the bill is available at this time.

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28	28	SENATE BILL 449
29	29	57
30	30	TH LEGISLATURE
31	31	-
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33	33	STATE
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35	35	OF
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37	37	NEW
38	38
39	39	MEXICO
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42	42	FIRST SESSION
43	43	,
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45	45	2025
46	46	INTRODUCED BY
47	47	Larry R. Scott and James G. Townsend and Candy Spence Ezzell
48	48	AN ACT
49	49	RELATING TO LITIGATION; AMENDING REQUIREMENTS FOR VENUE
50	50	DETERMINATION; PROVIDING REQUIREMENTS FOR DETERMINING VENUE IN
51	51	CASES INVOLVING MEDICAL MALPRACTICE; AMENDING THE MEDICAL
52	52	MALPRACTICE ACT; LIMITING RECOVERY FROM THE PATIENT'S
53	53	COMPENSATION FUND; REQUIRING PAYMENTS FROM THE PATIENT'S
54	54	COMPENSATION FUND TO BE MADE AS EXPENSES ARE INCURRED;
55	55	REQUIRING SEVENTY-FIVE PERCENT OF THE PUNITIVE DAMAGES AWARDED
56	56	IN MEDICAL MALPRACTICE CLAIMS TO BE AWARDED TO THE STATE;
57	57	LIMITING ATTORNEY FEES IN MALPRACTICE CLAIMS; REQUIRING THE
58	58	SUPERINTENDENT OF INSURANCE TO APPROVE PROPOSED SETTLEMENTS
59	59	PAID FROM THE PATIENT'S COMPENSATION FUND; REMOVING A
60	60	REQUIREMENT FOR SURCHARGES TO BE SET WITH THE INTENT OF
61	61	BRINGING THE FUND TO SOLVENCY; CREATING THE PATIENT SAFETY
62	62	IMPROVEMENT FUND; MAKING AN APPROPRIATION.
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90	90	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
91	91	SECTION 1. Section 38-3-1 NMSA 1978 (being Laws 1875-
92	92	1876, Chapter 2, Section 1, as amended) is amended to read:
93	93	"38-3-1. COUNTY IN WHICH CIVIL ACTION IN DISTRICT COURT
94	94	MAY BE COMMENCED.--All civil actions commenced in the district
95	95	courts shall be brought and shall be commenced in counties as
96	96	follows and not otherwise.
97	97	A. First, except as provided in Subsection F of
98	98	this section relating to foreign corporations, all transitory
99	99	actions shall be brought in the county where either the
100	100	plaintiff or defendant, or any one of them in case there is
101	101	more than one of either, resides; or second, in the county
102	102	where the contract sued on was made or is to be performed or
103	103	where the cause of action originated or indebtedness sued on
104	104	was incurred; or third, in any county in which the defendant or
105	105	either of them may be found in the judicial district where the
106	106	defendant resides.
107	107	B. When the defendant [has rendered himself ] is
108	108	liable to a civil action by any criminal act, suit may be
109	109	instituted against the defendant in the county in which the
110	110	offense was committed or in which the defendant may be found or
111	111	in the county where the plaintiff resides.
112	112	C. When suit is brought for the recovery of
113	113	personal property other than money, it may be brought as
114	114	provided in this section or in the county where the property
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143	143	may be found.
144	144	D. [(1)] When lands or any interest in lands [are ]
145	145	is the object of any suit in whole or in part, the suit shall
146	146	be brought in the county where the land or any portion of the
147	147	land is situate; [(2) ] provided that [where ] if such lands are
148	148	located in more than one county and are contiguous, [that ] the
149	149	suit may be brought as to all of the lands in any county in
150	150	which a portion of the lands is situate, with the same force
151	151	and effect as though the suit had been prosecuted in each
152	152	county in which any of the lands are situate. In all such
153	153	cases in which suit is prosecuted in one county as to
154	154	contiguous lands in more than one county, notice of lis pendens
155	155	shall be filed pursuant to Sections 38-1-14 and 38-1-15 NMSA
156	156	1978 in each county. For purposes of service of process
157	157	pursuant to Rule [4] 1-004 of the Rules of Civil Procedure for
158	158	the District Courts, any such suit involving contiguous lands
159	159	located in more than one county shall be deemed pending in each
160	160	county in which any portion of the land is located from the
161	161	date of filing of the lis pendens notice.
