HB99 Sponsor Rep. Christine Chandler, D-Los Alamos

By CLARA BATES and MARGARET O’HARA
The Santa Fe New Mexican

A group convened by Gov. Michelle Lujan Grisham to come to an agreement on changing the state’s medical malpractice law was still negotiating behind the scenes the week of a key House committee hearing on the measure. 

One sticking point, according to an attorney participating in the talks, has been whether or not to cap punitive damages for hospitals.

House Bill 99, set for a debate before the House Health and Human Services Committee on Friday morning, would establish caps for punitive damages, which are jury awards aimed at punishing providers for wrongdoing. It also would raise the standard of proof for awarding punitive damages and change how payments are made from a state fund that compensates patients for medical needs and losses. 

Lujan Grisham supports the bill, according to Michael Coleman, her chief spokesperson.

Medical malpractice has turned into one of the defining issues before lawmakers and Lujan Grisham this year, with the governor calling action a priority before she leaves office. Many see changes to the state’s medical malpractice system as a part of the solution to a problem of recruiting and retaining doctors.

But a group that has been negotiating the issue over the last month or so — including doctors, lawyers representing patients with medical malpractice claims and lawyers for the state’s largest hospitals — has not yet come to a consensus on some of the provisions. 

Kathy Love, an attorney who represents medical malpractice patients and has participated in the negotiations on behalf of the New Mexico Trial Lawyers Association, pointed to an impasse over punitive damages for hospitals.

“I think we were 90% of the way to a deal that I think that doctors would have been very happy with,” Love said in an interview Thursday, noting the compromise would have limited punitive damages assessed against doctors, “and now health care corporations worth billions of dollars are riding on the backs of the doctors to try to get caps on accountability for corporate bad acts, and it’s just really surprising to me.”

Coleman said, however, the sticking point has been punitive damages more broadly — that the negotiations “did not result in any consensus on punitive damage caps for medical providers, rural or urban hospitals or physicians.”

Sponsored by Rep. Christine Chandler, D-Los Alamos, and other lawmakers, HB 99 is designed to attract more doctors to the state and change what supporters describe as an imbalanced and unfriendly litigation environment. Doctors and hospitals argue the threat of punitive damages and high cost of medical malpractice insurance premiums are pushing providers out of the state.

Meanwhile, injured patients and attorneys — including some New Mexico lawmakers — have argued changes to the law would leave victims with fewer avenues for justice without meaningfully improving the provider supply.

Love said the Trial Lawyers Association, along with the patients and patient advocates it represents, is open to capping punitive damages assessed against individual doctors, whether they’re independent or part of a hospital, and against small rural hospitals. But they have serious concerns about capping damages for corporate health care companies.

The threat of huge payouts as punishment, she said, is the only tool to deter corporate hospitals from systematic wrongdoing.

“If hospitals don’t have the threat of those fines,” she said, referring to punitive damages, “then they have no incentive whatsoever to implement safety measures.”

Coleman wrote in an email Thursday, “The governor remains hopeful that consensus can be achieved in the coming days for the benefit of all New Mexicans trying to get a doctor’s appointment to take care of their health.”

Health Secretary Gina DeBlassie expressed similar sentiments. “We really hope that we can come to some agreement and that … we can fix the imbalance that’s occurring right now in the state,” she told a group of journalists Thursday.

“We’ve got a shortage of providers. Access to care is challenging for everyone,” DeBlassie added. “And this isn’t the only fix — but this is a big piece of it.”

Bill has hospital support

Gathered around a table during several recent negotiation meetings convened by the Governor’s Office were:

• Kathy Love and fellow attorney Ray Vargas, on behalf of the New Mexico Trial Lawyers Association.
• Steve Petrovich, chief legal officer for Ardent Health, acting as general counsel for Lovelace Health Systems, one of the largest hospital systems in the state. Ardent is Lovelace’s parent company.
• Ryan Burt, general counsel for Presbyterian Healthcare Services, another large hospital system in the state.
• Troy Clark, president and CEO of the New Mexico Hospital Association.
• Nick Autio, an attorney for the New Mexico Medical Society.
• Two physicians.

Coleman declined to name the participants, but spokespeople for Ardent and Presbyterian confirmed Petrovich and Burt have been participating. Love, Vargas, Clark and Autio confirmed they were part of the discussions.

Presbyterian is also leading a widespread advertisement campaign pushing changes to medical malpractice law, with the slogan “Keep NM Doctors.”

Spokespeople for Presbyterian and Lovelace said the hospitals support the bill — and said capping punitive damages against hospitals is important to solving the physician shortage.

“These discussions reflect a shared commitment among New Mexico providers to policies that protect patients’ access to care and support a stable health care environment,” said Lovelace Health System spokesperson Whitney Alcantar. “Lovelace supports HB 99 because it offers a balanced approach that helps attract and retain physicians and strengthens access to care for communities across the state.”

Dr. Darren Shafer, president of Presbyterian Medical Group, said in a statement, “Capping punitive damages protects fair compensation for patients while helping ensure that New Mexicans do not lose access to care because physicians leave the state or choose not to practice here.” 

Shafer added in order “to strengthen and preserve access to care for patients, a cap on punitive damages … must apply across New Mexico’s entire healthcare landscape” — which he called a “highly interconnected” system.

Clark said in an interview the hospital association is supportive of HB 99 as it’s currently drafted, arguing it would “make a meaningful change” toward the association’s ultimate goal this session to expand access to health care.

“HB 99 still contains enough of a change for us to be supportive of it,” he said.

Higher burden of proof

New Mexico’s medical malpractice environment is distinct from other states. Claims resulting in high-dollar settlement payouts — on the rise for two decades — have spiked in recent years to record-high numbers, according to data from the U.S. Health Resources and Services Administration’s National Practitioner Data Bank. Meanwhile, liability insurance premiums for providers in the state have risen far above the costs in other states. 

New Mexico has no statutory cap on punitive damages, which typically are excluded from insurance coverage, leaving providers in fear of being held personally liable. Though cases of physicians having their personal assets seized appear rare.

The Governor’s Office has said New Mexico’s uncapped punitive damages encourage attorneys to seek larger settlements — and prompt doctors to agree to such settlements because they fear going to trial and having their personal assets seized. Those larger settlements drive higher premiums, which leaves the state with fewer doctors, Coleman previously told The New Mexican.

Chandler’s HB 99 would make several changes to the state’s Medical Malpractice Act. 

It would increase the burden of proof for an award of punitive damages and limit the dollar amount for punitive damages to the existing caps on damages meant to compensate plaintiffs for losses such as income, earning capacity, and pain and suffering. The current limits, set to increase annually, are just over $900,000 for an independent provider and $6 million for a hospital.

“Punitive damages may only be awarded in a malpractice claim if the prevailing party provides clear and convincing evidence demonstrating that the acts of the health care provider were malicious, willful, wanton, reckless, fraudulent or in bad faith,” the legislation states. 

Under the bill, a claim for punitive damages can only be added after the court finds “proof of a triable issue” and permits “additional discovery on the question of punitive damages.”

Lujan Grisham on social media Thursday evening urged people to call their legislators to express support of the bill, calling it a “balanced solution” with “fair compensation for victims while preventing runaway awards.”