New Mexico’s laws are constantly evolving as new bills and propositions are passed to address changing needs and concerns. Beginning in 2024, New Mexico’s cap on medical malpractice damages will increase, and continue increasing in 2025 onward based on inflation. The amended Medical Malpractice Act can result in greater damage awards being made available to victims of medical malpractice starting in 2024.
What Is a Damage Cap?
A damage cap, also known as a compensation cap, is a legal limitation on the amount of money that the party filing a lawsuit (the plaintiff) can receive in damages. Many states have damage caps in place on specific types of claims or damage categories, such as punitive damages or pain and suffering. If a plaintiff is awarded an amount that exceeds the damage cap by a jury, the courts will reduce it to the maximum allowed by law. Damage caps are established by legislation and can vary based on the jurisdiction as well as the type of case.
What Was New Mexico’s Existing Medical Malpractice Damage Cap?
New Mexico has had caps on damages in medical malpractice cases for many years. If an injured patient pursues a cause of action against a doctor, hospital, clinic or another health care practitioner in New Mexico, the patient’s potential financial recovery will be capped or limited at a maximum amount as determined by law.
As of 2023, New Mexico’s damage cap under the state’s Medical Malpractice Act was $750,000. This was the maximum amount recoverable – except for punitive damages and past and future medical care and related benefits – by plaintiffs in medical malpractice claims against both individual health care providers and independent outpatient health care facilities.
Changes to New Mexico’s Medical Malpractice Damage Cap as of 2024
In April 2023, Governor Michelle Lujan Grisham signed Senate Bill 521 – titled “Medical Malpractice Changes” – into law along with four other health care laws. SB 521 amended the existing cap on medical malpractice damages in cases against independent health care facilities, increasing it from $750,000 to $1 million.
Beginning January 1, 2024, medical malpractice cases brought against independent clinics such as urgent care facilities, ambulatory surgical centers and emergency rooms that are not attached to hospitals will have an increased damage cap of $1 million. Beginning in 2025, this cap will be adjusted annually to account for inflation.
In addition, the cap on malpractice damages against hospitals (currently set at $4.5 million) will increase by $500,000 per year for injuries that take place between 2024 and 2026. However, the cap on damages available in malpractice cases against individual health care providers (e.g., doctors, nurses and physician’s assistants) remains at $750,000, adjusted annually for inflation.
What Damages Are Not Subject to the Medical Malpractice Cap?
Punitive damages are not subject to New Mexico’s cap on medical malpractice damages. The state’s damage cap only applies to compensatory damages in a medical malpractice claim, which aim to reimburse a plaintiff for losses suffered. Punitive damages, on the other hand, are designed to punish a defendant for particularly egregious conduct, such as a physician’s gross negligence or a wanton disregard for the safety of patients.
There is currently no cap on the amount of punitive damages available in a medical malpractice case in New Mexico. In addition, medical care and related benefits are excluded from the state’s damage cap. An injured patient can recover the full cost of all medical expenses deemed necessary due to the incident and injury, even if this exceeds the legal limitation. Instead, the cap applies to damages such as lost wages and pain and suffering.