162	162	E. Suits for trespass on land shall be brought as
163	163	provided in Subsection A of this section or in the county where
164	164	the land or any portion of the land is situate.
165	165	F. Except as provided in Subsection H of this
166	166	section, suits may be brought against transient persons or
167	167	[non-residents] nonresidents in any county of this state,
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196	196	except that suits against foreign corporations admitted to do
197	197	business and [which] that designate and maintain a statutory
198	198	agent in this state upon whom service of process may be had
199	199	shall only be brought in the county where the plaintiff, or any
200	200	one of them in case there is more than one, resides or in the
201	201	county where the contract sued on was made or is to be
202	202	performed or where the cause of action originated or
203	203	indebtedness sued on was incurred or in the county where the
204	204	statutory agent designated by the foreign corporation resides.
205	205	G. Suits against any state officers as such shall
206	206	be brought in the court of the county in which their offices
207	207	are located, at the capital or in the county where a plaintiff,
208	208	or any one of them in case there is more than one, resides,
209	209	except that suits against the officers or employees of a state
210	210	educational institution as defined in Article 12, Section 11 of
211	211	the constitution of New Mexico, as such, shall be brought in
212	212	the district court of the county in which the principal office
213	213	of the state educational institution is located or the district
214	214	court of the county where the plaintiff resides.
215	215	H. In a claim asserted by a personal representative
216	216	pursuant to Section 41-2-3 NMSA 1978, a conservator, guardian
217	217	or guardian ad litem appointed pursuant to Chapter 45, Article
218	218	5 NMSA 1978 or a third person acting in any representative
219	219	capacity, the residence of the person bringing the claim shall
220	220	not be considered in determining venue in any civil action.
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249	249	I. Subject to the provisions of Subsection H of
250	250	this section, venue in a claim asserting medical malpractice
251	251	shall be limited to the county in which the patient received
252	252	the medical treatment that is the basis for the medical
253	253	malpractice lawsuit. As used in this subsection:
254	254	(1) "medical malpractice lawsuit" means any
255	255	legal proceeding alleging a cause of action arising in this
256	256	state against a health care provider for medical treatment,
257	257	lack of medical treatment or other claim of departure from
258	258	accepted standards of health care that proximately results in
259	259	injury to a patient, whether the patient's cause of action
260	260	sounds in tort or contract, including actions based on battery,
261	261	wrongful death, unfair trade practices or negligent hiring,
262	262	supervision, training, retention or credentialing and excluding
263	263	a cause of action arising out of nonmedical acts related to the
264	264	operation, use or maintenance of a vehicular or aircraft
265	265	ambulance; and
266	266	(2) "patient" means a natural person of any
267	267	age who received or should have received health care from a
268	268	health care provider. "
269	269	SECTION 2. Section 41-5-3 NMSA 1978 (being Laws 1976,
270	270	Chapter 2, Section 3, as amended) is amended to read:
271	271	"41-5-3. DEFINITIONS.--As used in the Medical Malpractice
272	272	Act:
273	273	A. "advisory board" means the patient's
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302	302	compensation fund advisory board;
303	303	B. "control" means equity ownership in a business
304	304	entity that:
305	305	(1) represents more than fifty percent of the
306	306	total voting power of the business entity; or
307	307	(2) has a value of more than fifty percent of
308	308	that business entity;
309	309	C. "fund" means the patient's compensation fund;
310	310	D. "health care provider" means a person,
311	311	corporation, organization, facility or institution licensed or
312	312	certified by this state to provide health care or professional
313	313	services as a doctor of medicine, hospital, outpatient health
314	314	care facility, doctor of osteopathy, chiropractor, [podiatrist ]
315	315	podiatric physician, nurse anesthetist, physician's assistant,
316	316	certified nurse practitioner, clinical nurse specialist or
317	317	certified nurse-midwife or a business entity that is organized,
318	318	incorporated or formed pursuant to the laws of New Mexico that
319	319	provides health care services primarily through natural persons
320	320	identified in this subsection. "Health care provider" does not
321	321	mean a person or entity protected pursuant to the Tort Claims
322	322	Act or the Federal Tort Claims Act;
323	323	E. "hospital" means a facility licensed as a
324	324	hospital in this state that offers in-patient services, nursing
325	325	or overnight care on a twenty-four-hour basis for diagnosing,
326	326	treating and providing medical, psychological or surgical care
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355	355	for three or more separate persons who have a physical or
356	356	mental illness, disease, injury or rehabilitative condition or
357	357	are pregnant and may offer emergency services. "Hospital"
358	358	includes a hospital's parent corporation, subsidiary
359	359	corporations or affiliates if incorporated or registered in New
360	360	Mexico; employees and locum tenens providing services at the
361	361	hospital; and agency nurses providing services at the hospital.
