Malpractice bill tangled up with concerns over private-equity
February 5, 2026 at 3:41 PM MST
A bill to reform New Mexico’s medical malpractice laws was amended by a House committee last week to narrow its scope, sparking outrage among healthcare providers and confusion over who it would cover.
The amendment excluded all but five of the state’s hospitals from proposed caps on punitive damages but retained reforms of when and how punitive damages can be filed, which outside experts said would likely reduce the frequency of such claims, to the benefit of healthcare providers. The amendment also excluded outpatient facilities from the caps, which its sponsor said was unintentional.
The amendment’s supporters said their intention is to check the power of large, money-driven hospitals. But the bill’s sponsor said the amendment undercut the purpose of the bill, which was to make New Mexico more hospitable for healthcare providers. Even physicians and facilities that would be protected under the amendment said they could not support it.
With the amended bill heading to the House Judiciary committee as early as Friday, doctors, hospitals, and legislators are scrambling to analyze the new language, anticipate its further evolution, and stake out their positions.
As filed by Rep. Christine Chandler, a Los Alamos Democrat, House Bill 99 proposed a number of changes to rein in malpractice claims for punitive damages. Such claims are rare in other states but routine in New Mexico, and doctors here said their threat alone forces them to settle cases they would otherwise take to trial, inflating their insurance premiums.
Chandler’s bill would change when and how attorneys can seek punitive damages and raise the legal threshold for winning them. It would also cap punitive damages at the same threshold already applied to compensatory damages, around $1 million for doctors and $6 million for hospitals.
Taken together, analysts said these changes would reduce the number of punitive damage claims and, when claims are awarded, their size.
But last Friday, during a hearing of the House Health and Human Services Committee, several lawmakers indicated they did not want to limit punitive damage caps for most hospitals. Chair Liz Thomson, an Albuquerque Democrat, pushed through an amendment she said would exclude from the cap any health care provider who is not an individual clinician or a stand-alone hospital owned and operated by a local resident or domestic corporation.
During the hearing, lawmakers disagreed over who would be excluded by the amendment. Thomson contended the language protected all individual clinicians, but Chandler said she was “concerned about the doctors that work for the large hospital systems.” Asked at one point how many hospitals would remain under the caps, Thomson responded, “I’m having a difficult time figuring out this chart.”
The amendment left untouched other reforms in the bill, like requiring attorneys to complete the discovery process before filing for punitive damages and raising the “standard of proof” for winning them. It passed 6 to 4 on party lines.
According to the New Mexico Hospital Association, the amendment excludes all but five of the 38 hospitals eligible for the state’s Medical Malpractice Act. “To me, it’s a non-starter to exclude any hospitals, any outpatient health care facilities, any doctors,” said President Troy Clark.
In an interview, Thomson cited with alarm data from the nonprofit watchdog group the Private Equity Stakeholder Project, which show private equity firms have a stake in 26% of the hospitals in the state, including 38% of private ones. “I wanted to protect New Mexico patients and New Mexico providers,” she said.
But the amendment didn’t specifically exclude private-equity-owned facilities, instead carving out multi-hospital “systems,” which account for the vast majority of facilities in today’s healthcare landscape.
Those swept up include the state’s largest home-grown provider, the century-old Presbyterian Health System, which operates nine hospitals.
In New Mexico, multi-hospital systems also operate many of the facilities in rural areas, where patients are particularly underserved. For example, Presbyterian operates the only facilities in Española, Ruidoso, Tucumcari, Clovis, and Socorro.
Even the handful of stand-alone hospitals that are eligible under the amendment to have their punitive damages capped were opposed to the change, including Holy Cross Medical Center, a 25-bed facility in Taos and the only safety net within an hour’s drive in any direction.
The amended bill might reduce the $2 million bill the hospital pays each year in malpractice insurance premium, CEO James Kiser said, but it was misguided to think the facility’s success could be neatly separated from the broader medical landscape of which it is a part.
