Think New Mexico urges Governor to call a special session on health care worker shortages
By Taylor Velazquez
April 16, 2025 at 5:31 PM MDT
New Mexico is one of two states in the nation that charges a gross receipts tax on medical services. But Gov. Michelle Lujan Grisham has vetoed a bill that would have changed that. This comes as the state experiences a chronic shortage of health care professionals, some of whom criticize the cost of practicing medicine here.
House Bill 14 proposed to eliminate the gross receipts tax on medical services. Currently, many providers are on the hook to pay the full 8%, where Hawaii caps its tax at 4.7%.
Fred Nathan, founder and executive director of Think New Mexico, which advocated for a number of health care bills in the session, said it’s difficult to attract doctors and other providers to New Mexico, since they don’t have to pay the excess tax elsewhere.
“Medicare and Medicaid won’t pay state taxes and private insurance companies have a lot of negotiating power so they negotiate it out of their contracts,” said Nathan.
According to Nathan, if the bill were to have been signed into law it would have cut $50 million in taxes annually, but a legislative report points out that measuring impacts are difficult due to gaps in data on spending and taxes within private insurance plans.
In the Governor’s veto message she expressed concerns on how the legislature planned to pay for the tax cut. Nathan said he’s optimistic for another attempt in the 2026 legislative session.
Legislators had the opportunity to pass other bills making it easier to recruit and retain health care professionals , but like HB 14 most failed.
FRED NATHAN: I think at the beginning of the session, there was some denial as to whether there is a medical shortage in New Mexico, and we were able to point out to many legislators that New Mexico is the only state that's lost doctors.
For example, in the last five years, we've lost 247 doctors, whereas nationally, the number of doctors has increased by about 44,000 and it was helpful that the governor mentioned in her state of the state message that indeed there is a medical shortage. And then after that, I think we were able to get some traction with all of these bills.
KUNM: Considering the loss of health care workers across the board, I think it's important to talk about the bill that would have created an interstate compact to recruit more doctors to the state, which did stall out this session. Do you have any insights as to why that bill failed?
NATHAN: Yeah, that was maybe the most disheartening part of the session for us, was not being able to pass the interstate health care compacts. These are compacts that make it easier for health care providers licensed in other states to practice here, including by telehealth. And it was the single biggest thing the legislature could have done this last session to reduce the health care shortage.
And your listeners are probably wondering, “Well, this sounds so easy, why didn't we join these compacts?” And the short answer is, because of the power of the trial lawyers. The trial lawyers don't like the compacts because they are immune from lawsuits. So the short answer is, they would have passed but for the enormous political power of the trial lawyers.
KUNM: I'm sure a lot of people can relate to waiting weeks, maybe months, for doctors’ appointments, or maybe not even having the specific doctor that they need to see here in New Mexico. Do you think, considering that the interstate compact didn't get passed, that the governor should consider calling a special session on this issue?
NATHAN: Absolutely, we need a special session on the health care worker shortage in New Mexico. This is a crisis in rural New Mexico. It's beyond a crisis, and it's been a crisis for many years now, but now it's reaching the urban areas.
KUNM: The bill that would have reformed medical malpractice also failed the session. What did you hear from lawmakers as they considered this piece of legislation?
NATHAN: This was a bill that was introduced on the eighth day of the session and didn't receive a hearing until the 53rd day of the session, and of course, it was only a 60-day session.
But the good news is two dozen legislators co-sponsored that bill, a dozen Republicans and a dozen Democrats. That was the most of any bill this session. The other heartening thing for us was right after the session, the governor had a post-session press conference in which she connected the doctor shortage to the medical malpractice problem that New Mexico physicians, on average, are paying about double for their medical malpractice insurance than they would be in all of our neighboring states.
And in fact, we had one doctor when the bill was finally heard, Dr. [Andrew] Metzger, who is a neurosurgeon, who had been practicing in Albuquerque and left the state because of the cost of medical malpractice, and he pointed out that in Arizona, where he moved, he's paying 1/5 of what he was paying in New Mexico for his insurance. I think the tide is beginning to turn with the support of the governor, with so many legislators supporting this. Of course, the only interest group that's opposing this is the trial lawyers.
KUNM: We often see this happens with a lot of bills that they're introduced several times over the years before they get that traction. What are your thoughts on the outcomes of this session, and considering what we've talked about so far today, are you all already looking towards the next?