362	362	"Hospital" does not mean a person or entity protected pursuant
363	363	to the Tort Claims Act or the Federal Tort Claims Act;
364	364	F. "independent outpatient health care facility"
365	365	means a health care facility that is an ambulatory surgical
366	366	center, urgent care facility or free-standing emergency room
367	367	that is not, directly or indirectly through one or more
368	368	intermediaries, controlled or under common control with a
369	369	hospital. "Independent outpatient health care facility"
370	370	includes a facility's employees, locum tenens providers and
371	371	agency nurses providing services at the facility. "Independent
372	372	outpatient health care facility" does not mean a person or
373	373	entity protected pursuant to the Tort Claims Act or the Federal
374	374	Tort Claims Act;
375	375	G. "independent provider" means a doctor of
376	376	medicine, doctor of osteopathy, chiropractor, [podiatrist ]
377	377	podiatric physician, nurse anesthetist, physician's assistant,
378	378	certified nurse practitioner, clinical nurse specialist or
379	379	certified nurse-midwife who is not an employee of a hospital or
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408	408	outpatient health care facility. "Independent provider" does
409	409	not mean a person or entity protected pursuant to the Tort
410	410	Claims Act or the Federal Tort Claims Act. "Independent
411	411	provider" includes:
412	412	(1) a health care facility that is:
413	413	(a) licensed pursuant to the Public
414	414	Health Act as an outpatient facility;
415	415	(b) not an ambulatory surgical center,
416	416	urgent care facility or free-standing emergency room; and
417	417	(c) not hospital-controlled; and
418	418	(2) a business entity that is not a hospital
419	419	or outpatient health care facility that employs or consists of
420	420	members who are licensed or certified as doctors of medicine,
421	421	doctors of osteopathy, chiropractors, [podiatrists ] podiatric
422	422	physicians, nurse anesthetists, physician's assistants,
423	423	certified nurse practitioners, clinical nurse specialists or
424	424	certified nurse-midwives and the business entity's employees;
425	425	H. "insurer" means an insurance company engaged in
426	426	writing health care provider malpractice liability insurance in
427	427	this state;
428	428	I. "malpractice claim" includes any cause of action
429	429	arising in this state against a health care provider for
430	430	medical treatment, lack of medical treatment or other claimed
431	431	departure from accepted standards of health care that
432	432	proximately results in injury to the patient, whether the
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461	461	patient's claim or cause of action sounds in tort or contract,
462	462	and includes but is not limited to actions based on battery or
463	463	wrongful death; "malpractice claim" does not include a cause of
464	464	action arising out of the driving, flying or nonmedical acts
465	465	involved in the operation, use or maintenance of a vehicular or
466	466	aircraft ambulance;
467	467	J. "medical care and related benefits" means all
468	468	reasonable medical, surgical, physical rehabilitation and
469	469	custodial services and includes drugs, prosthetic devices and
470	470	other similar materials reasonably necessary in the provision
471	471	of such services;
472	472	K. "occurrence" means all [injuries to a patient
473	473	caused by health care providers' successive acts or omissions
474	474	that combined concurrently to create a malpractice claim ]
475	475	claims for damages from all persons arising from harm to a
476	476	single patient, no matter how many health care providers,
477	477	errors or omissions contributed to the harm ;
478	478	L. "outpatient health care facility" means an
479	479	entity that is hospital-controlled and is licensed pursuant to
480	480	the Public Health Act as an outpatient facility, including
481	481	ambulatory surgical centers, free-standing emergency rooms,
482	482	urgent care clinics, acute care centers and intermediate care
483	483	facilities and includes a facility's employees, locum tenens
484	484	providers and agency nurses providing services at the facility.
