Doctor shortage intensifies push to cap punitive damages in malpractice cases

Pat Jilek can’t find a doctor.

When the former train conductor and railway safety representative retired in 2022, he and his wife moved away from Fargo, N.D., where they had lived for 50 years. They built what Jilek called their “dream house” in Rio Rancho, swapping snow shoveling for sunshine.

“We love everything about being here — except for one thing,” Jilek said: They couldn’t keep a primary care provider.

Jilek, 56, said the couple each went to two initial appointments with doctors, only to learn the physicians had left the practice a few months later. While waiting to establish care with new providers, they sought care in Phoenix.

Jilek believes a critical shortage of doctors in New Mexico is related to the state’s medical malpractice environment, where liability insurance premiums for providers have risen far above the costs in many other states, malpractice claims resulting in high-dollar settlement payouts — on the rise for two decades — have spiked in recent years to record-high numbers, and there is no statutory cap on punitive damages for cases that go to trial. Punitive damages often are excluded from insurance coverage, leaving providers in fear of being held personally liable, although such cases appear rare.

Doctors and hospitals in New Mexico argue the high risk and high costs are pushing providers out of the state.

Around two-thirds of physicians surveyed by the Legislative Finance Committee last year reported they are thinking of leaving New Mexico to practice in another state. The most common reason cited was the risk of punitive damages in medical malpractice cases — court awards designed to punish the defendant for wrongdoing — followed by high insurance premiums.

A measure introduced by three Republican lawmakers in last year’s legislative session would have put some limits on punitive damages, requiring proof of a provider’s “deliberate disregard” of a patient’s safety and capping damages at “thirty times the state median household income.” The House bill didn’t get a committee hearing, although the New Mexico Department of Health noted in an analysis it could help stem the loss of providers. The report cited uncapped punitive damages as “a significant incentive for litigation.”

Gov. Michelle Lujan Grisham and New Mexico lawmakers from both sides of the aisle aim to address the lack of limits on punitive damages in the legislative session that began last week, but they are bound to face fierce pushback.

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

“The issue here is the malpractice itself, not the malpractice lawsuits,” said Theresa Hacsi, an Albuquerque attorney who primarily represents patients in medical malpractice cases.

Hacsi argued it’s because of the state’s “higher-risk population, and a higher rate of private equity-owned hospitals and for-profit systems” that “we have higher rates of injuries which need to be addressed.”

Lujan Grisham’s chief spokesperson, Michael Coleman, wrote in an email Friday the governor hopes to “reform the way punitive damages are assessed against individual physicians, as well as hospitals.” While she prefers to find a solution during the 30-day session, he added, “she is prepared to call a special session to address this issue if necessary.”

Whether a bill gets through this year could depend in part on the powerful Senate Judiciary Committee, whose members have been skeptical of similar changes in recent years.

Committee Chair Joseph Cervantes, D-Las Cruces, a personal injury attorney whose firm represents clients with malpractice cases, said in an interview at the Capitol last week he has reservations about capping punitive damages and changing the legal standard of proof, but the committee will thoroughly vet any legislation that comes its way.

“We have to be looking at what will really work, and what is really being driven by the industry,” he said, pointing to the hospital and insurance industries.

Cervantes said he doesn’t think reducing punitive damages would lower malpractice premiums, and said doctors’ fear of punitive damages is “because of the campaign that’s been run for the last year to put them in that kind of fear.”

Lawmakers’ proposals to cap punitive damages and increase the legal standard of proof required for a jury to award them are part of a broader strategy to tackle the doctor shortage. The effort includes entering interstate medical licensing compacts to make it easier for doctors from other states to practice here and pursuing more robust student loan forgiveness programs.

For Jilek, any change will come too late. He and his wife are planning to move to Phoenix to resolve their health care access woes. Their dream house is already on the market.

“What reform is needed is probably way over my head,” Jilek said of the state’s health care ecosystem. “But I would say this: Whatever reform comes, I think patient input should be taken. I think physician input should be taken. I think attorney [input should] be taken, and I think hospital administrator input should be taken.”