NATHAN: We were pleased with this session, especially getting the permanent fund on health care to address Medicaid reimbursements passed. Even the bills that didn't pass, the interstate compacts, the medical malpractice reform, both of those issues made enormous progress and are teed up for future sessions.
This coverage is made possible by the W.K. Kellogg Foundation and KUNM listeners.
House Bill 14 proposed to eliminate the gross receipts tax on medical services. Currently, many providers are on the hook to pay the full 8%, where Hawaii caps its tax at 4.7%.
Fred Nathan, founder and executive director of Think New Mexico, which advocated for a number of health care bills in the session, said it’s difficult to attract doctors and other providers to New Mexico, since they don’t have to pay the excess tax elsewhere.
“Medicare and Medicaid won’t pay state taxes and private insurance companies have a lot of negotiating power so they negotiate it out of their contracts,” said Nathan.
According to Nathan, if the bill were to have been signed into law it would have cut $50 million in taxes annually, but a legislative report points out that measuring impacts are difficult due to gaps in data on spending and taxes within private insurance plans.
In the Governor’s veto message she expressed concerns on how the legislature planned to pay for the tax cut. Nathan said he’s optimistic for another attempt in the 2026 legislative session.
Legislators had the opportunity to pass other bills making it easier to recruit and retain health care professionals , but like HB 14 most failed.
FRED NATHAN: I think at the beginning of the session, there was some denial as to whether there is a medical shortage in New Mexico, and we were able to point out to many legislators that New Mexico is the only state that's lost doctors.
For example, in the last five years, we've lost 247 doctors, whereas nationally, the number of doctors has increased by about 44,000 and it was helpful that the governor mentioned in her state of the state message that indeed there is a medical shortage. And then after that, I think we were able to get some traction with all of these bills.
KUNM: Considering the loss of health care workers across the board, I think it's important to talk about the bill that would have created an interstate compact to recruit more doctors to the state, which did stall out this session. Do you have any insights as to why that bill failed?
NATHAN: Yeah, that was maybe the most disheartening part of the session for us, was not being able to pass the interstate health care compacts. These are compacts that make it easier for health care providers licensed in other states to practice here, including by telehealth. And it was the single biggest thing the legislature could have done this last session to reduce the health care shortage.
And your listeners are probably wondering, “Well, this sounds so easy, why didn't we join these compacts?” And the short answer is, because of the power of the trial lawyers. The trial lawyers don't like the compacts because they are immune from lawsuits. So the short answer is, they would have passed but for the enormous political power of the trial lawyers.
KUNM: I'm sure a lot of people can relate to waiting weeks, maybe months, for doctors’ appointments, or maybe not even having the specific doctor that they need to see here in New Mexico. Do you think, considering that the interstate compact didn't get passed, that the governor should consider calling a special session on this issue?
NATHAN: Absolutely, we need a special session on the health care worker shortage in New Mexico. This is a crisis in rural New Mexico. It's beyond a crisis, and it's been a crisis for many years now, but now it's reaching the urban areas.
KUNM: The bill that would have reformed medical malpractice also failed the session. What did you hear from lawmakers as they considered this piece of legislation?
NATHAN: This was a bill that was introduced on the eighth day of the session and didn't receive a hearing until the 53rd day of the session, and of course, it was only a 60-day session.
But the good news is two dozen legislators co-sponsored that bill, a dozen Republicans and a dozen Democrats. That was the most of any bill this session. The other heartening thing for us was right after the session, the governor had a post-session press conference in which she connected the doctor shortage to the medical malpractice problem that New Mexico physicians, on average, are paying about double for their medical malpractice insurance than they would be in all of our neighboring states.
And in fact, we had one doctor when the bill was finally heard, Dr. [Andrew] Metzger, who is a neurosurgeon, who had been practicing in Albuquerque and left the state because of the cost of medical malpractice, and he pointed out that in Arizona, where he moved, he's paying 1/5 of what he was paying in New Mexico for his insurance. I think the tide is beginning to turn with the support of the governor, with so many legislators supporting this. Of course, the only interest group that's opposing this is the trial lawyers.
KUNM: We often see this happens with a lot of bills that they're introduced several times over the years before they get that traction. What are your thoughts on the outcomes of this session, and considering what we've talked about so far today, are you all already looking towards the next?
NATHAN: We were pleased with this session, especially getting the permanent fund on health care to address Medicaid reimbursements passed. Even the bills that didn't pass, the interstate compacts, the medical malpractice reform, both of those issues made enormous progress and are teed up for future sessions.
This coverage is made possible by the W.K. Kellogg Foundation and KUNM listeners.