485	485	"Outpatient health care facility" does not include:
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514	514	(1) independent providers;
515	515	(2) independent outpatient health care
516	516	facilities; or
517	517	(3) individuals or entities protected pursuant
518	518	to the Tort Claims Act or the Federal Tort Claims Act;
519	519	M. "patient" means a natural person who received or
520	520	should have received health care from a health care provider,
521	521	under a contract, express or implied; and
522	522	N. "superintendent" means the superintendent of
523	523	insurance."
524	524	SECTION 3. Section 41-5-4 NMSA 1978 (being Laws 1976,
525	525	Chapter 2, Section 4, as amended) is amended to read:
526	526	"41-5-4. AD DAMNUM CLAUSE--VENUE .--
527	527	A. A patient or [his] a patient's representative
528	528	having a malpractice claim for bodily injury or death may file
529	529	a complaint and demand right of trial by jury in [any] a court
530	530	of law having requisite jurisdiction and [demand right of trial
531	531	by jury] where venue is proper.
532	532	B. Venue in a malpractice claim shall be proper
533	533	when the claim is filed in the county in which the patient
534	534	received the medical treatment that is the basis for the
535	535	malpractice claim.
536	536	C. No dollar amount or figure shall be included in
537	537	the demand in [any] a complaint asserting a malpractice claim
538	538	and filed after the effective date of this section, but the
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567	567	request shall be for such damages as are reasonable. This
568	568	section shall not prevent a patient or [his ] the patient's
569	569	representative from alleging a requisite jurisdictional amount
570	570	in a malpractice claim filed in a court requiring such an
571	571	allegation."
572	572	SECTION 4. Section 41-5-6 NMSA 1978 (being Laws 1992,
573	573	Chapter 33, Section 4, as amended) is amended to read:
574	574	"41-5-6. LIMITATION OF RECOVERY.--
575	575	A. Except for punitive damages and past and future
576	576	medical care and related benefits, the aggregate dollar amount
577	577	recoverable by all persons for or arising from any injury or
578	578	death to a patient as a result of malpractice shall not exceed
579	579	six hundred thousand dollars ($600,000) per occurrence for
580	580	malpractice claims brought against health care providers if the
581	581	injury or death occurred prior to January 1, 2022. In jury
582	582	cases, the jury shall not be given any instructions dealing
583	583	with this limitation.
584	584	B. Except for punitive damages and past and future
585	585	medical care and related benefits, the aggregate dollar amount
586	586	recoverable by all persons for or arising from any injury or
587	587	death to a patient as a result of malpractice shall not exceed
588	588	seven hundred fifty thousand dollars ($750,000) per occurrence
589	589	for malpractice claims against independent providers; provided
590	590	that [beginning January 1, 2023 ] on the first day of each
591	591	calendar year, the per occurrence limit on recovery shall be
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620	620	adjusted [annually] by the prior three-year average consumer
621	621	price index for all urban consumers; and provided further that
622	622	an adjustment shall not result in a percentage increase in the
623	623	per occurrence limit on recovery greater than three percent .
624	624	C. The aggregate dollar amount recoverable by all
625	625	persons for or arising from any injury or death to a patient as
626	626	a result of malpractice, except for punitive damages and past
627	627	and future medical care and related benefits, shall not exceed
628	628	seven hundred fifty thousand dollars ($750,000) for claims
629	629	brought against an independent outpatient health care facility
630	630	for an injury or death that occurred in calendar years 2022 and
631	631	2023.
632	632	D. In calendar year 2024 and subsequent years, the
633	633	aggregate dollar amount recoverable by all persons for or
634	634	arising from an injury or death to a patient as a result of
635	635	malpractice, except for punitive damages and past and future
636	636	medical care and related benefits, shall not exceed the
637	637	following amounts for claims brought against an independent
638	638	outpatient health care facility:
639	639	(1) for an injury or death that occurred in
640	640	calendar year 2024, one million dollars ($1,000,000) per
641	641	occurrence; and
642	642	(2) for an injury or death that occurred in
643	643	calendar year 2025 and thereafter, the amount provided in
644	644	Paragraph (1) of this subsection, adjusted annually by the
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673	673	prior three-year average consumer price index for all urban
674	674	consumers, per occurrence; provided that an adjustment shall
675	675	not result in a percentage increase in the per occurrence limit
676	676	on recovery greater than three percent .
