New Mexico Senate Bill 176 proposes changes to medical malpractice law

Organ Mountain News report

SANTA FE - A bipartisan group of 20 lawmakers has introduced Senate Bill 176, which proposes changes to New Mexico’s medical malpractice law. The bill includes provisions to cap attorney fees in malpractice lawsuits, modify how the state’s Patient Compensation Fund disburses payments, and allocate a portion of punitive damages to a fund aimed at improving patient safety.

The bill is sponsored by 10 Democratic legislators, including Sen. Martin Hickey of Albuquerque, Sen. George Muñoz of Gallup, and Rep. Sarah Silva of Las Cruces. Republican sponsors include Sen. Pat Woods of Broadview, Sen. Jay Block of Rio Rancho, and Rep. Andrea Reeb of Clovis.

SB 176 was developed with input from Think New Mexico, a nonpartisan think tank that identified the state’s medical malpractice system as a factor contributing to the shortage of health care providers. The organization’s 2024 report, How to Solve New Mexico’s Health Care Worker Shortage, highlighted data from the U.S. Department of Health and Human Services showing that New Mexico has the second-highest rate of medical malpractice lawsuits in the nation.

Proposed changes to malpractice law

The legislation would cap attorney fees using a structure similar to California’s model, limiting fees to 25% of a settlement and 33% if a case goes to trial. New Mexico currently has no cap on attorney fees.

SB 176 would also reinstate a previous requirement that the PCF pay a patient’s medical costs as they are incurred rather than in a lump-sum payout. Supporters of the bill argue that lump-sum payments can be insufficient if a patient’s medical needs extend beyond the initial estimate.

Another provision would direct 75% of punitive damages awarded in medical malpractice cases to a new fund focused on improving patient safety, including staffing ratios and medical training. Similar policies are in place in Alaska, Oregon, and Pennsylvania.

Concerns over malpractice costs and provider shortages

Medical malpractice insurance premiums in New Mexico are about twice as high as in neighboring states, and advocates of SB 176 argue that the high cost discourages health care providers from practicing in the state.

In her 2025 State of the State address, Gov. Michelle Lujan Grisham acknowledged concerns about malpractice insurance costs and their impact on provider shortages.

“We’re making a better health care system in New Mexico,” Lujan Grisham said. “But talk to any New Mexican in a doctor’s office, or frankly, anyone in this room, and they’ll tell you it’s not enough. There’s still a long wait for appointments. Patients are still driving long distances to see a specialist. And health care leaders are clear that the high cost of medical malpractice insurance is the barrier to recruiting and retaining the providers we need.”

Perspectives from bill supporters

Sen. Hickey, the bill’s lead sponsor, said the legislation aims to balance the interests of patients and health care providers.

“A fair medical malpractice system should make injured patients whole, provide reasonable compensation for their attorneys, and treat doctors and other health care providers fairly,” Hickey said.

Fred Nathan Jr., executive director of Think New Mexico, said the proposal would shift the focus of the state’s medical malpractice system.

“Senate Bill 176 shifts New Mexico’s medical malpractice system from a lawyer-centered system to a patient-centered system while reducing the likelihood of malpractice in the future,” Nathan said.

More information about the proposed legislation is available on Think New Mexico’s website: www.thinknewmexico.org.