MedMal Cap Protection in New Mexico Protects both Doctors and Medical Corporations

In what seems to be another victory for healthcare corporations, the New Mexico Court of Appeals ruled recently that a number of professional corporations and a foreign limited liability company were considered to be “qualified health care providers” under the New Mexico Medical Malpractice Act (MMA) and therefore entitled to its protection.

Baker v. Hedstrom was a consolidation of three cases where all plaintiffs claimed medical malpractice against several professional corporations and a foreign LLC. In all three cases, the plaintiffs argued that the defendants did not fall within the definition of “qualified healthcare provider” under the MMA and therefore were not entitled to the protections provided by the Act.

The Court of Appeals disagreed and held that the New Mexico Legislature intended to include defendant corporations and LLC‘s in the MMA definition of “qualified health care provider” and protect them under the Act.

Being a “qualified health care provider” under the MMA has significant advantages. Under the MMA there is a $600,000 cap for damages for medical malpractice. The cap does not include past medical costs and benefits, but the MMA prohibits monetary damages for future medical expenses, which are paid as they are incurred. The MMA also limits an individual health care provider‘s personal liability to $200,000.

Under the MMA, if an individual or entity is a “qualified healthcare provider,” the statute of limitations on the medical malpractice claim is only three years from the date of the malpractice, regardless of whether the malpractice was discovered or could have been discovered during this period. For example, if a negligent act by a doctor qualified under the MMA is discovered one year after it happened, the patient only has two years to file suit. If a patient discovers the negligent act three and a half years after the malpractice, no suit can be brought against the provider.

Additionally, if there is a complaint against a qualified provider under the MMA, before being allowed to file suit in civil court, plaintiffs must submit to a mandatory medical evaluation process before the medical review panel.

Qualification as a healthcare provider under the MMA is not difficult. To qualify as a “health care provider” under the MMA, an individual doctor must pay a surcharge and file proof of liability insurance of at least $200,000 per occurrence or deposit at least $600,000 with the superintendent. If a hospital or other facility wants to qualify, the superintendent determines the surcharge and bases coverage or deposit for each hospital or facility based on a risk assessment study.

In this case, even though the Court agreed that the defendants would not be considered “qualified health care providers” under the plain language of the MMA, it concluded that it was the Legislature‘s intention to include defendant and entities like them in the MMA. Additionally, according to the Court, from 1976 to 2009 the New Mexico Department of Insurance has accepted payment from professional corporations and other organizations in order to qualify these under the MMA. Furthermore, even in 2009 when the state Superintendent of Insurance issued a memo proposing that these types of organizations not be included in the MMA‘s definition of “qualified health care providers,” a court issued a restraining order requiring the Superintendent to rescind the memorandum and continue to allow these organizations to procure insurance under the MMA.

For the reasons above, the Court held that defendants and organizations like them were considered “qualified health care providers” and entitled to the MMA‘ protections.

Qualification as a qualified healthcare provider provides many protections to the doctors and medical facilities largely at the expense of the injured patient. However, much if not all of the costs of capped medical negligence cases will fall upon the taxpayers through Medicaid, Medicare and Social Security.


Related Reading:
Caps on Medical Malpractice Damages Do Not Lower Insurance Premiums or Healthcare Costs
Medical Malpractice Reform Harms Patients and the Taxpaying Public
The Myth of the Frivolous Medical Malpractice Lawsuit

Collins & Collins, P.C.
Albuquerque Attorneys

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