677	677	E. In calendar year 2022 and subsequent calendar
678	678	years, the aggregate dollar amount recoverable by all persons
679	679	for or arising from any injury or death to a patient as a
680	680	result of malpractice, except for punitive damages and past and
681	681	future medical care and related benefits, shall not exceed the
682	682	following amounts for claims brought against a hospital or a
683	683	hospital-controlled outpatient health care facility:
684	684	(1) for an injury or death that occurred
685	685	in calendar year 2022, four million dollars ($4,000,000)
686	686	per occurrence;
687	687	(2) for an injury or death that occurred in
688	688	calendar year 2023, four million five hundred thousand dollars
689	689	($4,500,000) per occurrence;
690	690	(3) for an injury or death that occurred
691	691	in calendar year 2024, five million dollars ($5,000,000)
692	692	per occurrence;
693	693	(4) for an injury or death that occurred in
694	694	calendar year 2025, five million five hundred thousand dollars
695	695	($5,500,000) per occurrence;
696	696	(5) for an injury or death that occurred
697	697	in calendar year 2026, six million dollars ($6,000,000)
698	698	.230951.1
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726	726	per occurrence; and
727	727	(6) for an injury or death that occurred in
728	728	calendar year 2027 and each calendar year thereafter, the
729	729	amount provided in Paragraph (5) of this subsection, adjusted
730	730	annually by the prior three-year average consumer price index
731	731	for all urban consumers, per occurrence; provided that an
732	732	adjustment shall not result in a percentage increase in the per
733	733	occurrence limit on recovery greater than three percent .
734	734	F. The aggregate dollar amounts provided in
735	735	Subsections B through E of this section include payment to any
736	736	person for any number of loss of consortium claims or other
737	737	claims per occurrence that arise solely because of the injuries
738	738	or death of the patient.
739	739	G. In jury cases, the jury shall not be given any
740	740	instructions dealing with the limitations provided in this
741	741	section.
742	742	H. The value of accrued medical care and related
743	743	benefits shall not be subject to any limitation.
744	744	I. Except for an independent outpatient health care
745	745	facility, a health care provider's personal liability is
746	746	limited to two hundred fifty thousand dollars ($250,000) for
747	747	monetary damages and medical care and related benefits as
748	748	provided in Section 41-5-7 NMSA 1978. Any amount due from a
749	749	judgment or settlement in excess of two hundred fifty thousand
750	750	dollars ($250,000) shall be paid from the fund, except as
751	751	.230951.1
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779	779	provided in Subsections J and K of this section.
780	780	J. An independent outpatient health care facility's
781	781	personal liability is limited to five hundred thousand dollars
782	782	($500,000) for monetary damages and medical care and related
783	783	benefits as provided in Section 41-5-7 NMSA 1978. Any amount
784	784	due from a judgment or settlement in excess of five hundred
785	785	thousand dollars ($500,000) shall be paid from the fund.
786	786	K. Until January 1, 2027, amounts due from a
787	787	judgment or settlement against a hospital or hospital-
788	788	controlled outpatient health care facility in excess of seven
789	789	hundred fifty thousand dollars ($750,000), excluding past and
790	790	future medical expenses, shall be paid by the hospital or
791	791	hospital-controlled outpatient health care facility and not by
792	792	the fund. [Beginning January 1, 2027, amounts due from a
793	793	judgment or settlement against a hospital or hospital-
794	794	controlled outpatient health care facility shall not be paid
795	795	from the fund.
796	796	L. The term "occurrence" shall not be construed in
797	797	such a way as to limit recovery to only one maximum statutory
798	798	payment if separate acts or omissions cause additional or
799	799	enhanced injury or harm as a result of the separate acts or
800	800	omissions. A patient who suffers two or more distinct injuries
801	801	as a result of two or more different acts or omissions that
802	802	occur at different times by one or more health care providers
803	803	is entitled to up to the maximum statutory recovery for each
804	804	.230951.1
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832	832	injury.]
