New Mexico’s strained rural hospitals finally got some love this year. Two bills sitting on
the governor’s desk could go far in relieving financial pressure on the state’s smallest hospitals.
But medical malpractice insurance, the subject of two compromises in recent years, is
still a threat.
In New Mexico, where 26 of 33 counties meet the definitions of “rural” and even
“frontier,” a dozen hospitals have fewer than 30 beds, and they’re usually far from other
hospitals. They serve older, sicker, poorer populations who don’t have ready access to
healthcare. Inflation, changes in Medicaid funding and spiraling malpractice premiums have hit them hard, and it’s difficult to recruit staff. They operate on a wing and a prayer, and some teeter on the brink of closing.
Rural hospital executives “feel like they’re so vulnerable; they’re in such a tight spot,”
Stephen Stoddard, executive director of the New Mexico Rural Hospital Network, told the Santa Fe New Mexican. “A lot of them are barely making payroll or just getting by, and have had to do extraordinary things or close services … just to survive.”
SB 161, by Sen. George Muñoz, D-Gallup, and Sen. Pat Woods, R-Broadview, would
appropriate $50 million for grants to a dozen hospitals in fiscal 2025 and 2026 to cover losses from unreimbursed services, such as emergency, maternal and child healthcare, as well as malpractice premiums and property insurance.
SB 17, the Healthcare Quality Delivery and Access Act, would increase Medicaid
payments to hospitals by assessing a fee that can be used to unlock $1.3 billion in additional
federal matching funds. Eight of the state’s 28 rural hospitals are at risk of closure, and two
could close their doors imminently, said the bill’s sponsor, Rep. Liz Stefanics, D-Cerrillos. The New Mexico Hospital Association, the Health Care Authority and individual hospitals
cooperated to develop the bill.
We can all applaud these two bills, but there’s more percolating beneath the surface.
During the 2021 session lawmakers passed a controversial medical malpractice bill that’s come back to haunt us.
That bill, praised at the time as a compromise between the healthcare industry and trial
lawyers, raises hospitals’ cap on damages to $6 million by 2026. This year the cap is $4.5
million. Originally, the sponsor intended to take hospitals’ cap away altogether. Before the
compromise bill, New Mexico had a $600,000 cap on nonmedical damages to assure that doctors could afford malpractice premiums.
This three-year-old law has been disastrous for hospitals. Many insurers that provided
malpractice coverage to hospitals stopped doing business in New Mexico, and the few remaining are demanding a king’s ransom in premiums.
When Roosevelt General Hospital in Portales tried to renew its malpractice insurance last
year, the premium jumped from $330,000 to $820,000, according to the Eastern New Mexico News. Union County General Hospital paid $180,000 a year. Then the premium vaulted to $487,000, but that company stopped writing policies in New Mexico. The CEO could find only companies willing to cover her hospital. One wanted $800,000; the other, $1.8 million – for a little 25-bed hospital.
A second problem is that New Mexico has a big Medicaid population, but Medicaid
reimbursements are low. So doctors’ incomes are lower, but their medical malpractice premiums are higher. An attorney for the New Mexico Medical Society told The New Mexican, “From 2017 to 2021, 711 primary care providers left New Mexico. That’s 30% of the health care workforce.” And for all hospitals, it’s harder to recruit doctors. He called it “a major crisis.”
This year two bills would have amended the Medical Malpractice Act to reduce the
maximum recoverable amount against a hospital or hospital-controlled outpatient facility. But during the too-short, 30-day session they weren’t heard.
This is not going away. And small hospitals will continue to need the Legislature’s
attention.
Lawmakers help small hospitals but medical malpractice lurks
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New Mexico’s strained rural hospitals finally got some love this year. Two bills sitting on
the governor’s desk could go far in relieving financial pressure on the state’s smallest hospitals.
But medical malpractice insurance, the subject of two compromises in recent years, is
still a threat.
In New Mexico, where 26 of 33 counties meet the definitions of “rural” and even
“frontier,” a dozen hospitals have fewer than 30 beds, and they’re usually far from other
hospitals. They serve older, sicker, poorer populations who don’t have ready access to
healthcare. Inflation, changes in Medicaid funding and spiraling malpractice premiums have hit them hard, and it’s difficult to recruit staff. They operate on a wing and a prayer, and some teeter on the brink of closing.
Rural hospital executives “feel like they’re so vulnerable; they’re in such a tight spot,”
Stephen Stoddard, executive director of the New Mexico Rural Hospital Network, told the Santa Fe New Mexican. “A lot of them are barely making payroll or just getting by, and have had to do extraordinary things or close services … just to survive.”
SB 161, by Sen. George Muñoz, D-Gallup, and Sen. Pat Woods, R-Broadview, would
appropriate $50 million for grants to a dozen hospitals in fiscal 2025 and 2026 to cover losses from unreimbursed services, such as emergency, maternal and child healthcare, as well as malpractice premiums and property insurance.
SB 17, the Healthcare Quality Delivery and Access Act, would increase Medicaid
payments to hospitals by assessing a fee that can be used to unlock $1.3 billion in additional
federal matching funds. Eight of the state’s 28 rural hospitals are at risk of closure, and two
could close their doors imminently, said the bill’s sponsor, Rep. Liz Stefanics, D-Cerrillos. The New Mexico Hospital Association, the Health Care Authority and individual hospitals
cooperated to develop the bill.
We can all applaud these two bills, but there’s more percolating beneath the surface.
During the 2021 session lawmakers passed a controversial medical malpractice bill that’s come back to haunt us.
That bill, praised at the time as a compromise between the healthcare industry and trial
lawyers, raises hospitals’ cap on damages to $6 million by 2026. This year the cap is $4.5
million. Originally, the sponsor intended to take hospitals’ cap away altogether. Before the
compromise bill, New Mexico had a $600,000 cap on nonmedical damages to assure that doctors could afford malpractice premiums.
This three-year-old law has been disastrous for hospitals. Many insurers that provided
malpractice coverage to hospitals stopped doing business in New Mexico, and the few remaining are demanding a king’s ransom in premiums.
When Roosevelt General Hospital in Portales tried to renew its malpractice insurance last
year, the premium jumped from $330,000 to $820,000, according to the Eastern New Mexico News. Union County General Hospital paid $180,000 a year. Then the premium vaulted to $487,000, but that company stopped writing policies in New Mexico. The CEO could find only companies willing to cover her hospital. One wanted $800,000; the other, $1.8 million – for a little 25-bed hospital.
A second problem is that New Mexico has a big Medicaid population, but Medicaid
reimbursements are low. So doctors’ incomes are lower, but their medical malpractice premiums are higher. An attorney for the New Mexico Medical Society told The New Mexican, “From 2017 to 2021, 711 primary care providers left New Mexico. That’s 30% of the health care workforce.” And for all hospitals, it’s harder to recruit doctors. He called it “a major crisis.”
This year two bills would have amended the Medical Malpractice Act to reduce the
maximum recoverable amount against a hospital or hospital-controlled outpatient facility. But during the too-short, 30-day session they weren’t heard.
This is not going away. And small hospitals will continue to need the Legislature’s
attention.