New Mexico is one of the toughest places in the country to be a doctor—or a patient trying to find one. While headlines often focus on workforce shortages or rural hospital closures, one overlooked driver of this crisis is the state’s high-risk medical malpractice environment.

This FAQ breaks down the current state of malpractice law in New Mexico, recent reform efforts, and what’s at stake if action isn’t taken.

1. What is the current state of medical malpractice law in New Mexico?

New Mexico has made significant changes to its medical malpractice laws in recent years, which have had profound effects on healthcare providers and patients alike.

• In 2021, House Bill 75 raised the cap on non-economic damages (like pain and suffering) to $750,000 for independent doctors. For hospitals, this cap is set to increase to $6 million by 2026.

• In 2023, Senate Bill 523 established a $1 million cap for independent outpatient clinics, such as urgent care centers and ambulatory surgical centers. This cap excludes punitive damages and will adjust annually based on inflation starting in 2024.

While these laws aimed to modernize the system, they have inadvertently made New Mexico one of the most litigious states in the country for medical malpractice. The higher caps have led to soaring insurance costs for healthcare providers, especially those in small towns and rural areas. As a result, many doctors find it financially unfeasible to practice in the state.

Between 2019 and 2024, New Mexico experienced a net loss of 248 practicing physicians—the only state in the U.S. to see such a decline during that period. This exodus has left many New Mexicans with fewer healthcare options, forcing some to travel long distances for medical care or, in some cases, forgo it altogether.

2. How does this affect access to care?

Because of New Mexico’s high malpractice insurance costs and limited insurance options, more and more doctors and clinics are leaving the state—or choosing not to come here at all.

For example in 2023, the CEO of Union County General Hospital, Tammie Chavez, shared that they were rejected by over 40 insurance companies before finally finding coverage—at nearly five times the cost of the previous year.

These rising costs and the fear of being sued are pushing doctors into early retirement, stopping new providers from setting up practices, and forcing small clinics to shut their doors. That means longer wait times, fewer specialists, and fewer places to turn when you or your family need care—especially in rural and underserved communities.

3. What legislative solutions have been proposed?

Senate Bill 176 (2025) attempted to fix some of these issues by:

• Capping attorney fees

• Ending lump-sum payouts

• Allocating 75% of punitive damages to a public patient safety fund

Despite bipartisan sponsorship, the bill received only one late-session hearing and never reached a vote.

4. Who Is Opposing Reform—and Why?

Opposition Arguments

Leading opposition to medical malpractice reform in New Mexico comes from the New Mexico Trial Lawyers Association, New Mexico Safety Over Profit and The Patient Protection Project, 501(c)(4) organizations established to counter legislative changes. These groups argue that proposed reforms:

• Weaken patient protections by capping damages and attorney fees

• Make it harder for victims of medical negligence to access legal representation

• Shift power away from patients and juries, giving more control to insurance companies and large healthcare institutions

They contend that limiting financial accountability for providers undermines justice and may reduce incentives for safe, high-quality care. Their messaging has resonated with some lawmakers and been amplified through aggressive legal advertising and coalition-building efforts.

The Reality: New Mexico Is an Outlier

While patient rights are essential, reform advocates emphasize that New Mexico’s malpractice system is already among the most punishing in the nation—and it’s driving providers out of practice, closing rural clinics, and making care less accessible for everyone.

Consider the data:

• Malpractice Claim Frequency: New Mexico has one of the highest rates of malpractice claims per physician in the region.

• Payout Severity: The average malpractice payout in New Mexico exceeds $500,000, compared to a national average of approximately $309,000.
  (Source: National Practitioner Data Bank, 2022)

• Legal Advertising: New Mexico ranks among the top five states for growth in trial lawyer advertising. Between 2017 and 2021:

  • Legal ad spending grew from $5.2 million to $8.4 million

  • The number of local legal ads jumped from under 100,000 to nearly 240,000 annually
    (Source: American Tort Reform Association)

• Insurance Market Collapse: Several national malpractice insurers have left the state entirely, citing volatility and excessive payouts. Remaining carriers have drastically increased premiums or denied coverage altogether.

This legal climate doesn’t just affect providers—it affects patients, particularly in rural areas where hospitals and clinics struggle to retain staff or maintain basic services. In 2023, Union County General Hospital was rejected by more than 40 insurers, including international carriers, before securing a policy at a 500% higher premium than the year before.

Without reform, this trajectory will only worsen—more doctors will leave, fewer will come, and the communities that can least afford disruption will continue to bear the brunt.

5. What Is New Mexico Safety Over Profit?

New Mexico Safety Over Profit is a 501(c)(4) political advocacy group formed in 2024 to oppose medical malpractice reform efforts. While the organization claims to operate independently, it has close ties to the New Mexico Trial Lawyers Association and has echoed their positions in testimony, media, and legal briefs.

The group has:

• Challenged the severity of New Mexico’s physician shortage, despite widespread data and testimony from rural hospitals and provider groups

• Published self-funded reports attempting to discredit rising malpractice insurance costs

• Engaged in direct political advocacy, lobbying against bills such as Senate Bill 176 (2025)

Their messaging has gained traction with some legislators, in part due to high-volume advertising campaigns and coordinated legal advocacy. However, many stakeholders view the organization as a barrier to reform and a source of misinformation.

In 2025, Searchlight New Mexico published an investigative report titled “Dark Money in the Courtroom: How Anonymous Dollars Shape Malpractice Politics”, uncovering the flow of untraceable funds into groups opposing malpractice reform—including New Mexico Safety Over Profit. The article raised serious transparency concerns by highlighting the use of shell organizations and issue-advocacy loopholes to influence legislation outside of public view.

“It’s impossible to know who’s really funding these ads or writing these reports,” said one policy expert quoted in the piece. “That’s the problem. It distorts the debate without accountability.”
— Searchlight New Mexico, 2025

6. Are Political Contributions Influencing This Debate?

Yes—and the numbers tell a revealing story. In the 2024 election cycle alone, trial lawyer-affiliated political action committees (PACs) contributed more than $145,000 to candidates in the New Mexico Legislature. The vast majority of those funds were funneled through the Committee on Individual Responsibility, the political arm of the New Mexico Trial Lawyers Association.

Who Got the Money?

The top five legislative recipients of trial lawyer PAC donations were:

Searchlight New Mexico – “High Costs Threaten NM Hospitals”
https://searchlightnm.org/high-costs-threaten-nm-hospitals/

Searchlight New Mexico – “Malpractice Reform Debate”
https://searchlightnm.org/malpractice-reform-debate/

Searchlight New Mexico – “Malpractice Bill Stalled Despite Broad Backing”
https://searchlightnm.org/malpractice-bill-stalled-despite-broad-backing/ 

The Doctors Company – Legislative Update on New Mexico Medical Malpractice Act
https://www.thedoctors.com

Campaign Finance Information System (CFIS), April 2023 Analysis
https://login.cfis.state.nm.us

American Tort Reform Association – Legal Advertising Trends Report
https://www.atra.org

Union County General Hospital CEO Tammie Chavez – Public Testimony (2023)
Referenced in multiple Searchlight New Mexico articles