Anomalous environment

Mike Stinson, vice president of public policy and legal affairs for the Medical Professional Liability Association — a trade group for medical liability insurance companies across the country — described New Mexico’s medical malpractice environment as “an anomaly.”

“There’s been a huge increase in premiums that is relatively unprecedented across the country,” he said, noting costs here rose 63% in the last four years while remaining relatively stable nationwide.

Premium costs vary depending on the risk involved in a provider’s work, but Stinson said the rates are “substantially higher” in New Mexico than in neighboring states.

“An internist pays 33% more in New Mexico than they would in Texas,” Stinson said. “A general surgeon would pay 50% more in New Mexico than they would in Colorado. An OB-GYN would pay 50% more in New Mexico than they would in Utah.”

New Mexico Superintendent of Insurance Alice Kane told the legislative Courts, Corrections and Justice Committee in a November hearing premiums have increased by roughly 40% since 2022. A “large driver of the increase,” she said, was a 2021 overhaul of the Medical Malpractice Act that raised the cap for compensatory damages.

Another factor likely driving those costs upward is increasing numbers of medical malpractice claims in the state. Complaints resulting in insurance payouts on a physician’s behalf rose by about 52% between 2004 and 2024, with an all-time high of 201 cases in 2024, while rates nationwide dropped by 35% in that period, according to data from the National Practitioner Data Bank of the U.S. Health Resources and Services Administration.

The state has seen a particular rise in cases resulting in payouts of over $250,000, and claims with payments of over $1 million have spiked in recent years, figures from the databank show.

Jury awards, too, have dramatically increased. The New Mexico Medical Society, in an analysis of last year’s House Bill 379 — the unsuccessful GOP measure proposing caps on punitive damages — cited a December 2024 case in which a jury “awarded an injured patient $412 million in damages, which included $375 million in punitive damages.”

That settlement, against a male health clinic, was later reduced to around $96 million, the Albuquerque Journal reported.

The analysis argued the lack of punitive damages comes with consequences: “Plaintiffs’ attorneys rely on those nuclear verdicts, and the low bar for [punitive] damages in New Mexico, to leverage settlements in cases.”

Other recent jury trials also have ended in big awards.

A Bernalillo County jury early last year awarded $16.75 million to a woman who filed a lawsuit against Presbyterian Health Services over surgical complications, including $15 million in punitive damages, according to court records. The plaintiff alleged a surgical instrument had been left in her abdomen for around two months following surgery, causing pain.

Another Bernalillo County jury in June awarded over $40 million in damages in a lawsuit accusing Presbyterian of injury to an infant, with $15 million in punitive damages.

However, a judge later declared a mistrial in the case, after the hospital argued one juror was biased, citing her podcast episodes in which she expressed mistrust in hospitals.

Dr. Darren Shafer, president of Presbyterian Medical Group, declined to comment on those cases but noted in an email the health care organization sees problems with the state’s medical malpractice laws.

“At a time when New Mexico is already facing a critical physician shortage, exceptionally large and unpredictable punitive damage awards are part of a system that is not working for patients or providers,” Shafer wrote.

“Medical malpractice reform that includes a reasonable cap on punitive damages would preserve accountability, protect patients’ rights to compensation, and help ensure New Mexicans do not lose access to care because physicians are forced to leave the state or choose not to practice here,” he added.

Presbyterian Healthcare Services is sponsoring a campaign to advocate for medical malpractice changes this year, including television ads and a website called “Keep NM Doctors.”

The push this year to cap punitive damages in malpractice cases comes five years after a major overhaul of the New Mexico Medical Malpractice Act.

Lawmakers passed legislation in a special session in 2021 raising the cap for compensatory damages — awards that don’t include a patient’s medical costs or punitive damages — from a prior limit of $600,000. The law change set an initial rate of $750,000 for individual providers beginning in 2023, with annual increases based on the consumer price index, and separate rates for hospitals and outpatient clinics set to climb to $6 million by this year.

Another change was made in 2023, carving out a lower rate of $1 million for independent outpatient clinics beginning in 2024, with annual increases.