833	833	L. As used in this section, "consumer price index"
834	834	means the consumer price index for all urban consumers, United
835	835	States city average, as published by the United States
836	836	department of labor, between the end of December of the
837	837	penultimate calendar year and the end of December of the
838	838	immediately preceding calendar year. "
839	839	SECTION 5. Section 41-5-7 NMSA 1978 (being Laws 1992,
840	840	Chapter 33, Section 5, as amended) is amended to read:
841	841	"41-5-7. MEDICAL EXPENSES AND PUNITIVE DAMAGES.--
842	842	A. Awards of past and future medical care and
843	843	related benefits shall not be subject to the limitations of
844	844	recovery imposed in Section 41-5-6 NMSA 1978.
845	845	B. The health care provider shall be liable for all
846	846	medical care and related benefit payments until the total
847	847	payments made by or on behalf of it for monetary damages and
848	848	medical care and related benefits combined equals the health
849	849	care provider's personal liability limit as provided in
850	850	Subsection I of Section 41-5-6 NMSA 1978, after which the
851	851	payments shall be made by the fund.
852	852	C. Awards of past or future medical care and
853	853	related benefits shall not be paid from the fund unless the
854	854	amount of the award was actually paid by or on behalf of an
855	855	injured person and accepted by a health care provider as
856	856	payment for services rendered.
857	857	.230951.1
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885	885	D. Awards of future medical care and related
886	886	benefits shall only be paid from the fund as the expenses are
887	887	incurred. Payments from the fund for future medical care and
888	888	related benefits shall not be paid in a lump-sum payment.
889	889	[C.] E. Beginning January 1, 2027, any amounts due
890	890	from a judgment or settlement against a hospital or outpatient
891	891	health care facility shall not be paid from the fund if the
892	892	injury or death occurred after December 31, 2026.
893	893	[D.] F. This section shall not be construed to
894	894	prevent a patient and a health care provider from entering into
895	895	a settlement agreement whereby medical care and related
896	896	benefits shall be provided for a limited period of time only or
897	897	to a limited degree.
898	898	G. In a malpractice claim in which punitive damages
899	899	are awarded, the court shall divide the punitive damage award
900	900	and enter judgment as follows:
901	901	(1) twenty-five percent of the punitive damage
902	902	award shall be awarded to the prevailing party; and
903	903	(2) seventy-five percent of the punitive
904	904	damage award shall be awarded to the state. All amounts
905	905	awarded to the state shall be remitted to the state treasurer
906	906	to be deposited into the patient safety improvement fund.
907	907	[E.] H. A judgment of punitive damages against a
908	908	health care provider shall be the personal liability of the
909	909	health care provider. Punitive damages may only be awarded if
910	910	.230951.1
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938	938	the prevailing party provides clear and convincing evidence
939	939	demonstrating that the acts of the health care provider were
940	940	made with deliberate disregard for the rights or safety of
941	941	others. Punitive damages shall not be paid from the fund or
942	942	from the proceeds of the health care provider's insurance
943	943	contract unless the contract expressly provides coverage.
944	944	Nothing in Section 41-5-6 NMSA 1978 precludes the award of
945	945	punitive damages to a patient. Nothing in this subsection
946	946	authorizes the imposition of liability for punitive damages
947	947	where that imposition would not be otherwise authorized by law.
948	948	I. A punitive damage award shall not exceed an
949	949	amount greater than three times the compensatory damage award. "
950	950	SECTION 6. Section 41-5-25 NMSA 1978 (being Laws 1992,
951	951	Chapter 33, Section 9, as amended) is amended to read:
952	952	"41-5-25. PATIENT'S COMPENSATION FUND--THIRD-PARTY
953	953	ADMINISTRATOR--ACTUARIAL STUDIES--SURCHARGES--CLAIMS--
954	954	PRORATION--PROOFS OF AUTHENTICITY.--
955	955	A. The "patient's compensation fund" is created as
956	956	a nonreverting fund in the state treasury. The fund consists
957	957	of money from surcharges, income from investment of the fund
958	958	and any other money deposited to the credit of the fund. The
959	959	fund shall be held in trust, deposited in a segregated account
960	960	in the state treasury and invested by the state investment
961	961	office and shall not become a part of or revert to the general
962	962	fund or any other fund of the state. Money from the fund shall
963	963	.230951.1
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991	991	be expended only for the purposes of and to the extent provided
992	992	in the Medical Malpractice Act. All approved expenses of
993	993	collecting, protecting and administering the fund, including
994	994	purchasing insurance for the fund, shall be paid from the fund.
