SB176
Senate Bill 176 proposed amendments to the Medical Malpractice Act (“the MMA”) that would limit Patient Compensation Fund (“PCF”) payments for future medical care and related benefits, limit contingent attorney fees in MMA cases, and divert a portion of punitive damages awards that customarily go to the patient or the patient’s personal representative in MMA cases to a new state fund.
Sections 1 and 2 would require the PCF to pay expenses for future medical care and related benefits only “as [such] expenses are incurred.” Specifically, Section 1 seeks to amend Section 41-5-6 by adding the phrase “[e]xcept as provided in Section 41-5-7 NMSA 1978” to Subsection (H) that states that no limits shall be placed on the value of accrued medical care and related benefits; and Section 2 seeks to amend Section 41-5-7 by adding a Subsection (C) that states that “[p]ayments made from the [PCF] for medical care and related benefits shall be made as expenses are incurred.”
Section 2 would also add a new Subsection (F) that requires MMA punitive damage awards to be split between the prevailing party and the state treasurer, with 25 percent going to the prevailing party and 75 percent going to the patient safety improvement fund (“PSIF”).
Section 3 seeks to add a new section to the MMA that would limit contingent attorney fees based on when the MMA case is resolved. For cases settled before an arbitration proceeding or trial has started, the fee would be “twenty-five percent of the dollar amount recovered.” For cases settled after an arbitration proceeding or trial has started, the fee would be “thirty-three percent of the dollar amount recovered,” whether the case is resolved by settlement, arbitration, or judgment.
Section 4 seeks to add a new section to the MMA that establishes the PSIF, a non-reverting fund in the state treasury. The fund is to be invested by the state treasurer, expended as set forth in the section, and subject to appropriation by the Legislature to the department of health (“DOH”) “for the purposes of improving patient safety and health care outcomes.”
The New Mexico Department of Justice warned: “Section 3 raises serious constitutional separation of powers concerns as it appears to infringe upon Supreme Court authority to regulate attorney conduct. Article III, Section 1 of the New
Mexico Constitution provides: “The powers of the government of this state are divided into three distinct departments, the legislative, executive and judicial, and no person or collection of persons charged with the exercise of powers properly belonging to one of these departments, shall exercise any powers properly belonging to either of the others, except as in this constitution otherwise expressly directed or permitted.” As relevant here, in Ammerman v. Hubbard
Broadcasting, Inc., 1976-NMSC-031, ¶ 15, 89 N.M. 307, our Supreme Court stated that “[u]nder the Constitution, the legislature lacks the power to prescribe by statute rules of practice and procedure, although it has in the past attempted to do so. Statutes purporting to regulate practice and procedure in the courts cannot be made binding, for the constitutional power is vested exclusively in this court” … Similarly, Section 3 conflicts with the New Mexico Supreme Court’s Rules of Professional Conduct, which govern the practice of law by licensed attorneys. This legislative overreach poses the same constitutional concerns as noted above. Section 3 proposes to impose limitations on contingent attorney fees when Rule 16-105(E) NMRA already regulates this practice by permitting New Mexico attorneys to work for and charge contingent fees in all cases, except criminal cases and certain domestic relations cases … Even if the Section 3’s provisions survived a constitutional challenge, basing the contingent attorney fee solely on whether case is resolved before or after an arbitration proceeding or trial has started, without considering other factors, may, by itself, is an arbitrary and unreliable indicator of whether that fee is reasonable.”
SB176 failed in a 5 to 4 vote of the New Mexico Senate Health and Public Affairs Committee.
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