Patients frequently arrive at Holy Cross with complex needs that only bigger hospitals can provide. “As small as we are, we cannot be all things to all people,” Kiser explained. So the hospital averages four flights a day ferrying those patients to Santa Fe or Albuquerque. But as specialists become scarcer around the state, even these referrals have become difficult, and Holy Cross has been forced to fly patients as far as Denver.
“What good would it be to our region, those that we serve,” he asked, “if we have no one to send patients to?”
Legal experts said the amendment also exempts from the cap on punitive damages major outpatient facilities like the New Mexico Cancer Center, Women’s Specialists of New Mexico, and Eye Associates of New Mexico, since they are neither individual clinicians nor stand-alone hospitals.
Mary Pareja, a professor at University of New Mexico Law School said this omission “makes no sense,” given that independent physicians, many of whom are employed by those facilities, are who lawmakers set out to help.
For Dr. Mark Ritchie, an orthopedic surgeon who has worked more than 30 years at the independent physicians group New Mexico Orthopedics, the omission took him back to 2021, when the Legislature altered medical malpractice laws without distinguishing facilities like theirs. Lawmakers eventually returned for a special session to “tweak” their original work.
Medical malpractice insurance is a big expense for Ritchie’s group, which constitutes a higher-risk specialty and pays some of the highest premiums in the state. “They’ve almost doubled in the last five years,” he said.
Thomson said it was her intention to cap punitive damages for these facilities, conceding “the language maybe isn’t clear enough.” She expressed confidence the Judiciary Committee would fix it.
Chandler, who chairs that committee, said it would take up the matter as early as this Friday, and promised alterations. “My intent is to create an environment where doctors and other health care providers are not subject to an aggressively hostile litigation environment, and I think the amendment as written cuts against that goal.”
Martin Gaynor, a professor emeritus of economics at Carnegie Mellon University who recently served in the antitrust division of the U.S. Department of Justice, focusing on healthcare, said he understood where lawmakers were coming from. “It is perfectly reasonable and rational to be concerned about private equity,” he said.
But distorting the state’s medical malpractice laws was not, in his view, the most effective direction to pursue. “They should be identifying what the problems are with private equity ownership and then coming up with ways to address those problems.”
The amendment excluded all but five of the state’s hospitals from proposed caps on punitive damages but retained reforms of when and how punitive damages can be filed, which outside experts said would likely reduce the frequency of such claims, to the benefit of healthcare providers. The amendment also excluded outpatient facilities from the caps, which its sponsor said was unintentional.
The amendment’s supporters said their intention is to check the power of large, money-driven hospitals. But the bill’s sponsor said the amendment undercut the purpose of the bill, which was to make New Mexico more hospitable for healthcare providers. Even physicians and facilities that would be protected under the amendment said they could not support it.
With the amended bill heading to the House Judiciary committee as early as Friday, doctors, hospitals, and legislators are scrambling to analyze the new language, anticipate its further evolution, and stake out their positions.
As filed by Rep. Christine Chandler, a Los Alamos Democrat, House Bill 99 proposed a number of changes to rein in malpractice claims for punitive damages. Such claims are rare in other states but routine in New Mexico, and doctors here said their threat alone forces them to settle cases they would otherwise take to trial, inflating their insurance premiums.
Chandler’s bill would change when and how attorneys can seek punitive damages and raise the legal threshold for winning them. It would also cap punitive damages at the same threshold already applied to compensatory damages, around $1 million for doctors and $6 million for hospitals.
Taken together, analysts said these changes would reduce the number of punitive damage claims and, when claims are awarded, their size.
But last Friday, during a hearing of the House Health and Human Services Committee, several lawmakers indicated they did not want to limit punitive damage caps for most hospitals. Chair Liz Thomson, an Albuquerque Democrat, pushed through an amendment she said would exclude from the cap any health care provider who is not an individual clinician or a stand-alone hospital owned and operated by a local resident or domestic corporation.