New Mexico also operates a Patient Compensation Fund to help ease the liability costs for doctors, an initiative only a few other states have implemented.

A doctor who chooses to maximize their liability coverage using the fund would purchase an initial $250,000 in private insurance coverage and buy into the Patient Compensation Fund, said Christian Myers, chief actuary at the Office of the Superintendent of Insurance, which administers the fund.

The cost of buying into the fund varies based on the provider type and whether a doctor is independent or employed by a hospital, Myers said. For independent providers, Patient Compensation Fund surcharges for 2026 range from less than $6,000 for low-risk, nonsurgical specialties to more than $49,000 for very high-risk specialists like surgical OB-GYNs and neurosurgeons.

In the case of malpractice, the open market insurance would cover an independent doctor’s first $250,000 in compensatory damages, while the Patient Compensation Fund would kick in up to the compensatory damage cap, which now equates to just over $900,000, Myers explained.

The Patient Compensation Fund also covers a patient’s past and future medical costs in claims against participating providers.

Still, the combination of expensive insurance costs and the threat of uncapped punitive damages are pushing doctors out of the state, said Dr. Robert Underwood, president of the New Mexico Medical Society and the chief medical officer at San Juan Regional Medical Center in Farmington.

As new physicians complete their training, Underwood said, they’ll have options for where they want to practice — especially as a doctor shortage deepens across the U.S.

“If they’re looking at working in Colorado, Arizona, Utah, Texas, New Mexico and what they are seeing puts them at a high risk and a high cost for medical malpractice, that automatically bumps New Mexico,” he said.

The combination isn’t just bad for doctors, Underwood argued; it’s bad for patients.

“We’re talking about physicians and being able to bring physicians to the state — but ultimately, this is advocating for patients to have a doctor to go to,” he said.

Russell Toal, New Mexico’s former superintendent of insurance, said he sees reform as urgent and believes the problem lies in the state’s laws rather than the incidence of actual malpractice — that there are more cases because it’s easier to sue.

“I don’t think it’s a case that for some peculiar reason, the doctors in New Mexico are worse than doctors elsewhere. I don’t have any reason to believe that, and I haven’t seen any evidence to that effect,” Toal said.

Though, he added, hospitals still could “tighten up quality standards” for employing doctors.

‘Fix what you break’

What’s best for patients in the debate over medical malpractice overhaul is a subject of fierce debate, with injured patients arguing restrictions on their cases would have hindered their access to justice.

One such patient is Dominique Dupont, who sued Presbyterian Healthcare Services over a birth in 2013 that left her daughter with a severe brain injury. She settled her complaint in 2016 for an undisclosed amount.

Dupont’s pregnancy with her first child was a dream, she said — but giving birth was a nightmare.

Toward the end of the unmedicated birth, her labor stalled. Her medical team recommended she receive medication to ease her pain, take time to rest and rehydrate, and hope to progress to the next stage of labor.

But when Dupont started to receive intravenous fluids, something changed within seconds. It brought on an “animalistic pain,” she said.

“I started having contraction after contraction after contraction. They were relentless,” Dupont recalled.

Unbeknownst to Dupont, the IV was delivering not just saline but Pitocin — a synthetic hormone that induces contractions, according to the U.S. Food and Drug Administration.

Dupont’s contractions brought on by the drug — which she said was administered “completely improperly” — caused her daughter to lose access to oxygen for 20 or 25 minutes.

Now almost 13 years old, Dupont’s daughter has disabilities from the brain injury. She has cerebral palsy and visual impairments. She can’t open her mouth all the way due to a jaw injury at birth.

After experiencing malpractice firsthand, Dupont believes the state’s shortage of doctors and medical malpractice are entirely separate issues.

“Her receiving justice for that egregious harm that happened to her has really nothing to do with the doctor shortage,” she said of her daughter’s case. “But it has really everything to do with the corporation — the hospital — being held accountable for that kind of negligence.”

