Issue Summary News Policy Report

2025 Legislative Update

Think New Mexico is working to enact four major reforms during the 2025 legislative session:

1) Join the 9 major interstate health care worker compacts New Mexico does not yet participate in. 

We are advocating for nine bills that would bring New Mexico into the interstate compacts for physicians (Senate Bill 46; House Bill 243), physician assistants, psychologists (Senate Bill 106), counselors (House Bill 217), dentists and dental hygienists (House Bill 441), emergency medical personnel, audiologists and speech therapists (House Bill 79; Senate Bill 104), physical therapists (House Bill 82), and occupational therapists (House Bill 81).

These bills would make it easier for health care providers licensed in other states to provide care in New Mexico, including via telehealth. Without these agreements, doctors from other states cannot legally provide services in New Mexico unless they go through New Mexico’s lengthy licensing process.

Since 2003, New Mexico has been one of 40 states in the Nurse Licensure Compact, which grants nurses a multistate privilege to practice in other compact states. As many as 80% of the nurses at some New Mexico hospitals, especially in rural and border areas of the state, would not be practicing here but for this compact.

Yet New Mexico is one of only five states that has joined two or fewer interstate compacts. By contrast, our closest neighbors have adopted five or more interstate compacts—Arizona: six; Colorado: ten; Oklahoma: eight; Utah: nine; and Texas: five.

2) Pass Senate Bill 88: Create a Permanent Fund for Health Care.

Since 1973, New Mexico legislators have created twelve permanent funds to provide long-term dedicated funding for policy areas ranging from higher education to rural libraries. However, despite health care being the state’s second largest expenditure (after education), there is not yet a permanent fund for health care.

We are supporting legislation to establish a $2 billion permanent fund to support Medicaid, allowing the state to increase the rates it pays providers to care for patients insured by Medicaid.

3) End the Gross Receipts Tax on medical services (Senate Bill 295; House Bill 344) and expand the Rural Health Care Practitioner Tax Credit (House Bill 52)

New Mexico is one of only two states that impose a Gross Receipts Tax (GRT) on the medical services. Unlike most businesses, who simply pass on the gross receipts tax to their customers, medical providers cannot pass the tax on to insurance companies or Medicare. So doctors end up bearing the full burden of the tax, making it more expensive to practice medicine in New Mexico than in other states. Since 2004, the legislature has repealed parts of the tax. Senate Bill 295 and House Bill 344 would repeal the rest of it.

The Rural Health Care Practitioner Tax Credit provides an annual $5,000 income tax credit to licensed doctors, dentists, clinical psychologists, podiatrists, and optometrists who practice in rural areas. It also provides a $3,000 credit to licensed dental hygienists, physician assistants, certified nurse midwives, certified nurse anesthetists, certified nurse practitioners, and clinical nurse specialists. The tax credit was expanded in 2024 to include more types of health care providers, such as pharmacists, therapists and counselors, midwives, and physical therapists.

However, several health care professions that are in severe shortage in New Mexico are not yet included in the credit – for example, we are short nearly 5,000 EMTs across the state, and EMTs are not eligible for the credit. The existing tax credit has helped alleviate health care provider shortages in the state’’ rural areas, and it can be even more effective with further expansion to more health care professions.

Think New Mexico is supporting House Bill 52 to expand the health care practitioners eligible for the tax credit to include EMTS, paramedics, occupational therapists, audiologists, speech and language pathologists, and licensed practical nurses.

4) Pass Senate Bill 176: Reform the medical malpractice system to center patient needs and safety.

Senate Bill 176 would cap attorney’s fees in medical malpractice attorney lawsuits, end lump-sum payouts from the Patient Compensation Fund (PCF), and send the majority of any punitive damages awarded in a medical malpractice cases to a new fund designed to improve patient safety.

New Mexico currently has the second highest rate of medical malpractice lawsuits of any state in the U.S., as well as unlimited punitive damages. Medical malpractice insurance premiums are about twice as high in New Mexico as in other states in our region, and they continue to rise rapidly.

The reforms in Senate Bill 176 have been adopted in a variety of other states from across the political spectrum. For example, 20 states cap attorney’s fees, including California, Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Nevada, and Oregon. New Mexico currently has no limits on attorney’s fees.

Senate Bill 176 is based on the California model, which caps attorney’s fees at 25% of the money awarded if a case is settled, and 33% if a case goes to trial. Every dollar that goes to the attorney is a dollar that does not go to the injured patient.