During the hearing, lawmakers disagreed over who would be excluded by the amendment. Thomson contended the language protected all individual clinicians, but Chandler said she was “concerned about the doctors that work for the large hospital systems.” Asked at one point how many hospitals would remain under the caps, Thomson responded, “I’m having a difficult time figuring out this chart.”
The amendment left untouched other reforms in the bill, like requiring attorneys to complete the discovery process before filing for punitive damages and raising the “standard of proof” for winning them. It passed 6 to 4 on party lines.
According to the New Mexico Hospital Association, the amendment excludes all but five of the 38 hospitals eligible for the state’s Medical Malpractice Act. “To me, it’s a non-starter to exclude any hospitals, any outpatient health care facilities, any doctors,” said President Troy Clark.
In an interview, Thomson cited with alarm data from the nonprofit watchdog group the Private Equity Stakeholder Project, which show private equity firms have a stake in 26% of the hospitals in the state, including 38% of private ones. “I wanted to protect New Mexico patients and New Mexico providers,” she said.
But the amendment didn’t specifically exclude private-equity-owned facilities, instead carving out multi-hospital “systems,” which account for the vast majority of facilities in today’s healthcare landscape.
Those swept up include the state’s largest home-grown provider, the century-old Presbyterian Health System, which operates nine hospitals.
In New Mexico, multi-hospital systems also operate many of the facilities in rural areas, where patients are particularly underserved. For example, Presbyterian operates the only facilities in Española, Ruidoso, Tucumcari, Clovis, and Socorro.
Even the handful of stand-alone hospitals that are eligible under the amendment to have their punitive damages capped were opposed to the change, including Holy Cross Medical Center, a 25-bed facility in Taos and the only safety net within an hour’s drive in any direction.
The amended bill might reduce the $2 million bill the hospital pays each year in malpractice insurance premium, CEO James Kiser said, but it was misguided to think the facility’s success could be neatly separated from the broader medical landscape of which it is a part.
Patients frequently arrive at Holy Cross with complex needs that only bigger hospitals can provide. “As small as we are, we cannot be all things to all people,” Kiser explained. So the hospital averages four flights a day ferrying those patients to Santa Fe or Albuquerque. But as specialists become scarcer around the state, even these referrals have become difficult, and Holy Cross has been forced to fly patients as far as Denver.
“What good would it be to our region, those that we serve,” he asked, “if we have no one to send patients to?”
Legal experts said the amendment also exempts from the cap on punitive damages major outpatient facilities like the New Mexico Cancer Center, Women’s Specialists of New Mexico, and Eye Associates of New Mexico, since they are neither individual clinicians nor stand-alone hospitals.
Mary Pareja, a professor at University of New Mexico Law School said this omission “makes no sense,” given that independent physicians, many of whom are employed by those facilities, are who lawmakers set out to help.
For Dr. Mark Ritchie, an orthopedic surgeon who has worked more than 30 years at the independent physicians group New Mexico Orthopedics, the omission took him back to 2021, when the Legislature altered medical malpractice laws without distinguishing facilities like theirs. Lawmakers eventually returned for a special session to “tweak” their original work.
Medical malpractice insurance is a big expense for Ritchie’s group, which constitutes a higher-risk specialty and pays some of the highest premiums in the state. “They’ve almost doubled in the last five years,” he said.
Thomson said it was her intention to cap punitive damages for these facilities, conceding “the language maybe isn’t clear enough.” She expressed confidence the Judiciary Committee would fix it.
Chandler, who chairs that committee, said it would take up the matter as early as this Friday, and promised alterations. “My intent is to create an environment where doctors and other health care providers are not subject to an aggressively hostile litigation environment, and I think the amendment as written cuts against that goal.”
Martin Gaynor, a professor emeritus of economics at Carnegie Mellon University who recently served in the antitrust division of the U.S. Department of Justice, focusing on healthcare, said he understood where lawmakers were coming from. “It is perfectly reasonable and rational to be concerned about private equity,” he said.
But distorting the state’s medical malpractice laws was not, in his view, the most effective direction to pursue. “They should be identifying what the problems are with private equity ownership and then coming up with ways to address those problems.”