995	995	B. The superintendent shall contract for the
996	996	administration and operation of the fund with a qualified,
997	997	licensed third-party administrator, selected in consultation
998	998	with the advisory board, no later than January 1, 2022. The
999	999	third-party administrator shall provide an annual audit of the
1000	1000	fund to the superintendent.
1001	1001	C. The superintendent, as custodian of the fund,
1002	1002	and the third-party administrator shall be notified by the
1003	1003	health care provider or the health care provider's insurer
1004	1004	within thirty days of service on the health care provider of a
1005	1005	complaint asserting a malpractice claim brought in a court in
1006	1006	this state against the health care provider.
1007	1007	D. The superintendent, as custodian of the fund, or
1008	1008	the superintendent's designee, shall evaluate and approve a
1009	1009	proposed settlement if any amount of the proposed settlement is
1010	1010	to be paid from the fund.
1011	1011	[D.] E. The superintendent shall levy an annual
1012	1012	surcharge on all New Mexico health care providers qualifying
1013	1013	under Section 41-5-5 NMSA 1978. The surcharge shall be
1014	1014	determined by the superintendent with the advice of the
1015	1015	advisory board and based on the annual independent actuarial
1016	1016	.230951.1
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1044	1044	study of the fund. The surcharges for health care providers,
1045	1045	including hospitals and outpatient health care facilities whose
1046	1046	qualifications for the fund end on January 1, 2027, shall be
1047	1047	based on sound actuarial principles, using data obtained from
1048	1048	New Mexico claims and loss experience. A hospital or
1049	1049	outpatient health care facility seeking participation in the
1050	1050	fund during the remaining qualifying years shall provide, at a
1051	1051	minimum, the hospital's or outpatient health care facility's
1052	1052	direct and indirect cost information as reported to the federal
1053	1053	centers for medicare and medicaid services for all self-insured
1054	1054	malpractice claims, including claims and paid loss detail, and
1055	1055	the claims and paid loss detail from any professional liability
1056	1056	insurance carriers for each hospital or outpatient health care
1057	1057	facility and each employed health care provider for the past
1058	1058	eight years to the third-party actuary. The same information
1059	1059	shall be available to the advisory board for review, including
1060	1060	financial information and data, and excluding individually
1061	1061	identifying case information, which information shall not be
1062	1062	subject to the Inspection of Public Records Act. The
1063	1063	superintendent, the third-party actuary or the advisory board
1064	1064	shall not use or disclose the information for any purpose other
1065	1065	than to fulfill the duties pursuant to this subsection.
1066	1066	[E.] F. The surcharge shall be collected on the
1067	1067	same basis as premiums by each insurer from the health care
1068	1068	provider. The surcharge shall be due and payable within thirty
1069	1069	.230951.1
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1097	1097	days after the premiums for malpractice liability insurance
1098	1098	have been received by the insurer from the health care provider
1099	1099	in New Mexico. If the surcharge is collected but not paid
1100	1100	timely, the superintendent may suspend the certificate of
1101	1101	authority of the insurer until the annual premium surcharge is
1102	1102	paid.
1103	1103	[F.] G. Surcharges shall be set by October 31 of
1104	1104	each year for the next calendar year. [Beginning in 2021, the
1105	1105	surcharges shall be set with the intention of bringing the fund
1106	1106	to solvency with no projected deficit by December 31, 2026. ]
1107	1107	All qualified and participating hospitals and outpatient health
1108	1108	care facilities shall cure any fund deficit attributable to
1109	1109	hospitals and outpatient health care facilities by December 31,
1110	1110	2026.
1111	1111	[G.] H. If the fund would be exhausted by payment
1112	1112	of all claims allowed during a particular calendar year, then
1113	1113	the amounts paid to each patient and other parties obtaining
1114	1114	judgments shall be prorated, with each such party receiving an
1115	1115	amount equal to the percentage the party's own payment schedule
1116	1116	bears to the total of payment schedules outstanding and payable
1117	1117	by the fund. Any amounts due and unpaid as a result of such
1118	1118	proration shall be paid in the following calendar years.
