Since 1996, New Mexico law places a limit of $600,000 on non-economic damages in medical malpractice cases. There is no cap on economic damages such as medical expenses, lost wages, etc. The state established a patient compensation fund in 1976 which physicians must pay in to and limits each defendant’s liability to $200,000. Insurance carriers collect the surcharges for the fund and premiums for the underlying insurance. Any damages awarded over the $200,000 limit are paid from the fund. In addition, there is a requirement that any malpractice claim must first be reviewed by the medical review commission.
In New Mexico a patient has 3 years from the date of a medical incident to file a medical malpractice claim. In the case of children under 6 years old, the limit expires when the child turns 9 years old.
Physicians are only required to carry liability limits of $200,000 per occurrence because the patient compensation fund covers anything over this limit. However, many New Mexico physicians carry a higher liability limit because the fund does not cover punitive damages.
New Mexico has many companies licensed in the state to sell medical professional liability insurance but the market is dominated by one large carrier. The good news is that there are options available at competitive rates if physicians are willing to explore the market. In recent years a number of national, A-Rated companies have begun offering coverage in New Mexico.
The state has had a history of challenges in the medical malpractice insurance market. In the 1970s and again in the 1990s legislators reacted to those challenges with reforms that have helped to stabilize the market. Both the damage cap and the patient compensation fund have helped to limit the liabilities of physicians, but the insurance premiums are still not as low as many other states. In the last couple of years New Mexico has seen an increase in the number of affordable options for medical malpractice insurance, which may lead to more competition and pressure to lower rates.