New Mexico also recently began allowing lump-sum payouts from the Patient Compensation Fund (PCF). The PCF was created to make sure that patients who are injured by malpractice will have all of their medical needs paid for. Up until 2021, payments were made from the fund as a patient incurred medical expenses, for as many years as needed. By contrast, the lump-sum payout is meant to cover the patient’s medical costs for the rest of their life. However, it is based on an estimate, which may be wrong. In addition, the lawyer’s fee, which may be upwards of 40% of the total, now comes off the top immediately. As a result, a patient may very well run out of money for their medical care. Senate Bill 176 would return to the system that worked well for many years, which is having the PCF pay out medical costs as they were incurred by a patient injured by malpractice.

Finally, punitive damages are meant to be an extraordinary remedy, awarded in rare instances where it is necessary to punish someone for committing gross negligence or intentional harm. They are separate from compensatory damages, which are meant to compensate the patient. Unlimited damages are a windfall for the attorneys bringing the cases, but they undermine medical care across the state.

Three states, Alaska, Oregon, and Pennsylvania, instead use a significant portion of any punitive damage award should be used to benefit the public instead. Senate Bill 176 would send 75% of any punitive damages to a new fund earmarked for improving patient safety and reducing medical malpractice.

Issue Summary

Many New Mexicans struggle to access health care due to a growing shortage of doctors, nurses, and other health care professionals in the state. The number of primary care physicians in New Mexico fell by 30% from 2017-2021 and the numbers of ob-gyns, registered nurses, dentists, psychiatrists, pharmacists, and EMTs have also declined sharply in recent years. New Mexico has the oldest physician workforce in the nation, with nearly 40% of the state’s doctors aged 60 or older and expected to retire by 2030.

To reverse this growing shortage, in 2024 Think New Mexico published a new report proposing a ten-point plan with 20 separate legislative recommendations to make the state a more attractive place for health care workers to practice. Think New Mexico’s proposals include:

• Reforming the state’s medical malpractice act, since New Mexico currently has the second highest number of medical malpractice lawsuits per capita in the U.S. Recommended reforms include capping attorney’s fees; raising the legal standard for awarding punitive damages and capping them; and prohibiting the filing of multiple malpractice lawsuits over a single injury. These and similar reforms have already been implemented by other states from across the political spectrum, as detailed in Think New Mexico’s report.

• Joining all ten interstate healthcare worker compacts so that doctors, psychologists, and other providers licensed in other states can more easily provide care to New Mexico patients, including via tele-health.

• Creating a centralized credentialing system to reduce administrative burdens on doctors and other health care professionals and make it easier for patients to keep their providers when their insurance coverage changes.

• Making New Mexico’s student loan repayment program for health care professionals more competitive with the vast majority of other states, including all of New Mexico’s neighbors, which offer higher loan repayment amounts.

• Making New Mexico’s tax policy friendlier to health care workers by permanently repealing the state’s Gross Receipts Tax on medical services and increasing and expanding the Rural Health Care Practitioner Tax Credit.

• Enhancing Medicaid reimbursement rates to health care providers, since New Mexico has a higher proportion of patients insured by Medicaid than any other state, and Medicaid generally pays less than the cost of providing treatment. The report also recommends reducing the rate of Medicaid claim denials so that health care providers receive the full payment they earn for treating patients insured by Medicaid.

• Growing more of our own health care workers by expanding access to health-care-related career and technical education (CTE) in high school. Recommended reforms include providing liability protections to employers that offer CTE programs and revising the state’s CTE pathways so that more students earn certifications in high school (e.g., as EMTs or nursing assistants).

• Expanding access to higher education in health care fields by increasing salaries for the faculty training future health care professionals and providing a tax credit for the preceptors who provide community-based education for doctors, nurses, and others.

• Importing more international medical graduates into New Mexico by allowing fully trained and vetted doctors from other countries to apply for a provisional license to practice under supervision in the state for two years, after which they could apply for a full medical license.

• Using some of the state’s one-time surplus from oil and gas taxes to create a $2 billion permanent fund for health care to generate income to pay for these and other reforms in perpetuity.

Think New Mexico will be advocating for the enactment of its recommended reforms to address the health care worker shortage during the 2025 legislative session.

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News Coverage

Read an investigative article on the malpractice insurance crisis in New Mexico from Searchlight New Mexico • December 5, 2024

Read a column by syndicated columnist Merritt Hamilton Allen about Think New Mexico’s initiative to solve the health care worker shortage • October 4, 2024

Watch a report from KOAT-TV 7 News on Think New Mexico’s initiative to solve the health care worker shortage • September 24, 2024 (2:09)

Read an article from the Santa Fe New Mexican about Think New Mexico’s initiative to solve the health care worker shortage • September 23, 2024

Read an article in the Albuquerque Journal about Think New Mexico’s initiative to solve the health care worker shortage • September 22, 2024