Rural hospitals in New Mexico are facing a deepening crisis as soaring medical malpractice insurance premiums and the threat of litigation drive doctors away, leaving communities with limited access to essential care. The situation has reached a point where physicians are being advised not to practice in the state, jeopardizing the viability of already strained healthcare facilities.
A Growing Crisis
The problem is particularly acute in rural areas like Clayton, a town of fewer than 4,000 residents in Union County, where CEO Tammie Chavez was forced to accept the withdrawal of a urologist who had been set to relocate from Amarillo. The physician’s attorney advised against the move, citing New Mexico’s reputation for high malpractice risk. Similarly, Roosevelt General Hospital in Portales saw two urologist recruits back out of positions for the same reason, leaving Roosevelt County, with nearly 19,000 residents, without urology care.
Kaye Green, CEO of Roosevelt General, described the situation as a “crisis,” noting the hospital has also struggled to recruit cardiologists, general surgeons, and primary care physicians. A Texas-based radiology group even terminated its contract last year, citing the state’s malpractice environment. The financial strain is immense: Roosevelt General’s most recent insurance premium reached $1.4 million, more than double last year’s cost, while Union County General’s premium topped $1 million – a sevenfold increase from its previous rate.
Rising Costs, Diminishing Access
Data compiled by the New Mexico Hospital Association reveals that malpractice insurance costs for rural hospitals have risen nearly 160% since 2020, while urban hospitals have seen an increase of over 330% during the same period. This financial pressure is forcing hospitals to make difficult choices, including closing medical programs and financing insurance costs with interest, as Union County General has been compelled to do. The consequences are clear: patients in Clayton now face hours-long drives to reach care in Texas or Albuquerque.
A September 2025 report from the Medical Professional Liability Association found New Mexico has 50% more paid claims per capita than any neighboring state. This trend is contributing to a growing exodus of doctors, with a report by the state Legislative Finance Committee indicating that two-thirds of New Mexico’s physicians are considering leaving the state.
Legislative Action and Uncertain Future
Lawmakers are preparing for the 2026 legislative session with the understanding that action is critical. Representative Christine Chandler, D-Los Alamos, has introduced House Bill 99, which proposes capping payouts for punitive damages in malpractice suits. Senator Martin Hickey, D-Albuquerque, is pursuing separate legislation focused on the same issue. The debate centers on punitive damages, which are not subject to caps and have resulted in substantial judgments against healthcare providers, contributing to rising insurance costs.
Governor Michelle Lujan Grisham has expressed support for malpractice reform and is prepared to push for legislation during the current session, and potentially call for a special session if necessary. However, past attempts at reform have faced strong opposition from trial lawyers, who argue that limiting damages would harm patients. Lobbying groups, such as New Mexico Safety Over Profit and Patient Protection Project, have actively campaigned against changes to the state’s malpractice laws.
While recent federal funding of $211.5 million may offer some relief, the impact is likely to be limited given upcoming reductions in Medicaid reimbursement rates. As Kaye Green of Roosevelt General stated, “We can’t wait another year and pay out another insurance hike. Our patients can’t wait till another session while there are no doctors to treat them.”
Frequently Asked Questions
What is driving up malpractice insurance costs in New Mexico?
According to the source, unsustainable increases in medical malpractice insurance premiums are driven by high payouts from malpractice suits, particularly those involving punitive damages, and a resulting cycle of rising premiums.
What is being done to address the crisis?
Lawmakers have introduced legislation, including House Bill 99, to cap payouts for punitive damages. Governor Lujan Grisham has also expressed support for reform. However, these efforts face opposition from trial lawyers.
What are the consequences if the situation is not addressed?
The source states that unchecked costs could lead to the closure of rural hospitals, leaving residents without access to essential medical care and potentially resulting in preventable deaths.
Given the complex interplay of legal, financial, and political factors, what steps can New Mexico take to balance the need to protect patients with the need to ensure access to healthcare in its rural communities?