Dupont asked lawmakers to keep this in mind as they consider malpractice reform this session: “If something goes wrong, limiting their access to justice does not improve outcomes. It makes no difference. In fact, it might make it worse.”

Cid Lopez, an attorney who specializes in medical malpractice cases and serves as a board member of the New Mexico Trial Lawyers Association, said the basic premise behind medical malpractice lawsuits is “fix what you break.”

What distinguishes malpractice from an unexpected bad outcome, he said, is whether the provider met a reasonable standard of care.

If a jury determines a provider has engaged in malpractice, they can award three types of monetary compensation to the patient: medical expenses; compensatory damages, like lost income, lost earning capacity, and pain and suffering; and punitive damages, awards intended to punish providers for wrongdoing.

Lopez said judges do a good job of tempering any jury verdicts to ensure they’re “proportionate” to the evidence presented.

“Our courts are tasked with the responsibility of making sure that any verdicts or any damages that are awarded are in ratio or conform to what the evidence has shown during trial,” he said.

Lopez argued other policy fixes — like tax reforms and expanded student loan repayment programs, another priority for this session — could improve the state’s shortage of doctors without imposing limits on victim compensation.

Hacsi’s law firm has been filing lawsuits in recent years against private equity-backed Lovelace Women’s Hospital alleging a pattern of injuring babies and mothers during labor. The hospital has denied those claims.

“My clients are David, and they are up against multibillion-dollar Goliaths,” Hacsi said.

“To say that it’s easy to file a medical malpractice lawsuit — it’s coming from somebody who has no idea what it actually takes ... to actually be successful in court. It’s very hard,” she added.

Punitive damages, she said, are the “only tool we have to hold these big corporations accountable.”

Changes on the table

The pressure is on for lawmakers to act on medical malpractice.

Rep. Gail Armstrong, R-Magdalena, who was a co-sponsor on HB 379 last year and is a co-sponsor on a similar bipartisan measure in this year’s session, House Bill 99, said failing to make meaningful changes will be “a huge black eye” for Lujan Grisham, whose term will end this year.

“It will be her legacy, if she does not fix it — and I think she realizes that,” Armstrong said.

The governor is focused on changing punitive damages in the legislative session, Coleman said, arguing the threat of such damages drives high premiums.

“Plaintiffs’ lawyers are threatening outrageous monetary demands at trial as leverage to settle cases early,” Coleman said, which raises the cost of settlements.

“That’s resulted in skyrocketing premiums over the last several years,” he added.

Lawmakers have proposed various legislation so far this session to limit punitive damages and change the standard of proof for a jury to award those damages.

HB 99, sponsored by Rep. Christine Chandler, D-Los Alamos, would increase the burden of proof for an award of punitive damages and limit the dollar amount for punitive damages. The legislation also calls for plaintiffs’ medical costs to be covered as they are incurred, rather than in a lump sum.

“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, adding, “The initial claim for relief in a malpractice claim shall not include punitive damages.”

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.”

Rep. Jenifer Jones, a Deming Republican and registered nurse, has sponsored House Bill 107, proposing similar reforms and capping attorneys’ fees in medical malpractice cases.

“Medical malpractice is an issue, and it is important, I think, that we address it head-on,” Chandler said. “We can recruit all the doctors in the world here, but if they feel that the medical malpractice environment is hostile to their practice, then ... we can’t keep them here.”

House Majority Leader Reena Szczepanski said she’s planning to carry a bill to protect doctors’ personal assets in malpractice cases.

“We can just take those off the table,” she said.

Sen. Martin Hickey, an Albuquerque Democrat, physician and longtime health care administrator who led medical malpractice reform legislation in 2025, said he’s “seriously thinking” about proposing a bill that would take those policy changes a step further by eliminating the possibility of punitive damages in medical malpractice cases altogether — a policy in place in other states like Illinois.

Hickey said his priority is to ensure physicians feel it’s safe to practice in the state, and he argued removing the threat of punitive damages could accomplish that goal.

“That’s the best safety message to send to docs: You won’t get hit with punitive damages, period, if you come to New Mexico. That’s the kind of reassurance they want,” Hickey said.

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