1119	1119	[H.] I. Upon receipt of one of the proofs of
1120	1120	authenticity listed in this subsection, reflecting a judgment
1121	1121	for damages rendered pursuant to the Medical Malpractice Act,
1122	1122	.230951.1
1123	1123	- 21 - underscored material = new
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1149	1149	25
1150	1150	the superintendent shall issue or have issued warrants in
1151	1151	accordance with the payment schedule constructed by the court
1152	1152	and made a part of its final judgment. The only claim against
1153	1153	the fund shall be a voucher or other appropriate request by the
1154	1154	superintendent after the superintendent receives:
1155	1155	(1) until January 1, 2022, a certified copy of
1156	1156	a final judgment in excess of two hundred thousand dollars
1157	1157	($200,000) against a health care provider;
1158	1158	(2) until January 1, 2022, a certified copy of
1159	1159	a court-approved settlement or certification of settlement made
1160	1160	prior to initiating suit, signed by both parties, in excess of
1161	1161	two hundred thousand dollars ($200,000) against a health care
1162	1162	provider; or
1163	1163	(3) until January 1, 2022, a certified copy of
1164	1164	a final judgment less than two hundred thousand dollars
1165	1165	($200,000) and an affidavit of a health care provider or its
1166	1166	insurer attesting that payments made pursuant to Subsection B
1167	1167	of Section 41-5-7 NMSA 1978, combined with the monetary
1168	1168	recovery, exceed two hundred thousand dollars ($200,000).
1169	1169	[I.] J. On or after January 1, 2022, the amounts
1170	1170	specified in Paragraphs (1) through (3) of Subsection [H ] I of
1171	1171	this section shall be two hundred fifty thousand dollars
1172	1172	($250,000)."
1173	1173	SECTION 7. A new section of the Medical Malpractice Act
1174	1174	is enacted to read:
1175	1175	.230951.1
1176	1176	- 22 - underscored material = new
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1178	1178	1
1179	1179	2
1180	1180	3
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1202	1202	25
1203	1203	"[NEW MATERIAL] LIMITING ATTORNEY FEES.--An attorney shall
1204	1204	not contract for or collect a contingency fee for representing
1205	1205	a person seeking damages in a malpractice claim in an amount
1206	1206	that exceeds:
1207	1207	A. twenty-five percent of the dollar amount
1208	1208	recovered, if the recovery is pursuant to a settlement
1209	1209	agreement and release of all claims executed by all parties
1210	1210	prior to the start of a trial or an arbitration proceeding; or
1211	1211	B. thirty-three percent of the dollar amount
1212	1212	recovered, if the recovery is pursuant to settlement,
1213	1213	arbitration or judgment that occurs after a trial or
1214	1214	arbitration proceeding begins."
1215	1215	SECTION 8. A new section of the Medical Malpractice Act
1216	1216	is enacted to read:
1217	1217	"[NEW MATERIAL] PATIENT SAFETY IMPROVEMENT FUND--
1218	1218	CREATED.--
1219	1219	A. The "patient safety improvement fund" is created
1220	1220	in the state treasury and shall be administered by the
1221	1221	department of health. The patient safety improvement fund
1222	1222	consists of distributions, appropriations, gifts, grants,
1223	1223	donations and receipts of punitive damage awards from medical
1224	1224	malpractice claims. Money in the patient safety improvement
1225	1225	fund shall be invested by the state treasurer, and income from
1226	1226	investment of the patient safety improvement fund shall be
1227	1227	credited to the patient safety improvement fund. Money in the
1228	1228	.230951.1
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1254	1254	24
1255	1255	25
1256	1256	patient safety improvement fund shall be expended only as
1257	1257	provided in this section.
1258	1258	B. Money in the patient safety improvement fund is
1259	1259	subject to appropriation by the legislature to the department
1260	1260	of health for the purposes of improving patient safety and
1261	1261	health care outcomes. All payments made from the patient
1262	1262	safety improvement fund shall be made by warrant of the
1263	1263	secretary of finance and administration pursuant to vouchers
1264	1264	signed by the secretary of health or the secretary's authorized
1265	1265	representative. Any unexpended or unencumbered balance
1266	1266	remaining in the patient safety improvement fund at the end of
1267	1267	a fiscal year shall not revert but shall remain to the credit
1268	1268	of the patient safety improvement fund."
1269	1269	- 24 -
1270	1270	.230951.1