Tag Archives: damage caps

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New Mexico Supreme Court upholds damage caps – protecting physicians and how much they pay for malpractice coverage

Our take: The historical payout data in NM can play a major role in determining the overall cost that insurance companies charge physicians for their malpractice coverage……and how hospital systems determine the malpractice coverage part of their financials. This decision, and the follow-up compromised legislation, will keep the damage cap in place. We have been tracking historical medical malpractice insurance rates for decades, and we have steadily seen a small uptick over the past years. This will help NM stabilize their rates. If there are any doctors practicing in NM, and you have questions about this decision and how it will affect your malpractice rates, fill out our Contact Us form and you can speak to one our NM specialists that can walk you through this.

The New Mexico Supreme Court determined last month, in the case of Siebert v. Okun, that the state’s $600,000 cap on nonmedical, nonpunitive damages in medical liability lawsuits is constitutional.

According to the unanimous decision, Second Judicial District Court Judge Victor Lopez erred in 2018 when he denied a motion by Rebecca C. Okun, MD, and Women’s Specialists of New Mexico to reduce a $2.6 million medical malpractice judgment to conform with the $600,000 damage cap established by the New Mexico Medical Malpractice Act. The Supreme Court remanded the case back to the district court to conform the judgment with the cap.

Judge Lopez had refused to reduce the $2.6 million medical malpractice verdict, determining the legislature exceeded its constitutional authority when implementing the New Mexico Medical Malpractice Act to the extent that it restricts a plaintiff’s “right to receive an unaltered jury verdict.”

The five justices disagreed. According to the Supreme Court’s opinion, while Article II, Section 12, of the New Mexico Constitution holds that the right to a jury trial shall remain “inviolate,” an “inviolate right is not beyond the reach of regulation, so long as that regulation does not substantially impair the core essence of the right” and that the statutory cap on damages “merely gives legal consequence to the jury’s determination of the amount of the verdict.”

Two days after the decision in Siebert v. Okun, New Mexico legislators unveiled a compromise bill intended to modernize the state’s Medical Malpractice Act. Prior to the agreement, competing bills had divided the legislature as well as the state’s hospitals, physicians and trial lawyers.

At issue was whether to remove hospitals from the definition of “healthcare provider” under the Medical Malpractice Act in order to exclude them from accessing the state’s patient compensation fund (PCF). The PCF currently carries a $56 million deficit, and supporters of the proposal argued that, as written, the Act’s excess coverage was never intended for hospitals.

The New Mexico Hospital Association and Medical Society warned that without access to the PCF and the other protections afforded by the Medical Malpractice Act, a number of already struggling hospitals could be forced to close their doors.

The compromise legislation, which was signed into law by Gov. Michelle Lujan Grisham on April 1, maintains hospitals’ “healthcare provider” status under the Medical Malpractice Act and makes a number of changes to the New Mexico medical liability law. Some of these changes are as follows:

• The cap on nonmedical, nonpunitive damages will increase to $750,000.

• Healthcare providers will be required to carry a medical malpractice insurance policy of $250,000 per occurrence with a $750,000 aggregate. The requirement was previously $200,000/$600,000.

• The PCF will cover any amount due from a judgment or settlement in excess of $250,000. It previously covered damages in excess of $200,000.

• For hospitals, outpatient healthcare facilities or business entities electing to be covered under the Medical Malpractice Act, the superintendent will determine, based on an annual risk assessment, the hospital, outpatient healthcare facility or business entity’s additional charges for accessing the PCF.

• Payment for future medical care and related benefits shall be made as expenses are incurred. The court must approve any lump-sum settlement, and the portion of settlement funds intended for future medical care must be placed into a medical savings trust.

If you want to take a deep dive into New Mexico and view current medical malpractice rates, historic rates and learn everything there is to know about medical malpractice insurance for physicians in New Mexico, then click here.

Is New Mexico’s Compensatory Damage Cap the Next to Fall?

Arguments in favor of and against New Mexico’s medical malpractice compensatory damage cap were made last month, and now the question as to whether it is constitutional rests in the hands of five justices on the state’s Supreme Court. The compensatory cap limits economic and noneconomic damages, but not medical costs or punitive damages, to $600,000.

Enacted in 1976, the New Mexico Medical Malpractice Act defined the standard of care, established a state-sponsored patient compensation fund, implemented statute of limitation guidelines, mandated the screening of all alleged cases of medical malpractice and capped the amount of recoverable damages in medical liability trials. In 2018, District Judge Victor Lopez determined that the compensatory cap improperly interfered with a plaintiff’s constitutional right to a trial by jury.

The underlying case, Siebert v. Okung, alleges Rebecca Okun, MD, an obstetrician/ gynecologist and employee of Women’s Specialists of New Mexico, performed a hysteroscopy on Susan Siebert. The procedure created a hole in Siebert’s uterus and intestine. Okun failed to notice these holes and sent Siebert home after the procedure.

Siebert became infected because of the perforations, requiring numerous surgeries, followed by extensive in-patient hospital and rehabilitation center care. She spent months on a ventilator and a feeding tube. She lost her job and suffered permanent brain damage.

Siebert sued Okun and Women’s Specialists of New Mexico in District Court, where a jury found for Siebert and against the defendants in the amount of $2.6 million.

Following entry of judgment, the defendants moved for a reduction in the judgment based on the language of the New Mexico Medical Malpractice Act, which provides that,  except for medical care and related benefits, medical malpractice damages are to be capped at $600,000. Siebert opposed the motion, arguing the cap is unconstitutional.

District Judge Victor Lopez agreed with Siebert and held the cap unconstitutional. He primarily found that the cap abridged the right of trial by jury, but also determined other constitutional rights might be “implicated,” including equal protection, due process and separation of powers. He refused to reduce the judgment.

The defendants appealed to the New Mexico Court of Appeals, which forwarded the case directly to the New Mexico Supreme Court without any ruling on the merits by the Court of Appeals.

During last month’s hour-long oral arguments before the New Mexico Supreme Court, Bennett Cooper, attorney for Okun and Women’s Specialists of New Mexico, emphasized that what is at stake is not just the compensatory damage cap, but the entire Medical Malpractice Act, due to issues of severability. In other words, should the compensatory damage cap be determined unconstitutional, all the protections afforded by the Medical Malpractice Act would likewise disappear.

“Over 40 years ago, the legislature protected patients and physicians of New Mexico by securing the availability of medical malpractice insurance,” Cooper argued. “This was a reasonable, prescient approach and likely the most pro-patient medical malpractice reform law anywhere in the country. The district court’s ruling on the issue of jury rights endangers the entire medical malpractice act.”

Lisa Curtis, the attorney representing Siebert, argued that the New Mexico Constitution is very specific in that every New Mexican has the right to have damages determined by a jury.

“In New Mexico, the right to trial by jury, as it has heretofore existed, shall be secured to all and remain inviolate,” Curtis stated before the Court. “An inviolate right constitutionalizes the jury’s role. In fact, our Second Judicial District Judge Lopez found that [the compensatory damage cap] violates Susan Siebert’s specific inviolate constitutional right to a jury trial. The jury awarded Ms. Siebert $2.6 million in compensatory damages, and very importantly here, the defendants moved to reduce, or limit, the jury’s verdict … If you were to eviscerate the jury’s finding on damages, then you are eviscerating the jury’s right to make a determination of the case and the facts of it.”

The New Mexico Supreme Court is expected to reach a decision in Siebert v. Okun sometime next year. Keep an eye on our News Section for the latest updates.